Born and educated in Vienna, Hayek taught at London, Cambridge, and Chicago before going to Freiburg in 1962 and returning to his native country in 1969. His long-standing dispute with Keynes and Keynesians began when he lectured at the London School of Economics in 1931, when Keynes was urging both private and government expenditure as the key to Britain ameliorating unemployment and climbing out of recession. In a succession of economic analyses, and in more popular works (such as The Road to Serfdom, 1944), he propounded a laissez-faire economic individualism, allied with the political belief that anything in the nature of state action or coerced collective action (such as that of a trade union closed shop) undermines liberty and paves the way to totalitarianism. However, as with Adam Smith Hayek’s followers often take up more extreme positions than their hero. Hayek himself recognized the need for limited state action to counter unemployment, and, for instance, to ‘organize a comprehensive system of social insurance’. Perhaps curiously he did not think that individuals, sovereign in their economic choices, could exercise sufficient moral or political good sense to halt what he thought of as the inevitable road from state economic action to totalitarianism.

Similar analyses were applied to the history of positivism since Comte, in The Counter-Revolution of Science: Studies in the Abuse of Reason (1952). Hayek became a notable influence on the economic and political right wing in Britain and the USA, especially after his views were revivified by the award of the Nobel prize in 1974. Perhaps his principal philosophical contribution lies in social epistemology, with his insistence that there can be no better indicator of value than the price a product can command in a free market economy. See also Austrian School, Bastiat, Frédéric.