Friedrich Hayek: Economic Genius

Friedrich Hayek was an economic and political influence. Born in 1899, Hayek through his life brought some great ideas and methods to the political  leaders. Though he past away 25 years ago, his legacy and brilliance still lives on. Hayek even received a Nobel Peace Prize in 1974 for all of his economic work. Universities all around the world still study his works, and many of them are still used today. 

Hayek was a genius and knew how to make old things new things. He revamped the philosophy know as the "cloud". Instead of ideas and plans being in the brain their up in the clouds. Meaning human "ideas" or thoughts are a collective phenomena.  Hayek also stressed the idea that human collaboration is absolutely necessary in order for society to grow. At the beginning of the school year we were taught the human side of economics. Economics is not just money but rather choices, decisions, and lessons. Hayek, in my opinion, is a great example of this lesson. 

Hayek, along with recreating old things, pulled some great ideas from the clouds. He created the Austrian Business Cycle Theory (ABC Theory). The ABC Theory is a theory that describes how business cycles are the result of excessive growth in banking credit. And that the bank is purposely setting low rates. Thus creating imbalance between saving accounts and current investments. Which causes people to loan money from the bank. This Theory is what earned him the Nobel Peace Prize, as stated earlier. 

Through his life Hayek argued with the socialist economists about their view of economics. They had "socialist planners" that the socialists thought could take current economic data and that will help future problems. Hayek, a former philosopher, pointed out that you cannot just take "data". Everyone has separate resources. Not every planner would come back with the same answers and thoughts. It's because of this argument that many believe helped spark the internet and its vast array of resources. Friedrich was quoted as saying. "if socialists understood economics, there wouldn't be socialists." It was one of Hayek's goals to see economic freedom. Though he didn't see it, economic freedom has increased, thanks to his principles. 

Since I have 5 minutes to finish the blog I'm going to cut it there. Hayek is a pure genius and I could write on and on about him and his achievements. His principles and designs have shaped not only America but the entire world towards economic freedom. His work will continue to be in use and studied by economists for centuries to come.