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Alan Ebenstein
Alan Ebenstein
Friedrich Hayek: A Biography
ISBN: 0312233442
Friedrich Hayek: A Biography
This book tells the story of one of the most important public figures of the twentieth century. It is the first full biography of Friedrich Hayek, the Austrian economist who became, over the course of a remarkable career, the great philosopher of liberty in our time. In this richly detailed portrait, Alan Ebenstein chronicles the life, works, and legacy of a visionary thinker, from Hayek's early years as the scholarly son of a physician in fin-de-siecle Vienna on an increasingly wider world as an economist and political philosopher in Londom, New York, and Chicago. Ebenstein gives a balanced, integrated account of Hayek's extordinary diverse body of work, from his fist encounter with the free market ideas of mentor Ludwig Von Mises to his magisterial writings in later life on the legal, political, ethical, and economic requirements of a free society. Awarded the Nobel Prize in 1974, Hayek's vision of a renewed classical liberalism-of free markets and free ideas in free societies-has taken hold in much of the world. Alan Ebanstein's clearly written account is an essential starting point for anyone seeking to understand why Hayek's ideas have become the guiding force of our time. His illuminating portrait of Hayek the man brings to new life the spirit of a great scholar and tenacious advocate who has become, in Peter Drucker's words, "our time's preeminent social philosopher."
—from the publisher
Friedrich Hayek: A Biography
Program Air Date: July 8, 2001

BRIAN LAMB, HOST: Alan Ebenstein, author of "Friedrich Hayek," why do you think people want to know about this man?
ALAN EBENSTEIN, AUTHOR, "FRIEDRICH HAYEK: A BIOGRAPHY": I think that Freidrich Hayek is possibly the most important political philosopher of the 20th century, and in the same way that Karl Marx during the 19th century put forward ideas that were implemented during the 20th century, I think that Hayek's ideas in the 21st century may be of great importance.
LAMB: Where'd you first learn about him?
EBENSTEIN: I first learned about Hayek as a student at the London School of Economics, where Hayek had taught. I was a student there during the mid-1980s and read his book, "The Road to Serfdom."
LAMB: When did he live?
EBENSTEIN: Hayek was born in 1899 and he died in 1992. He was from Austria and grew up still in pre-World War I Austria-Hungary, the Austro-Hungarian empire, and he then moved to London during the 1930s and '40s, and subsequently went to Chicago, and then back to Europe for his later decades, so he was a man whose life spans almost the entire 20th century, and who lived throughout the European and American world.
LAMB: When did he first come to America's attention?
EBENSTEIN: Hayek actually was a student in America in 1923-24, and that, I think, was vital in his intellectual development, so as a--as a young student, he--he--he came to America and studied at New York University. He studied economics. After being in the United States for a year, he returned to Vienna. Subsequently he went to the London School of Economics. He was in America from 1950 to 1962, at the University of Chicago. Milton Friedman was at the University of Chicago at that time, and others. His most well-known book, "The Road to Serfdom," was published in 1944, so he really became known in the United States several years before he came here to teach.
LAMB: What did he say in "The Road to Serfdom" that got everybody's attention?
EBENSTEIN: I think the crucial idea of "The Road to Serfdom" is that without economic freedom, there cannot be political freedom. Hayek tried to tie political freedom and economic freedom together, and this was a very different idea than existed during the 1930s and '40s, when there was the idea of democratic socialism, that there could be a socialism, government control of a nation's economy, and yet still have democracy. Hayek said that that would not be possible, that instead, without a free market system, there could be no democracy.
LAMB: How old was he when this picture was taken?
EBENSTEIN: This picture was taken when he was at the London School of Economics, so he was probably in his 30s at that time.
LAMB: And why all the numbers on the cover?
EBENSTEIN: I think that that's to indicate that he was an economist, he was both an economist and a political philosopher, and for the first several decades of his career, he was primarily an economist, and then he moved into the area of political theory. He received the Nobel Prize in economics in 1974, so I think the idea of the numbers is to tie in the economic aspect of Hayek's thought.
LAMB: Another Nobel Peace Prize winner, James Buchanan, is out here at George Mason, around the DC area, at the university. He's quoted in your book as saying, "I never called him Fritz."
EBENSTEIN: Hayek was...
LAMB: Why would he say that?
EBENSTEIN: Hayek was a formal man. He was not particularly outgoing or warm. He was more an aloof intellectual, and we should say as well that James Buchanan received the Nobel Prize in economics, not--not the peace prize, as Hayek did, and Hayek and Buchanan were close, through an organization called the Mont Pelerin Society, and that's an international society of classical liberals and libertarian free market-oriented economists. And Hayek was reserved, he was a man who was--was an excellent teacher. Many of his teachers--many of his students speak to his--his knowledge and his--his great intellectual ability, and at the same time, they speak of him being a reserved man, not someone who would talk readily about his family life or his personal life, but rather someone who was most interested in ideas and their consequences.
LAMB: I made the mistake of saying Nobel Peace Prize, which leads me to want to ask you, what's the difference between getting the peace prize and an economics prize, Nobel?
EBENSTEIN: Originally, there were five Nobels, when the Nobel Prize was established in 1900, and actually I think the first award was given in 1901. The Nobel Prize in Economic Sciences was first given in 1969, and Hayek received the Nobel Prize in Economics in 1974, and he was the first free market economist to receive the Nobel Prize. Prior to that time, it had primarily been Keynesians who had received the Nobel Prize, so when Hayek received the Nobel Prize in 1974 in economics, it was a real event, because the free market view, a pro-capitalist view, was being acknowledged as a respectable way of looking at the world.

This is something that was very different from the way Hayek had been treated earlier in his career when he had written "The Road to Serfdom" and some of his other works, and he had been considered virtually a reactionary crank for the views that he put forward. So it was something that the Nobel prize had a--had a great influence on Hayek in terms of bringing him to national and international attention again.
LAMB: How many copies of "The Road to Serfdom" sold in the United States?
EBENSTEIN: The--there have--since it was originally published in 1944, it was a best-seller at the time. Hayek came to the United States from England at that time, and participated in a whirlwind tour, and was on the Brian Lamb show of the time in terms of the--the C-SPAN BOOKNOTES. Of course, this was before TV. But he--he had a whirlwind tour of the United States, and so it sold a lot at that time. It's since sold hundreds of thousands of copies, so all told, there's probably 300,000 to 400,000 or so copies of "The Road to Serfdom" that have sold. It's been translated into over 20 languages, sometimes unauthorized foreign-language translations to countries in the former--the former Eastern Communist--Eastern Europe and the Soviet Union.

Before the Berlin Wall fell, Hayek's works would be circulated in typewritten, translated copies, so he's someone who has had a great influence not just in the Western world, but in the formerly Communist world, he's considered to be one of the greatest intellectuals who put forward the idea that it's not possible to have an effective command economy. It's not that it would be ethically or morally undesirable to have a socialist system, where the government owns all the land, runs all the businesses. It's simply that a system like that doesn't work. When he put forward these ideas in the 1930s, this was considered to be just not even a position almost worth considering. However, it's since become the conventional wisdom, almost, and it's something that since that time, since we've seen the collapse of the Soviet Union and of the economies in Eastern Europe, Hayek has largely been vindicated by events in his--his predictions of the way the world works.
LAMB: What did Reader's Digest have to do with the success of this, years ago?
EBENSTEIN: Ro--"The Road to Serfdom" was originally put into a digest form by the Reader's Digest, and as a result of that--and this is before the TV age. The--the Reader's Digest at that time had a circulation of something like 12 million people, so it was a much more significant part of the American intellectual scene than it has subsequently become. Right as Hayek was coming to the United States, he had this Reader's Digest version that was published, so all of a sudden he was not just well known within academic and literary circles, but the general public, and so his lecture tour in the United States was changed from a rather scholarly, sedate tour to a more popular tour, and he tells the story of going to his first lecture in New York that was unanticipated in terms of what sort of address it would be, and he gets on the stage and he says, `Now what am I supposed to talk about?' and they say, `Well, you're going to have to speak on international law.' And he says, `I've never talked on that before,' and they say, `Well, it has to be exactly 45 minutes, and by the way, you're on the radio.' So he'd never done this sort of lecturing before, but he proved to be very adept at it, and as a result of the Reader's Digest lead article, his work became well known to a wide public at that time.
LAMB: Where do you live, and what do you do for a living?
EBENSTEIN: I'm--I live in Santa Barbara,, California, and I am an independent scholar and also the director of research for the Arthur N. Rupe Foundation.
LAMB: What is the foundation? What's the name?
EBENSTEIN: The--the Arthur N. Rupe Foundation is a foundation that is interested in philanthropic activities with an idea towards social change. What we're interested in doing is working toward changing public policy and promoting education in a free market line, so Hayek is someone who we're very interested in, and his sorts of ideas.
LAMB: And what was the name again? Rupe?
EBENSTEIN: It's the Arthur N. Rupe Foundatoin.
LAMB: Ah. And who is he?
EBENSTEIN: Art--Art Rupe is the founder. He formerly was the owner and director of Specialty Records, and he had people on his label like Sonny Bono and Little Richard and other leading stars during the 1950s and 1960s, and he's since created a foundation.
LAMB: Is he still alive?
EBENSTEIN: Yes, he is.
LAMB: And how did you get into that?
EBENSTEIN: Well, Art and I met through political activities. I was a candidate for the local California state Assembly, and he and I met at an event, and stuck u--struck up a friendship, and have been in contact since then.
LAMB: Where did you go to school?
EBENSTEIN: I attended the use--UCSB, the University of California at Santa Barbara for my undergraduate work, and then I did my PhD at the London School of Economics.
LAMB: Who is William Ebenstein, who you refer to in the book?
EBENSTEIN: Sure. William Ebenstein is my father, and--or was my father. He was a student himself at the London School of Economics during the 1930s when Hayek was a professor there. My father, like Hayek, was from Vienna, and he was born 11 years after Hayek, and after graduating from the university, as Hayek did, he went to the University of Vie--he we--he went--like Hayek, my father went to the University of Vienna, and then after being at the University of Vienna, like Hayek, my father went to the London School of Economics, and then, after being at the London School of Economics, my father taught briefly at the University of Chicago, which is where Hayek came when he came to the United States. So actually, from a familial perspective, this was a--an interesting and fun project, because it was almost tracing my father's background.

My father, however, was a student of some of Hayek's leading bete noirs at both the University of Vienna and the London School of Economics. At the University of Vienna, Hans Kelsen was a leading progressive philosopher who my father was a student of, and then at the London School of Economics, my father was a student of Harold Laski, who was the leading democratic socialist of the day, and perhaps Hayek's arch-rival at the London School of Economics. So it was--it was an interesting project from the perspective of getting to know some of the people who are in my own background, as well, better.
LAMB: What were your father's politics?
EBENSTEIN: My father started out as a democratic socialist, and in fact, in the book--he--he then became a professor at Princeton University, and at the University of California at Santa Barbara, and he was one of those who criticized Hayek after Hayek originally published "The Road to Serfdom" for suggesting that planning would not be possible. However, my father's views emerge--evolved, and as time went on, he took a more Hayekian view. I remember him mentioning to me after Hayek received the Nobel Prize in 1974, he said that, `Well, it's about time that they gave him the award. It was long overdue, and that it's a shame that he had to split it.' When Hayek received the Nobel Prize of 1974, he received it with the Swedish socialist Gunnar Myrdal, and my dad was said to--said to me, I remember him mentioning that it was--it was--it was about time that Hayek had received it and that it was a shame he had to split it.

Ironically, when I read in Hayek's correspondence--I read the correspondence to him written my Milton Friedman after--after he received the--after Hayek received the Nobel Prize, that Friedman's comment to Hayek was exactly the same. It was something--`Dear Fritz, it's taken far too long for you to receive the award, and even then, the Swedes only went half the way, but that's more than I expected them to do.' So...
LAMB: Now one of the reasons that we wanted to ask you here to do this is because over the years--BOOKNOTES is over 12 years old--the name Hayek--I never heard the name before I started the show. It pops up all the time, so in order for us to kind of get on the same wavelength as our audience has been over the years--and a lot in the audience don't hear the name as it's talked about--we're going to go back and run a--a number of clips of people who--who you will recognize talking about this.

The first one is from an interview just a couple of weeks ago with the chief justice of the United States, and we'll roll this and get your response to this.

(Excerpts from previous broadcasts)

Chief Justice WILLIAM REHNQUIST (Author, "The Supreme Court"): (From 4/10/01) The first really controversial or--advocacy book I ever read was when I was in the s--in the Air Force, and it was Friedrich Hayek--Friedrich Hayek's "The Road to Serfdom." And I was used to just, you know, textbooks that would set forth a bunch of facts. You were supposed to memorize the facts and recite them back on the te--on the test. But this book was an advocacy book, trying to show that s--state planning and socialism and that sort of a thing didn't work economically and was dangerous politically, and it made quite a--quite an impression on me.

Mr. GEORGE WILL (Author, "Restoration"): (From 10/7/92) There were, just by lot at Oxford at that time, a number of Americans who were interested in Friedrich von Hayek.

Mr. DAVID BOAZ (Author, "Libertarianism: A Primer"): (From 1/10/97) And that's what the Cato Institute does. We take the ideas of people like John Locke and Adam Smith and Friedrich Hayek and apply them to issues of the day.

Mr. ROBERT BORK (Author, "Slouching Towards Gomorrah"): (From 11/1/96) Well, because he was a very profound man--mind,, and very clear, and I think conservative, and convinces you that conservatism is the correct approach. He's a--he has written a great deal, all of it very valuable.

Mr. SEYMOUR MARTIN LIPSET (Author, "American Exceptionalism"): (From 5/6/96) Friedrich Hayek is one of the gods of the--of the Reagan-Friedman ideology. Friedrich Hayek would knock your head off if you called him a conservative. He was--he was an Austrian, he's--conservatives are people who believe in--in the emperor, believe in a state church, believe in a strong state. He was a liberal.

(End of excerpts)

LAMB: There you have it. There's a--all over the lot.
EBENSTEIN: I think that what these clips indicate is that Hayek is a thinker who appeals to individuals of all political perspectives, and I think that goes to the idea that--when Marx wrote, during the 19th century, he was not well recognized during his time. In the reviews of Marx before the Russian Revolution in 1917, he's referred to as a socialistic commentator and agitator, and that might be the view of Hayek today in terms of he's known in a broader circle, but he's not famous in the sense of--in--in the sense that some others are famous. Keynes, for example, might be a better example of the economist, or Friedman, to an extent, who's the most well known today.

Hayek's renown is not as great as either Keynes or Friedman, but I think that Hayek is someone who enunciated a vision, a way of looking at the world, a--a world that could be different than the way that it is. I think that's why some people refer to him as a liberal, some people refer to him as a conservative. Hayek himself would have referred to himself as a 19th-century liberal. He didn't particularly like the word libertarian, but that was the--the view that was closest to his own. He did not like conservatism. His postscript to his 1960 work, "The Constitution of Liberty," is explicitly titled: "Why I am Not a Conservative," and he criticizes conservatism for its power-adoring characteristics, for the idea of a very establishment social order, for the idea of power in society. He didn't like those ideas, non-governmental sources of power in a society.
LAMB: Go back to what Chief Justice Rehnquist said, about, you know, the first book that he ever read that was something he picked on his own and had made quite an impression on him. Does that surprise you in any way? I mean, what you know about him?
EBENSTEIN: Not at all. It--it's something that that's a reaction that many have when the first read Hayek's works, that it's a new way of looking at the world. There are many individuals who say that reading "The Road to Serfdom" or some of Hayek's other works have had a significant influence on them, and I think what's so important about Hayek's work is that he's really challenging the way people look at the world. And I think that particularly in regard to socialism, the argument wasn't that socialism would be undesirable, or that people weren't altruistic enough to be social for socialism to work, but rather that factually, socialism couldn't deliver the goods because in order to have an effective economy,, you have to have prices, you have to have profits, you have to have the ability for people to exchange services, goods and services. This is a different idea than much of the mind-set and ideology, the way of looking at the world, so it's something that when people read it, it often changes their way of looking at the world.
LAMB: George Will referred, very quickly there, just a little comment about Oxford. Would Hayek have been studied at Oxford, and what were the politics of the Oxford dons?
EBENSTEIN: At this point in time, Hayek is probably the most well known in England of any country in the world, particularly as a result of having lived there for almost 20 years, his--his family lives in--in--his children still live in England.
LAMB: Have you met them?
EBENSTEIN: Oh, yes. I was able to spend several weekends with Larry Hayek and Eska Hayek, and visit their home, and I had the opportunity to research their personal files and letters and clippings and articles, and those sorts of things.
LAMB: How old are they now?
EBENSTEIN: At this point in time--Larry was born, I think, in 1933, so he'd be 67, 68 years old, something along those lines.
LAMB: And what's he do?
EBENSTEIN: He's a--he's a--he's a medical doctor, and he's tried to continue his father's work from the perspective of making sure that the procedural and administrative aspects are taken care of.
LAMB: What about the daughter?
EBENSTEIN: His daughter is several years older. She was a bacteriologist for the British Museum, so she's someone who also has a scientific background.
LAMB: And as you know--you wrote about it--there was quite a controversy over his first and second marriage, and they are from his first marriage?
EBENSTEIN: They--they're both from his first marriage. Hayek had a divorce from his first wife. She--his first wife would not give him a divorce, so ultimately he came to the United State in considerable part to be able to establish residency in 1950 in Arkansas, which at that time was about the only place that had permissive, no-fault divorce laws. He then was able to obtain a divorce and then subsequently married his second cousin. Well, he married a cousin of his who had been a childhood sweetheart, so it was something that was not in a--an entirely happy chapter in his life, as Larry refers to it but...
LAMB: What do they think of it?
EBENSTEIN: Well, I--I think that it was very hard on them at the time. At the same time, Hayek was someone who was dedicated to his work, and in talking both to--particularly to his daughter, she made a comment along the lines that, `I hardly knew my father, because he spent so much time researching and--and writing.' This was his primary activity. It's also been suggested to me that in part as a result of his unhappy family circumstances, this was part of the reason why he wrote as much as he did. But I think the truth is that Hayek was someone who was absolutely committed to the life of the mind, and regardless of his family circumstances, he would have been a pure scholar.
LAMB: Why--what was the reason for the divorce, and--and was it abrupt?
EBENSTEIN: It was--it was strictly a matter that he wanted to--he wanted to marry his cousin. They had been--as--as young people, they had been in a--in a relationship. He then left for the United States. When he came back, as a result of miscommunication, she was then in another relationship, and they didn't marry at that time. They considered trying to marry before World War II, but decided not to, and then as a result of World War II--his second wife was in Austria during World War II, so they had no contact for almost six or seven years. After the war, they decided--Hayek says in his autobiographical notes that whatever the cost, he'd have to seek a divorce and that's what he did.
LAMB: What year did he divorce?
EBENSTEIN: He divorced in 1950.
LAMB: And he lived to what year again?
LAMB: He was how old?
EBENSTEIN: He was a--two months short of his 93rd birthday.
LAMB: And "Road to Serfdom" came out again what year?
LAMB: Let's look at some more videotape, and look at what others have said about him on this show in the last 12 years. (Excerpts from previous broadcasts)

Mr. DAVID FRUM (Author, "Dead Right"): (From 10/4/94) A philosophical work. I think I would pick two, if I could. One is Hayek's "Constitution of Liberty," and the other's the book I just referred to by st--James Fitzjames Stephen, called "Liberty, Equality, Fraternity."

Mr. PHILIP HOWARD (Author, "The Death of Common Sense"): (From 1/24/95) The year and a half before I tried to write the book, that's who I was reading. I said, `Well, who--who can comment on these things?' And says--reading all--I read Hayek, I read Woodrow Wilson, Cardozo, Holmes.

Mr. R. EMMETT TYRRELL (Author, "The Conservative Crack-Up"): (From 5/19/92) In the early days of the conservative movement--well, when her--when Friedrich Hayek's book, "The Road to Serfdom," came out, there weren't a lot of publishing houses eager to publish it in this country. It wasn't conventional.

Mr. M. STANTON EVANS (Author, "The Theme is Freedom"): (From 12/6/94) Hayek had a profound impact on me in my thinking. I read "The Road to Serfdom" very early, in the mid-50s.

LAMB: Why is it so important? Mr. EVANS: Because it is such a succinct and persuasive and powerful statement of what is wrong with collectivism, with socialism, with any form of authoritarian government, why such governments are--don't work economically and are also destructive of personal liberty.

Mr. ROBERT BARTLEY (Author, "The Seven Fat Years and How to Do It Again"): (From 5/11/92) I'm a kind of a populist. I believe that--that the common people out there in the country are really pretty smart. They may not be able to tell you about Keynes and Hayek and all that, but they--they have a kind of street sense of what's working and what isn't out in the--out in the street.

(End of excerpts)

LAMB: These men all have touched on what you've written about at different times in the book. Let me start with Bob Tyrrell saying that he had a hard time getting published in this country. Is that true?
EBENSTEIN: I think so. When Hayek first attempted to publish "The Road to Serfdom" it was taken to three different publishers, none of whom accepted it, and one of the reviewers wrote back that although the book might do well, it had an ideological viewpoint that wouldn't be appropriate to be published by a leading publishing house. So it was the case that at that point in time, the views that Hayek was putting forward were not popular views.
LAMB: Now Bob Bartley's an editor of The Wall Street Journal, and he calls himself a populist, and thinks that the people are pretty smart out there but they might not know who either Keynes or Hayek are. D--is that--do you agree with that?
EBENSTEIN: I--I think that it's the case that the--as Keynes said, `The ideas of political philosophers, econo--and economists, both for good and ill, are more powerful than is commonly understood.' It's not necessarily the case that the individuals who enunciate ideas are known to the general public, but their ideas percolate through the areas of journalism, academia and media of other sorts, and then generally become common views. So I think that it--it is often the case that the people who put forward ideas are not well known.
LAMB: What is the primary difference between John Maynard Keynes and Friedrich Hayek?
EBENSTEIN: I think the primary--and--and Hayek and Keynes knew each other well. During the 1930s, as Hayek came to the London School of Economics, he immediately started out with just a blistering confrontation with Keynes on some of the economic issues of the day, and Hayek wrote a blistering review of one of Keynes' books, and then Keynes did a response to Hayek's review where he says that, `Professor Hayek's review is an outstanding example of how a logician starting from a wrong premise can end up in Bedlam.'

Notwithstanding that rather inauspicious start, they became good friends, and during World War II, in fact, the London School of Economics was relocated to Cambridge, where Keynes was, and Keynes and Hayek would take turns at night watching for fires, as Britain was being bombed, from the top of King's College in Cambridge. So they knew each other well.

I think the primary difference between Keynes and Hayek is that Keynes was a welfare state interventionist. He was not a socialist. He did not believe in government management and operation of a nation's economy. But he believed in a large role for government in a nation's economy though demand management, through active support for unions, for a strong welfare state, whereas Hayek is more a pure free market economist, more of a libertarian. Hayek's view is that the smaller the state, the less government, the better. So they differed in their views in that regard.
LAMB: David Frum, who we saw first on that clip, is now writing speeches for George W. Bush. Does that track?
EBENSTEIN: I think so. I--I think that--I think that the--within the United States, there are aspects of Hayek's message that appeals both to Democrats and to Republicans. I think that from an economic perspective, Republicans are probably closer to Hayek's message, but I think that from a civil liberties perspective, that Democrats are probably closer to Hayek's message. So it--it's a message that can find support--the--the idea of less government is an idea that in different ways, appeals to both sides of the political spectrum.
LAMB: David Frum mentioned "Constitution of Liberty" and "Liberty, Equality and Fraternity." You v--star those in your book as two of his most important works. You say there were four really important works. How many did he write altogether?
EBENSTEIN: Hayek wrote over 20 books, and they range from technical economics to the history of ideas to psychology and then, later his career, primarily in the area of political philosophy, political theory, history--and the history of ideas, all wonderful books in terms of--I--I think that "The Road to Serfdom" is probably the--the easiest book for a general reader to get into and--and something that, as many of the peop...
LAMB: Yeah. Let me just ask you about the general reader. The--take the person out there that doesn't consider themselves to be an intellectual; they don't know economics any more than they're just, you know, reading it every day in the newspaper. Why would they want to buy and read Road To--To--"The Road to Serfdom"?
EBENSTEIN: I--I think that "The Road to Serfdom" remains a valuable book for understanding the essence of a free market economy, why it is that a free market economy is economically productive, but more than that, why a free market economy is the only free society that's possible; that if people don't have freedom in their economic lives to buy and sell as they wish, to exchange on the terms that they see fit, that really there's not much political freedom either. So as an introduction to the idea of a tie between economic freedom and political freedom, I think it's an outstanding work for that.
LAMB: I mentioned that we've heard about Hayek on this show, over 620 books over the last 12 years. The other person we hear about a lot--and there are about three or four of them--is Alexis de Tocqueville. "Road to Serfdom" came, you say, from Tocqueville?
EBENSTEIN: Absolutely. Originally, the title of "The Road to Serfdom" was going to be "The Road to Servitude," which is a line from Tocqueville, and Hayek decided to change that to "The Road to Serfdom" because he thought that it sounded better. But Hayek was definitely in that school of 19th century political writers who believed also, as--as Thurow put it, `That government is best which governs least.' So it--it is a different idea than government as it's emerged, and I think that Hayek's analysis is a sophisticated analysis of how those ideas are applicable to the 21st century as well as the 19th.
LAMB: Friedrich Andrew von Hayek, I believe, is his name.
EBENSTEIN: Friedrich August von Hayek.
LAMB: August. Oh, thank you. I'm sorry. Von--what's it mean?
EBENSTEIN: Von was a title of nobility in the Austro-Hungarian empire. There were four levels of nobility; von was the lowest of those four levels. Its English approximation would be `sir.'
LAMB: You also have a Ludwig von Mises in your book.
EBENSTEIN: Ludwig...
LAMB: Who was he?
EBENSTEIN: Ludwig von Mises was Hayek's teacher. He was not at the University of Vienna as a result of anti-Semitism. Mises was Jewish; he was not able to teach at the University of Vienna, but he ran an agency called the Chamber of Commerce, which was not like our Chamber of Commerce, which is a--a non-profit, but was a--an agency of the government. And Hayek worked for Mises fro--for 10 years, from 1921 to 1931.

Mises was a great free market economist who participated in something called the Socialist Calculation debate during the 1920s, when the idea was really being considered in Austria to nationalize the economy. He argued strongly against nationalization. And Hayek then applied some of these ideas later in his career.
LAMB: You say that Hayek was Catholic. Did he practice?
EBENSTEIN: No, he was not a practicing Catholic. He was--he was born a Roman Catholic, however. His father was a botanist. His--his grandfather was a biologist. He had a strictly Darwinian view of the world. He considered himself to be an agnostic.
LAMB: Let's look at some more videotape and get some more ideas, from what people have said on this program. Mr. JOHN KENNETH GALBRAITH (Author, "A Journey Through Economic Times"): (From 9/23/94) And then the economists, after World War II, came to the United States either, in the c--as in the case of Hayek and some others, by way of Eng--England and--and rejection of the socialist tendencies of the time in Austria, which they didn't like, and then later in escape from Hitler. And so American public life was enormously refreshed. Nor--macroacademic life was enormously refreshed by this Austrian migration. Even though it was, by my standards, most of it, much more conservative than I would be disposed to be.

Mr. R. EMMETT TYRRELL (Author, "The Conservative Crack-Up"): (From 5/19/92) In Prague--free Prague, in free Warsaw, in free Budapest, young men and women and old men and women, who heretofore had been having their fingers broken by Communist truncheons for expressing their belief in freedom--those people are now in power all over Eastern Europe, and they are th--they treat Hayek as a kind of founding father. And they talk to people like me, from the United States, when we visit Prague and Budapest as though we read Hayek every morning. I mean, they think he's a formidable force, and, of course, their appraisal's correct.
LAMB: Now Bob Tyrrell was here almost 10 years ago when he said that; that was not too far from when the Wall fell and all that. Do they still think he's that important over in Eastern Europe?
EBENSTEIN: Absolutely. No, I--I'd say that among the free market forces in the former Communist world, that Hayek probably stands taller than any other thinker. So, once again, that's within a more intellectual circle, but it's something that--perhaps even more so in the West. His ideas really were directed more against classical socialism, the idea of government management and ownership and control of all of the nation's economy, which is really more applicable to the Communist and Eastern European model.

In England, it also has quite a bit of influence because they had many industries that were nationalized. I think the arguments against the welfare state are more difficult, and Hayek had himself difficulty with, `Where do you draw the line of government?'
LAMB: John Kenneth Galbraith seemed to be friendly toward him.
EBENSTEIN: He--he was. Hayek--Hayek actually was--as a professor at the London School of Economics, Galbraith was a visiting junior scholar for one year and sat in on Hayek's seminar, which he recalls fondly. And I think that where Galbraith particularly--although he disagrees strongly with Hayek's work, he believes that he's an honest writer and that he sets forth his views clearly and accurately. He's just wrong, but he's not motivated by any sort of desire to do anything other than what he thinks really is the best.
LAMB: Showed this picture of Ronald Reagan earlier. What year was this?
EBENSTEIN: This was, I believe, in 1983 in...
LAMB: In the Oval Office.
EBENSTEIN: In the Oval Office. Reagan once met Hayek and mentioned to him that he'd read one of his books and learned a great deal from it. The same goes for--Barry Goldwater was a great admirer of Hayek, Margaret Thatcher in England, and Winston Churchill as well read "The Road to Serfdom" in England. So it's something that--Hayek is someone who's had great influence, particularly on the leading conservative, economic, political leaders in the United States and England during the last half-century.
LAMB: You discuss the relationship between Margaret Thatcher and Mr. Hayek in your book. Was it friendly? Was it--I mean, there was a point where people thought he was a part of her administration.
EBENSTEIN: Thatcher was very friendly toward Hayek and looked at him as her leading philosophical inspirer. At the same time it shouldn't be thought, as--as the one comment was about the people read Hayek every morning, that they were on the phone constantly. She saw him perhaps only several times a year, often in a--in a--in a semi-social manner. So it was something that he was more an inspirer of thought and someone who put forward philosophical ideas rather than someone who was an active government adviser on the issues of the day. He really didn't offer too much advice on the issues of the day. Occasionally he'd get involved on an individual basis, but it wasn't from the perspective of his--of his thought.
LAMB: Did you ever meet him?
EBENSTEIN: I never met him, no.
LAMB: Have you ever seen him on film or on tape?
EBENSTEIN: Oh, yes, many--a number of times.
LAMB: What would you see?
EBENSTEIN: Well, Hayek was someone who--he had a--a relatively strong accent, but he also spoke in a somewhat soft vo--voice. He was a tall man, somewhat thin. He had a mustache, very urbane in his style. He--he had a good sense of humor, and he was self-depricating and, at the same time, very profound, someone who you really learned--you--one really learns from listening to him; that he genuinely is someone who has the--a different view of the world in terms of, `Our society can be different than the way it is now.' And I think that's something that is too often forgotten.

There's a feeling that whatever exists now is the way things always are going to be and the way they've always been, whereas if there's one thing we learn from history, it's that the future will be completely unlike the present. We don't know how it's going to be, but we should know that it's going to be completely different. Hayek is someone who really had a completely different view of the world, and he tried to enunciate it, and, obviously, it's--it's a view that has inspired many people.
LAMB: You paint a picture in the book of David Bowa's--Boaz's boss, Ed Crane at the Cato Institute, where they have an auditorium--and you say named after Friedrich Hayek--presenting a bust of Hayek to Yevgeny Primakov in the--Russia back in the early nin--1990s. What--what--why would he do that, and--and what was the impact of that?
EBENSTEIN: It--it was a great moment. It was actually in Moscow that--that Ed Crane was presenting the bust. I should mention that I just was able to--to give a presentation at the Cato Institute, and I have a--another one on the book that's going to be at the Independent Institute.
LAMB: Were you in the Hayek Auditorium?
EBENSTEIN: I was in the Hayek Auditorium. And it's something that--Ed Crane presented this bust in Moscow as a symbol of the ideas that underlie political systems, and that it's the ideas of people like Hayek that have had such an influence on the world in leading to a different sort of social system in the Soviet--former Soviet Union and elsewhere. And Hayek, although very old at this point in time, and ill, wrote--wrote Crane back a letter saying how pleased he was that the--the bust had been presented, and he also said that he had hardly lived--he hardly had expected to be able to live to experience this. But since he lived until 1992, he was actually able to go from the perspective of someone who was completely ridiculed for his idea that the Soviet-type of economy was a less-effective economy to someone whose ideas were vindicated through the collapse of Communism in the Soviet Union and the fall of the Berlin Wall.

It should be remember that during the 1940s, '50s, '60s, '70s, even the 1980s--in 1989, Paul Samuelson wrote that the Soviet economy is proof of the power of a collectivist economy. That was in his leading economics textbook. As recently as that, individuals thought that the Soviet model of state direction was more economically effective than a free market based on profits, prices, private property, contract. And so Hayek was able to--to live to see the triumph of his ideas.
LAMB: The first time we really talked at length about Hayek on this program was this book, which is the 50th anniversary edition of "The Road to Serfdom" and the--the--it was written by Milton Friedman, not the book, but the introduction. And here's a little bit about what he said then and some more videotape from earlier BOOKNOTES programs to kind of bring this all around to the beginning.

Mr. MILTON FRIEDMAN (Economist & Author): (From 10/28/94) Hayek and I had been associated for a very long time, in particular in an organization called the Mont Pelerin Society that he founded. The charter meeting was in 1947 in Switzerland. And it was an attempt as Hans Morgenthau, who was a professor at the University of Chicago when I was there, a political scientist--when I came back from the meeting, he asked me where I had been, and I told him that I had been a--to a meeting that had been called by Hayek to try to bring together the believers in a free, open society and enable them to have some interchange, one with another. And he said, `Oh, a meeting of the veterans of the wars of the 19th century.' And I thought that was a wonderful description of the Mont Pelerin Society.

Mr. DAVID BOAZ (Author, "Libertarianism: A Primer"): (From 1/10/97) Well, personally, of course, when I met him, he was a very old man, and so I remember a very old man of old-fashioned, European demeanor, a gracious gentlemen, a scholar who was always so careful and precise to state his objections to other people's ideas without ever criticizing other people personally. He dedicated his book, "The Road to Serfdom," to the socialists of all parties, and I think he was very sincere in wanting to say, `I share your aspirations. I understand your dreams. But please read this warning of what will happen if you let government have too much power.' And he--he kept that respect for every--for all of his adversaries up to the end of his life.
LAMB: Now Milton Friedman mentioned the Mont Pelerin Society, and there's a picture in your book of the first meeting in 1947. You can't see it very well, but on the left is Milton Friedman; on the right is von Mises. What is this society? Does it still exist? What did it do?
EBENSTEIN: Well, one of the real--the--the outstanding aspects of writing this book for me was the opportunity to inder--interview Milton Friedman on--on two different occasions. And both Hayek and Friedman were members of the Mont Pelerin Society, charter members. The Mont Pelerin Society is still in existence. They meet every year or two to discuss issues of the free market and the free, open society, as Friedman said.

And a number of members of the Mont Pelerin Society, particularly in Europe, have been leading government statesmen--for example, Ludwig Erhard, a former chair--chancellor of West--then West Germany, once a member of the Mont Pelerin Society. I believe that during the Reagan administration in the United States, of participants on economic task forces in the Reagan administration, something like one-third were members of the Mont Pelerin Society. So it's an international society of believers in the free market and who believe--individuals who believe that the ideal government is the government that governs least and who look forward to a society in which government governs less than it now governs.
LAMB: What's Mont Pelerin?
EBENSTEIN: Mont Pelerin was simply where they held the first meeting. Hayek had hoped that the organization might be named after thinkers that he was fond of. In fact, he originally wanted to call it perhaps the Acton-Tocqueville Society. So it's something that Tocqueville was someone who really was influential in Hayek's thought. However, there could not be agreement as to who to name the society after, so they simply named after where they'd met.
LAMB: Acton was...
EBENSTEIN: He was a British political theorist and historian, primarily historian, during the 19th century. I believe he died early in the 20th century.
LAMB: This ba--book is published by St. Martin's Press. How'd you sell it to them?
EBENSTEIN: Well, I'll tell you, I got in contact with an editor at St. Martin's, Michael Flemini, who had published other books in this area. He was interested in it, and St. Martin's has done an excellent job in bringing the book to publication. And I think that they're--they're--they're an outstanding publisher.
LAMB: Do you have any idea how many of the first run on it is?
EBENSTEIN: You know, that I don't know, I'm afraid to say, but it's something that--I know they've already ordered a second printing, so I was delighted to hear that.
LAMB: `The ultimate message,' you say, `in "Fatal Conceit,"' another one of his books near the end of his life, `was life has no purpose but itself.'
EBENSTEIN: Hay--Hayek was an agnostic, so he did not have a religious view of the world or a supernal view of morality. But his idea was that the--the justification for capitalism, for free market libertarianism, is that it creates more material goods, that people have a higher standard of living, that it leads life to be more flourishing, more abundant. It's the medical breakthroughs, it's the technology that allows us to have a higher standard of living and that, from his non-religious perspective of the world, life has no purpose but itself, and that was his message in "The Road"--in the "Fatal Conceit."
LAMB: I found footnote, page 390, at the end of the--chapter 37. I just want to read it. He says, `I don't have many strong dislikes. I admit that, as a teacher, I have no racial prejudices in general. But there were certain types and conspicuous among them the Near Eastern populations, which I still dislike because they are fundamentally dishonest. It was a type, which in my childhood in Austria, was described as Levintine, typical of people of the Eastern Mediterranean. But I encountered it later, and I have a profound dislike for the typical Indian students at the London School of Economics, which I admit are all one type: Bengali, money-lending sons. They are, to me, a detestable type, I admit, but with--not with any racial feeling, I have found a little of the same amongst the Egyptians.'
LAMB: What is that?
EBENSTEIN: Well, I--I think that Hayek is someone who did express cultural stereotypes. I placed that as a footnote, rather than in the main text, because I felt that it's the truth and, therefore, it should be in the book. At the same time, I don't feel that it really was relevant to most of his life or thought. He was born in 1899 in a thoroughly prejudice society, primarily anti-Semitic. I suppose an example--and within that society, he was highly progressive. He was someone--and a--and an example might be someone who was very progressive and born in the old South in 1899, who was completely egalitarian in their political outlooks, believed in equality and so forth, and yet at the same time could occasionally make a statement that would strike us today as racist.

So I think it's something that--it's important that it's--it's acknowledged and it's stated and, at the same time, not overemphasized. So it--it's a facet of his personality and outlook, but I don't believe an important facet.
LAMB: Another picture in the book is him in World War I. What did he do in World War I? Which side was he on?
EBENSTEIN: Well, Hayek was--was born in the Austro-Hungarian empire in 1899, so in World War I, which was 1914 to 1918, he would have been a young man. At the age of 17, he enlisted in the Austrian army and fought on the Italian front. But, once again, it's something that--I think it's difficult to expect 17-year-olds to do anything other than to fight for the country of which they're currently a part of.
LAMB: You did say he got a chip knocked out of his head with a--some kind of a rifle. I mean, somebody fired at him.
EBENSTEIN: He--a--and World War I was still very old-fashioned warfare compared to some of what we're more--re--used to more recently. And he had a number of life-threatening experiences. One time he was fired at, and, indeed, the bullet actually grazed his skull, and a little chip of--a little chip of bone came out, which he didn't even notice at the time as a result of the battle. On another occasion, he was in an airplane that almost crashed. So he had a number of experiences like that. And later in life, he would almost laugh about them as he discussed them in terms of it was something that he'd been through those sorts of experiences, though, during World War I.
LAMB: Earlier in the discussion, you said that you were out in Santa Barbara, that you're an independent scholar. What's that mean?
EBENSTEIN: Independent scholar--I'm not affiliated with any university or college. I'm--I'm a writer, and I've--I've just written the book on Friedrich Hayek. I've revised several of--my--my father's books were some of the leading textbooks in the area of history of political thought and comparative politics. I've revised several of them, "Great Political Thinkers," "Introduction to Political Thinkers," "Today's ISMs." And I've also written on the--the British economist Edwin Cannan, who's at the London School of Economics. So I guess that's what an independent scholar is.
LAMB: Now Kent--before Zimmer, Kent escaped, going back to--Is it Arthur Rupe (pronounced RUPP)?
EBENSTEIN: Arthur Rupe (pronounced ROOPE).
LAMB: Spell that.
LAMB: I apologize to Mr. Rupe. I k--keep getting his name wrong. As a old Little Richard fan and a Specialty Records buyer years and years ago, tell us more about that. Is that company still in existence?
EBENSTEIN: Sure. Sure. No, Art was involved with Specialty Records. He founded it in the late 1940s and then sold it in the early 1960s and there were many people who were on his label who became leading stars. I think Art once told me that one year he had to pay 95 percent marginal income tax and I think that led him to his free market views and some of his interest in people like Friedrich Hayek.
LAMB: Who's on--who is on the--who was on those labels beside Little Richard and Sonny Bono?
EBENSTEIN: Well, Little Richard, Sonny Bono. He had--I'm--I'm afraid to say that's an aspect that I'm not as familiar with.
LAMB: You're not old enough to remember?
EBENSTEIN: Yeah, that's--that's--I'm...
LAMB: But where--where does he live now?
EBENSTEIN: Art also lives in Santa Barbara.
LAMB: How old a man is he?
EBENSTEIN: Art is 83.
LAMB: How much money did he put into this foundation?
EBENSTEIN: Well, the--the foundation at this point in time has about $15 million to $20 million of assets and in time it'll have something like $40 million to $50 million of assets.
LAMB: And how many people work there?
EBENSTEIN: At this point in time, there's Art, one secretary and yours truly.
LAMB: And so what do you do? I mean, wh--how do you get your--what's the plan?
EBENSTEIN: Well, at this point in time the foundation is still in the start-up mode. We're attempting to develop things like prizes and--and fellowships and research. And it's something that I think that we'd like to see the--the foundation play a role in the formulation of public policy and ideas.
LAMB: Why didn't you call it the Hayek Foundation?
EBENSTEIN: Well, I--the foundation has been in existence for a number of years in a somewhat embryonic stage and it's only been in the last couple of years that it has moved to a more active stage.
LAMB: Now is--are there places around the world where Hayek's name's on the door?
EBENSTEIN: Absolutely. There is a college in Guatemala that's named after Hayek. There's, of course, the--the Hayek Auditorium at--at Cato and other places like that that have his name on it. But as he himself mentioned--he said after he received the Nobel Prize that he received honorary doctorates but none of them, he said, from a really prestigious institution. It was more places--I won't say them by saying that they're then second rate, but in terms of it wasn't Harvard and Yale and Princeton that gave Harva--that gave Hayek honorary degrees. So it's still the case that the ideas that he put forward are not the popular ideas or the common ideas of academia. Rather, it's still more along the idea that as recently as 10 or 11 years ago, the leading economics textbook writer and Nobel laureate could make statements like, `The Soviet Union is the--an example of the effectiveness of a command economy.' So these are ideas that still have a long way to go before they're implemented in public policy.
LAMB: You write, `His introduction to the socio-humanities was in a class on the elements of philosophy. The teacher spoke about Aristotle and said that Aristotle, quote, "defined ethics as consisting of three parts: morals, politics and economics." When Hayek heard this, his reaction was, "Well, these are the things I want to study." It had a comic after-effect when I went home and told my father, "I know what I'm going to study. I'm going to study ethics."'
EBENSTEIN: I think that Hayek is someone who had a genuinely interdisciplinary approach. It's not something where he's just an economist or he's just a political philosopher--pher or just a moralist. He's someone who really is trying to look at a wide variety of issues and discover their interconnections. How does the economic system and the political system and the moral system interact? How do--do all the aspects of a--of a societal order function together? And it--it's not something that can be looked at in isolation. It's something that has to be looked at in a more holistic manner. And I think that that's really Hayek's ultimate message, is it's the moral aspect in terms of the questions of politics and economics are not just questions that are technical questions that have objectively right and wrong answers. They're questions about how do people want to live, how are people organized, how can we create the best society? And Hayek's argument was that because there are so many people in society, knowledge is fragmented. Because knowledge is so fragmented among all the members of a society, you have to create a society in which fragmented knowledge can be most utilized. This is most likely to happen in a capitalist society and it's a society that, in particular, prices and profits pay--play a crucial role. They're ways to communicate information, that that's how we should look at prices and profits as way to communicate information on individuals who have divided knowledge.
LAMB: Where's he buried?
EBENSTEIN: He's buried in Vienna where he was born and that's a--that's a picture of his grave stone. And he just modestly says `F.A. Hayek, 1899 to 1992.'
LAMB: What was his--the last couple of years of his life like and what did he die of?
EBENSTEIN: He was just--he--he--he was--he was a--he was a--he suffered illness during his last years and it was simply a matter of he was--was almost 93 years old. He--he was not able to write or give interviews for his--during his last several years, but he still was occasionally able to answer questions that would be forwarded to him. As recently as a few months before he passed away, his son was able to read him a question from a reporter and he gave a rather detailed response indicating that his mind remained sharp to the end. He undoubtedly had periods that were stronger and weaker as he grew older and during his illness and so forth, but he--he--he retained his faculties to the end.
LAMB: You told when he arrived that they don't call you Alan but they call you Lanny.
EBENSTEIN: I go by Lanny, so my friends call me Lanny.
LAMB: And how long did it take you to write the book?
EBENSTEIN: Well, I worked on this book for over seven years, so it was--it was a long project.
LAMB: Here's the cover of the book and that's Friedrich Hayek on the cover, author of "Road to Serfdom." Our guest has been Alan Ebenstein. We thank you very much.
EBENSTEIN: Thank you.
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