Book Review: The Essential Hayek

The Essential Hayek by Don Boudreaux

I have in my library a book called The Essential Galileo which consists of excerpts of Galileo’s major works with commentary provided by the editor. When I heard that Don Boudreaux of Cafe Hayek was writing a book called The Essential Hayek in collaboration with the Fraser Institute, I assumed it would be the same: samples of FA Hayek’s published works stitched together with commentary by Boudreaux.

But it’s not that. Instead, it’s all Boudreaux (save for a quote from Hayek to start off each chapter) giving a primer on major ideas by Hayek in his own words. I think Hayek: A Short Primer might have been a more accurate title, but whatever.

As a regular listener to the EconTalk podcast, I’ve been presented with many of Hayek’s ideas already, so for me this book was an enjoyable and short systematic grouping of those ideas. The one that has most affected my thinking is his insight of prices as conveyors of information rather than just a measure of value:

Another important insight I’ve found is the importance of the rule of law, and how law is distinct from legislation. Just legislation is not a top-down mandate, but comes about from the process of discovering and codifying bottom-up laws (what we might call social norms) made between people:

Also discussed is Hayek’s theory of the business cycle, which in large part is what he was awarded the Nobel Prize for. I think the presentation here is too brief to really get a handle on the intricacies and controversies of business cycle theory, and in general my default attitude is one of skepticism towards macroeconomic explanations.

One of Russ Roberts’, the host of EconTalk’s, favourite Hayek quotes is “Part of our present difficulty is that we must constantly adjust our lives, our thoughts and our emotions, in order to live simultaneously within the different kinds of orders according to different rules. If we were to apply the unmodified, uncurbed, rules of the micro-cosmos (i.e., of the small band or troop, or of, say, our families) to the macro-cosmos (our wider civilization), as our instincts and sentimental yearnings often make us wish to do, we would destroy it. Yet if we were always to apply the rules of the extended order to our more intimate groupings, we would crush them. So we must learn to live in two sorts of worlds at once.” There’s a whole chapter on this topic, and my only thought is that there are probably more worlds than just two: one for close family and friends, one for good friends, acquaintances, etc.

The entire book is available for free. I wouldn’t say this is the first book of economics somebody should read (my recommendation there would be The Undercover Economist or, God forbid, an econ textbook like The Economic Way of Thinking), but it might be the second or third to explore the ideas of one of the most important figures of one of the economic schools of thought (in this case, the Austrian school). If nothing else I’d recommend the first five chapters.

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