------------ EH.NET BOOK REVIEW --------------
Published by EH.NET (July 2004)
Bruce Caldwell, _Hayek's Challenge: An Intellectual Biography of F.A.
Hayek_. Chicago: University of Chicago Press, 2004. xii + 484 pp. $55
(cloth), ISBN: 0-226-09191-0.
Reviewed for EH.NET by D.E. Moggridge, Department of Economics,
University of Toronto.
Bruce Caldwell of the University of North Carolina at Greensboro, the
general editor of _The Collected Works of F.A. Hayek_, has carved out
for himself a substantial and deserved reputation as a student of
methodology and of Hayek's work. In this book, the two streams merge
into an intellectual biography concentrating on the development of
Hayek's methodological thinking. That this is the volume's main
thrust is not apparent from the dust-jacket description or laudatory
blurbs from colleagues. It becomes slightly clearer on page 11 when
he states: "In my intellectual biography of Hayek ... I trace the
development of Hayek's ideas, focusing on the development of his
ideas regarding methodology as a unifying theme." One gets a bit more
suspicious when one comes to _Prices and Production_ (1931) and finds
the author always referring to the revised and enlarged 1935 edition.
But it becomes starkly clear on pages 178 and 179 when, in reference
to the Keynes/Hayek debates of the 1930s and the evolution of _The
Pure Theory of Capital_ (1941), he notes that while "these stories
are of considerable independent interest, they bear less directly on
our account of the development of Hayek's methodological thought and
... will be touched on only briefly here" and in the attached
footnote adding that "were this a comprehensive intellectual
biography, the effort [of relating Hayek's monetary and capital
theories and their development in the 1930s] would be warranted, but
this was never my goal." So much for truth in advertising!
After a brief introduction, the book proceeds in three stages. First,
before Hayek comes on to the scene on page 133, there is Part I -
"The Austrian School and Its Opponents -- Historicists, Socialists
and Positivists" -- with wonderfully stimulating chapters on Menger's
_Principles_, the rise of the German historical school, the
_methodenstreit_, Max Weber and the decline of the historical school,
positivism and socialism. This sets the stage for Part II - "Hayek's
Journey" from Vienna to the puzzle of the final volume _The Fatal
Conceit_ (1988). Although there are references to monetary matters at
the beginning, as already noted, the treatment is perfunctory for the
1930s and they are completely ignored after 1960, as are his public
activities in the 1970s and 1980s. There is also a rather light
treatment of _Law, Legislation and Liberty_ (1973-79). The study ends
with Part III - "Hayek's Challenge" -- a chapter on Hayek's legacies
and the author's own meditation on twentieth-century economics which
concludes with a consideration of the author's own sub-discipline,
the history of economics -- an important part of Hayek's teaching and
publishing activities from the mid-1930s to the 1970s oddly ignored
in the book itself.
The volume rests on an immense secondary literature and Hayek's own
published works. It is not archive-based: there are fourteen
references to documents in the Hayek papers at the Hoover Institution
and one from the University of Chicago. (In one sense this is a
blessing, because the publisher's favored author/date format for
references can survive a few such items but would have probably
proved less useful if the author had tried to learn and convey more
of, say, Hayek in the 1930s from his correspondence with Machlup and
Haberler deposited at the Hoover Institution.) Caldwell's command of
the secondary literature is breathtaking. Nonetheless, Zeus
occasionally nods in the surrounding details as when he muddles the
process by which Hayek became Tooke Professor at LSE so that he has
to have him reappointed in 1932 (p. 174, note 7) and has Nicky Kaldor
providing an appendix to the 1942 Beveridge _Report_ on social
services rather than Beveridge's 1944 book _Full Employment in a Free
Society_ (p. 175, note 9). Fortunately these nods are relatively few.
Caldwell's reliance on the existing secondary literature leaves the
story somewhat one-sided. It means, as a start, that Caldwell adds
nothing to our biographical knowledge of Hayek: indeed the book is
remarkable for its paucity of biographical information. But there is
another problem it shares with the other products of the Hayek
"industry." Hayek was an academic. He taught, took part in seminars
and had colleagues and students, some of whom became quite
distinguished. Yet this world seems to have had relatively little
effect on Hayek's intellectual development after Vienna (and he seems
to have had surprisingly little effect on those around him). Caldwell
makes one very good attempt to trace Hayek's possible influence on
Lionel Robbins in the transition from the first to the second
editions of the latter's _An Essay on the Nature and Significance of
Economic Science_ (1932/35) but there is no attempt to consider
influences running the other way. The discussion of the socialist
calculation debate and related papers such as his March 1933
inaugural lecture "The Trend of Economic Thinking," is carried on
with a sample of the relevant literature that is more limited than
Hayek's own evolving reading lists for his course "The Problems of a
Collectivist Economy" offered from 1933-34 until 1939-40 and
published in the LSE _Calendar_. In the same context, there is no
mention of the Robbins/Hayek/Plant seminar of 1932-33 which,
according to the _Calendar_, "will be chiefly devoted to discussions
of Collective Economics. Attention will be given to the theoretical
problems of pure collectivism and to applied problems of mixed
economies." Given that one of the members of and a frequent
contributor to that seminar was Abba Lerner, who was writing a Ph.D.
thesis on "The Economics of Control and the Price System of a
Socialist State" under Hayek's supervision, one wonders about
possible influences and interactions, as did Alan Sweezy visiting his
brother Paul in April 1933 when he speculated in a letter to
Gottfried Haberler on the reactions of Robbins, Hicks, Kaldor and
Hayek to a paper by Lerner on "The Optimum Price" scheduled to be
delivered to the seminar on 1 May. Similarly, in the discussions of
the origins of the abuse of reason project, part of which included
_The Road to Serfdom_ (1944), we get mention of Karl Mannheim, then
an LSE sociologist but not, surprisingly, of his colleague Evan
Durbin, who was intellectually closer to Hayek and whose lecture
course on "Economic Planning in Theory and Practice" was listed
immediately below Hayek's "The Problems of a Collectivist Economy" in
the LSE _Calendar_ from 1935-36 onwards. Durbin later became a Labour
junior minister.
One could mention other frustrations that might irk other readers,
but one should congratulate Caldwell on a finely nuanced addition to
the literature of which he has such a fine command. The study
represents a landmark in studies of Hayek and the development of
Austrian economics for either of which it will long remain essential
reading.
D.E. Moggridge is Professor of Economics at the University of
Toronto. He is currently engaged on an edition of the correspondence
of D.H. Robertson for the Royal Economic Society and a biography of
Harry Johnson.
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