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------------ 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. 
 
Copyright (c) 2004 by EH.Net. All rights reserved. This work may be  
copied for non-profit educational uses if proper credit is given to  
the author and the list. For other permission, please contact the  
EH.Net Administrator ([log in to unmask]; Telephone: 513-529-2229).  
Published by EH.Net (July 2004). All EH.Net reviews are archived at  
http://www.eh.net/BookReview. 
 
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