Revaluing Hayek

There has been plenty of talk about how Hayek's predictions in Road to Serfdom have been falsified.  Nonetheless, recent events in Ireland and the EU raise the value of some other Hayek books:

1. Monetary Nationalism and International Stability (free at the link!).  This book isn't as clear as it might have been, and he is too skeptical about currency depreciation.  One point is that bad international currency arrangements can distort relative prices and also drive boom-bust cycles.  Partially globalized currency arrangements will prove counterproductive and possible unworkable.  While I am more sympathetic to "monetary nationalism" than is Hayek, this 1937 short book reveals him to be a thinker with concerns very much in synch with the world of 2010.  There is a reason for that, and it's not an entirely reassuring one.

2. Individualism and Economic OrderCounterrevolution of Science, and in particular Hayek's critique of rationalist constructivism, of which the EU and the euro are prime current examples.  If you wish to know why the euro is failing, or why not every Obama policy will work out, this is the #1 place to go.  The euro project was even driven by the French and resisted by the English, exactly as Hayek's approach would have predicted.

I still think that The Sensory Order is Hayek's most overrated book, though many call it his most underrated book, which in my view is where the overratedness comes from.  I know the recent talk about "neural nets" and the like and you can claim Hayek was a precursor of the idea of the mind as an organ of classification.  I simply think this is an empirical book more or less written in the 1920s about a field which has changed dramatically in the last ten to fifteen years, never mind in the last ninety years.  And for an empirical book…it's not even empirical!  A few weeks ago I asked Bruce Caldwell whether the book had a single true sentence…


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