In the early 1950s, Friedrich Hayek was ahead of his time when he posited the idea that spontaneous order in the brain arises out of decentralized networks of simple units ( neurons ).

Hayek ( 1935, 1937, 1940, 1945 ) stressed the knowledge problem of central planning, partly because decentralized socialism seemed indefensible.

Paul Cockshott and Allin Cottrell in Towards a New Socialism, Information and Economics: A Critique of Hayek, and Against Mises have argued that the use of computational technology now simplifies economic calculation and allows central planning to be implemented and sustained.

The economist Walter Block observed critically that while The Road to Serfdom is " a war cry against central planning ," it does show some reservations with a free market system and laissez-faire capitalism, with Hayek even going so far as to say that " probably nothing has done so much harm to the liberal cause as the wooden insistence of some liberals on certain rules of thumb, above all the principle of laissez-faire.

In his Prices and Production ( 1931 ), Hayek argued that the business cycle resulted from the central bank's inflationary credit expansion and its transmission over time, leading to a capital misallocation caused by the artificially low interest rates.

In accordance with the reasoning later outlined in his essay The Use of Knowledge in Society ( 1945 ), Hayek argued that a monopolistic governmental agency like a central bank can neither possess the relevant information which should govern supply of money, nor have the ability to use it correctly.

Hayek argued that all forms of collectivism ( even those theoretically based on voluntary cooperation ) could only be maintained by a central authority of some kind.

In his popular book, The Road to Serfdom ( 1944 ) and in subsequent academic works, Hayek argued that socialism required central economic planning and that such planning in turn leads towards totalitarianism.

Despite this comment, Samuelson spent the last 50 years of his life obsessed with the problems of capital theory identified by Hayek and Böhm-Bawerk, and Samuelson flatly judged Hayek to have been right and his own teacher, Joseph Schumpeter, to have been wrong on the central economic question of the 20th century, the feasibility of socialist economic planning in a production goods dominated economy.

Hayek also played a central role in Milton Friedman's intellectual development: " My interest in public policy and political philosophy was rather casual before I joined the faculty of the University of Chicago.

Friedrich Hayek in particular elaborated the arguments of Weber and Mises about economic calculation into a central part of free market economics's intellectual assault on socialism, as well as into a model for the spontaneous coordination of " dispersed knowledge " in markets.

However, a group of central European economists led by Austrians Ludwig von Mises and Friedrich Hayek identified the collectivist underpinnings to the various new socialist and fascist doctrines of government power as being different brands of political totalitarianism.

* Friedrich Hayek: He argued that central planning was inefficient because members of central bodies could not know enough to match the preferences of consumers and workers with existing conditions.

Hayek further argued that central economic planning-a mainstay of socialism-would lead to a " total " state with dangerous power.

This problem of information flow implied that a decentralised system, in which information travelled freely and was freely determined at each localised point ( Hayek called this catallaxy ), would be much better than a central authority trying to do the same, even if it was completely efficient and was motivated to act in the public good.

Austrian economists such as Ludwig Von Mises and Friedrich Hayek for example continually used the word " socialism " as a synonym for state socialism and central planning.

Hayek whose ideas about spontaneous order and inability of government central planners to create thriving economies are seen in the Center ’ s criticism of targeted tax credits and corporate subsidies used by government economic development bureaucracies ; and James M. Buchanan, whose work in public choice economics has informed many of the organization ’ s critiques of state government programs.

The Road to Serfdom is a book written by the Austrian-born economist and philosopher Friedrich von Hayek ( 1899 – 1992 ) between 1940 – 1943, in which he " warned of the danger of tyranny that inevitably results from government control of economic decision-making through central planning ," and in which he argues that the abandonment of individualism, classical liberalism, and freedom inevitably leads to socialist or fascist oppression and tyranny and the serfdom of the individual.

Significantly, Hayek challenged the general view among British academics that fascism was a capitalist reaction against socialism, instead arguing that fascism and socialism had common roots in central economic planning and the power of the state over the individual.

In his review ( collected in The Present as History, 1953 ) Marxist Paul Sweezy joked that Hayek would have you believe that if there was an over-production of baby carriages, the central planners would then order the population to have more babies instead of simply warehousing the temporary excess of carriages and decreasing production for next year.

He arranged for translation and publication into a variety of central and eastern European languages of textbooks in economics and law, as well as seminal works by Ludwig von Mises, F. A. Hayek, Milton Friedman, and other thinkers in the libertarian and liberal traditions.

As a thinker in what Hayek called the “ critical rationalist ” philosophical school – that is the more empirical one as contrasted with the “ constructivist rationalism ” of a ` priori deductivism – Meyer ’ s understanding of world history is central to his philosophy.

The problem of planning production is the knowledge problem explained by Hayek ( 1937, 1945 ) The planning could either be done in a decentralised fashion, requiring some mechanism to make the individual plans coherent, or centrally, requiring a lot of information.

Hayek ( 1937 ) defined an efficient planning process as one where all decision makers form plans that contain relevant data from the plans from others.

In 1947, 39 scholars, mostly economists, with some historians and philosophers, were invited by Professor Friedrich Hayek to meet to discuss the state, and possible fate of classical liberalism and to combat the “ state ascendancy and Marxist or Keynesian planning was sweeping the globe ”.

Hayek argues that Western democracies, including the United Kingdom and the United States, have “ progressively abandoned that freedom in economic affairs without which personal and political freedom has never existed in the past .” Society has mistakenly tried to ensure continuing prosperity by centralized planning, which inevitably leads to totalitarianism.

Eric Zencey wrote that the free market economy Hayek advocated is designed for an infinite planet, and when it runs into physical limits ( as any growing system must ), the result is a need for centralized planning to mediate the problematic interface of economy and nature.

Although he spoke with apprehension at his award speech about the danger which the authority of the prize would lend to an economist, the prize brought much greater public awareness of Hayek and has been described by his biographer as " the great rejuvenating event in his life ".

Conservatives, he says, are not averse to change – but like Hayek, they are highly averse to change being imposed on the social order by people in authority who think they know how to run things better.

Writing for the Naples Daily News, Steve Schmadeke, notes, " it's also true that his system of governance, in which authority is given to the expert in each field — in this case, specially programmed computers — is one that many writers, including Nobel-prize-winner Friedrich Hayek, have shown to be disastrous.

F. A. Hayek wrote that Hobhouse's book would have been more accurately titled Socialism, and Hobhouse himself called his beliefs " liberal socialism ".

Friedrich von Hayek responded that the system of equations required too much information that would not be easily available and the ensuing calculations would be too difficult.

Hayek responded by arguing that the simulation of markets in socialism would fail due to a lack of genuine competition and entrepreneurship.

Through analysis of this and other of Hayek's works, Block purports, " in making the case against socialism, Hayek was led into making all sort of compromises with what otherwise appeared to be his own philosophical perspective – so much so, that if a system was erected on the basis of them, it would not differ too sharply from what this author explicitly opposed.

On 9 October 1974, it was announced that Hayek would be awarded the Nobel Memorial Prize in Economics, along with Swedish socialist economist Gunnar Myrdal.

Hayek argued that his ideal individualistic, free-market polity would be self-regulating to such a degree that it would be ' a society which does not depend for its functioning on our finding good men for running it '.

Hayek felt that application of Keynes's policies would give too much power to the state and would lead to socialism.

Erhard wrote, “ I would like to frankly acknowledge that my own contribution to this effort social market economy -- R. P. would not have been possible without Walter Eucken, Franz Bohm, Wilhem Ropke, Alexander Rustow, F. A. von Hayek, Alfred Muller-Armack, and many others who joined me in thinking and debating ”.

Hayek did not believe that a complete lack of coercion was possible, or even desirable, for a liberal society, and he argued that a set of traditions was absolutely necessary which allowed individuals to judge whether they would or would not be coerced.

Friedrich Hayek would argue that this is knowledge which could not be provided as a " given " by any " method " yet discovered, due to insuperable cognitive limits.

Hayek derived the word " Catallaxy " ( Hayek's suggested Greek construction would be rendered καταλλαξία ) from the Greek verb katallasso ( καταλλάσσω ) which meant not only " to exchange " but also " to admit in the community " and " to change from enemy into friend.

People would say that she was much influenced by Karl Popper or Frederick Hayek.

It was only in the 20th century that the relative sophistication found in Smith ’ s work would be reformulated by economists such as Friedrich Hayek, Joseph Schumpeter, and Milton Friedman ( of the Chicago School of economics of the 1960s and 1970s ), resulting in a recipe for a free-market economy:

Although Hayek believed that government intervention in markets would lead to a loss of freedom, he recognized a limited role for government to perform tasks of which free markets were not capable: