Abstract
F. A. Hayek (1899–1992) was an Austrian‐British economist and political scientist, best known for his work on business cycles and on spontaneous social orders. He explained business cycles as market disruptions caused by monetary policy mistakes, giving investors the “false signal” of artificially cheap credit, causing them to lengthen the capital structure unsustainably. On spontaneous orders, he argued that many human institutions, such as language, the common law, and markets, evolve without conscious design. We may not fully understand the rules (e.g., grammar), and they can be more complex, and process more information, than any single mind could comprehend. This, he explained, is why the “fatal conceit” of trying to impose a plan on such orders can prove so disastrous.
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