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BUSINESS PEOPLE

BUSINESS PEOPLE; Neglected Economist Honored by President

BUSINESS PEOPLE; Neglected Economist Honored by President
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November 19, 1991, Section D, Page 4Buy Reprints
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For years, Friederich von Hayek was a prophet little honored in this land. In a 1944 best seller, "The Road to Serfdom," the Austrian-born economist warned the West that socialism -- whether German Nazism, Soviet Communism or the "gentler and kinder" British brand -- would inevitably lead to poverty and loss of liberty.

An ardent opponent of most government intervention in the economy, Mr. von Hayek, though respected for early contributions to monetary theory, was all but ignored by other economists for 30 years after World War II as Keynesian thought became a dominant intellectual force, the European social democracies boomed and the Soviet Union and other centrally planned economies scored impressive feats of industrialization. Even after he won the Nobel Memorial Prize in Economic Science in 1974, Mr. von Hayek's following in the United States consisted mostly of a small band of monetary economists and libertarians.

With the collapse of Communism in Eastern Europe, all that has changed. Mr. von Hayek's views on the economic inadequacies and political ills of central planning are now those of the mainstream. Yesterday, President Bush awarded the 92-year old Mr. von Hayek, a British citizen, the Presidential Medal of Freedom, the nation's highest civilian honor.

"More than almost anyone else in the 20th century, this guy was vindicated by the events in Eastern Europe," said Austin Furse, director of policy planning at the White House. Mr. von Hayek has a wide following among Eastern European economic reformers, he noted, including Vaclav Klaus, the Finance Minister of Czechoslovakia.

Once described as "articulate, austere and infinitely urbane," Mr. von Hayek was born in 1899 into a Viennese family of academics and civil servants. He eventually left for the London School of Economics, where he lectured throughout the 1930's and 40's. When Keynesian thought triumphed and his own reputation as an economist went into eclipse, Mr. von Hayek turned to philosophy and psychology, which he first taught at the University of Chicago, then in Salzburg, Austria, and finally in Freiburg, Germany.

Conservatives have been urging President Bush, who picks the Medal of Freedom winners himself, to honor Mr. von Hayek. The Nobel laureate's son, a British physician, was on hand at the ceremony yesteray to accept the medal on behalf of his father, who lives in Freiburg and has been ill for several years.

A version of this article appears in print on  , Section D, Page 4 of the National edition with the headline: BUSINESS PEOPLE; Neglected Economist Honored by President. Order Reprints | Today’s Paper | Subscribe

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