"It is hardly an exaggeration to refer to the twentieth century as the Hayek century," John Cassidy wrote in the New Yorker. The Cato Institute was proud to count him as a Distinguished Senior Fellow. We provided support for Hayek's research in his later years, during which he wrote The Fatal Conceit: The Errors of Socialism and lectured around the world. The Cato Institute's auditorium is named for him. Hayek won the Nobel Prize in Economics in 1974 for his "pioneering work in the theory of money and economic fluctuations and penetrating analysis of the interdependence of economic, social and institutional phenomena."
Hayek may have made his greatest contribution to the fight against socialism and totalitarianism with his best-selling 1944 book, The Road to Serfdom. In it, Hayek warned that state control of the economy was incompatible with personal and political freedom and that statism set in motion a process whereby "the worst get on top." But not only did Hayek show that socialism is incompatible with liberty, he showed that it is incompatible with rationality, with prosperity, with civilization itself. His essay "The Use of Knowledge in Society," published in the American Economic Review in 1945 and reprinted hundreds of times since, is essential to understanding how markets work.
Building on his insights into how order emerges "spontaneously" from free markets, Hayek turned his attention after the war to the moral and political foundations of free societies. The Austrian-born British subject dedicated his classic The Constitution of Liberty "To the unknown civilization that is growing in America." Hayek had great hopes for America, precisely because he appreciated the profound role played in American popular culture by a commitment to liberty and limited government. While most intellectuals praised state control and planning, Hayek understood that a free society has to be open to the unanticipated, the unplanned, the unknown. As he noted in The Constitution of Liberty, "Freedom granted only when it is known beforehand that its effects will be beneficial is not freedom." The freedom that matters is not the "freedom" of the rulers or of the majority to regulate and control social development, but the freedom of the individual person to live his own life as he chooses. The freedom of the individual to break old molds, to create new things, and to test new paths is the mark of a progressive society: "If we proceed on the assumption that only the exercises of freedom that the majority will practice are important, we would be certain to create a stagnant society with all the characteristics of unfreedom."
Although sometimes characterized by his critics as a "conservative," Hayek always maintained that he was in fact an old-fashioned liberal, a believer in individual liberty, constitutionally limited government, and the free market of ideas and of goods. A progressive society must always be open to innovation, at the same time that it rests on a stable foundation of rights and rules of just conduct. He entitled the postscript to The Constitution of Liberty "Why I Am Not a Conservative."