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Hayek’s new ideas and present-day ones

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  • Edmund Phelps

Abstract

This paper reexamines key themes in Friedrich Hayek’s work, including his early macroeconomics and work on overinvestment, as well as his critiques of socialism and corporatism. The paper argues that Hayek’s concern was over economic efficiency rather than innovation. Hayek viewed innovation as exogenous to the business sector, as did Schumpeter. A likely reason for his resistance to innovation as indigenous to the business world was his unease about a theory of the capitalist economy in which the future is indeterminate. Viewing innovation as rare and exogenous helped to minimize the problem of indeterminacy in his economic model. While Hayek’s great ideas will continue to be revered, economic scholarship must now build an economics that gives central place to indigenous innovation in determining a modern economy. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Edmund Phelps, 2015. "Hayek’s new ideas and present-day ones," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 28(3), pages 253-256, September.
    • Handle: RePEc:kap:revaec:v:28:y:2015:i:3:p:253-256
    DOI: 10.1007/s11138-015-0308-x
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    References listed on IDEAS

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    1. Edmund Phelps, 2015. "Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge, and Change," Economics Books, Princeton University Press, edition 1, number 10058-2.
    2. Oskar Lange, 1936. "On the Economic Theory of Socialism," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 4(1), pages 53-71.
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    More about this item

    Keywords

    Adaptation; Indeterminacy; Overinvestment; Socialism; Corporatism; Exogenous innovation; JEL Code; B2; B3;
    All these keywords.

    JEL classification:

    • B2 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925
    • B3 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals

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