Now, this dissatisfies the more-ambitious young men. They want to achieve a science which both gives the same exactness of prediction and the same power of control as you achieve in the physical sciences. Even if they know they won't do it, they say, "We must try. We ultimately will discover it." When we embark on this process, we want to achieve a command of social events which is analogous to our command of physical affairs. If they really created a society which was guided by the collective will of the group, that would just stop the process of intellectual progress. Because it would stop this utilization of widely dispersed opinion upon which our society rests and which can only exist in this very complex process which you cannot intellectually master.
Reason: In 1947 you founded the Mont Pelerin Society, an international group of free-market scholars. Has its progress pleased you?
Hayek: Oh yes. I mean its main purpose has been wholly achieved. I became very much aware that each of us was discovering the functioning of real freedom only in a very small field and accepting the conventional doctrines almost everywhere else. So I brought people together from different interests. Any time one of us said, "Oh yes—but in the field of cartels you need government regulation," someone else would say, "Oh no! I've studied that." That was how we developed a consistent doctrine and some international circles of communication.
Reason: U.S. News & World Report did a special cover story last year in which they interviewed eight leading social scientists from around the world, including yourself, on the question: "Is Democracy Dying?" What I found most interesting was that several of the other thinkers seemed to be reciting passages out of The Road to Serfdom in identifying the current crisis as a result of the involvement of the welfare state in vast areas of our formerly private lives. Do you see this thesis gaining academic adherents? Are more intellectuals beginning to understand the fundamental conflict between liberty and bureaucracy, so to speak?
Hayek: No doubt, yes. That the ideas are spreading, there is no doubt. What I cannot judge is what part of the intelligentsia has yet been reached. Compared with what the situation was 25 years ago, instead of a single person in a few centers of the world, there are now dozens wherever I go. But that is still a very small fraction of the people who make opinion, and sometimes I have very depressing experiences. I was quite depressed two weeks ago when I spent an afternoon at Brentano's Bookshop in New York and was looking at the kind of books most people read. That seems to be hopeless; once you see that you lose all hope.
Reason: You currently carry the torch for the Austrian school of economics, representing a great tradition from Carl Menger to Bohm-Bawerk to Ludwig von Mises to yourself. What is the most important way in which the Austrians differ with Milton Friedman and the Chicago School?
Hayek: The Chicago School thinks essentially in "macroeconomic" terms. They try to analyze in terms of aggregates and averages, total quantity of money, total price level, total employment--all these statistical magnitudes which, I think, is a very useful approach and even quite impressive.
Take Friedman's "quantity theory." I wrote 40 years ago that I have strong objections against the quantity theory because it is a very crude approach that leaves out a great many things, but I pray to God that the general public will never cease to believe in it. Because it is a simple formula which it understands. I regret that a man of the sophistication of Milton Friedman does not use it as a first approach but believes it is the whole thing. So it is really on methodological issues, ultimately, that we differ.
Friedman is an arch-positivist who believes nothing must enter scientific argument except what is empirically proven. My argument is that we know so much detail about economics, our task is to put our knowledge in order. We hardly need any new information. Our great difficulty is digesting what we already know. We don't get much wiser by statistical information except in gaining information about the specific situation at the moment. But theoretically I don't think statistical studies get us anywhere.
Reason: You have written that the main reason that the Keynesian explanation of unemployment was accepted over the classical explanation was that the former could be statistically tested while the latter could not.
Hayek: From that point of view, Milton's monetarism and Keynesianism have more in common with each other than I have with either.
Reason: You met Alexandr Solzhenitsyn at the Nobel ceremonies in Stockholm. How did you find him?
Hayek: I was strongly confirmed in my very high opinion of the man. He is a very impressive figure in addition to his works. But I had no chance to argue with him because he had just come out of Russia and his capacity for communicating orally was very limited.
Reason: What validity is there in his thesis concerning the collapse of the West?
Hayek: I think he is unduly impressed by certain superficial features of Western politics. If he believes, as he does believe, that what our politicians do is a necessary consequence of opinions generally held in the West, he really must come to that conclusion. Fortunately, I think, what the politicians do is not an expression of the profound belief of the more intelligent people in the West, and I hope Solzhenitsyn will soon discover that there are people who can see further than seems to be shown by the policies of the West.
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