The Collected Works of F.A. Hayek. Vol. 5: Good Money, pt. 1: The New World; Vol. 6: Good Money, pt. 2: The Standard (review)

The Collected Works of F. A. Hayek. Edited by Stephen Kresge. Vol. 5: Good Money, pt. 1: The New World. xii; 260 pp. $45.00. Vol. 6: Good Money, pt. 2: The Standard. x; 260 pp. $45.00. Chicago: University of Chicago Press, 1999.

The publication of the collected works of Friedrich Hayek is an important—indeed necessary—enterprise. Much of Hayek’s early work is in German, and that available in English translation is widely scattered. From the point of view of those interested in the history of economics, however, the edition so far has suffered from the preoccupations of the founding editor, the late W. W. Bartley III, who planned the series of volumes. He published first, in 1988, an entirely new work, The Fatal Conceit, a manifesto against socialism, which Hayek wrote late in his life and which had not been previously published. He intended this to be followed by The Uses and Abuses of Reason: The Counter-Revolution of Science and Other Essays, which has not yet been published, and then two volumes of historical and biographical essays. The edition was to continue with four volumes “encompassing the bulk of Hayek’s contributions to economics [to be entitled] Nations and Gold; Money and Nations; Investigations in Economics; and Monetary Theory and Industrial Fluctuations” (Bartley 1988, xi). The two books under review are the first pair of the quartet; they have appeared after the ninth and tenth volumes of the original conception, which include essays and correspondence relating to Hayek’s “battles” (Bartley’s word) with Keynes and with socialism. These were published in 1995 and 1997. It is therefore only now that economists interested in Hayek as an economist can begin to see the development of his thought from the beginning.

Friedrich August von Hayek was born in Vienna on 8 May 1899. He served with the field artillery of the Austro-Hungarian army on the Italian front before studying law and economics at the University of Vienna from 1918 to 1921. His first employment was in a government agency set up to deal with financial clauses of the peace treaty. He wrote his doctoral dissertation on the theory of imputation before he obtained leave from his government job to spend just over a year (March 1923–May 1924) in the United States, where he worked in New York as a research assistant to Professor Jeremiah W. Jenks for six months and registered as a doctoral student at NYU. He also attended lectures and seminars at Columbia, including the lectures of Wesley Mitchell. His interests in monetary theory and monetary history date from this period, as well as his acquaintance with statistical methods for analyzing and forecasting business cycles. This, and his friendship with Ludwig von Mises, whom he first met when he applied for the government job, led to his appointment in 1927 as director of the newly created (by Mises) Austrian Institute for Business Cycle Research (Hayek 1994, 45–69). By 1929 he had written his first book, Geldtheorie und Konjunkturtheorie (published in an English translation in 1933 with the title Monetary Theory and the Trade Cycle), with which he obtained his Privatdozentur, and began to lecture at the University of Vienna. He had also commenced a long monograph on monetary history and the origins of monetary theory, which he never completed. In the summer of 1930 he was invited by the University of London to give four lectures (as part of the Advanced Lectures in Economics series) at the London School of Economics in the Lent Term of 1931; according to Hayek (1994, 74–75), this was at the suggestion of Lionel Robbins, the professor of economics at LSE, who had been impressed with Hayek’s critique of the underconsumptionist theories of the Americans William Trufant Foster and Waddill Catchings published in the new journal...