The beginning of the Austrian School of thought and the rejection of government intervention
Early Life
Hayek was born in Vienna in 1899 to medical doctor August von Hayek, who also gave lectures on botany part-time at the University of Vienna. His father’s career as a university professor and both his grandfathers as scholars greatly influenced Friedrich’s future goals. His father pushed him to pursue an academic career from a young age, and Hayek thrived in this environment. He showed great intellectual and academic capacity from an early age and read fluently and frequently before attending school. Much of his reading when young involved philosophical or economic principles, yet despite this young aptitude for academia, the future economist was at the bottom of his class in most subjects and even falling to the level of receiving three failing grades in one instance in Latin, Greek and Mathematics. However, he kept reading as a teenager and delved into the works of de Vries, Weismann and Feuerbach upon his father’s recommendation. He also found Goethe very interesting and described it as his most significant early intellectual influence. In 1917, Hayek joined the Austro-Hungarian army and fought on the Italian front during WWI. Unfortunately, he was injured and had impaired hearing in his left ear, later being decorated for his bravery.
Education
Friedrich studied at the University of Vienna, which was very helpful because it allowed students to choose their subjects freely, which meant not much obligatory written work or tests aside from the main exams after finishing the course. He mainly studied philosophy, psychology and economics initially. As he progressed, he became more focused on economics, primarily for financial and career reasons. In 1921 he received his doctorate in law and later in 1923 in political science. So, Hayek combined law and economics to prepare himself for work in diplomatic service.
Published Works
Hayek’s most influential work is his book ‘The Road to Serfdom‘ published in 1944 and was an instant bestseller, as it was highly relevant after the Great Depression in the 1930s and the Second World War raging throughout the globe. He criticised government intervention in markets and blamed this for the extended suffering experienced by many during the economic crisis. The book would later influence the likes of Ronald Reagan and Margaret Thatcher in their leadership. His other notable works include ‘Individualism and Economic Order’ published in 1948, ‘The Constitution of Liberty’ in 1960 and ‘Law, Legislation and Liberty’, which had three volumes published in 1973, 1976 and 1979. Margaret Thatcher was such a fan of his work that she reportedly interrupted a speech at the Conservative Research Department on taking a central approach by producing Hayek’s book ‘The Constitution of Liberty’ from her briefcase. She held it up, saying, ‘This is what we believe’ before slamming it on the table. Thatcher is one of Britain’s most revolutionising prime ministers, showing the vast sphere of influence Hayek and his theories held.
How did Hayek think economies should be run?
His book ‘The Road to Serfdom’ outlined his opinion on government involvement in markets in times of economic downturn, stating that the state should detach themselves entirely and allow the laws of supply and demand to adjust and enable the economy to recover automatically. He argued that printing more money or other attempts to mitigate the impacts would only worsen the crisis and that government schemes slowed down planning. He also claimed that central planning led to totalitarianism, as all decisions would be deferred to one individual. As a result, too much power would be allocated to this person in power, which would eventually transform into a dictatorship. Furthermore, he stated that one person couldn’t make all the right choices when making plans, as other factors like bias will cloud their judgment. He instead promoted governments with no interference in markets and with a democratic system both to elect the party and make the decisions fairly.
Economics 101 
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