Juliette Sellgren 

Science is the great antidote to the poison of enthusiasm and superstition. Hi, I'm Juliet Sellgren, and this is my podcast, the Great Antidote named for Adam Smith, brought to you by Liberty Fund. To learn more, visit www.AdamSmithWorks.org. Welcome back. Today on September 27th, 2024, we're going to be continuing our series on Hayek, celebrating the 50th anniversary of his Nobel Prize. Now, you've probably heard me say this like three or four times at this point, but this is one of the last ones. I am so excited to invite Bruce Caldwell to the podcast today to talk to us about Hayek's life and who Hayek was. He is a research professor of economics at Duke and the director of the Center for the History of Political Economy, which sounds super-duper cool. He's also the biographer of Hayek, which we'll talk about obviously. But most recently, I think, correct me if I'm wrong, he's co-authored the book Hayek: A Life, which is out in its first volume and there's a second to come. So welcome to the podcast.

Bruce Caldwell 

Very happy to be here. Very happy indeed.

Juliette Sellgren 

So first question, what is the most important thing that people my age or my generation should know that we don't?

Bruce Caldwell (1.27)

Well, I've thought about that question since you were nice enough to give it to me in advance. And I would say the thing that you should know that you don't is that, and this is good news, there's not really an existential crisis looming in your future. I say that based on ideas from Hayek. Surprise, surprise. He had a good relationship with a man named Julian Simon, who is one counterpart to a debate with Paul Ehrlich that has written up in a book called The Bet that I recommend to your listeners. And Simon was one of these people who was optimistic in the same way that Hayek was, Paul Erlich was gloom and doom, Population Bomb was his book. And then he was worried about running out of resources and he was worried about this and that and how we're just going to hell in a hand basket because of bad decisions that people make.

And he was going to correct it all and had recommendations for this. And we have similar sorts of things these days in terms of climate crisis and all that stuff. And what it fails to recognize is something that Julian Simon emphasized, which is the ingenuity of humans to adapt to new circumstances. I'm not saying that there's not perhaps going to be extensive climate change, but people adapt to these and it's the anticipation of trying to change things because you think the world is always going to be the same static world that it is today without the new knowledge that is always being produced is what misleads people into thinking the future is glum, bleak, and horrible. So be optimistic. That would be my message to young people. If you're not some I'm sure are, but from all reports, your generation is the generation that worries about the future more than most have. So I'll stop there.

Juliette Sellgren (3.37)

It's funny because it's so relevant, especially talking to you about this right now and that this is your response because it's true that my generation, for whatever reason, we're really preoccupied with this, probably because we literally have nothing else to worry about because we're so well off, right? Because this fact is true really, which is kind of ironic. But also this is kind of the exact, I mean, as you were mentioning, the debates and the problems that they were facing at the time and the conversations and the socialist calculation debate and all of that were exactly conversations about this, but not from the anxiety felt by a generation. It seems, at least to me, so much as what is the ideal economic system. So in a way, they're going about it more intellectually than freaking out. And maybe that's not true, but it is particularly relevant because I do think a lot of the conversations that Hayek was probably having were related to this question.

Bruce Caldwell (4.40)

Let me just follow up on that just briefly before we get to his life. Because Otto Neurath, who is somebody who was a socialist, the person that provoked [Ludwig] von Mises into writing the article and then the book criticizing socialism in the early twenties, he was reacting to Otto Neurath, who was a philosopher of science who was also a socialist, and he was a big advocate of planning was Neurath. And one of the things that he was worried about was them running out of fuel, running out of coal. And so one of the papers that he wrote was saying, okay, what we need to do is really restrict the usage of people of coal. We should restrict the usage of coal only to industrial producers, and we're just going to cut back on everyday. People just have to suck it up. They have to live a bit more frugally.

But this is so that we can ensure that we'll be able to produce the goods and services that we need in the future. Absolute malarkey. Absolute malarkey. I mean, the coal has been, there was, back in the 1880s, 1890s, William Stanley Jevons was also worried about running out of coal. This guy was riding in the 1920s. It's all about energy and there's always been fear that we're going to be running out of energy. In my lifetime. This was one of the things that was associated with the Arab OPEC oil embargo in the 2000 and tens is recently as a time period when your listeners were alive, there was a book came out that was called Peak Oil. We're running out of oil, of course there was fracking. There was a new innovation that now we're awash in oil, but it's always this fear that we're going to be running out of stuff and that the future is bleak. It's, it's hard to argue against it because people extrapolate from where we are right now with whatever trends they see existing right now, but it always fails to take into account the ingenuity of people, which is, it's something that we've got

Juliette Sellgren (6.51)

What I'm wondering about, so a lot of conversations, I think people who think critically who think a lot about their intellectual lineage, so then people who come on this podcast, classical liberalism, et cetera, it ends up being kind of about this in a sense. But I'm wondering, as someone who focuses so much on history, how do you approach this? What seems to me is a fact that we keep almost forgetting or it's a new generation, so we keep rehashing the same conversations and the same debates and the same fears and all of that. And I don't know, how do you maintain optimism given that even though it always ends up fine, people seem to never learn in a way of, there's a new application of the same fear from before. And even though it got resolved, we don't apply it. Any thoughts?

Bruce Caldwell (7.51)

So I think it's just every generation has to learn the lessons anew. There's no question about that. And as a teacher, I taught Econ  101, oh gee, is 40 years probably something like that. And if you take a look at the popularity of say, some economic policy that in Econ 1 0 1, you're able to show that it doesn't really accomplish the goals that people hope, like a minimum wage law or rent controls, that in fact it causes harm to the very people that you most want to help. Yet the popularity of those positions always seem to be, yeah, for minimum wage law, something like 80% of the electorate always are in favor of it after years and years of Econ 101 being taught. So I mean, it kind of makes me feel like, well, thank goodness at least we are teaching econ 101 so that some people in that classroom are going to have a different view.

But it's true, these debates go on forever. Hayek experienced that personally. He thought he had laid socialist planning to bed. And in the 1970s, Wassily Leontief famous economist, Nobel Prize winning economist, was testifying before Congress calling for extensive economic planning. So it is something that is just these debates go on and went on before me and will go on after me. Same for all of us. But it is, it's important to have the debate though. That's the point. It's important to have the discussion, and that's what podcasts like this and the university and engaging your friends in conversations is all about.

Juliette Sellgren (9.42)

So in light of this question and answer, and then just personally, why Hayek?

Bruce Caldwell (9.51)

Yeah. So how did I get involved in Hayek?

Juliette Sellgren (9.55)

Is that what you're asking? Yeah. And why I think a lot of people, especially kind of in the economic tradition, political economy, all of that know Hayek and have spent some time with Hayek. But you've spent a lot of time with Hayek.

Bruce Caldwell (10.07)

Oh, yes. Well, I did. Well, I mean, I got involved initially because I was interested in the methodology of economics, and Hayek wrote something about that, about what is it that makes, is economics a science? What does it mean for something to be a science? These sorts of questions. And Hayek has some very interesting answers to them. So that was my initial entree. But in the course of that, I had two really interesting experiences. The first one was I attended a summer school out in Boulder, Colorado, which is a beautiful, beautiful place to have a summer school. And there was, it spread over about 10 or 11 days, two lectures a day, 20 lectures in total. And it was right after I had gone through grad school and grad school, and economics is really rigorous, and I found it boring for the most part except when I was doing the stuff that I was most interested in.

But this was a two-week seminar on Austrian economics and had some great teachers. Jerry O’ Driscoll, Roger Garrison, Israel Kirzner in the late seventies. And I felt I'd learned more in two weeks in that seminar than I had in four years of grad school. So that really got my interest going on Austrian economics in general. And I then went on from there to spend a postdoc year at NYU, which is where O Driscoll and Kirzner were, and Larry White there. There's a whole bunch of people whose names would be familiar to people who know the classical liberal tradition in economics in particular. So I kind of got introduced into that community. And then in terms of Hayek specifically, I explored some of the ideas that he had. And then I was working, I went out to actually do a paper on Karl Popper and Popper and Hayek's relationship to the archives, Hayek archives out in at the Hoover Institution in Sanford University and working in the archives. I had never done that before. And you get in there, and we have a great archival collection, by the way, at Duke where I direct this center. So I'm still doing this stuff and encouraging other people to come here to do it. Not in Hayek's papers, but other people's papers.

Juliette Sellgren 

Hey, I'm interested.

Bruce Caldwell (12.34)

Yeah. Oh, it's very, very cool. So I mean, just feel it, Juliette, you're sitting there and you're holding in your hands the physical copy of a letter between John Maynard Keynes and Friedrich Hayek between Karl Popper and Friedrich Hayek and looking at their exchanges. And I'll tell you, it also enables you to really see what the person's doing at the time they're making their arguments. As a scholar, I was learning Hayek's work, what his ideas were, but to see the papers and the correspondence that he's writing as he's developing those ideas is really something quite different. You really get a sense of who he was debating with and what the arguments were and why he was doing it. It allows you to motivate a story that you can tell about the person. That was another wonderful experience. I had done a couple of papers on Hayek.

I had done a couple of volumes in the Hayek Collected Works. So the third thing that really got me fully hooked was I was invited to become the general editor of the Hayek Collected Works. And in doing that, I got to meet his family, his daughter, and his son. Hayek, by that time was dead, early two thousands, I met Christina's daughter and his son Larry. And Larry took me up into his office on meeting him and showed me all of this family memorabilia, I mean an enormous set of things, all sorts of an album that Hayek had created of pictures of flora, of various kinds that he was taking when he accompanied his father, who was a big botanist on trips when he was age 16, all carefully labeled, his skis, a copy of the Road to Serfdom manuscript form. One of the last copies before the final copy, family photographs, all sorts of maps from World War.

I thought they were mountain climbing maps, but there were maps from the front when he was in World War I on the Italian front. And it struck me at that point, geez, I know a lot about this guy's ideas, and now I'm meeting the family, and of course there's all these letters to letters back and forth. I thought, yeah, I could actually do the biography here. So that's what got me fully into it. That was 20 years ago. And the book that you mentioned that we will talk a little bit about Hayek’s life, the first volume covers 1899 to 1950, the first half of his life. And it was just getting to know the family and getting to see all this great material that really motivated me to go in full bore. So full Monty all the way through.

Juliette Sellgren (15.29)

And there's something so realistic. I've been thinking a lot about reputation and image and thinking about putting things out into the world, and that's kind of weird. And a podcast is kind of a cool medium. You get to reveal more of yourself than in written writing, just by nature of it being a different medium. And it's kind of different. There are limitations. There are things you can say in writing, you can be more clear about your thought process, but there's less of you, at least in the explicit, observable, whereas the context, everything, the photos and the skis and all of it, and the letters, that is so important. And I don't know, it's just been something that I've been noodling over having a reputation online. And obviously it was more than online in Hayek’s time, but today having something out online and actually being a real person and thinking about, okay, well cancel culture is kind of this disconnect between your ideas and who you are and understanding that there's a person behind that. So that is fascinating, and I want to kind of fold that in as we continue, but how does it feel being called Hayek’s biographer? You kind of step into this role. Does it feel cool to say I own that?

Bruce Caldwell (17.00)

It definitely feels cool, although I'm not the only biographer. I have a co-author, Hansjoerg Klausinger, and was very much, this book was very much a joint project because Hansjoerg lives in Vienna where Hayek was born and was spent through his late twenties. And Hansjeorg is wonderful contributor to this book. So we're both his biographer in that respect. And I'll just say what a great experience it was working with Hansjeorg, because he was someone who was able to go into all the details of Hayek's life in Vienna. He went to the schools, Hayek kept having to change schools because his father was a medical officer in the Viennese Health Department. And every time he got a promotion, he would be in another district and they'd have to move to another apartment. And so he went and found all of the schools and all of high school records saw how he didn't school.

Now, some of this made it in the book, not all of it, but mean. So part of being a biographer is really just trying to get inside the person's life and find out all these things. Even if you don't recount every detail of it, it does allow you to get a better sense of who the person was. In the end, I think I probably know more about his family than I ever did about my parents and their extended families. It's just something that you do to get into it. So it feels real good to be his biographer to answer your question, but I did want to just say that it's not just me who's doing this work, and there's lots of other Hayek experts out there as well.

Juliette Sellgren (18.45)

Yeah. So how, this is kind of following off of that, did it feel not weird, but was there kind of a disconnect in certain ways where your coauthor understood certain things just being in Vienna and being there that you didn't have as much access to being an American?

Bruce Caldwell (19.07)

Absolutely. I don't read German. So when I started to get into studying Hayek, I thought, geez, I need to learn German. I took a semester's worth of German at the university I was teaching at, and I thought, this isn't going to do it. I'm too old to be learning a new language, and I don't know the culture and I don't know all these other things. And so when I invited to join me in this project, I mean, it was a very much of a match made in heaven because he's not only knows German, he knows Vienna, which is where Hayek was from. He knows that aspect of Germanic culture and knows the history. So a lot of what the biography is placing Hayek in specific moments in time, in specific places. And so just as he knows Vienna, I spent some time at the London School of Economics. I spent a semester on a fellowship at Cambridge, which is where the LSE evacuated to.

I was the person who interviewed Hayek's children to a great extent. And with Christine, Hayek's daughter, with whom I established a really nice relationship. I really liked this woman. She was hilarious and very honest, very upfront. And I took her to where she had grown up the Hayek Family home in Hampstead Heath, Gold Green Hampton Garden suburb, that was the name of the actual neighborhood. And I walked around and she says, oh, the trees have grown up, but you can see over there, that's the clock I used to look at when we were playing outside. And when it would get to six, we knew we had to come in. So it was just great getting into the spaces, not only the ideas, but the spaces that people occupied to see what it was like. It really made it a very rich experience that way.

Juliette Sellgren (21.19)

Yeah, that's so awesome. So okay, I think we always start with Hayek. We're like, oh, Hayek and Mises, but who is Hayek? Before he met Mises, who was he as a kid growing up? I think the thing that I've realized in talking to a lot of people about Hayek is that I don't even think, and I think a lot of people would agree that you can't really just call him an economist because he had so many interests. And I just naturally go, oh, well, that starts in childhood. You have to have been surrounded by so many different stimuli, and I mean, your brain turns the world into things to study and things to be excited about. But what was he surrounded by growing up?

Bruce Caldwell (22.06)

So he grew up in a very academic sort of family, although his father was not until very late in his life, affiliated with a university as a university position. He always longed for that. And many of the people that they hung out with were people who were affiliated with the university. So it was a scientific family. He was the eldest of three boys, and his father was a medical doctor, as I said, but his passion was botany, and he had an extensive herbarium. He organized a club of people who would come and give lectures about various topics. So he was constantly learning stuff through the family. When they would go on their summer outings, summer vacation period, the father would work for most of the time, but usually be able to spend a month. And they'd always go to the mountains and they'd go hiking.

They'd identify not just flowers, but various geological formations, all different sorts of things collect. He said he had lots of collections of bugs. His daughter became a Beatle expert of all things. Wow. Yeah, so I mean, it was that kind of family. And the education system in which he grew up in was very formal, and he didn't fit in very well. He was the smartest kid in the class always, but he was lazy, and his teachers really were angry about that. And in one case, he was actually kept back because what they had were exams at the end of the year, and he would not do his homework. He would piss off the teachers, and then at the end of the year, they'd have their exams. And this one year he thought he could study up at the last minute and didn't make it through a couple of the subjects.

So they made him repeat a grade, which was just, I mean, Einstein also I think had a similar situation. The kind of secondary school and primary schools at that time in those countries was very strict and formal, and he was much too much of an independent spirit to get much out of school. But he learned a tremendous amount outside of school and just in his family. So yes, he wasn't an economist at that point. He was just a kid learning all these things. He did go and fight in World War I, the very end of the war at last year. He was on the Italian front. He saw some action, but very little. Most of the action he saw was at the very end of the war when the Austro-Hungarian forces were retreating back towards Vienna. He got there just after a big offensive had taken place.

(24.55)

So he was the offensive, ended up on this river in Italy called the pve [?] which is very wide. And both sides just sat there. There was not any action. They were just observing each other from both sides of a very long, very wide shallow river. And so it was mostly bored during the war. That's what a lot of wartime situations are like, the months of boredom and then intense periods of terror. So he goes to the University of Vienna after the war and gets trained as a lawyer basically. And if there wasn't an economics curriculum the way there is today, and this is also true even today in some German universities, that if you wanted to study economics, you might study law and get it as a side. So he basically got two degrees. The first one was a law degree, the second one was a degree in state sciences for which economics was part of it.

But he then met Ludwig von Mises, although he had sat in on a seminar of Mises when he was at university. He met him through this agency that had been set up after World War I that was trying to adjudicate and resolve all sorts of debts that were between different countries that all had to be settled up after the war was over. And that was where he got to know von Mises and, Mises's book on socialism came out. Von Mises had written on monetary economics and now on socialism. And those were the two areas that Hayek really started to work in early on as an economist. Those were the two areas that he also contributed to. So in that regard, he was very much like Mises. He frequently would say in later interviews that he tended to agree with von Mises, but he wasn't always comfortable with how Von Mises got to his conclusions. So he wanted to rethink the way that Mises got to specific conclusions. And I think that that's actually a very good sort of training when you're trying to think, are there other ways to make these arguments? Are there other ways to see this particular phenomenon? So I think it was a very fruitful relationship right from the beginning. And it continued throughout their lives. Typically said that Hayek was his, I don't know if he used the word favorite student, but he certainly was someone that he remained close to throughout their lives.

Juliette Sellgren (27.40)

And I didn't think to make this connection until you said it, and I'm sure this is playing out in the back of your mind as you were speaking, but the fact that he begins surrounded by science, and then he goes and he questions kind of the methodology really of Mises. I don't even know if you would necessarily call a train of thought or logic methodology, but in a way it kind of is. And that is a lot of what he's concerned with. One of the big areas he's concerned with is how do we reach our conclusions? How do we deal with x? What is economics? And we were kind of talking about this earlier, but is that, I don't know how much of it, I don't even know really how to phrase this anymore, but it seems so clear.

Bruce Caldwell 

Lemme…

Juliette Sellgren 

Jump in.

Bruce Caldwell (28.36)

So one area that I think that Hayek differed with Mises was in terms of, if you think of Von Mises’ Human Action as, starting chapters first seven chapters of that where he talks about praxeology and the method of logical science and it's axiomatic. And he talks about if you get the logic right, the conclusions follow with certainty. And this was something that Hayek thought didn't really apply. It wasn't an argument that he agreed with in terms of exploring social phenomena and market phenomena, and for Hayek, assumptions that we make about knowledge end up being something that's separate, that's not part of that aorist reasoning. So they had a disagreement, I think about that. It was never out in the open in their discussions with each other, but I think it's pretty clear from their exchanges, the correspondence and also the articles that Hayek wrote, that aspect of it he didn't quite agree with.

So that's one area where I think there is differences. But if you speak to other people who are within the Austrian tradition, some will emphasize that some will minimize it. Pete Boettke, somebody who tends to minimize it, he has a famous phrase that he tells all his students, you must read Mises with Hayek eyeglasses on and read Hayek with Mises eyeglasses on, which is his way of trying to say, no, you can, they're complements to one another. Other people don't accept that reading. But I think historically, just as an historian looking at it, it's clear that Hayek had disagreements on some of that methodological aspect. Now that said, both of them I think were critics of the direction of mainstream economics throughout their lives. One reason I got interested in studying Hayek was my interest in his methodological views and those of Mises. And it was because I thought, well, basic economic reasoning of the sort that I got as an undergraduate in my undergraduate education made a lot of sense to me. But I got to grad school and it was all very quantitative and either theoretically mathematical or empirical mathematics and econometrics that I didn't see advanced our understanding, my understanding anyway of economics. That's why I said four years of grad school and two weeks of this Austrian seminar, I got more out of the latter.

And they are people who while accepting the basic economic reasoning, were questioning some of the approaches, the heavy emphasis on perfect competition, heavy emphasis on equilibrium theory, which remains in economics today as not really being an effective way to understand how a market order forms, how a market process works. So those were things that were attractive to me. And on that they're on the same page very much.

Juliette Sellgren (31.55)

And it's funny because I think if you read entirely, I mean there's an extent to which you can read Hayek and Mises with each other's of course,

Bruce Caldwell 

Yep.

Juliette Sellgren (32.08)

Thought processes, glasses on, I guess in mind. But also it's a conversation. There's a certain chronology to it that advances the way that we understand and the entire field, understands or hopes to understand certain aspects of human behavior or human action and the order that emerges. Who else was, well obviously, so there's Keynes, but who else was critical to Hayek's development in terms of what he was interested in and the lines of inquiry that he pursued and the things he was driven to talk about either as a continuation of a reaction to them?

Bruce Caldwell (32.54)

So the book Hayek: A Life, one of our major goals was to try to figure out how Hayek saw the world, how those views changed through time and what he was responding to that caused him to develop his views in the way that he did. And very often it's easier to see the people he was responding to, responding in a sense against he is born or raised rather in the Austrian school tradition, which had as their opponents the German historical school. So part of what the Austrian as a whole were responding to was the German historical school. But in 1923 and 24, after he had finished those two degrees, he goes to the United States, he spends 15 months there, he hates it. He's in New York, he says these people, he sends letters home the noise. These people are crass. All they think about is money. There's no culture here. They're over familiar. One thing after another standard European reaction, by the way, if you don’t…

Juliette Sellgren 

Oh totally.

Bruce Caldwell (34.12)

If you don't realize this to the United States, often people are too polite to say it to Americans, but certainly they say it to the people back home. So he was having that kind of reaction. But one of the people that he interacts with there is Wesley Clair Mitchell, who is a founder of American Institutionalism. So this is an indigenous American approach to economics that in many ways, from highest viewpoint anyway, was really similar to this German historical school tradition that he thought had been thoroughly discredited during World War I and subsequently, so here's the cutting edge stuff. Yeah, Columbia University, professor Wesley Clair Mitchell, he's giving his presidential address to the American Economic Association in 1925. So he is writing this when Hayek was there and certainly had these views in the classroom that Hayek was attending, he thought, gee whiz, here's a bunch of views that I thought were discredited, yet they're emerging here.

He gets to London in 1931. He's working at the London School of Economics, and the London School of Economics was founded by Socialists, Fabian Socialists in the 1890s. So one of the books that he writes is War Effort, as it were, that he starts writing and doesn't quite finish, is called the Abuse and Decline of Reason. And in that he's basically making the argument that scientism what he calls scientism, which is the attempt to appear scientific by using certain techniques that are really not appropriate for the study of the phenomena that you're interested in, that this scientism basically started to emerge in France around the time after the French Revolution and the Napoleonic era spread to Germany, spread to England and spread to the United States, and took really different forms in these different places. In Germany, German historical school are basically conservative imperialists in England, you've got Fabian Socialists in America, you've got Institutionalists who are basically progressives, part of the progressive movement, really different political and ideological standpoints.

But all of them had this great confidence that you can use science to reshape society as it should be. And this was a pernicious view in Hayek's mind because it had the hubris of reason and often set up political situations, political and economic planning, sorts of ways of organizing society that if malignant people got in control, could really have a lot of power. So it was these sorts of ideas that Hayek was reacting against as he became a more mature economist in the 1930s. If you think about the 1930s, just the Great Depression, you've got fascism emerging all over the continent. You had the emergence the decade before of the Soviet Union. It is a fraught world, as you said at the beginning of the podcast. Things are pretty good now. They weren't so good back then, and that's what he was dealing with and the ideas that he was trying to combat.

So that's a long answer to your question. But yes, trying to figure out what made him who he was. In many ways it was a reaction to the men of science to LSE professors that he disagreed with professors he had encountered at other places, that he's responding to their ideas with other ideas. One final thing I'll say, Juliette, one of the things that people, many of whom were disagreed with, Hayek said that he was, particularly in the classroom or the seminar room or in these debates, always was very polite, always gave his opponent the benefit of the doubt. In fact, Schumpeter made fun of him for going overboard in terms of attributing good motives to his opponents. This is in Schumpeter's review of the Road to Serfdom. So he was someone who took these ideas seriously, wanted to have a good give and take a good debate, believed what he believed in firmly, but believed in the importance of having a good discussion of ideas.

Juliette Sellgren (38.54)

And it's funny because in a way I see him, that makes so much sense to me because I see it as a representative of what a true, not just scientist, not just economists, not just philosopher, but really an academic, someone in pursuit of the truth. So he has this kind of exposure to science, this exposure to the abuse of reason and all of that. And he's just very well placed to be dispositionally in between all these things.

Bruce Caldwell 

Yes, it was his personality. There's no question about it. I mean, everyone friend and foe acknowledged that. And I mean, I think he was a liberal.

Juliette Sellgren 

Yes.

Bruce Caldwell (39.41)

Yeah. Basically he was a liberal, and that's part of the liberal set of, so I think he was born a liberal and discovered that he was one, and it was that sort of thing. And I think I have to say one of my interests in Hayek is that like Hayek, when I was in my college years, this was the early 1970s, there was a lot of talk revolution, counterculture, all the rest of this stuff had very long hair, was always buying into this stuff. But I always wanted to have reasoned debates with people. And that part was the liberalism. I wanted to hear what the people's arguments were, what reasons they had for the views that they had. And I think that this was always Hayek's view as well. He thought he was a socialist or kind of tended towards Fabian socialism when he was in college. And Mises helped awaken him from those days very much by the arguments that Mises came up with in his writings and in their interaction personally. But I think some people are constitutionally liberals and then they realize that they're perhaps classical liberals or new liberals or whatever, only afterwards. And that anyway was an aspect of his personality that really shined through during this period that we were investigating.

Juliette Sellgren (41.12)

So here's maybe a big question as we kind of draw closer to a close. How do you think that you understand Hayek differently after taking this time to look at all of the context and to really, I think it comes through when you read his actual published writing that he is dispositionally liberal, but I'm certain it comes through more when you learn this whole context. So that among other things, how do you understand and read Hayek differently now? Might be kind of a hard question to answer, but I don't know.

Bruce Caldwell 

So he had flaws and virtues, and I think that's what I learned in doing the biography.

Juliette Sellgren 

So he was a man.

Bruce Caldwell (42.07)

Yeah, exactly. A regular human being.

And particularly, so he ends up going, we end the biography in 1950, which is when he went to the University of Chicago, left the London School of Economics, but left behind his first wife and children. His children were, his son was a teenager finishing up secondary school and his daughter was already in college at the time. But yeah, this was something that he did because he was not, it's funny, this guy who writes so much about knowledge and information and importance of a price system and conveying this, he was not a very good communicator when it came to personal issues. So he ended up taking this move because when he went to New York, he had failed to mention to the woman that he loved that he loved her and for her to wait. So she didn't wait and she got married, had a kid. When he gets back, they realized, well, yeah, they were in love with each other.

And so for 25 years they're living with that and finally decide to act on it. And he wants to divorce his first wife and marry this other woman. So that caused a lot of pain for his family, for friends. It cost him his relationship, at least for a decade with Lionel Robbins, his closest friend in England. So was, I wanted to be able to tell that story. It was a story I had learned from his children, both Larry and Christine. And I wanted to share it in a way that was not salacious, but Hayek has admirers and he has people who hate him. And I wanted to be the one to tell that very sensitive story. On the other hand, he was heroic at various points in ways that I didn't realize and that you wouldn't get from his writings. When he was a student, there were various mass political parties that were being formed in Austria. His party was really kind of a liberal party.

One of the mass parties was Pan German. They were looking for union with German. Many of them had Aryan paragraphs. That means no Jews, no Jews allowed, no Jews wanted. There was a kind of Christian social Catholic party also often had Aryan paragraphs, no Jews allowed, the socialists didn't have Aryan paragraphs, but they also were sometimes using tropes of money, lenders, capitalism, this is all Jewish stuff. So all of these mass parties that were getting all of the support, very unsavory. And the party that he supported and his friend Herbert Firth supported- another buddy of his from the university- was had except Jews. I mean there was no area in paragraph, it was cosmopolitan in that way. It tended towards social reform, but it wasn't socialist. So it was kind of trying to pick out the liberal elements that might go together in a party.

This party went nowhere, by the way, in Austria. So the time period he was living in those kind of views that you shouldn't be prejudiced, that it was a party that supported, for example, universal male, female, adult suffrage. Not all parties had supported that as well. So it was what we would consider to be a legitimate party that didn't have any of the horrible aspects of the various other mass parties that everyone was voting for. So that was what made me think, yeah, early on he knew he was a liberal, and this continued on into the 1930s. So he's in London in the thirties when Hitler's coming on, when fascism is emerging, had emerged in Italy, Spain, Portugal. He is defending liberalism while his mother is in Vienna and his two brothers are working in Germany. And they were happy to be in Germany because you could get jobs there, which you couldn't get in Austria.

So one of them was pretty actively supportive, joined the party. Ultimately the Nazi party in the late thirties, mostly it appears from what we can tell to make sure that he didn't lose his job. That basically you're a civil servant. He was a medical doctor and a civil servant, and he's from Austria, not from Germany. So if he wanted to stay employed, he wanted to take the steps that he thought would do it. But meanwhile, Hayek is denouncing this. There are letters back and forth between them where he's saying, you idiots this guy, Hitler is bad. He's dangerous. And Hayek went to Vienna after 1938, which is when Germany invaded Austria called the SLU to check up on his friends to make sure they're okay. And he went back a couple of times and we know from Hans Jo's investigation of the records that the Gestapo had a notice out that if this guy comes back again, we want to detain him.

So he was personally brave and tried to support people who, some of the people that he helped get out of Austria, where people who were ideologically, yeah, they were socialists, but they were in danger. They were in trouble, and he was trying to help people who he respected intellectually, even if he disagreed with them on other grounds to escape the madness that was taking place on the continent. So I really came to and talk about how that changes your reading when you read the road to serfdom the chapter on how the worst get on top and talk about how people like Hitler would appeal to the most base instincts of the electorate. Yeah, he's writing that. Meanwhile his brothers are over there in Germany, he's thinking about them. I have to say, when he's writing these words, how is it that people can be sucked in? Well, he was trying to explain some of that. So yeah, knowing the history does give you new eyes in the reading, but also new eyes on who's the person behind the words that are on this page.

Juliette Sellgren (49.00)

Wow. I mean, it speaks for itself. I think you spoke it. That is amazing, but also complicated.

Bruce Caldwell 

It's complicated.

Juliette Sellgren 

It's complicated for that, especially the last bit. It's just really amazing. Have one little question for you.

Bruce Caldwell 

Okay.

Juliette Sellgren 

Why end in 1950?

Bruce Caldwell 

Well, there'll be a volume too.

Juliette Sellgren 

Yeah, but why is this the cutoff point? I was just always curious.

Bruce Caldwell (49.34)

Yeah, so that's when the last paragraph of the book is that Hayek has now gone to America. He's about to start a brand new life left behind his wife and children, married a new woman, woman he'd known since they were children, new job, university of Chicago. He's entering Chicago just as a Chicago School of Economics and all that was being formed. So he's embarking going to a new world with a new life, new wife. And that seemed like the appropriate cutting off point.

Juliette Sellgren

Yeah, no, that does sound appropriate. Alright, I was just curious. I am looking forward to the next one. I have one last question for you.

Bruce Caldwell 

Sure.

Juliette Sellgren 

Thank you so much first for taking the time to share your wisdom. And with all of this and your knowledge, I've learned a ton, and I know my listeners will as well. What is one thing that you believed at one time in your life that you later changed your position on and why?

Bruce Caldwell (50.40)

Yeah, I struggled with this question. I think it means, it's a good question. So I was thinking of going the Santa Claus route, and that's one way to kind of duck it, but I thought let's maybe take it more seriously. But at the very end, I do want to prove to you that Santa Claus exists. So I'll say that as a thing. Well, I referred kind of almost directly to this earlier on. Yeah, I've been teaching economics for 45 years or so, maybe even longer. I was 30 years at UNC Greensboro, and this is my 17th year at Duke. And early on, I really thought when I'd hear an argument and I found it convincing, I thought, geez, that matters. I would change my minds about being vaguely socialist to being what I now understand as being a liberal. And I think getting my education in economics was a big part of that.

And then also going on to teach it helped convince me that some of these ideas were right. So I think I did change along those lines, but I also had kind of a confidence that other people were like that. And that if you telling them about basic economic reasoning, that it would make sense to them in the same way that it made sense to me. And as I said, the needle doesn't move when you ask about people's American public support for things like the minimum wage, lower rent controls, despite the Econ 101 being taught all over the country and world day in and day out. So I think I've become less optimistic and saddened by the fact that, yeah, arguments sometimes very good arguments just don't convince people. And I guess I was more optimistic that arguments would be something that would convince people. I was a great advocate, by the way, when I was your age of a carbon tax.

Carbon tax proposals had been around John Anderson in 1980, presidential candidate. One of the big things he ran on was a carbon tax, a really simple way to handle problems that have to do with the environment, but politically could never go anywhere. And that was just, it was something that really upset me. That could, arguments sometimes just don't work. That is something that, but it didn't make me be completely cynical. It did make me not vote for Democrats or Republicans going forward. I'd always vote for some third party afterwards. But let me prove to you that the other thing that I once believed was true, and then it came to believe not true. Then I heard this argument, so I'll leave you to this one. So it's kind of a syllogism. I'm give you a premise. So first premise is people who think the most about a topic are experts, and we should respect their opinion on it.

And I think that that's something that most people, maybe these days, there's more suspicion of experts, but often I think people would believe that. And the second thing is just a factual assertion. The people who think most about Santa Claus are kids. And the third premise is kids think Santa Claus is real. So if you put 'em all together, Santa Claus is real. There's an argument for you. There's a good argument. So hopefully this will convince all those listeners of yours who have given up their faith in Santa to rethink the problem. That's the best I can do, Juliette. So we'll go with the first one if you're not convinced about the Santa Clause.

Juliette Sellgren 

Once again, I'd like to thank my guests for their time and insight. I'd also like to thank you for listening to the Great Antidote Podcast. It means a lot. The Great Antidote is sound engineered by Rich Goyette. If you have any questions, any guests or topic recommendations, please feel free to reach out to me at great antidote@libertyfund.org. Thank you.