[59] During Hayek's years at the University of Vienna, Carl Menger's work on the explanatory strategy of social science and Friedrich von Wieser's commanding presence in the classroom left a lasting influence on him.

[49] Upon the completion of his examinations, Hayek was hired by Ludwig von Mises on the recommendation of Wieser as a specialist for the Austrian government working on the legal and economic details of the Treaty of Saint-Germain-en-Laye.

[66] With the help of Mises, in the late 1920s, he founded and served as director of the Austrian Institute for Business Cycle Research before joining the faculty of the London School of Economics (LSE) in 1931 at the behest of Lionel Robbins.

[68] In 1932, Hayek suggested that private investment in the public markets was a better road to wealth and economic co-ordination in Britain than government spending programs as argued in an exchange of letters with John Maynard Keynes, co-signed with Lionel Robbins and others in The Times.

[71] Keynes called Hayek's book Prices and Production "one of the most frightful muddles I have ever read", famously adding: "It is an extraordinary example of how, starting with a mistake, a remorseless logician can end in Bedlam".

[84] At the instigation of editor Max Eastman, the American magazine Reader's Digest also published an abridged version in April 1945, enabling The Road to Serfdom to reach a far wider audience than academics.

[102] He regularly spent summers in Austrian Alps, usually in the Tyrolean village Obergurgl where he enjoyed mountain climbing, and also visited Japan four times with additional trips to Tahiti, Fiji, Indonesia, Australia, New Caledonia and Ceylon.

[122] Hayek gained some controversy in 1978 by praising Thatcher's anti-immigration policy proposal in an article which ignited numerous accusations of anti-Semitism and racism because of his reflections on the inability of assimilation of Eastern European Jews in the Vienna of his youth.

Writing to The Times, Hayek said: "May one who has devoted a large part of his life to the study of the history and the principles of liberalism point out that a party that keeps a socialist government in power has lost all title to the name 'Liberal'.

[127] Hayek supported Britain in the Falklands War, writing that it would be justified to attack Argentinian territory instead of just defending the islands, which earned him a lot of criticism in Argentina, a country which he also visited several times.

[130] In 1980, Hayek was one of twelve Nobel laureates to meet with Pope John Paul II "to dialogue, discuss views in their fields, communicate regarding the relationship between Catholicism and science, and 'bring to the Pontiff's attention the problems which the Nobel Prize Winners, in their respective fields of study, consider to be the most urgent for contemporary man'"[131] Hayek was appointed a Member of the Order of the Companions of Honour (CH) in the 1984 Birthday Honours by Elizabeth II on the advice of British Prime Minister Margaret Thatcher for his "services to the study of economics".

In his Prices and Production (1931), Hayek argued that the business cycle resulted from the central bank's inflationary credit expansion and its transmission over time, leading to a capital misallocation caused by the artificially low interest rates.

[149] In accordance with the reasoning later outlined in his essay "The Use of Knowledge in Society" (1945), Hayek argued that a monopolistic governmental agency like a central bank can neither possess the relevant information which should govern supply of money, nor have the ability to use it correctly.

[67] Eager to promote alternatives to what he regarded as the narrow approach of the school of economic thought that then dominated the English-speaking academic world (centred at the University of Cambridge and deriving largely from the work of Alfred Marshall), Robbins invited Hayek to join the faculty at LSE, which he did in 1931.

[151] According to Nicholas Kaldor, Hayek's theory of the time-structure of capital and of the business cycle initially "fascinated the academic world" and appeared to offer a less "facile and superficial" understanding of macroeconomics than the Cambridge school's.

[154] For Keynes, unemployment and idle resources are caused by a lack of effective demand, but for Hayek they stem from a previous unsustainable episode of easy money and artificially low interest rates.

[156] Kaldor later wrote that Hayek's Prices and Production had produced "a remarkable crop of critics" and that the total number of pages in British and American journals dedicated to the resulting debate "could rarely have been equalled in the economic controversies of the past".

This argument, first proposed by Max Weber and Ludwig von Mises, says that the efficient exchange and use of resources can be maintained only through the price mechanism in free markets (see economic calculation problem).

But if we tried to do so for the purposes of explaining human action, we would confine ourselves to less than we know about the situation.He notes that these are mutually exclusive and that social sciences should not attempt to impose positivist methodology, nor to claim objective or definite results:[172] Hayek's first academic essay was a psychological work titled "Contributions to the Theory of the Development of Consciousness" (Beiträge zur Theorie der Entwicklung des Bewußtseins) In The Sensory Order: An Inquiry into the Foundations of Theoretical Psychology (1952), Hayek independently developed a "Hebbian learning" model of learning and memory—an idea he first conceived in 1920 prior to his study of economics.

With regard to a social safety net, Hayek advocated "some provision for those threatened by the extremes of indigence or starvation due to circumstances beyond their control" and argued that the "necessity of some such arrangement in an industrial society is unquestioned—be it only in the interest of those who require protection against acts of desperation on the part of the needy".

[207]Political theorist Adam James Tebble has argued that Hayek's concession of a social minimum provided by the state introduces a conceptual tension with his epistemically derived commitment to private property rights, free markets, and spontaneous order.

[229] In 1978 Hayek made a month-long visit to South Africa (his third) where he gave numerous lectures, interviews, and met prominent politicians and business leaders, unconcerned about possible propagandistic effect of his tour for Apartheid regime.

For his part, Hayek dedicated a collection of papers, Studies in Philosophy, Politics, and Economics, to Popper and in 1982 said that "ever since his Logik der Forschung first came out in 1934, I have been a complete adherent to his general theory of methodology".

[250] He deeply disagreed with Chicago School methodology, quantitative and macroeconomic focus, and claimed that Friedman's Essays in Positive Economics was as dangerous a book as Keynes' General Theory.

After winning the 1979 United Kingdom general election, Margaret Thatcher appointed Keith Joseph, the director of the Hayekian Centre for Policy Studies, as her secretary of state for industry in an effort to redirect parliament's economic strategies.

[26] Hayek's ideas on spontaneous order and the importance of prices in dealing with the knowledge problem inspired a debate on economic development and transition economies after the fall of the Berlin wall.

Economists at the Bank for International Settlements, e.g. William R. White, emphasize the importance of Hayekian insights and the impact of monetary policies and credit growth as root causes of financial cycles.

[275] In line with Hayek, an increasing number of contemporary researchers sees expansionary monetary policies and too low interest rates as mal-incentives and main drivers of financial crises in general and the subprime market crisis in particular.

[278] Along with market monetarist economist Scott Sumner,[279] White also noted that the monetary policy norm that Hayek prescribed, first in Prices and Production (1931) and as late as the 1970s,[280][281] was the stabilization of nominal income.

His books were translated and published by the underground and black market editions, read widely, and undoubtedly influenced the climate of opinion that ultimately brought about the collapse of the Soviet Union.