Hayek in Vienna

Monday, November 07, 2005

What Hayek got for Christmas.

In my investigations for the exhibition I found a letter by Friedrich Hayek and his brothers to the „Christkind“ from 1907. For those of you that don't know the Christkind or christchild is the European Santaclaus (whose civilian name is „Chris Kringl“ isn't crossculturalism funny?) and brings the presents on Christmas Eve.

"Address: To the Christkind in Heaven

Dear Christkind!

Please bring two packets of tin soldiers, one „Dragoon“ and one „Artillery“. Also a Matador building block set and a set of map puzzles. Finally three books, an atlas, a book on plants and a book by Karl May."

All three boys sent the same letter so I assume that there was some "suggestion" as to whet they should wish for. Besides the tin soldiers which are interesting since Hayek latter served in an Artillery regiment I especially like the Matador reference. This is a company that makes wood building blocks and was founded in 1903 and had become popular by 1907 as the letter proves. These are really creative toys for kids. In the late 20th century the company changed its traditional product to more modern plastic etc. and subsequently went broke. In 1997 a young husband and wife entrepreneur team bought the rights to the product and began production of the classic product again in a rural area of Austria with real wood. Just goes to show that with energy and the right product you can be successful even in a high labour cost country like Austria. I think Hayek would have liked that.

Friday, November 04, 2005

Homo Oeconomicus?

Don Boudreaux in a funny note on an American driver of old cars remarks in essence that people always think they know the (economic) consequences of their actions but can't really judge them. Basic economic understanding is not widespread either in the U.S. of A. (what is a foreign car, most are made in the U.S. now just not in unionized Detroit but down south) or in Austria where they think saving at 0,5 % for your old age is smart!? See my previous post. The guy we learned about who knows the full situation and acts upon it just doesn't exist. But somehow lots of individuals acting as they see fit create interesting outcomes. Seems Hayek said something like that? Well tomorrow back to some of his letters and since its getting cold and dark and I heard Bing Crosby for the first time this year maybe I'll let you know what Friedrich wished for for Christmas.

Rest in the mountains

The first thing they said about blogging was that you need to post regularly to get readers. So in the first month I've broken that rule. Here's why: I've been doing what Hayek did on a regular basis, taking time off to think and collect myself in the mountains. I've been away from the net (or at least broadband and I don't surf with dial-up anymore, just check the mail..). After a terrible summer with too much rain its been the warmest October in memory and the Austrian mountains are just beautiful and relaxing at this time of year. Just getting away was great and the delights of harvest time in a rural area with fresh produce, wine, chestnuts and pumpkins really rounded it out. If it hadn't been for the papers it would have been even better. First, fall vacation should be regulated rather than decided on by individual schools, then the great "world savings day" € 113 billion on passbook savings accounts at rates of 1/2 percent with inflation at 2 % and a tax of 25% on interest, it's time this country got a really working capital market! The government is in discussions with the rail workers union, seems they again want to raise the retirement age from 53 (!) and maybe change the work rules so that the estimated 12000 employees that everyone agrees are not currently needed in the basic rail business can at least be transferred to another job in the company (since everyone employed before 1996 is a civil servant they can't be fired). O.K. next time I take a few days off no papers! But I really have to agree with Hayek, there are few ways to relax and think like a bit of work and walking in the mountains.

Thursday, October 20, 2005

Why being an "Austrian" in Austria is so difficult.

Well the conference on the roots of capitalism is over and we had some interesting discussions. More on that in later posts. First today's newspapers. Politicians never learn. There have been some cases of bird flu in Turkey and everybody is afraid of a pandemic i.e the virus jumps to humans and spreads. One of those terrible capitalist companies Roche has developed a pill Tamiflu that helps against the flu (although how much is helps and if its good against bird flu is still being tested). Now many countries have decided to buy Tamiflu and negotiate the price. The Minister of Health Mrs. Rauch-Kallat is still negotiating and waiting since "we don't want to be hysteric and contribute to the rise in a pharma companies stock price." The head of the social security agencies, Mr. Erich Laminger has suggested suspending patent rights for flu medicine in case of a pandemic. While I realize this might be a negotiation ploy I'm not sure it will work. Now all this wouldn't really surprise me in a socialist country but these people are members of or associated with our ruling center right coalition. It might be a good idea to distribute basic economic handbooks to these people.

Just now the news came over the radio that the normal flu vaccine is sold out in Austria. The government didn't foresee such high demand. I seem to remember a book by Friedrich Hayek called the "Road to Serfdom", had something to do with the failure of central planning.

As I said its not easy being a supporter of the Austrian School of Economics in Austria.

Wednesday, October 12, 2005

Publishing Hayeks' old letters

It seems people in my family don't like parting with things. So if it didn't fall victim to moving, natural disasters or war, chances are its still around. That leads to lots of junk piling up but also nice finds such as the letters by Friedrich A. Hayek to his parents from WWI and his studies in New York in 1923. Obviously these don't contain much economics but they do show a man with very keen powers of observation and dry humor. I'm currently trying to decide how to make these public. A few people have seen them and one article was published including an English translation. Have a look at the Link above for some tidbits. Seems New York is no fun if you don't have lots money as a student? I have a graph showing how he saves every dollar till he has enough for the trip home. His biggest wish after that is buying books. More contents from the letters soon.

Tuesday, October 11, 2005

A different Hayek.

Most of us are used to seeing Friedrich Hayek as a distinguished elderly scholar. But as long as I'm scanning anyway here is a picture of Hayek with his younger brother Heinz in 1903.

In Hayeks' lap

Working on an exhibition on the early years of Friedrich A. von Hayek is challenging and I never know what I'm going to come across next. I'm sifting lots of paper, phoning schools and drawing maps. The opening is Monday morning, running against the clock!

But mostly it's fun! Look what I just found: The kid in the great mans lap is me!

Sunday, October 09, 2005

Job creation or how Hayek got the "von"

Well, I said I'd start out with history, so here goes. Opponents of Reagan, Thatcher and Churchill always emphasized the "von" to give Hayek either the "nobility" and not-good-for-common-folk or the nasty "kraut" image. Actually the "von" was abolished in Austria in 1919 and Hayek only used it in his name since it was copied from his birth certificate when he applied for a British passport. The Austrian "von" that Hayek had was comparable to the British Honours system in that it was awarded for merit. The interesting thing is that Josef Hayek got the "von" in 1789 by doing exactly what Friedrich A. von Hayek advocated 150 years later. He helped to privately found and expand two textile factories in lower Austria and Moravia, thereby creating jobs and increasing the GDP as well as the tax base (this was positive from the emperor's point of view, so he honoured Hayek with the title). All this is stated in the nobility document. I'm now faced with the first difficulty in this blog: most of the material from the early years is in German and it's not easy to do a bi-lingual blog. Some of it is easy to translate and mostly I will, however this document is in 200 year old German and I'll give the translation a shot with the "thy, theyn" thing later. For now I've decided to just post the German version since it's fun for those readers who know the language. If anybody has ideas on how to solve this, I'm open to suggestions. Thanks!

"Aus dem Adelsdiplom des Josef von Hayek de dato Wien 11. August 1789

Wenn wir nun gnädigst angesehen, wahrgenommen, und betrachtet: dass unser lieber Getreuer Josef Hayek, wegen besitzenden guten Eigenschaften, und in Rücksicht der von seinem Vater und Grossvater in den preussischen Kriegen, bei dem im Markgraftum aufgestellten Jägerkorps sich für den Staat gesammelten Verdienste, im Jahre Eintausensiebenhundert fünf und siebenzig bei unserer Böhmisch-Österreichischen Hof-Kanzley, als Accessist angestellet, u. im Jahre Eintausend siebenhundert sechs und siebzig darauf wegen bezeigter thätiger Verwendung, und erprobter Fähigkeit zum Hofkonzipisten befördert worden sey, nach der Hand aber, als er von dem damaligen Obristen Kanzler, Grafen von Blümingen zu dem Wirtschaftsfach seiner Güter gezogen worden, dennoch für den höchsten Dienst, und das Beste des Staates sich dergestalten bestrebet habe, dass durch seyne Bemühungen auf den zweyen Kottonfabriken zu Kettenhof in Niederösterreich, und Lettowitz in Mähren, bey welch letzterer er wegen seiner der Fabrik nach bisher leistenden nützlicher Dienste als Mitinteressent gewählet worden, die Errichtung ansehnlicher, und wohlbemittelter Sozietäten zu Stande gekommen seyn, die Fabriken selbst ihm ihre Aufnahme, und Erweiterung zu verdanken haben, und dadurch der Nahrungs-Stand sowohl, als auch die Bevölkerung des Staates seinen Namhaften Vorteil ziehen, da dermals einige Tausend Insassen mehr als vorher dabey ihre Beschäftigung und Unterhalt finden, und wirklich zwey ansehnliche Dorfschaften bey Kettenhof in Österreich und ob der Herrschaft Lettowitz in Mähren durch die daselbst etablirten Fabriken entstanden sind, die sich von Zeit zu Zeit vergrössern, mithin dem Staate in Ansehen der Bevölkerung, Besteuerung, Rekrutierung und mehrfähigkeit und anderem Betracht zum wesentlichen Nutzen gereichen. Da Uns derselbe seiner Geschicklichkeit, Kenntnis und Verwendung in der Landwirtschaft wegen besonders angerühmt worden, auch in dem Besitz eines eigenen Vermögens bestellet ist, desgleichen in seiner Bisherigen getreuen Gesinnung bis in die Grube fortzufahren d

The roots of capitalism or why this blog?

The Austrian Hayek Institut is organizing a conference on the roots of capitalism from October 16th to 18th in Vienna, Austria. Roots of Capitalism

During this conference there will be an exhibition on the early years of Friedrich A. von Hayek in Vienna from 1899 to 1930, which I am currently organizing and which was the initial reason to start this blog. I'll be posting some of the pictures and letters that have surfaced during the research for the exhibition, on the blog soon. I am really enjoying getting to know a different Hayek than the one we know from his books and interviews, as well as learning more about the famous "Mises Kreis". Since I want to share what I am finding I've decided to start this blog.

On a really personal note: This is my first shot at a blog and its all live, so I'm hoping people will give me helpful comments on how I'm doing. Thanks!