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The Austrian economist Friedrich von Hayek is stubbornly attempting to discredit economic regulation claiming that is too complex to try to organize it. His theory of the "Minimum State" was widely spread and praised through the Republican Party in America. The minimum state is an a theory to escape the middle class that controls the democratic process with its main objective to obtain a redistribution of wealth through public treasury. The theory developed by Hayek is based on belief that is shared through all liberals.
Hayek crossed paths with his biggest rival, Keynes. Keynes promoted the idea that the government can actively and respectfully manage the economy. On the contrasting side, Hayek believed that the economy was far too complicated and that there were many sources that influenced the economy. Most economists and policy makers stood behind Keynes' theory. After being in the shadows briefly, Hayek moved to University of Chicago where he published his second piece of writing known as The Constitution of Liberty. Continuing to work, he published two more books, "Law, Legislation, and Liberty" and "The Fatal Conceit". In 1974, Hayek won the nobel prize in economics after refusing to support Keynes' theories. In 1991 the collapse of the Soviet Union occurred, backing up the theory that central planning by the government can not work.
Keynes and Hayek both had different theories recovering from a post-boom crash. Keynes believed that the government had to step in and help, which Hayek also believed in. On the other hand, Hayek did not think that the help from the government would be enough and wanted more. Hayek was not an individual who wanted to "liquidate stocks, liquidate labour and liquidate farmers". Quantitative easing did not necessarily help in the 2008 financial crisis. The bank holders held a large sum of the money provided to the country by the government. Now, those businesses have a lot of money and watch other small start-up companies go bankrupt. The Keynesian Theory provided a safe solution to the problem. Hayek and his followers said multiple times, the only way to have no pain is to avoid the boom itself.
Hayek was known to be a great economist, ranging in ideas and theories. Most of Hayek's work through the 1930's and 1940's was focused on the business cycle, capital theory and monetary theory. He saw a connection and argued that the main problem for any economy is the way people's actions are coordinated. Adam Smith, another economist had also noticed that the price system did a great job by coordinating people's actions. Hayek also stated that the market had slowly developed through human actions. A question that Hayek had was what caused the money market to fail? He said one of the causes was the increase of the money supply by the central bank. Increases like that, would cause the interest rate to fall making credit "artificially cheap". In 1944, Hayek viewed socialism from a completely different perspective. He lived in Austria, which is close to Germany, letting him observe how they functioned. After he moved to Britain, he would see some British socialists advocate the same policies that were advocated in Germany. He wrote the "Road to Serfdom" to warn his fellow British citizens about the dangers that socialism brings. His basic argument was "Economic control is not merely control of a sector of human life which can be separated from the rest,” he wrote, “it is the control of the means for all our ends.”