Friedrich Hayek won the Nobel prize for Economics in 1974. Margaret Thatcher came to power in 1979 and would promote the welfare state ideals,
But it wasn’t really the free market that Hayek wanted. Hayek’s followers would say the deregulated financial system that came out of the 80s and 90s played a big role in the financial crisis because it was only ever half free.
For many economists the regular cycle of boom and bust is an inevitable consequence of a free-market. But rampant inflation can wreak havoc.
Friedrich Hayek’s prediction came out of what he saw happening at America’s new central bank. The Federal Reserve had been set up in 1913 to stabilise America’s notoriously shaky private banks by offering them a reliable source of credit.
Friedrich Hayek is a firm believer in a free market and is convinced that government meddling is deeply damaging to economic stability.
It’s our desire to control it that most often turns it against us. Hayek thought meddling by government could make it harder for the market to do its job by distorting the signals it was sending to buyers and sellers, and the meddling involved in the government’s control of the supply of money, Hayek decided, could be most damaging of all.
Friedrich Hayek was considered, by many, as one of the champions of the free financial market. Governments should not meddle with financial markets.
Of all the big pro-market thinkers, Friedrich Hayek was by far the most radical. He believed the market should be freer than any government has ever dared to allow it to be.
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