We are grateful to Routledge and Kegan Paul, the Editors of The Economic Journal and Professor Hayek for permission to reproduce extracts or articles.

— Editor

(Chapters II to VIII)

F. A. HAYEK:

Prices and Production (1931)

Monetary Nationalism and International Stability (1937)

The Pure Theory of Capital (1941)

‘A Commodity Reserve Currency’, Economic Journal (1943)

Studies in Philosophy, Politics and Economics (1967)

The Constitution of Liberty (1960)

‘Personal Recollections of Keynes and the “Keynesian Revolution”,’ The Oriental Economist (1966)

The small book you are holding in your hands is unique. It is perhaps the finest introduction to the thought of a major thinker ever published in the discipline of economics. What makes it unique is the fact that it comprises selections and short excerpts from a broad range of Hayek’s works written over a span of forty years. Despite its broad coverage the book is amazingly compact and coherent, seamlessly integrating the main themes from Hayek’s writings on money, capital, business cycles, and international monetary systems.

The purpose of the Hobart Paperbacks is to discuss, in the spirit of what was once called ‘political economy,’1 the influences which affect the translation of economic ideas into practical policy and the economics of government activity. In the first Paperback Professor W.H.

The first edition of Tiger by the Tail made an almost immediate impact by reminding economists, the press and the public that for 40 years Professor Hayek’s critique of Keynesian economics had been consistent, persistent and, in the end, vindicated. The extracts collated by Miss Sudha Shenoy comprised a graphic introduction to Professor Hayek’s longer works since his early differences with Keynes.

Friedrich August Hayek, Dr. Jur., Dr. Sc. Pol. (Vienna), D.Sc. (Econ.) (London), Visiting Professor at the University of Salzburg, Austria, 1970–74. Director of the Austrian Institute for Economic Research, 1927–31, and Lecturer in Economics at the University of Vienna, 1929–31. Tooke Professor of Economic Science and Statistics, University of London, 1931–50. Professor of Social and Moral Science, University of Chicago, 1950–62. Professor of Economics, University of Freiburg i.Brg., West Germany, 1962–68.

By Sudha Shenoy

The roots of current economic ideas and of those guiding wages policy lie in the 1930s, in discussion inspired by the publication of the General Theory.

1.   INFLATIONISM

In 1931 Professor Hayek believed that the naïve inflationist view—that every expansion of monetary expenditure produces expansion in output—had been superseded; but this view was revived in 1936 by the General Theory which strengthened the ‘subtler inflationism’ against which he directed his attack.

7.   KEYNES’S NEGLECT OF SCARCITY

Professor Hayek argues here that the Keynesian system rests implicitly on a denial of the existence of real scarcities, since it assumes that aggregate real output automatically changes in the same direction as total monetary expenditure—in other words, that every increase in money incomes automatically calls forth a corresponding supply of consumer goods and of investment goods.

10.   A COMMODITY RESERVE CURRENCY

In these two brief extracts Professor Hayek points to the advantages of an international economic system, and emphasises the necessity of an international monetary system for its proper functioning.