chapter
45 Pages

Introduction

The Austrian economist Friedrich A. Hayek came to the London School of Economics (LSE) as a visiting professor in fall of 1931 and secured a permanent position as the Tooke Chair of Economic Science and Statistics the following year. From late 1933 onwards, he toiled fi tfully over a big book on capital theory, an endeavour that was fi nally nearing completion in 1939. On August 27 of that year Hayek wrote a letter to Fritz Machlup, an old friend from university days.1 He told him about his plans for his next big research project, a wide-ranging historical investigation that would incorporate intellectual history, methodology, and an analysis of social problems, all aimed at shedding light on the consequences of socialism:

1 At the time, Machlup was teaching at the University of Buffalo in New York; he and Hayek had corresponded frequently throughout the 1930s about the book on capital theory. For more on this, see the editor’s introduction to F. A. Hayek, The Pure Theory of Capital, ed. Lawrence H. White, vol. 12 (2007) of The Collected Works of F. A. Hayek (Chicago: University of Chicago Press, and London: Routledge), xviii-xxi. The correspondence between Hayek and Machlup was invaluable in reconstructing the evolution of the Abuse of Reason project.