ABSTRACT

Friedrich Hayek was an Austrian-born, naturalized British economist considered to be one of the most important social theorists. Hayek was always active in politics, influencing British Prime Minister Margaret Thatcher and United States President Ronald Reagan, both personally and through his writings. Their policies aimed at cutting government spending were strongly tied to Hayek's ideas as put forward in The Road to Serfdom. The Road to Serfdom addresses one of the most important problems in economics: How should the economy be run to maintain democracy and the overall well-being of the people? The Road to Serfdom also helps readers to understand a crucial period in political and intellectual history. To have a detailed understanding of global economy, it is important to have some idea about the debates that shaped the period when Hayek was writing The Road to Serfdom. Of these debates, one of the most important concerned the appropriate size and influence of the state.