Hayek is my favorite author not because I agree with all of his ideas, but because his books have taught me so much. I write this review as an experienced fan of Hayek, but those who have read few or none of Hayek's writings will benefit the most from reading this well-researched biography.
Never before has any writing put together so complete a picture of Hayek's life and background. If you admire Hayek as much as I do, you'll find it very satisfying to read Ebenstein's largely fruitful efforts to understand the man behind the distant - but kind - demeanor that he wore. Frankly, much of the value I got from this book came from the satisfaction of my curiosity. Those who haven't yet read much of Hayek, however, will find far more of value in Ebenstein's excellent summaries and analyses of Hayek's ideas. Ebenstein has a knack for condensing Hayek's ideas in a concise and highly readable form, which Hayek himself could not do very well. Mostly Ebenstein saw it as his function to simply summarize and explain Hayek's ideas, but he also entered into some interesting discussions about the intellectual controversies Hayek was involved in. Obviously the socialist calculation debate is one such controversy, but Ebenstein also picks out a few nits from Hayek's books, such as an inconsistent interpretation of J.S. Mill and the inspiration Hayek may have taken from a misunderstanding of Karl Popper.
I was most disappointed with the author's treatment of Hayek's strictly economic work in capital and trade cycle theory. In short, Ebenstein informs us that Hayek's views on these subjects are very far from being the accepted wisdom among economists, and that students of Hayek consider his economic work to be greatly overshadowed by his achievements in political philosophy. Both points are true, but neither goes any distance toward refuting Hayek's somewhat unique ideas about capital, business cycles, and inflation. Ebenstein nearly dismisses these theories out of hand. Readers will probably either be left unconvinced that Hayek was wrong, or they will be left with the impression that Hayek was not a very successful economist. I feel that if Ebenstein is going to reject the Austrian Business Cycle theory (ABC), he has no excuse not to provide his readers with an adequate summary of the arguments against it. First of all, a good, nontechnical argument against it could be made within the space of a few pages. Secondly, the mainstream arguments against ABC aren't usually a complete rejection of it: many mainstream economists only differ from ABC by degrees. For instance, Hayek thought that the most serious side effect of inflation was, by far, its distortion of capital investments. Some mainstream economists would agree that this distortion can take place, but they would argue that it isn't nearly as important as the other costs of inflation, such as the deadweight loss resulting from individuals' efforts to avoid having their wealth depreciated away. On the other hand, I think Ebenstein slightly understated the enormity of the chasm between the mainstream and Hayek (along with the other Austrian economists) when it comes to methodological issues. The slight mistreatments of Hayek's economics constitute my only complaints against this book. It is excellent in every other regard.
