Transcript
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Speaker: Hello, welcome to Curious Objects.
Speaker: Our subject today is Friedrich Hayek, born in 1899, died in 1992.
Speaker: He was an economist whose theory that market prices are an efficient mechanism for individuals to communicate information is a cornerstone of modern economics and led to Hayek receiving the Nobel Prize in Economics in 1974.
Speaker: He was born in Vienna and split his career between London, Chicago, and Freiburg.
Speaker: In 1947, he organized the Mount Pelerin Society, a group of classical liberal economists who developed arguments against socialism.
Speaker: Although he once wrote an essay titled Why I Am Not a Conservative, nevertheless Hayek's ideas about self-regulating markets have deeply influenced economic policymakers like Margaret Thatcher and Ronald Reagan.
Speaker: He is often described as a countervailing force to the ideas of John Maynard Keynes.
Speaker: There's even, I don't know if you know this, there's a YouTube rap battle between the two of them, which is very entertaining.
Speaker: Hayek is one of the most widely cited economists of all time, and now his personal effects are being offered for sale at Sotheby's in London.
Speaker: To mark the occasion, I'm speaking with Gabriel Heaton, a specialist at Sotheby's who has organized the sale, and Bruce Caldwell, professor of economics at Duke University and the general editor of the collected works of F.A.
Speaker: Hayek.
Speaker: Gabriel, why are these items coming up for sale now?
Speaker: They're coming from the family, and it is for personal reasons.
Speaker: It's an appropriate time for them.
Speaker: to be disposing of them.
Speaker: But it's all coming directly from the family, from his descendants.
Speaker: One thing that we did bear in mind and that has, and it did affect our timing here somewhat, is that it's the 75th anniversary of the publication of the Road to Serfdom in March of this year.
Speaker: Could you tell us a little bit about the marquee item of the sale?
Speaker: What is that object?
Speaker: The key item in our sale is the original Nobel Prize, the medal awarded to Hayek in 1974.
Speaker: And like all of these prizes, it's a gold medal.
Speaker: But also, there are a couple of other items that come with it.
Speaker: So they always have a bespoke box, and then they come with a citation, which is a
Speaker: calligraphic documents and then also watercolour as well by a Swedish artist.
Speaker: So obviously the key item is the medal, but then there's a small package of items there.
Speaker: Now, for those of us who have never received a Nobel Prize, how large is this piece and what does it weigh?
Speaker: It's about three and a half inches long, solid gold, and it is obviously engraved on both sides.
Speaker: with in the distinctive manner of the Nobel Memorial Prize for Economics.
Speaker: Now the... Each of the prizes have different engravings on them.
Speaker: Oh, I see.
Speaker: Right.
Speaker: But the value of this object, I would imagine, is significantly higher than the value of the gold that makes it up.
Speaker: Could you tell us what do you think this piece is worth?
Speaker: We're putting an estimate of £400,000 to £600,000 on the Nobel medal.
Speaker: Very significantly more than it.
Speaker: Yeah, yeah, yeah.
Speaker: Bruce, what was Hayek's key insight that the Nobel Prize was recognizing?
Speaker: Well, they recognized him for two contributions.
Speaker: Early in his career, he made contributions to monetary economics.
Speaker: John Maynard Keynes engaged in the battles that are represented in the rap video that you mentioned.
Speaker: And the other contribution that the Nobel Committee identified was his contribution to social theory.
Speaker: He got the Nobel Prize together with Gunnar Myrdal, who was much more left-leaning.
Speaker: So they had one Nobel winner who was...
Speaker: a free market advocate, the other one who was an advocate of planning of various sorts and government intervention of various sorts.
Speaker: But both of them, in addition to being economists, had written in areas outside of economics.
Speaker: Hayek contributed to political philosophy with books like The Constitution of Liberty or Law, Legislation and Liberty.
Speaker: He contributed to social science methodology.
Speaker: He actually even had a book called The Sensory Order that was on theoretical psychology.
Speaker: So
Speaker: They were recognizing, the Nobel Committee was recognizing the fact that here are two economists, but they are economists who did something more than economics, that they tried to study social and cultural and political aspects of a society in a way that a straight economist is simply building models of the economy going beyond that sort of contribution.
Speaker: Gabriel, how do you determine the value of an object like this?
Speaker: You said four to six hundred thousand pounds.
Speaker: Where does that number come from?
Speaker: Well, the value of Nobel Prizes is very much in the in the recipient and really where the where the recipient sits in our culture today and how much how much he or she means to people.
Speaker: so they do vary enormously in value and it is quite hard to predict how they will perform at auction but Hayek is someone who has been so key to our kind of economic and political thought in recent decades and is cited so much by a range of people and is very much at the heart of a kind of economic and political movement that has been hugely influential so
Speaker: That's why we think that he is someone who will be really treasured by people and so that there will be strong competition for what is really the ultimate public accolade for his thoughts.
Speaker: If it does sell in the range of your estimate, will that be a record for a Nobel Prize or are there others that have gone for even more?
Speaker: There are others that have gone for even more.
Speaker: The record is the James Watson Nobel Prize, which sold for, I think it was around $3 million.
Speaker: They're not very easily comparable.
Speaker: Now, Bruce, as Gabriel insinuated earlier, Hayek is a politically charged figure and is sometimes associated with various political controversies.
Speaker: His career, I think it's fair to say, was defined, at least as we see it, by intellectual debates.
Speaker: What was the nature of those debates?
Speaker: Could we dive into that a little bit deeper?
Speaker: What are the controversies that define Hayek as an ideological figure today?
Speaker: Sure.
Speaker: I'll do a little self-promotion and let you know that if there are people who want to know more about Hayek in a very painless way, I gave a talk that was taped.
Speaker: at Clemson University, and it's on my website at Duke University, about the life and times and ideas, contributions of Hyatt.
Speaker: But you're exactly right.
Speaker: This is a person who was of interest to me as an historical figure because he seemed to be at the right place at the right time, but he was always fighting with the people that he was around.
Speaker: So in the early 1930s, he had the debate with John Maynard Keynes about what the appropriate
Speaker: policy should be in terms of dealing with what we would call macroeconomics, the macroeconomy today.
Speaker: He also engaged at that point in debates with people who were favoring socialism.
Speaker: There has been an increased interest today in democratic socialism while he was debating people at the London School of Economics and elsewhere on the merits of socialism in the 1930s.
Speaker: It was
Speaker: In the process of those debates that he came up with the idea of how a market system within an appropriate set of other social, juridical, political institutions is a remarkable device for coordinating economic activity in a world in which knowledge is dispersed.
Speaker: That would be a phrase that could be used to describe it.
Speaker: He also talked about what he calls spontaneous orders.
Speaker: These are complex phenomena, theory of complex phenomena is something that he wrote about.
Speaker: And this is something that goes indeed far beyond economics.
Speaker: His work in psychology was also looking at how the interaction of individual agents can sometimes create structures that are much greater than unintended structures.
Speaker: that contribute to whatever phenomena you're looking at.
Speaker: So, for example, within the brain, we have individual neurons that are firing.
Speaker: They're not trying to accomplish anything, but the end result of all of that is human consciousness.
Speaker: In a like manner, the working of individual agents in a market, nobody intends to feed Paris every day,
Speaker: You've got millions of people, though, whose work, either from directly feeding people through restaurants, but also people who are bringing food to market or growing the food, who are miners, whose end products end up being silverware.
Speaker: All of these people are contributing to feeding Paris every day, although no one plans to do it.
Speaker: Those are the sorts of things that he was examining, and it's why, actually, his contributions are important.
Speaker: are viewed as, although, as you say, obviously there are political elements that are tied to this, but his understanding of how a market system works and what to do when it fails to work, I think, are quite insightful.
Speaker: Among the other Nobel Prize winners in economics, I saw one paper one time by a person, a scholar named David Scarbeck, that said, of all of the Nobel Prize winners in economics, the ones who cite other Nobel Prize winners
Speaker: in economics in their Nobel addresses, Hayek was at the top of the list of people who other people cited.
Speaker: So that gives you some sense that he's not really just an ideological figure, although he's been embraced by certain groups in various ways.
Speaker: He's a real scientist contributing to the science of economics.
Speaker: So for someone like Gabriel or I, who is not a professional economic historian, where might we look to see the effects of Hayek's work and ideas in today's politics and economy?
Speaker: So as you pointed out, he has a paper that said, well, I am not a conservative.
Speaker: So he is somebody who believes in free trade.
Speaker: So those who would argue for protectionism, he would oppose that.
Speaker: And indeed,
Speaker: In 1945, he had written his most famous book, The Road to Serfdom, and he came to the United States thinking he was going to give a few lectures at universities, and because the book went into a Reader's Digest condensation, they turned over the whole tour to a professional touring company, and they worked him to death.
Speaker: He was going for a full month with multiple presentations, and
Speaker: But he kept saying, look, I'm not a Republican.
Speaker: The Republicans seemed to love him.
Speaker: The Democrats seemed to hate him.
Speaker: There was all of the same sort of political focus that we might have today.
Speaker: And he would appear before a Republican audience and said, look, I just want to make sure you understand.
Speaker: Yeah, this is not a partisan message.
Speaker: I'm for free trade, for free borders.
Speaker: The sorts of things that he would be for is the free movement of ideas, people,
Speaker: capital goods across, throughout a country and across borders.
Speaker: So at one point when he gave a talk before some, a Republican senator got him in front of some of his constituents and the person who reported on the talk said the temperature in the room went down 10 degrees when Hayek started to talk about free trade because they, free trade, but not for our industry.
Speaker: You know, we're not for our industry.
Speaker: but not free trade in general.
Speaker: In many ways, he's a mainstream economist in terms of his policy views, I would say.
Speaker: Now, Gabriel, there are some other items in this sale.
Speaker: Could you run us through some of the more interesting pieces that are going to be available?
Speaker: Well, I think my personal favorite would be Hayek.
Speaker: own copy of Alasdut's Wealth of Nations.
Speaker: It's an everyman edition published in 1911.
Speaker: It's not a valuable antiquarian book, but this is Hayek's copy with his underlinings and the occasional marginal notes in there, which is just such an evocative object bringing these two great economists together.
Speaker: But there are other things as well, things like his writing desk and typewriter, both from the 1930s, both almost certainly is what he would have been writing The Road to Serfdom on.
Speaker: These are things from his LSE, his LSE times.
Speaker: And we have, oh, there was a lovely item you mentioned.
Speaker: Again, very, very, in terms of individual value, very, very slight.
Speaker: But we have these...
Speaker: gold coins that were spent in the late 1970s as a currency that did not have government backing.
Speaker: But these are Hayek's, so they had his face on them.
Speaker: And of course, this is all very topical today because these are basically a precursor of Bitcoin.
Speaker: So all sorts of treasures.
Speaker: And a few other books from his library, these sorts of things, yeah, that's it.
Speaker: nice grouping of things enough to give a flavor of the man actually another thing which of course does that would be photograph albums so we have three albums of his which really they trace his life right through his I mean this is a man who his childhood was spent in Vienna under the Austro-Hungarian Empire when it was one of the great cultural centers of the world he then fights in the
Speaker: Austrian army in the First World War.
Speaker: He's in, he leaves mainland Europe in the early 30s just before the rise of the Nazis.
Speaker: He spends the war in Britain.
Speaker: You know, he's really pretty extraordinary life.
Speaker: And then in his old age, he becomes this incredibly fated public figure meeting presidents and the Pope and Margaret Thatcher's favorite economist famously.
Speaker: But there's a long journey that gets into that place, and items which trace that journey are really quite special.
Speaker: Now, I wonder if you could say another word about valuing these objects.
Speaker: Let's take his copy of The Wealth of Nations, for example.
Speaker: You mentioned that it's a book that's not particularly valuable from a collector's standpoint outside of its association with Hayek.
Speaker: But, of course, it is associated with Hayek.
Speaker: Now, as an auctioneer, how do you come up with an estimate for an item like that?
Speaker: It's different from the Nobel Prize, where there are at least comparables, you know, other medals that have been awarded to other people, and you can sort of go back and forth about who's more important.
Speaker: But this is different, right?
Speaker: Actually, the comparables for Nobel Prizes, they're not really different.
Speaker: hugely helpful.
Speaker: I mean, they're helpful in that there's clearly, there are benchmarks there which show that there is no reason why a Nobel Prize cannot fetch really quite substantial summit auction.
Speaker: But beyond that, they're not, the comparables are not terribly helpful because they're such different figures, different people who are interested in them.
Speaker: And they're interested in each of the, each Nobel Prize for different reasons.
Speaker: So actually,
Speaker: Yeah, the comps don't take you that far.
Speaker: But you're quite right with the wealth of nations.
Speaker: There are two ways of going about it.
Speaker: I mean, you can value it simply as a book.
Speaker: And you say, okay, as a book, this is worth, you know, actually in this case it wouldn't even be this, but you'd say it's worth a couple of hundred pounds.
Speaker: You put it in at that and then obviously you would expect it to go for significantly more than that because you let the market decide the value of the
Speaker: of the association.
Speaker: You can think, well, what do people pay for really good association books for kind of, you know, relating to economics and political theory?
Speaker: And you reach an estimate that way.
Speaker: But you always want to be on the conservative side for these sorts of items.
Speaker: You do want to allow the market to...
Speaker: to operate and especially you want any auctioneer, you want competition.
Speaker: Because that's what really, that's what gets you the best prices in the end is strong competition between real bidders.
Speaker: What is the number that you've put on the Wealth of Nations?
Speaker: Oh, sorry, it's three to five thousand pounds.
Speaker: Let's take a quick break.
Speaker: First, I want to remind you that, as always, there are images of the objects we're talking about on the web at themagazineantiques.com slash podcast, and also on my Instagram at Objective Interest.
Speaker: And you can get in touch with me directly by emailing podcast at themagazineantiques.com.
Speaker: I'd love to hear your comments and suggestions for future guests.
Speaker: Thanks so much for your feedback.
Speaker: If you like the podcast, leave a rating and a review on Apple Podcasts or wherever you're listening.
Speaker: We'll get back to Gabriel and Bruce right after this.
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Speaker: Now, there are other items in the sale, and I mentioned the Mont Pelerin conference.
Speaker: Gabriel, there's a piece commemorating that conference in the sale, is there not?
Speaker: There is.
Speaker: There's a small gold ingot that was presented to Hayek in 1972 on the 25th anniversary of the conference, which is a
Speaker: A lovely memento, actually, of this key moment in post-war economic and political thinking.
Speaker: And a really lovely gesture to Hayek.
Speaker: Bruce, can you give a little context around Mont Pelerin?
Speaker: What was it and why did it matter?
Speaker: Sure.
Speaker: The Mont Pelerin Society was a meeting that took place in Switzerland in 1947.
Speaker: Hayek was the person who organized the conference.
Speaker: It attracted people who in later years would become famous, people like Milton Friedman, George Stigler.
Speaker: So these are members of the University of Chicago Economics Department, so the Chicago School of Economics, as it were.
Speaker: And the way Hayek described the meeting was that he would go around to each country after World War II, and there was such enthusiasm for building a welfare state, the beverage report,
Speaker: in England in the 40s that outlined the way forward.
Speaker: He said there was very few people who, like him, embraced classical liberalism, who were more in favor of a pre-market approach.
Speaker: So he gathered people from different countries all over Europe.
Speaker: This is post-war Europe.
Speaker: He had a few people from Germany, but mostly the States, England, other places.
Speaker: And he...
Speaker: saw it as a place where people who had these similar views, although they disagreed with each other about the way forward, they agreed on certain basic principles, rule of law, trying to create a society where people had the maximum liberty, but also within a government framework as well.
Speaker: So they weren't anarcho-libertarians by any means, but they were going against the grain of their times.
Speaker: And it was actually quite successful in a number of ways in providing an intellectual framework for developing some of the ideas that Hayek, for example, would express in books like Constitution of Liberty.
Speaker: So would you say it was influential in terms of the, shall we say, the mainstream of economic thought in the latter half of the 20th century?
Speaker: So it was interesting in the way that it was influential.
Speaker: It was quietly influential.
Speaker: A lot of people don't know anything about the Monterey society.
Speaker: It's not like they put out discussion papers or anything like that.
Speaker: It's a meeting of individuals.
Speaker: But the ideas that they generated certainly did enter into the mainstream, particularly after the 1970s.
Speaker: You know, if you take a look at the economic history of that period, you've got stagflation, that is to say, simultaneously high levels of inflation and unemployment, low growth.
Speaker: And this was following kind of the rise of Keynesian economics, where the idea was that government could be
Speaker: manage the economy, have full employment with low inflation, and exactly the opposite is what was taking place.
Speaker: So in England, in the United States, in other places, these ideas suddenly had a resonance that they might not have had during the immediate post-war period.
Speaker: So it's in that way that these ideas started to spread.
Speaker: And then they had political, you know, representatives who would engage them
Speaker: Often the theories and the politics weren't always in line exactly, but certainly in terms of the general influence in favor of less government intervention, of deregulation, that certainly caught on.
Speaker: And it is obviously part of an ongoing debate.
Speaker: And I have to point out that this was in 1972, so this was just when –
Speaker: stagflation was actually starting to ramp up.
Speaker: So although Hayek early in his career favored a gold standard, later he did not.
Speaker: And indeed later in the 1970s he wrote a book on the denationalization of money competing currencies.
Speaker: But the idea of remembering his contributions of founding the society by giving him this piece of gold was
Speaker: was to say, well, we need to have a secure currency, and the gold standard was something that at least at one time seemed to have worked pretty well.
Speaker: Gabriel, had you studied economic history at all before, or was this a brand new subject for you?
Speaker: It was pretty much brand new.
Speaker: I mean, obviously, as I said, I was aware of him, but I was aware of him really more from a
Speaker: in terms of what I did know about political philosophy rather than me.
Speaker: But it's one of the great pleasures of my job is to discover new writers, new thinkers, and to just try and understand what it is about them that makes them so compelling.
Speaker: And when the gears started turning and the sales started to come together, what sort of work were you doing to prepare for that?
Speaker: And what sort of research were you conducting?
Speaker: Well, it was a combination of things.
Speaker: So I needed to understand more about kayak.
Speaker: and what would draw people to Hayek, really.
Speaker: I mean, because I knew the politics with which he was associated, but what I didn't know was about his thinking and how he reached the conclusions that he did.
Speaker: And what really struck me and what made me realise this is what draws people to Hayek is...
Speaker: his questioning nature.
Speaker: It's the way that he poses questions, really profound questions about the nature of society, the nature of economic transactions.
Speaker: He looks at these questions and that's what takes them to the economics and the politics that we're maybe more familiar with.
Speaker: That was a key thing for me.
Speaker: And then the other side of it was to look at the items that the family had and to think, well,
Speaker: to sift through, if you like, and to work out what would be appropriate for auction.
Speaker: And that's very much a collaborative business with the sellers, of course.
Speaker: I want to step back from Hayek for a second and ask you about that.
Speaker: Could you give an example or two of other areas that you've been thrust into, maybe without prior training or knowledge and that you had to sort through?
Speaker: Well, it does vary a lot.
Speaker: I mean, what I do quite a lot of are these very distinctive association objects.
Speaker: So items where the real, the value there is not in the object itself, it's about the story that the object tells.
Speaker: And whether that could be, I don't know, last September I was dealing with a copy of the novel Lady Chatterley's Lover that was used in a very, very famous trial.
Speaker: an obscenity trial here in England in the beginning of the 1960s and this is one of these things that triggered the permissive society.
Speaker: I mean I've dealt with other Nobel Prizes including the biologist Hans Krebs who discovered something called the citric acid cycle which is certainly something that I didn't know
Speaker: anything about before.
Speaker: Well, I thought everyone knew about the citric acid side.
Speaker: I mean, it's a wonderful pleasure to have that opportunity to find out about these very diverse subject matters.
Speaker: And as I say, it's not about becoming a great specialist in that area, obviously, but it's about understanding why people care.
Speaker: Right, okay.
Speaker: Who do you think, not specifically, but what sort of buyer or collector do you think is likely to buy the Nobel medal?
Speaker: And what do you think that the piece is going to mean to that person?
Speaker: I think it is very hard to imagine that it wouldn't be bought by someone who
Speaker: who is deeply interested in Hayek and for whom Hayek's thinking does not mean a great deal.
Speaker: That's really the key.
Speaker: That's really the key point.
Speaker: It's not about sort of someone who is a collector of, you know, Nobel Prizes.
Speaker: You know, that is, it will be someone for whom Hayek chimes.
Speaker: It really means something to that.
Speaker: That'll be the thing that sells the
Speaker: Who that would be, we will have to wait and see.
Speaker: But what you can say is that there are a lot of people out there for whom Hayek doesn't mean great people.
Speaker: including people with substantial funds.
Speaker: All right.
Speaker: Well, it's been a real pleasure.
Speaker: Thank you both.
Speaker: I really do appreciate it.
Speaker: I hope you've had a little bit of fun.
Speaker: It's been fascinating for me.
Speaker: I wish I had 3,000 pounds for that Adam Smith book.
Speaker: I'd like to see what high-end got under funds.
Speaker: Yeah, it's a lovely thing, isn't it?
Speaker: Yeah, yeah.
Speaker: That I think will probably do very well.
Speaker: There you have it.
Speaker: I hope you enjoyed the conversation and maybe took something away from it.
Speaker: Once again, you can see images at themagazineantiques.com slash podcast or on Instagram at Objective Interest.
Speaker: Today's episode was edited and produced by Sammy Delati and our music is by Trap Rabbit.
Speaker: I'm Ben Miller.
Speaker: See you next time.
