Summary of Law, Legislation and Liberty

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In the 1970s, Nobel laureate Friedrich A. Hayek (1899–1992), a founder of the Austrian School in economics and one of the most influential economic thinkers of modern times, published his culminating work on the political economy. He initially offered it in three volumes, which expound his ideas on how nations can balance “individual liberty with political stability” and his framework for a “Great Society.” A staunch advocate of free markets, Hayek also believed that markets need strong states in which to function. Hayek profoundly influenced the deregulation and privatization policies of the 1980s that US president Ronald Reagan and UK prime minister Margaret Thatcher issued in response to economic stagnation. Hayek’s complex themes continue to echo in debates about capitalism and government’s role in democratic societies. His style is academic and often rambling, making this a challenging but ultimately rewarding analysis. getAbstract recommends it as required reading to those interested in the foundations of modern economics.

About the Author

Social theorist and political philosopher Friedrich A. Hayek (1899–1992) ranks as one of the most influential thinkers of the 20th century. Hayek won the 1974 Nobel Memorial Prize in Economic Sciences for his “pioneering work in the theory of money and economic fluctuations.” He taught at the University of London, the University of Chicago and the University of Freiburg.



The “Great Society” of Free Individuals and Markets

People live together in communities of different sizes, but each community has common goals and rules of conduct. In prehistoric times, hunter-gatherer tribes were family assemblages characterized by strong emotional bonds and dedicated to the survival of all. Individuals shared the necessities of life, and leaders could make decisions that benefitted the whole group.

Moral obligations and ideas of social justice developed early in these small, connected groups. Those precepts still explain much of humankind’s instincts, but the requirements of a functioning large society argue against behaviors that focus on group welfare. In modern life, success in providing basic living standards lies in economic systems that depend on treating strangers the same as friends – that is, on setting impersonal laws everyone must follow. Individuals now support themselves through their economic activities, but they achieve the benefits of emotional bonds in personal associations that are external to the economic system.

Many political theories share a misconception in imagining that the progress made from prehistoric times to...

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