Clarifications on why I support Hayek on some of his economics

Following a recent status I put on Facebook which read "Hayek is the best, I am at the wrong university" and the responses I got, I just want to clarify exactly want I meant by this. 

The first point to clarify that my status was written in an impulse after watching a documentary on Hayek (Masters of Money BBC) so I accept that it was misleading. 

The second was that it was aimed at those who were aware that I had a place to study at LSE and at SOAS. I chose SOAS to question some of my so-called "right-wing" ideas and up till today, some cannot understand why this choice was made given my aspirations to work in the professional world. Furthermore, I don't think it is controversial to point out that most people do perceive SOAS as a left-wing university and LSE as a right-wing and (okay the scope might be limited) but this does affect our teaching.

Finally, I am a second-year student and my thoughts, beliefs and ideas are subject to change. Just like this was not an idea I supported last month. I am still in my thought development but regardless will share with you some of my ideas. Do not interpret these as Komilla's fixed absolute ideas. 

Starting points....

• Firstly, I stand put with Marx that societies go through transitions just as we transformed from a feudal society to that of a capitalist society and that there are future transitions ones we cannot imagine to follow. Capitalism is not the be all and end all. 
• I am also in agreement that capitalism is the most productively efficient economic system seen to man today, if implemented correctly.
• I am also of the understanding that economics is not a science and can never be a science - an understanding proposed by Hayek. Being trained in philosophy for two years, I often find it hard to distinguish the boundaries between economics and philosophy (see my ideas on Adam Smith & Aristotle's Virtue Ethics) and actually all the great economic thinkers Aristotle (yes he is classed as an economist), Smith, Marx etc are philosophers and are often trained in other disciplines.
• Science makes predictions and offers methods in which to tweak our current environment. The key difference between science and economics to me, is that science is based on largely absolute rules which economics is not. Assumptions are more subject to scrutiny in economics than in science - (even though I do realise science develops by questioning our assumptions).

Why I show support for Hayek...

• Currently, (which makes since given the recent financial crisis) the debate seems to be around how much governments should intervene and how they can rectify the the current economic climate. 
• What I want to learn more about is the role of government in boom times, because it makes no sense to adopt Hayek's theory right now given that in boom times we lived off government support too.
• I believe that to reduce the extremity of busts, booms need to be contained. Especially in regard to "developed" countries. 
• Yet it seems from the boom that preceded our recent bust, governments did not contain the boom, in fact they maximised it - they sought ways to prolong it as to keep the "welfare of the nation". Which makes perfect sense as that is the so-called role of government. 
• However, if we just imagined a boom time without the interference from the state or other quasi-political intuitions such as the central bank, one can perceive an economy with not so much growth.  
• This is because as the economy begins to grow, demand for money increases several fold, interest rates rise - if no fiscal changes were made then tax revenues start to increase (particularly with progressive taxation as people become richer)  and this is great because boom is contained and it is clear to see why the bust that would follow would be contained too. At the same time, this is an adverse effect because it means that the economy does not reach the levels of growth and development we saw then.
• So am I putting Hayek's policy prescription (or as some say no policy at all) forward as a cure to the current aliment of the economy? No.
• As I understand, for Hayek we should completely eradicate all state interference as quickly as possible. 
• That would not work right not given that the economy was dependent on the government in its boom time. We need the government right now to bail out the banks etc just as the governments stimulated them in boom times. 
• Furthermore, it would be very unrealistic for me to make such an argument. It is human nature that once power has been given, people do not want to let go of it. For example, take any parent from the time the child is a baby dependent on them they have power, so when the child grows up - most of the time they are reluctant to give this power up - it is natural to all humans. This implies that it would be unrealistic ever to reach the free market in Hayek's vision. 
• I haven't got any new or amazing ideas of what will rectify our economy, when I have them I will be sure to tell you. Just Hayek's one is not one we should implement right now.

So what am I saying...

By the sounds of things I like Hayek's analysis and yet refuse to advocate his policy prescription and what has Marx got to do with all this?

• What I am saying is, i can see how leaving markets free without any state interference could possibly lead to a better regulated economy as well as a more economically efficient output. 

• I think this pareto efficiency as it were is of absolute importance because on this attained, my prediction is society will move into its next phase as Marx suggested. Although I do not agree with Marx that socialism is the end, I think there would be further stages as tensions exist in every type of society because of finite resources and our infinite wants/needs. 

• Why will this revolution and next phase kick in once we have this efficient output? Because this is when capitalism is fully maximised and the inequalities it causes are fully maximised too, causing enough individuals reason to support a revolution.  Today there is simply not enough inequality to support this revolution - we might have our welfare state to thank for that.

• Largely, what I said is hypothetical and lives in the realm where we can have an absolute state-free economy.

• In reality, this is not possible and so I side with Keynes that our government has to step to regulate and tweak the society just as it had done in boom times. 

• It is for this reason I do not know when capitalism will reach this "efficiency" level where it is maximised, when the next successful revolution is and thus societal transformation (as proposed by Marx) would follow. 

I hope this clarifies my particularly vague statement. This is not sacrosanct and I am constantly questioning my theories and changing them, so if you ever speak to me in the future and I say this is nonsense then don't be surprised.

Everyday, we learn something new and it is on these perceptions we form understandings. However, perceptions are never reality and thus always subject to change. You are entitled to your views and I respect them even if they are not in line with mine.