In creating itself St. Peter’s of the Objectivist Right, the Cato Institute has become custodian of all things Hayek. A 2004 Cato Institute Book Forum ¹ honored the authors of two new books on Hayek’s thought and influence. It featured extensive remarks by former leader of the Republican majority in the House of Representatives, and erstwhile economics professor, Dick Armey [his self-appellation].

The Honorable Professor Armey makes several references to Mises’ miracle of the market in arriving at efficient prices — the literal nature of this miracle being emphasized repeatedly. He analogizes the economy to a gigantic computer (as does SFEcon) and he goes on to assert that no human agent could ever fathom [this computer’s] operations. Here we find economic conservatism expounding a faith a bit beyond the actual revelation at its source.

For economic conservatives, Hayek’s most gripping assertions appear in his authoritative 1945 AER paper on The Uses of Knowledge in Society. This paper makes what is now considered the definitive statement of Mises’ Vienna Problem:

The conditions which the solution of this optimum problem must satisfy have been fully worked out and can be stated best in mathematical form: put at their briefest, they are that the marginal rates of substitution between any two commodities or factors must be the same in all their different uses.²

1. Hayek clearly emphasizes the Vienna Problem's mathematical nature in his formulation thereof; and

2. His reference to marginal rates of substitution establishes production and utility functions as the boundary conditions within which the problem is to be solved.