In 1922, when Mises (Full name Ludwig von Mises, a economist and social philosopher of the 20th century) published Die Gemeinwirtschaft(Socialism ), Hayek stated that "To none of us young men who read the book when it appeared,the world was ever the same again." the article argues that " economic calculation requires a market for the means of production; without such a market there is no way to establish the values of those means and, consequently, no way to find their proper uses in production." His idea turned Friedrich into laissez-faire( " let things alone") , and he began to join Mises's "privateseminar" , which was at that time the center of economic community in Vienna, attracting people all over the world. However Friedrich was the first one to leave Vienna and other people began leaving too. Mises along with many others also left before the start of World War Two.
Friedrich started his own research on fluctuation, and explained that the origin of the business cycle in terms of back credit expansion and its transmission in term of capital malinvestments. Because of his work, he got a invitation at the London School of Economics and Political Science to lecture, and accepted to occupy the Tooke Chair in Economics and Statistics in 1931.. In the London School of Economics, Friedrich taught Mises’s business cycle theory, which was the preferred explanation of the Depression before the Keynes’s General Theory came out in 1936.
Friedrich and Keynes had sparred in the early 1930s over the Keynes's Treatise on Money, Even though Friedrich had full refutation of the General Theory, but because of his personality, he never directly confronted with Keynes who was his colleague, and because Friedrich and Keynes were both in the fight against wartime inflation. He began to devote his energies into the elaboration of Böhm-Bawerk's capital theory.
Hayek remained at the London School of Economics until the 1950s, when he joined the Committee on Social Thought at the University of Chicago. At Chicago, Hayek worked among a group of economist, including Knight, Milton Friedman, and George Stigler, one of the best group anywhere.In there, Hayek stopped working on Economics, and started to concentrate on psychology, philosophy and politics, and Austrian economics entered a prolonged eclipse.
In 1974, Friedrich won the Nobel Prize in economics, and the Austrian school unexpectedly revived. Friedrich 's writing was taught to the new generation, and Friedrich himself was in the early institute for Humane Studies conference in the mid 1970s. At the age of 89, he produced the Fatal Conceit, however he passed away in 1992 in Germany, after he left Chicago.