Im reihan salam. Im president of the Manhattan Institute. And i wanted to start the evening by explaining exactly why this prize is so important to us. The hayek prize is a celebration of Friedrich Hayek, one of the most consequential thinkers of the modern era, a celebrated who was awarded the nobel prize in 1974. Hayek did more than just make intellectual breakthroughs. He inspired a generation of economic reformers who helped liberate countless millions from poverty around the world. And his message remains vitally important as we look to the future. In his 1944 book, the road to serfdom, hayek drew a connection between economic and freedom more generally, arguing that government control of economic Decision Making paved the way to further encroachments on individual rights and the use of knowledge in society. A groundbreaking article published in 1945, he carefully and methodically dismantled the logic behind economic collectivism at a time when the worlds intellectual elite was convinced that state socialism was the wave of the future. Hayek saw it for what it was a seductive illusion that would cause untold misery. Im proud to say that i played a role in the formation of the Manhattan Institute. One of our founders, sir anthony fisher, a successful entrepreneur, once asked him how to reverse the erosion of freedom. Hayek urged to invest in the battlefield of ideas. And we continue that essential work today, we at the Manhattan Institute are dedicated to building on hayeks legacy and this prize is the crown jewel of those efforts. Each year we award 50,000 to an author who continues in the hierarchy and tradition of rigorous thought, Clear Communication and respect for the liberating power of free markets. Tonight, we will hear from the 2023 hayek prize winner, Edward Chancellor lerner, author of the price of time, will be introduced in just a moment by my distinguished colleague john tierney. Before i turn things over to john, however, there are several people id like to thank for the support and hard work that goes into this prize. None of this would be possible without the support and friendship of Manhattan Institute trustee Thomas W Smith, who first conceived of the prize, and diane smith. Together, they have supported the prize since its inception. Please join me in thanking mr. And mrs. Smith for their generosity and commitment to the cause of freedom. In addition to mr. Smith, we have a number of other Manhattan Institute trustees who have kindly joined us tonight, and charters ravenel, currie, michael kaufman, nico, nell and russell poyer. Were also honored have larry moen, our president emeritus, with us tonight. Thank you for all you do in support of our work. Id now like to recognize the hayek prize jury, the distinguished women and men who carefully read each nominated book before selecting the winner. This years jury included brian anderson, don boudreaux, thomas easton, katherine ward, james pearson, amity shlaes, john taylor. And last but not least, the chair of the jury, john tierney. As many of you know, john is a contributing editor at city journal and one of the nations most renowned science journalists. A author known for his keen ability to make complex ideas, engaging and accessible. He is a highiq ian through and through and the perfect steward for this important prize and its Important Mission without. Please welcome john tierney to the stage. Thanks very much, reihan. And thanks to all of you for braving the unfriendly skies to be here tonight. On behalf of the hayek prize jury, i can promise you that were in for a treat. Were going to hear from an author with an extremely rare gift. You know, theres a common lament in the Book Business that was once nicely summed up by a friend of mine. When youre working on a book, you said you never know whether youll end up being published too early or too late. But it will definitely be one or the other. Now, this has never been a problem for Edward Chancellor. His books come out just in time for the world to say. My god, he was right. In his first book, a history of financial speculation, titled devil take the hindmost, he warned in 1999 that the surge index stocks had all the earmarks of earlier financial manias. And next year, the dot com bubble burst. Later, he published crunch time for credit, warning that the housing and credit bubbles would burst disastrously. And sure enough, they promptly did a leading to the financial crisis in 2007 and then the Great Recession. So early last year, when nobody worried about bank bailouts, when the Federal Reserve was still blithely keeping the Interest Rate at zero, he went to press with his latest book, the price of time the real story of interest. He warned that we would pay a hefty price for the feds irresponsible and unprecedented decade of easy money. And sure enough, you know, here we are with headlines about failing banks. But collapsing Pension Funds and fears of an even worse financial crisis ahead. His book is remarkable not only for its presence, but also for its erudition and its flair. Its another of his rare gifts. He makes interest. Interesting. He even makes it funny. Above all, he makes it relevant. He shows that just as hayek warned manipulating Interest Rates is the most dangerous form of Central Planning because it occurs very subtly, but it distorts the entire economy and it leads to so many problems that are not subtle. From unaffordable housing to worsening income inequality, you know, he clearly explains how the feds policies have fueled the populist anger in both Political Parties right now by rewarding reckless investors, finance gimmickry and giant corporation ends at the expense of Small Businesses and workers and retirees who, as the book, traces a long history of Money Lending channels, are deftly shows how rulers and bankers and investors keep making the same and keep ignoring hayeks wisdom. Now, hayek was one of those authors whose books appeared too early. He did have that one surprise bestseller in the 1940s, the road the road to serfdom. But intellectuals and politicians were so enthralled with socialism and central that it took decades for him to be vindicated. Nationalize industries foundered in the soviet union, eventually collapse, due to what hayek called the fatal conceit. Thats a delusion of central planners that they know enough to direct the economy. Hayek recognized that these that this fatal conceit afflicted the Federal Reserve and also other central bankers. But on this issue, he was really ahead of his time. During 1920s, when central bankers were confident they could keep the economy and the stock market rising, hayek warned that their manipulation of Interest Rates were distorting and would ultimately produce an ugly bust. Now, other economists poohed this possibility, including hayeks famous intellectual sparring partner, john maynard keynes. As chancellor recounts, keynes was so convinced in the late 1920s that experts had figured out how to smooth the economy and avoid that, he just kept on investing the stock market and he lost three quarters of his net worth when the Roaring Twenties to a crashing end. Well, hayek knew better, but his monetary theories are still ignored by most modern economist chancellors reminds us that hayeks ideas are more important today than ever and so do the other five books that were finalist for the prize. The next American Economy by. The eminent political economist samuel draws eloquently hayek in a nation the founders offer a practical and also an inspiring strategy to defend free markets and free trade against the populists in both parties. I wish every president ial candidate would read it, and i like to salute sam, who is with us tonight for just writing a great book. Im not sure. Another finalist, Bruce Caldwell, whos a previous winner of the Manhattan Institutes hayek prize four scholarship, has as teamed with hans, your cousin, to offer a wealth of Surprising New insights about early personal and intellectual struggles. We forward to the concluding volume of what is sure to be the definitive biography of hayek. 40 years ago, hayek championed the economist julian simon and other optimists convinced that the world was not running out of natural resources. Their optimism has been confirmed decisively by the Rigorous Research of merian to be engaged purely in superabundance, a book that joyous refutes doomsayers by showing just how much better life is becoming. People around the world. Another finalist the journalist Matthew Hennessy has written a witty and breezy primer titled the hand. If you want to convert the many young people who doubt the virtues of free markets, give them this delightful introduction to basic economics. And if you want to understand how a city can thrive without the of master planners, take a look at emergent tokyo, this beautifully illustrated book shows how tokyo became so vibrant and livable through the process that hayek called spontaneous order. Our winners comes from he joins us from england, where he was born and raised after earning his degree in modern history at cambridge and a masters degree in enlightenment history at oxford. He went on to work as an investment strategist in london at the lazard Brothers Bank and later at the gmo investment in boston. In between those stints managing money, hes been writing about it during the last financial crisis in 2008. His article and Institutional Investor won the george polk award for financial reporting. Hes edited two very wellreceived books in his financial have been translated into half a dozen languages. Hes currently a columnist for reuters and contributes to wall street journal money week, the new york of books and the financial times. I must add one other biographical detail. When i wrote to him to inform him that the higher jury had chosen his book. Heres what he wrote in response, quote, i was over the moon to be nominated for the hayek prize without expectation of further honors and actually winning the prize brings tears to my eyes only morning i was reading extracts of hayeks road to serfdom to my wife saying that what he says applies exactly to what one can see. Now the same mindset among the expert class imposing. Their priorities on the people, close quote. I ask you, there be a more worthy recipe of this award than in than an author who reads the road to serfdom to his wife at breakfast. Somewhere hayek must be smiling. Ladies and gentlemen, please welcome Edward Chancellor, the winner of the 2023 hayek book prize. And one that is coming my eyes again. I am, as you say, deeply honored to be standing here and delight that the prize im receiving today is named after Friedrich Hayek, a hero of mine. But let me start with way to. Thanks. Id like to thank the Manhattan Institute and john tierney and the other judges for selecting my book for that generous prize. My publisher, morgan entropy, grove atlantic. You cant hear me . Oh, yeah. Sorry. And i like to thank my publisher, morgan at grove atlantic, for taking my book after my former u. S. Publisher Farrar Strauss turned it down on the grounds it was too difficult for a trade audience. And my u. K. Editor, Stuart Proffitt penguin, who wont accept the book, wrote that, quote, neo hijacking conclusion is both powerful and persuasive. And my wife, antonia, whos described in the acknowledgments as my inhouse editor, but is also a lot more the early 19th century banker thought ann thornton author of a classic work on monetary economic makes an inquiry into the nature and effects of paper money wrote to his sister that working on the book had been a hard fagg. I know the feeling and antonio saw me through many years of hard faxing, which in english means enduring hard work and i was thrilled to be short listed for the hayek prize, but didnt think i had much chance since among the other books on the shortlist was the definitive biography of Friedrich Hayek by Bruce Caldwell and are closing as is the case with anyone who is interested himself with hayek in recent years. I owe caldwell a huge debt for his editorship of hayeks works. My introduction to the austrian economist came from reading caldwells intellectual biography. Hayeks challenge some two decades ago. Since we await a second installment of the hayek biography by caldwell in closing, or at least have a second chance, i first became interested in, after i was commissioned to write a report on the ongoing credit boom of the early 2000 and later published. As john mentioned, under the title crunch for credit. It was curious to observe an epic credit bubble forming with associated bubbles in, real estate in the United States and europe which the central bank has studiously ignored. So, so obsessed. Were they at the time with meeting their inflation targets and nothing else appeared the radar. Both keynesian monetarist economists milton was still alive at the time, supported the feds policy under alan greenspan. The easy money policy was inaugurate it and the fed funds rate was to 1 . A postwar low in 2002. As long as inflation remained under control. We were told nothing could go wrong. Bank of england developed a an acronym at the time called a nice noninflationary, consistent expansion to pursuit of price stability. What we now inflation targeting became popular in the 1920s. Many of the worlds leading economists at the time maynard keynes i think fisher of yale, the swede cassell, ralph holt, terry at the British Treasury support, had this policy in 1933. Irving fisher wrote his enormously intelligent general paper, the debt deflation theory of great of Great Depression means, which argued that the debt deflation was the primary cause of the 1930s depression. Friedman and Milton Friedman and Anna Schwartz continued that this argument in their monetary history of the United States and in their short the great contraction. These views are summed up by comment of schwartz in 1995 that, quote, monetarist stability is a prerequisite for price stability and price stability, a prerequisite for financial stability. The young hayek, who studied the Federal Reserves policy at nyu knew when he visited new york in the early 1930s. And as caldwell closing a tell us, was forced to earn his money washing dishes, criticized the monetary authorities attempt to keep the price level stable in an economy with strong productivity growth, as was the case in spades for the u. S. , the 1920s. Prices a natural tendency to decline, he said. In fact, if think about it, the entire nature of a capitalist system is to generate productivity, which Everything Else being equal should bring down the price level. Any attempt to resist this movement required the Central Banks to keep Interest Rates unnaturally low below what economists call the natural rate of interest credit. Newly created by commercial banks. Then took then takes the place of genuine savings. This involved what hayek called force savings and the hidden inflation of the credit boom. Such policies in the short run could could succeed in delivering an unchanging price, but they would doomed to failure eventually. Interest rates would have to rise to inflation and the boom would give way to a bust. I also argued expanding the theory of interest propounded by i von buskirk, the author of the land the three volume work capital of interest, which perhaps kaplan interests, which i perhaps im the only person in the room to read cover to cover taking me several weeks in the process and bernbach who was also a his maternal grandfathers climbing companion argued that manipulate argued that manipulating the rate of interest would change the structure of production in an economy. Lower Interest Rates would lead to investments. Profits lay in the more distant future. When the bust arrived, such investment would prove unviable. They would become what we would now call stranded. In his early days, hayek emphasized that all Economic Activity takes place over time. This is a very important insight of hayeks. He understood that the that interests served to coordinate Economic Activities across time and introduced the notion of into temporal disequilibrium in the pursuit of price stability at a time of a positive supply shock. As hayek wrote in 1928, quote, a ministers an excessive stimulus to the expansion of output as costs of production fall and thus regularly makes a later fall in prices with. A simultaneous contraction of output unavoidable. In other words, by trying to avoid the good deflation produced productivity growth, we bring the bad deflation of a credit bust. That Fisher Friedman and others deplored. We can argue whether hayek anticipated Great Depression called will enclosing suggests that