Thirty-two years ago this month—on March 23, 1992—Austrian economist, political philosopher, and Nobel laureate Friedrich August von Hayek passed away at age 92. It is not upon that sad occasion I dwell here, but rather, on the 50th anniversary later this year of his acceptance speech at the Nobel ceremonies in Stockholm, Sweden. What a glorious moment it was!

From 1969, when the first Nobel in Economic Science was awarded, until Hayek’s win in 1974, I was among many who yearned for the day when a genuine friend of freedom and free markets would be so honored. It seemed every year that the award went to someone for attempting to quantify the unquantifiable, to count the angels on a pinhead, or to whitewash statism. We despaired, as Adam Smith surely did from the grave.

Then in 1974, Stockholm fired a shot across the Establishment bow by recognizing Hayek. Two years later, Milton Friedman won the prize. In the decades since, more economists friendly to markets claimed it—including such luminaries as George Stigler, James Buchanan, Ronald Coase, Gary Becker, Robert Lucas, Robert Mundell, Vernon Smith, Elinor Ostrom, and Angus Deaton.

Even so, the Nobel Committee in 1974 couldn’t bring itself to give that year’s Economics award to Hayek only. It “balanced” him by also bestowing one on the Swedish socialist Gunnar Myrdal—whose arrogance showed itself when he turned his nose up at Hayek. The latter was always gracious; if he harbored uncomplimentary views of the crackpot Myrdal, he never said so in public. The smug, state-worshiping Swede argued the prize should be abolished if central planning skeptics like Hayek and Friedman were given it.

All these years later, almost nobody remembers Myrdal, and fewer still ever quote him. Practically no one recalls a good book or a memorable phrase he penned. His own country, Sweden, turned away from his naïve presumptions and now boasts the 9th freest economy in the world.

Hayek, however, is cited somewhere every day, if not every hour. The Road to Serfdom, The Constitution of Liberty, The Denationalization of Money, and The Use of Knowledge in Society are four of his many works that millions around the world have either read or heard of. I could take a nice vacation if I claimed fifty bucks for every instance in which I have quoted just this one of many Hayek gems: “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”

The great man from Vienna richly deserves to be remembered. He was erudition wrapped with eloquence and neatly packaged in elegance. His contributions to social sciences are monumental. He will still be quoted a century from now. But in the meantime, allow me to share a few excerpts from his Nobel acceptance speech, “The Pretence of Knowledge,” delivered on December 11, 1974, in Stockholm.

In his opening paragraph, Hayek expressed a humility sadly lacking in his profession at the time, dominated as it was by a mindset to plan economies from the ivory tower or a government bureau. Economists are, he said,

called upon to say how to extricate the free world from the serious threat of accelerating inflation which, it must be admitted, has been brought about by policies which the majority of economists recommended and even urged governments to pursue. We have indeed at the moment little cause for pride: as a profession we have made a mess of things.

A major reason for these errors, he went on to explain, is the temptation to transfer to economics the rules, measures, and techniques that apply to the more precise world of the physical sciences. When economic theory “must be formulated in such terms that they refer only to measurable magnitudes,” the result may sometimes be the appearance of exactitude and predictability, but it is an illusory one. The plain truth we know, Hayek said, is that there are,

with regard to the market and similar social structures, a great many facts which we cannot measure and on which indeed we have only some very imprecise and general information. And because the effects of these facts in any particular instance cannot be confirmed by quantitative evidence, they are simply disregarded by those sworn to admit only what they regard as scientific evidence: they thereupon happily proceed on the fiction that the factors which they can measure are the only ones that are relevant.

When I taught economics at the college level, I acquainted my students with the rudiments of “mathematical economics” while cautioning, in Hayekian terms, against the temptation to read too much into graphs, equations, and the like. Human beings are not lifeless blocks of concrete.

A simple supply-and-demand graph illustrates a hypothetical intersection, but at best, it depicts a fleeting moment in time. It tells you almost nothing about the dynamic forces at work (subjective value and competition, among others) that make it obsolete in the next moment. Mathematical economists worship “equilibrium” because it freezes those unfreezable forces, but in reality, the only lasting equilibrium is known as “death.” To borrow a phrase Hayek employed elsewhere to describe socialism, this temptation to mathematize a social science is a “fatal conceit.” In his Nobel lecture, he said:

[C]ertainly in my field, but I believe also generally in the sciences of man, what looks superficially like the most scientific procedure is often the most unscientific, and, beyond this, that in these fields there are definite limits to what we can expect science to achieve.

Ironic, isn’t it? Reducing complex human actions and interactions to numerical expression gives off airs of precision and deep sophistication. In fact, however, such efforts are usually nothing more than oversimplification magnified by hutzpah. Two dozen centuries after Socrates told the world, “Awareness of ignorance is the beginning of wisdom,” Hayek correctly postulated that the world desperately needed to be reminded of it—aspiring central planners (Adam Smith called them “men of systems”) in particular:

It is indeed true that, in contrast to the exhilaration which the discoveries of the physical sciences tend to produce, the insights which we gain from the study of society more often have a dampening effect on our aspirations; and it is perhaps not surprising that the more impetuous younger members of our profession are not always prepared to accept this.

Hayek’s remarkable speech teased out these critical points with inescapable logic. The coup de grâce appeared in a final, brilliant paragraph:

If man is not to do more harm than good in his efforts to improve the social order, he will have to learn that in this, as in all other fields where essential complexity of an organized kind prevails, he cannot acquire the full knowledge which would make mastery of the events possible… The recognition of the insuperable limits to his knowledge ought indeed to teach the student of society a lesson of humility which should guard him against becoming an accomplice in men’s fatal striving to control society—a striving which makes him not only a tyrant over his fellows, but which may well make him the destroyer of a civilization which no brain has designed but which has grown from the free efforts of millions of individuals.

BRAVO! This is wisdom the world yearned to hear in 1974. Fifty years later, it needs to hear it again.

This article was originally featured on FEE.org. You can read it here.