There is huge confusion over the ideologies of these two guys. Both are usually seen as torch-bearers of free market camp.
Angus Burgin (assistant professor of history) at Johns Hopkins University says Hayek’s views differed from Friedman on regulation. Hayek supported regulation but Friedman did not. Both however opposed central planning/government intervention which is dubbed usually as Keynesian (which is also wrong whatever little I read).
The same mistakes are being made by Republicans:
Friedrich Hayek’s book “The Road to Serfdom” has served as a beacon for American conservatives since its publication in 1944. Today’s Republicans often cite the book in their fight to limit federal power and regulation. Hayek’s views, however, were more complicated than they often assume.
As a shy and scholarly scion of an aristocratic Austrian family, Hayek hadn’t expected to find much of an audience for his wartime tract on political economy. He was shocked when opponents of the New Deal propelled it up the U.S. best-seller lists shortly after its release, and would have been equally astonished at its rise up the Amazon.com sales rankings following an endorsement from the former Fox News host Glenn Beck in 2010.
As he undertook an American lecture tour in 1944, Hayek expressed frustration that many of his most ardent acolytes seemed not to have read the book. Although “The Road to Serfdom” expressed deep anxieties about central planning, it was also explicit about the positive role that government could play. “Probably nothing has done so much harm to the liberal cause,” Hayek wrote, as a “wooden insistence” on “laissez-faire.”
Hayek was quick to point out a number of areas where regulations might be beneficial, including the restriction of excessive working hours, the maintenance of sanitary conditions and the control of poisonous substances. And he argued that the price system became “ineffective” when property owners weren’t charged for the damages they caused; hence the need to regulate deforestation, farming, and the smoke and noise produced by factories. “In such instances,” he wrote, “we must find some substitute for the regulation by the price mechanism.”
These views echoed Friedman’s thoughts not Hayek’s:
Economists such as Knight and Hayek worried deeply about the erosion of free markets, but saw their chief antagonist as “central planning” rather than “regulation.” Central planning, as Hayek explained it, involved “direction of all economic activity according to a single plan, laying down how the resources of society should be ‘consciously directed’ to serve particular ends in a definite way.”
Much of the contemporary animus against excessive regulation more closely resembles ideas first brought into general circulation by Milton Friedman. Where Hayek perceived a host of areas that might be improved by regulation, Friedman saw almost none.
In the 1960s, although very few among even his closest allies shared such views, Friedman advocated for the abolition of almost every regulatory arm of the federal government. He argued that the agencies with famous abbreviations — the ICC, FCC, FDA — should all be shuttered to grant greater discretion to consumers, whose actions Friedman viewed as the most reliable record of public opinion. If doctors and dentists would be allowed to practice without licensing requirements, he said, the cost of care would plunge, yielding benefits that far outweighed any dangers that uncertified practitioners might pose. (If one proved inept with a drill, Friedman reasoned, consumer preferences would soon take that into account.)
Knowing wrong history is more dangerous than knowing no history…