Question: What was an economic effect of the war during which Hayek started working on Abuse of Reason?

Context paragraphs:
paragraph_text: At the University of Vienna, Hayek earned doctorates in law and political science in 1921 and 1923 respectively; and he also studied philosophy, psychology, and economics. For a short time, when the University of Vienna closed, Hayek studied in Constantin von Monakow's Institute of Brain Anatomy, where Hayek spent much of his time staining brain cells. Hayek's time in Monakow's lab, and his deep interest in the work of Ernst Mach, inspired Hayek's first intellectual project, eventually published as The Sensory Order (1952). It located connective learning at the physical and neurological levels, rejecting the "sense data" associationism of the empiricists and logical positivists. Hayek presented his work to the private seminar he had created with Herbert Furth called the Geistkreis.
title: Friedrich Hayek
paragraph_text: During World War II, Hayek began the ‘Abuse of Reason’ project. His goal was to show how a number of then-popular doctrines and beliefs had a common origin in some fundamental misconceptions about the social science. In his philosophy of science, which has much in common with that of his good friend Karl Popper, Hayek was highly critical of what he termed scientism: a false understanding of the methods of science that has been mistakenly forced upon the social sciences, but that is contrary to the practices of genuine science. Usually, scientism involves combining the philosophers' ancient demand for demonstrative justification with the associationists' false view that all scientific explanations are simple two-variable linear relationships.
title: Friedrich Hayek
paragraph_text: Jason Altom (6 October 1971 – 15 August 1998) was a Ph.D. student working in the research group of Nobel laureate Elias James Corey at Harvard University. He killed himself by taking potassium cyanide in 1998, citing in his suicide note "abusive research supervisors" as one reason for taking his life. Altom was studying a complex natural product and felt enormous pressure to finish the molecule before starting his academic career.
title: Suicide of Jason Altom
paragraph_text: In 1929, Lionel Robbins assumed the helm of the London School of Economics (LSE). Eager to promote alternatives to what he regarded as the narrow approach of the school of economic thought that then dominated the English-speaking academic world (centred at the University of Cambridge and deriving largely from the work of Alfred Marshall), Robbins invited Hayek to join the faculty at LSE, which he did in 1931. According to Nicholas Kaldor, Hayek's theory of the time-structure of capital and of the business cycle initially "fascinated the academic world" and appeared to offer a less "facile and superficial" understanding of macroeconomics than the Cambridge school's.
title: Friedrich Hayek
paragraph_text: While there is some dispute as to the matter of influence, Popper had a long-standing and close friendship with economist Friedrich Hayek, who was also brought to the London School of Economics from Vienna. Each found support and similarities in the other's work, citing each other often, though not without qualification. In a letter to Hayek in 1944, Popper stated, "I think I have learnt more from you than from any other living thinker, except perhaps Alfred Tarski." Popper dedicated his Conjectures and Refutations to Hayek. For his part, Hayek dedicated a collection of papers, Studies in Philosophy, Politics, and Economics, to Popper, and in 1982 said, "...ever since his Logik der Forschung first came out in 1934, I have been a complete adherent to his general theory of methodology."
title: Karl Popper
paragraph_text: With the help of Mises, in the late 1920s Hayek founded and served as director of the Austrian Institute for Business Cycle Research, before joining the faculty of the London School of Economics (LSE) in 1931 at the behest of Lionel Robbins. Upon his arrival in London, Hayek was quickly recognised as one of the leading economic theorists in the world, and his development of the economics of processes in time and the co-ordination function of prices inspired the ground-breaking work of John Hicks, Abba Lerner, and many others in the development of modern microeconomics.
title: Friedrich Hayek
paragraph_text: Arthur M. Diamond argues Hayek's problems arise when he goes beyond claims that can be evaluated within economic science. Diamond argued that: “The human mind, Hayek says, is not just limited in its ability to synthesize a vast array of concrete facts, it is also limited in its ability to give a deductively sound ground to ethics. Here is where the tension develops, for he also wants to give a reasoned moral defense of the free market. He is an intellectual skeptic who wants to give political philosophy a secure intellectual foundation. It is thus not too surprising that what results is confused and contradictory.”
title: Friedrich Hayek
paragraph_text: The principle of double effect -- also known as the rule of double effect; the doctrine of double effect, often abbreviated as DDE or PDE, double - effect reasoning; or simply double effect -- is a set of ethical criteria which Christian philosophers, and some others, have advocated for evaluating the permissibility of acting when one's otherwise legitimate act (for example, relieving a terminally ill patient's pain) may also cause an effect one would otherwise be obliged to avoid (sedation and a slightly shortened life). The first known example of double - effect reasoning is Thomas Aquinas' treatment of homicidal self - defense, in his work Summa Theologica.
title: Principle of double effect
paragraph_text: Also in 1931, Hayek critiqued Keynes's Treatise on Money (1930) in his "Reflections on the pure theory of Mr. J. M. Keynes" and published his lectures at the LSE in book form as Prices and Production. Unemployment and idle resources are, for Keynes, caused by a lack of effective demand; for Hayek, they stem from a previous, unsustainable episode of easy money and artificially low interest rates. Keynes asked his friend Piero Sraffa to respond. Sraffa elaborated on the effect of inflation-induced "forced savings" on the capital sector and about the definition of a "natural" interest rate in a growing economy. Others who responded negatively to Hayek's work on the business cycle included John Hicks, Frank Knight, and Gunnar Myrdal. Kaldor later wrote that Hayek's Prices and Production had produced "a remarkable crop of critics" and that the total number of pages in British and American journals dedicated to the resulting debate "could rarely have been equalled in the economic controversies of the past."
title: Friedrich Hayek
paragraph_text: The Supreme Court Economic Review is an academic journal published by the University of Chicago Press. The journal applies economic and legal scholarship to the work of the United States Supreme Court. Articles consider the implicit or explicit economic reasoning employed by the Court to reach its decisions, and explains the economic consequences of the Court's decisions. "SCER" is published in conjunction with the Law and Economics Center at the George Mason University School of Law.
title: Supreme Court Economic Review
paragraph_text: With regard to a safety net, Hayek advocated "some provision for those threatened by the extremes of indigence or starvation, be if only in the interest of those who require protection against acts of desperation on the part of the needy." As referenced in the section on "The economic calculation problem," Hayek wrote that "there is no reason why... the state should not help to organize a comprehensive system of social insurance." Summarizing on this topic, Wapshott writes "[Hayek] advocated mandatory universal health care and unemployment insurance, enforced, if not directly provided, by the state." Bernard Harcourt says that "Hayek was adamant about this." In the 1973 Law, Legislation, and Liberty, Hayek wrote:
title: Friedrich Hayek
paragraph_text: At the end of the war, millions of people were dead and millions homeless, the European economy had collapsed, and much of the European industrial infrastructure had been destroyed. The Soviet Union, too, had been heavily affected. In response, in 1947, U.S. Secretary of State George Marshall devised the ``European Recovery Program '', which became known as the Marshall Plan. Under the plan, during 1948 -- 1952 the United States government allocated US $13 billion (US $139 billion in 2016 dollars) for the reconstruction of Western Europe.
title: Aftermath of World War II
paragraph_text: Hayek's principal investigations in economics concerned capital, money, and the business cycle. Mises had earlier applied the concept of marginal utility to the value of money in his Theory of Money and Credit (1912), in which he also proposed an explanation for "industrial fluctuations" based on the ideas of the old British Currency School and of Swedish economist Knut Wicksell. Hayek used this body of work as a starting point for his own interpretation of the business cycle, elaborating what later became known as the "Austrian Theory of the Business Cycle". Hayek spelled out the Austrian approach in more detail in his book, published in 1929, an English translation of which appeared in 1933 as Monetary Theory and the Trade Cycle. There he argued for a monetary approach to the origins of the cycle. In his Prices and Production (1931), Hayek argued that the business cycle resulted from the central bank's inflationary credit expansion and its transmission over time, leading to a capital misallocation caused by the artificially low interest rates. Hayek claimed that "the past instability of the market economy is the consequence of the exclusion of the most important regulator of the market mechanism, money, from itself being regulated by the market process".
title: Friedrich Hayek
paragraph_text: Friedrich Hayek CH (German: [ˈfʁiːdʁɪç ˈaʊ̯ɡʊst ˈhaɪ̯ɛk]; 8 May 1899 – 23 March 1992), born in Austria-Hungary as Friedrich August von Hayek and frequently referred to as F. A. Hayek, was an Austrian and British economist and philosopher best known for his defense of classical liberalism. Hayek shared the 1974 Nobel Memorial Prize in Economic Sciences with Gunnar Myrdal for his "pioneering work in the theory of money and economic fluctuations and ... penetrating analysis of the interdependence of economic, social and institutional phenomena."
title: Friedrich Hayek
paragraph_text: Hayek is widely recognised for having introduced the time dimension to the equilibrium construction and for his key role in helping inspire the fields of growth theory, information economics, and the theory of spontaneous order. The "informal" economics presented in Milton Friedman's massively influential popular work Free to Choose (1980), is explicitly Hayekian in its account of the price system as a system for transmitting and co-ordinating knowledge. This can be explained by the fact that Friedman taught Hayek's famous paper "The Use of Knowledge in Society" (1945) in his graduate seminars.
title: Friedrich Hayek
paragraph_text: Hayek's work on the microeconomics of the choice theoretics of investment, non-permanent goods, potential permanent resources, and economically-adapted permanent resources mark a central dividing point between his work in areas of macroeconomics and that of almost all other economists. Hayek's work on the macroeconomic subjects of central planning, trade cycle theory, the division of knowledge, and entrepreneurial adaptation especially, differ greatly from the opinions of macroeconomic "Marshallian" economists in the tradition of John Maynard Keynes and the microeconomic "Walrasian" economists in the tradition of Abba Lerner.
title: Friedrich Hayek
paragraph_text: Hayek had made contact with many at the U. of Chicago in the 1940s, with Hayek's The Road to Serfdom playing a seminal role in transforming how Milton Friedman and others understood how society works. Hayek conducted a number in influential faculty seminars while at the U. of Chicago, and a number of academics worked on research projects sympathetic to some of Hayek's own, such as Aaron Director, who was active in the Chicago School in helping to fund and establish what became the "Law and Society" program in the University of Chicago Law School. Hayek, Frank Knight, Friedman and George Stigler worked together in forming the Mont Pèlerin Society, an international forum for libertarian economists. Hayek and Friedman cooperated in support of the Intercollegiate Society of Individualists, later renamed the Intercollegiate Studies Institute, an American student organisation devoted to libertarian ideas.
title: Friedrich Hayek
paragraph_text: In 1984, he was appointed as a member of the Order of the Companions of Honour (CH) by Queen Elizabeth II of the United Kingdom on the advice of the British Prime Minister Margaret Thatcher for his "services to the study of economics". Hayek had hoped to receive a baronetcy, and after he was awarded the CH he sent a letter to his friends requesting that he be called the English version of Friedrich (Frederick) from now on. After his 20 min audience with the Queen, he was "absolutely besotted" with her according to his daughter-in-law, Esca Hayek. Hayek said a year later that he was "amazed by her. That ease and skill, as if she'd known me all my life." The audience with the Queen was followed by a dinner with family and friends at the Institute of Economic Affairs. When, later that evening, Hayek was dropped off at the Reform Club, he commented: "I've just had the happiest day of my life."
title: Friedrich Hayek
paragraph_text: In 1950, Hayek left the London School of Economics for the University of Chicago, where he became a professor in the Committee on Social Thought. Hayek's salary was funded not by the university, but by an outside foundation. University of Chicago President Robert Hutchins was in the midst of a war with the U. of Chicago faculty over departmental autonomy and control, and Hayek got caught in the middle of that battle. Hutchins had been attempting to force all departments to adopt the neo-Thomist Great Books program of Mortimer Adler, and the U. of Chicago economists were sick of Hutchins' meddling. As the result the Economics department rejected Hutchins' pressure to hire Hayek, and Hayek became a part of the new Committee on Social Thought.
title: Friedrich Hayek
paragraph_text: Hayek's influence on the development of economics is widely acknowledged. Hayek is the second-most frequently cited economist (after Kenneth Arrow) in the Nobel lectures of the prize winners in economics, which is particularly striking since his own lecture was critical of the field of orthodox economics and neo-classical modelisation. A number of Nobel Laureates in economics, such as Vernon Smith and Herbert A. Simon, recognise Hayek as the greatest modern economist. Another Nobel winner, Paul Samuelson, believed that Hayek was worthy of his award but nevertheless claimed that "there were good historical reasons for fading memories of Hayek within the mainstream last half of the twentieth century economist fraternity. In 1931, Hayek's Prices and Production had enjoyed an ultra-short Byronic success. In retrospect hindsight tells us that its mumbo-jumbo about the period of production grossly misdiagnosed the macroeconomics of the 1927–1931 (and the 1931–2007) historical scene". Despite this comment, Samuelson spent the last 50 years of his life obsessed with the problems of capital theory identified by Hayek and Böhm-Bawerk, and Samuelson flatly judged Hayek to have been right and his own teacher, Joseph Schumpeter, to have been wrong on the central economic question of the 20th century, the feasibility of socialist economic planning in a production goods dominated economy.
title: Friedrich Hayek

Reasoning steps:
When did Hayek start working on Abuse of Reason? >>>> During World War II
what was an economic effect of During World War II >>>> much of the European industrial infrastructure had been destroyed

Answer: spans: much of the European industrial infrastructure had been destroyed