In the essay Why I am not a conservative Hayek mentions the changes in that which is denoted by the word "liberalism":
"Conservatism proper is a legitimate, probably necessary, and certainly widespread attitude of opposition to drastic change. It has, since the French Revolution, for a century and a half played an important role in European politics. Until the rise of socialism its opposite was liberalism. There is nothing corresponding to this conflict in the history of the United States, because what in Europe was called "liberalism" was here the common tradition on which the American polity had been built: thus the defender of the American tradition was a liberal in the European sense. This already existing confusion was made worse by the recent attempt to transplant to America the European type of conservatism, which, being alien to the American tradition, has acquired a somewhat odd character. And some time before this, American radicals and socialists began calling themselves "liberals." I will nevertheless continue for the moment to describe as liberal the position which I hold and which I believe differs as much from true conservatism as from socialism. Let me say at once, however, that I do so with increasing misgivings, and I shall later have to consider what would be the appropriate name for the party of liberty. The reason for this is not only that the term "liberal" in the United States is the cause of constant misunderstandings today, but also that in Europe the predominant type of rationalistic liberalism has long been one of the pacemakers of socialism."
The liberalism with which Professor Hayek aligns himself conceptualises an attitude toward a social order in transformation, consonant with the attitude of conservatism before the French Revolution toward a society imagined static. A conservatism restored is likely to exhibit as odd a character as one transplanted. Hayek's tradition covers a relatively brief period. It consists principally of such ideas as were useful to the ascendant capitalist class.
(This isn't meant as some kind of unconscious censorship, in a psychoanalytical vein, just a rather banal admission of ordinary social politics. For example Marshall writes concerning Ricardo and his Principles of Economics: "He was with difficulty induced to publish it; and if in writing it he had in view any readers at all, they were chiefly those statesmen and business men with whom he associated. So he purposely omitted many things which were necessary for the logical completeness of his argument, but which they would regard as obvious".)
Similarly the adoption of the tag "liberal" by "radicals and socialists" relates back to an older, more general liberalism as well as the Latin American tradition that has followed its own distinct course.
We will look at Hayek's logic in due course, but we could perhaps say, rather provisionally, that Hayek's method, which works backwards from institutions to human practice, has something in common with the experience common to people in modern cities, drawn into the decipherment of giant billboards.