The perception of individuals plays a central role in the business cycle theory that Hayek developed in the 1930s. Yet it does not make use of the psychology of perception which he had worked out in 1920, and which was published in 1952 as The Sensory Order. Is this a paradox? No! The Sensory Order’s main purpose is to present a mind-body theory, and the psychology of perception it contains serves as an illustration of that theory. The parts of Hayek’s work that were influenced by The Sensory Order are his methodology and his social philosophy rather than his economics.