Hayek's The Constitution of Liberty - Institute of Economic Affairs

s a f e g ua r d i n g p r o g r e s s
14 SAFEGUARDING PROGRESS (Chapters
22, 23, 24)
Hayek concludes his discussion of freedom in the welfare state
with chapters on housing and town planning, agriculture and
natural resources, and education and research. These policy areas,
like the ones we examined earlier, involve issues of wealth redistribution,
but more broadly they raise questions about progress
– what it means, why it is threatened by current policies, and how
best to ensure its continuation.
The complex problems of rural and city life and of dwindling
natural resources have a common origin in the advance of modern
technology. Hayek points out that the Industrial Revolution
was preceded and made possible by a revolution in agriculture,
which made it possible for a smaller number of farmers to feed
the populace. Many rural inhabitants then moved to the cities and
took up industrial pursuits, which themselves were highly productive
and greatly beneficial to both urban and rural consumers. The
decline in the size of the farming population is often lamented
on economic and aesthetic grounds; but Hayek sees this decline
as a necessary and beneficial adaptation to technological change.
As for cities, their growth was determined mostly by undirected
market forces and not by advance planning. In Hayek’s view, ‘the
market has, on the whole, guided the evolution of cities more
successfully, though imperfectly, than is commonly realized;’ and
proposals for a system of central direction ‘show little awareness
of what such a system would have to accomplish, even to equal the
market in effectiveness’ (342; cf. 358–9, 363, 366, 525, n. 8).
Hayek relies chiefly on markets to ameliorate problems of
land use, population imbalances and possible resource depletion.
Central planning cannot solve these problems, and it is likely to
make them worse. Good policies will facilitate adaptation and
help markets work effectively.
Besides considering where progress has brought us, Hayek
looks ahead to the requirements for its continuation. Progress
is driven above all by new knowledge. Indeed, the emergence
and spread of knowledge is a large part of what Hayek means by
progress. As we will see, this forward-looking stance is particularly
evident in his concluding discussion of education and research
policy.
Urban policy
Hayek traces human progress to the growth of cities. Urban
life was responsible not only for enormous increases in industrial
production and material comforts, but also for advances
in science and art. The advantages of civilization over primitive
society are due to the city; and since its products can be enjoyed
in the country, a leisured life in the country has come to be seen as
‘the ideal of a cultured life’ in advanced civilisations. Yet despite
its indispensable contribution to civilisation and to progress, the
city ‘is at the same time responsible for the darkest blotches on
this civilization.’ City life produces a level of poverty and outward
signs of squalor that fellow men find shocking and scarcely tolerable
(340–41).
Hayek has no objection to planning as a way to deal with
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