capitalism

Hayek, Friedrich A. (1899–1992) 219
epistemological purpose, as a discovery process, that is, as
a vehicle for the generation of knowledge.
Hayek’s insights into the market as a coordinating
mechanism of otherwise dispersed knowledge served
as the philosophical underpinning of his most important
insight into social theory, the idea that complex social
institutions, while the product of human action, are not the
product of human design. Social institutions, Hayek contended,
are so complex that their internal structure cannot
be fully understood by any one mind or group of minds.
They arise and take their shape not from conscious human
invention, but through evolution as the product of countless
human interactions, each aimed at some more immediate,
private end. The notion that the social arrangements
under which we live are the product of evolution and not
of deliberate calculation had been earlier suggested by the
thinkers associated with the Scottish Enlightenment, in
particular Adam Smith, David Hume, and Adam Ferguson.
Indeed, Adam Smith’s conception of the invisible hand is
one prominent instance of the broader idea of spontaneously
generated orders. In his writings, Hayek maintained
that language, law, morals, and social conventions
were all instances of spontaneously generated orders.
Hayek regarded the view that social arrangements required
some central controlling authority, lest lawlessness and
chaos ensue, as the entryway to totalitarian ideologies.
Hayek regarded this rationalistic approach to social problems,
predicated on the view that the methodology of the
natural sciences was applicable to social questions, as
inimical to a free society, and associated it with the French
Enlightenment and continental political theory.
Alarmed by the prodigious growth of government in the
20th century, even in those nations ostensibly dedicated to
personal liberty and private initiative, Hayek wrote The
Road to Serfdom in 1944. The essay was directed primarily
at a lay rather than an academic audience, and it warned of
the dangers inherent in a planned economy, pointing to the
similarities between the social and economic systems that
had been embraced by National Socialist Germany and
Fascist Italy, on the one hand, and by the Allied powers, on
the other hand. Hayek had been alarmed by the prevailing
orthodoxy that viewed an immense welfare state and extensive
government intervention into the lives of its citizens as
a compassionate response to unrestrained capitalism. In
The Road to Serfdom, he hoped to show that those preconceptions
were rooted in the same distrust of individual initiative
and voluntary exchange as were the ideologies with
which the West was at war, and that central planning, even
should its intentions be benign, resulted in destroying the
spontaneously generated order of the market, which in turn
led to even more government planning.
The book was received enthusiastically in both the
United States and Great Britain, to the point where the
American publisher, the University of Chicago Press, was
unable to print enough copies to meet the demand because
of the wartime rationing of paper. However, the essay was
able to reach a much larger American audience when the
Reader’s Digest published a 20-page excerpt of the book in
April 1945. The American lecture tour that followed the
appearance of the Reader’s Digest excerpt whetted Hayek’s
appetite to spend more time in the United States, and
he was prevailed on to accept an appointment to the
Committee on Social Thought at the University of Chicago,
which he took up in 1950.
While at the University of Chicago, Hayek published his
most ambitious work in social and legal philosophy, The
Constitution of Liberty (1960). In that work, Hayek
attempted to set out nothing less than a treatise on the theoretical
foundations of a free society. A work of immense
erudition, The Constitution of Liberty outlines Hayek’s
views on the origins and nature of law in a liberal society,
his conclusions regarding the nature of justice, and his conception
of a free society. A free polity, Hayek contended, is
one in which men are governed by abstract, general rules
that are predictable in their application and apply to all, in
contrast to systems of government based on the exercise of
wide, discretionary powers by those in authority.
Among his final essays was the three-volume Law,
Legislation, and Liberty (1973, 1976, 1979), in which
Hayek elaborated on his earlier discussions of the nature of
liberty and the political and legal framework of a free commonwealth.
In that work, Hayek amplified his views on the
nature of social evolution and described how the moral and
legal rules that have proved themselves compatible with free
societies emerged without the need of a lawgiver. In The
Fatal Conceit (1988), Hayek took up a theme that he had
dealt with earlier in a series of articles that first appeared in
the British journal Economica and were later published
in book form as The Counter-Revolution of Science: Studies in
the Abuse of Reason (1952). Those earlier studies provided
a persuasive defense of methodological individualism and
criticized those who asserted that we may make meaningful
statements about social collectivities independent of their
constituent components. The Fatal Conceit was to be
Hayek’s last book. In it, he once again took issue with those
who refuse to acknowledge the limitations of human knowledge
and who are under the mistaken notion that reason
alone is sufficient to shape the complex of rules and institutions
that make up modern society and that, as a consequence,
conscious social planning is possible and salutary.
Hayek died in 1992, having witnessed the total collapse
of the socialist economies of Eastern Europe. More important,
he was aware that his own work played a crucial role
in the revolutions that swept the Eastern Bloc. That is certainly
the highest tribute that can be accorded to someone
who dedicated his life to the ongoing war against tyranny.
RH