"F. A. Hayek and the Rebirth of Classical Liberalism"

Gray, John N.
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First Pub. Date
Winter 1982
Literature of Liberty. vol. v, no. 4, pp. 19-101. Arlington, VA: Institute for Humane Studies
Pub. Date

1a. [1a] . Hayek does not consistently employ the idea of spontaneous social order as an explanatory device of this sort, and some of the difficulties of his thought arise from this ambiguity. At the same time, Hayek's use of the idea of a spontaneous order in society is his most brilliant use in the context of social theory of his conception of knowledge as at bottom at once conceptual and practical. The spontaneous or undesigned patterns of order in society have the advantage over planned or constructed orders, first and foremost, because planned orders can utilize only explicit or conscious knowledge. Hayek's great thesis, then, is that, contrary to Descartes' unwitting interventionist disciples, spontaneous order is the fundamental order in society because it embodies that practical or tacit knowledge of which theory is only a precipitate or an abridgement. If we accept that the Cartesian view of knowledge and mind is in error, we have no alternative but to acknowledge that the constructivist projects of modern interventionism are all attempts to do the impossible—to replace inarticulate and tacit knowledge by articulate theory, and spontaneous order by conscious control.

1b. [1b]. F. A. Hayek, [B-10], The Sensory Order, London: Routledge and Kegan Paul, 1952, pp. 4-5. The Sensory Order has not in fact gone wholly ignored by psychologists. For a useful symposium on it, see W. B. Weimer and D. S. Palermo, eds., Cognition and Symbolic Processes, vol. II, New York, 1978. Also "Hayek Revisited: Mind as a Process of Classification" by Rosemary Agnitto in Behaviorism: a Forum for Critical Discussion, 3/2, Nevada, (Spring 1975): 162-171. Neglect of Hayek's contributions to psychology by professional psychologists may in part be due to his drawing on a tradition in psychology—the neo-Kantian tradition of Helmholz and Wundt—which fell on hard times when behavioral and psychoanalytical approaches came to dominate the theoretical investigation of mental life.

2. [2]. Hayek, [B-10], Sensory Order, p. 5, para. 1.12. At times, Hayek goes so far as almost to relativize any distinction between appearance and reality. When he adopts such a position, he breaks with a decisive element in Kantian critical philosophy, for which the distinction between how things seem to us and how they are in themselves must be fundamental.

3. [3]. Hayek, [B-10], Sensory Order, p. 171, para. 8.24.

4. [4]. Hayek, [B-10], Sensory Order, p. 42, para. 2.15.

5. [5]. Hayek, [B-10], Sensory Order, p. 165, para. 8.2.

6. [6]. Hayek, [B-10], Sensory Order, p. 193, para. 8.93, and his [B-12], The Constitution of Liberty, London: Routledge and Kegan Paul, 1960, pp. 13, 438. See Mach's influence on Hayek by consulting the bibliography to my essay: B-10 and A-119.

7. [7]. Hayek, Sensory Order, [B-10], pp. 178-9, para. 8.45. Hayek's affirmation of a practical dualism in the theory of the mind may well have been influenced by Mises, who adopts a very similar standpoint in several of his writings.

8. [8]. Hayek, [B-10], Sensory Order, p. 194, para. 8.97.

9. [9]. Hayek, [B-10], Sensory Order, p. 194, para. 8.97.

10. [10]. See W. V. Quine, Ontological Relativity, New York: 1969. Unlike Hayek, Quine sees compelling reasons for postulating a realm of abstract entities, including numbers, but, like Hayek, he admits no ontological gulf between body and mind. Hayek's objection to the neutral monism defended by William James, Bertrand Russell, and John Dewey seems to be on the grounds of its psychologistic features as it is stated by these writers: see Sensory Order, p. 176, para. 8.38. Neutral monism need not have these features, however, and perhaps Hayek's system need not exclude it.

11. [11]. See Hayek's interesting discussion of differences of method as between natural and social sciences in [E-5], the collection which he edited: Collectivist Economic Planning, London: 1956 (originally published 1935), pp. 10-11. Hayek withdraws from the strong methodological dualism about natural and social science adopted here and in many of his earlier writings, explicitly in the Preface to his Studies in Philosophy, Politics and Economics, London: Routledge and Kegan Paul, 1967, p. viii, where he asserts that through Popper's work "the difference between the two groups of disciplines has thereby been greatly narrowed." For a brilliant discussion of Popper's demarcation criterion for science, see I. Lakatos, "Popper on Demarcation and Induction," in P. A. Schilpp, ed., The Philosophy of Karl Popper, La Salle, Illinois: 1974, pp. 241-273.

12. [12]. See F. A. Hayek, "Kinds of Rationalism" in his [B-13], Studies in Philosophy, Politics and Economics, Ch. 5, pp. 82-95, and his Law, Legislation and Liberty, Vol. I, London: Routledge and Kegan Paul, 1973, p. 29.

13. [13]. Karl R. Popper in P. A. Schilpp, ed., The Philosophy of Karl Popper, pp. 1059-1060.

14. [14]. J. W. N. Watkins in P. A. Schilpp, ed., The Philosophy of Karl Popper, pp. 401-402.

15. [15]. Hayek, Sensory Order, [B-10], p. 176, para. 8.39.

16a. [16a]. Hayek does cite Popper's ideas of a third world of abstract entities with apparent endorsement in [B-18], Law, Legislation and Liberty, Vol. III, p. 157.

16b. [16b]. See Hayek's reminiscences, "Remembering My Cousin Ludwig Wittgenstein," Encounter (August 1977), listed as A-143 in Bibliography.

17. [17]. I owe to Professor Hayek this information regarding his interest in Mauthner's work. Wittgenstein's reference to Mauthner occurs in para. 4.0031 of his Tractatus Logico-Philosophicus. The only book-length study of Mauthner's philosophy in English is that of Gershon Weiler, Mauthner's Critique of Language, Cambridge: Cambridge University Press, 1970. Also see Allan Janik and Stephen Toulmin, Wittgenstein's Vienna. New York: Simon and Schuster, 1973, pp. 121-133,178-182.

18. [18]. See F. A. Hayek, [B-17], New Studies in Philosophy, Politics and Economics, London: Routledge and Kegan Paul, 1978, Chapter Six.

19a. [19a]. In attributing a pragmatist aspect to Hayek's Kantianism, I do not mean to ascribe to Hayek any of the doctrines of modern Pragmatism, but rather to note the sense in which for Hayek action or practice has primacy in the generation of knowledge. For Hayek, in some contrast with Kant, knowledge emanates from practical life in the sense that it is ultimately embodied in judgments and dispositions to act.

19b. [19b]. In his [B-13], Studies in Philosophy, Politics and Economics, p. 24, speaking of "the erroneous belief that if we look only long enough, or at a sufficient number of instances of natural events, a pattern will always reveal itself," Hayek remarks that "in those cases the theorizing has been done already by our senses."

20. [20]. See Gilbert Ryle, "Knowing How and Knowing That," Proceedings of the Aristotelian Society 46 (1945-1946): 1-16.

21. [21]. See Michael Polanyi, The Tacit Dimension, London: Routledge and Kegan Paul, 1967.

22. [22]. Michael Oakeshott, "Rational Conduct," in Rationalism in Politics, London: Methuen, 1962, pp. 97-100.

23. [23]. Hayek, [B-13], Studies in Philosophy, Politics and Economics, London: Routledge and Kegan Paul, 1967, pp. 60-62. Hayek's belief that the reflexive investigation of our own minds must always be incomplete, inasmuch as it will always be governed by meta-conscious rules beyond the range of critical scrutiny, is not one that Kant could easily have accepted.

24. [24]. Hayek, [B-13], Studies, p. 44, footnote 4.

25. [25]. Hayek, [B-13], Studies, Chapter 4.

26. [26]. Hayek, [B-17], New Studies, p. 45, footnote 14.

27. [27]. Hayek, [B-16], Law, Legislation and Liberty, Vol. II, London: Routledge and Kegan Paul, 1976, p. 25.

28. [28]. I have in mind, of course, Popper's important criticism of holistic social engineering in Karl R. Popper, The Poverty of Historicism, London: Routledge and Kegan Paul, 1972, pp. 83-93.

29. [29]. Hayek goes so far as to assert that "the idea of a mind fully explaining itself involves a logical contradiction." See [B-13], Studies, p. 34.

30. [30]. Hayek, [B-15], Law, Legislation and Liberty, Vol. I, London: Routledge and Kegan Paul, 1973, p. 17.

31. [31]. Descartes may not always have committed the errors Hayek finds in him or his disciples. See on this Stuart Hampshire, "On Having a Reason," Chapter 5 of G. A. Vesey, ed., Human Values, Royal Institute of Philosophy Lectures, vol. II, 1976-1977, Harvester Press, 1976, where on p. 88 Hampshire speaks in Hayekian fashion of "a Cartesian error, which was not consistently Descartes', and which consists of assuming a necessary connection between thought on the one side and consciouness and explicitness on the other..."

32. [32]. Hayek, [B-13], Studies, p. 73. On Hayek's view of spontaneous order, see Barry (1982) in Bibliography.

33. [33]. Hayek, [B-13], Studies, pp. 71-72.

34. [34]. Hayek, [B-15], Law, Legislation and Liberty, Vol. I, p. 13.

35. [35]. Hayek, [B-17], New Studies, p. 253.

36. [36]. Hayek, [B-13], p. 76. "The problems of how galaxies or solar systems are formed and what is their resulting structure is much more like the problems which the social sciences have to face than the problems of mechanics..." See also [B-16], Law, Legislation and Liberty, Vol. II, pp. 39-40.

37. [37]. Hayek, [B-17], New Studies, p. 250.

38. [38]. On Spencer, see J. D. Y. Peel, Herbert Spencer: The Evolution of a Sociologist, London: Heinemann, 1971.

39. [39]. See Hayek, [B-18], Law, Legislation and Liberty, Vol. III, pp. 153-155.

40. [40]. See Peter Winch, "Nature and Convention," Proceedings of the Aristotelian Society, 60 (1959-1960):231-252, reprinted as Chapter 3 of Winch's Ethics and Action, London: Routledge and Kegan Paul, 1976. In some of his writings published after The Open Society and Its Enemies, Popper comes closer to a Hayekian position. In his "Towards a Rational Theory of Tradition," in particular, perhaps in response to Oakeshott's writings, he effectively abandons the Sophistic dichotomy of nature and convention entailed in his earlier writings. See Popper's Conjectures and Refutations, London: Routledge and Kegan Paul, 1963, for this study.

41. [41]. Hayek, [B-13], Studies, Chap. 4.

42. [42]. Personal communication from Professor Hayek to the author.

43. [43]. See Hayek, [B-13], Studies, p. 61: "...if 'to have meaning' is to have a place in an order which we share with other people, this order itself cannot have meaning because it cannot have a place in itself."

44. [44]. See Hayek, [B-12], The Constitution of Liberty, p. 160.

45. [45]. On the calculation debate, see The Journal of Libertarian Studies 5, No. 1 (Winter 1981) especially the historical paper by Don Lavoie, "A Critique of the Standard Account of the Socialist Calculation Debate," pp. 41-87.

46. [46]. All the preceding three quotations occur on pp. 80-81 of Hayek, [B-7], Individualism and Economic Order, London: Routledge and Kegan Paul, 1976.

47. [47]. Hayek, [B-7], Individualism, p. 50.

48. [48]. Israel M. Kirzner, Competition and Entrepreneurship, Chicago and London: University of Chicago Press, 1973, p. 68.

49. [49]. Joseph Schumpeter, Capitalism, Socialism and Democracy, London: Unwin, 1974, Chapter XVI.

50. [50]. See Paul Craig Roberts, Alienation in the Soviet Economy, Albuquerque: University of New Mexico Press, 1971.

51. [51]. Hayek, [B-13], Studies, p. 40.

52. [52]. Hayek, [B-13], Studies, p. 35.

53. [53]. See F. A. Hayek, [B-9], The Counter-Revolution of Science, Indianapolis: Liberty Press, 1979, Chapter Three.

54. [54]. Hayek, [B-13], Studies, p. 26.

55. [55]. Quoted by T. W. Hutchinson, The Politics and Philosophy of Economics, Oxford: Basil Blackwell, 1981, p. 214.

56. [56]. Norman P. Barry, Hayek's Social and Economic Philosophy, London: MacMillan, 1979, p. 41.

57. [57]. Barry, Hayek, p. 40.

58. [58]. Hayek, [B-17], New Studies, pp. 51-52.

59. [59]. Hayek, [B-13], Studies, p. viii.

60. [60]. Hayek, [B-13], Studies, p. 6: "while this possibility [of falsification] always exists, its likelihood in the case of a well-confirmed hypothesis is so small that we often disregard it in practice."

61. [61]. Hayek, [B-13], Studies, p. 16.

62. [62]. Hayek, [B-13], Studies, p. 36. See also Studies, p. 18: "Where our predictions are thus limited to some general and perhaps only negative attributes of what is likely to happen, we evidently also shall have little power to control developments." And on p. 19: "the wise legislator or statesman will probably attempt to cultivate rather than to control the forces of the social process."

63. [63]. Hayek, [B-16], Law, Legislation and Liberty, vol. II, p. 157, footnote 25.

64. [64]. Michael Oakeshott, Rationalism in Politics, London: Methuen, 1962, p. 4.

65. [65]. Rush Rhees, Without Answers, London: Routledge and Kegan Paul, 1969, p. 49.

66. [66]. F. A. Hayek, [P-16b], Denationalisation of Money, 2nd edition, London: Institute of Economic Affairs, 1978, p. 52.

67. [67]. G. L. S. Shackle, Epistemics and Economics: a Critique of Economic Doctrines, Cambridge, Cambridge University Press, 1976.

68. [68]. Hayek, [B-12], The Constitution of Liberty, pp. 35-6.

69. [69]. Hayek, [B-13], Studies in Philosophy, Politics and Economics, p. 38.

70. [70]. Hayek, [B-13], Studies, p. 113. Hayek acknowledges earlier in his Hume essay (p. 109, note 5: "My attention was first directed to these parts of Hume's works many years ago by Professor Sir Arnold Plant, whose development of the Humean theory of property we are still eagerly awaiting.") Hayek is alluding to his discussions with Sir Arnold in the early 1930s at the London School of Economics, where Hayek had migrated to take up The Tooke Professorship. See Sir Arnold Plant, "A Tribute to Hayek—The Rational Persuader." Economic Age 2, no. 2 (January-February 1970): 4-8, especially p. 5: "I myself had returned to LSE in the middle of 1930 after six years at the University of Cape Town, where I had developed a special interest in the scope of and functions of property and ownership, both private and public. It was a delight to find Hayek as well seized of the economic significance of the ramifications of property law as I was myself. I recall his excitement when I called his attention to the profound discussion of these matters in David Hume's Enquiry concerning the Principles of Morals: section III, Of Justice, and my own gratitude to him for his influence on my own thinking about so-called intellectual and industrial property law." The entirety of Sir Arnold's article should be consulted for the light it sheds on LSE during the 30s as a seedbed for transmitting Austrian economics (One visitor described LSE as "ein Vorort von Wien"—a suburb of Vienna; Plant, p. 6). See also Hayek's important Inaugural lecture delivered at LSE March 1, 1933, "The Trend of Economic Thinking," (A-20) and his revealing article on the history of "The London School of Economics, 1895-1945," (A-60). During the 1940s Hayek was also editor of LSE's journal, Economica.

71. [71]. H. L. A. Hart, The Concept of Law, Oxford: Clarendon Press, 1961.

72. [72]. See, especially, Henry Sidgwick's masterpiece, The Method of Ethics, in which Sidgwick defends an indirect form of utilitarian morality.

73. [73]. For Hayek's criticism of the standard variety of utilitarian theory, see especially [B-16], Law, Legislation and Liberty, vol. II, pp. 17-23.

74. [74]. See Hayek, [B-13], Studies in Philosophy, Politics and Economics, p. 173: "An optimal policy in a catallaxy may aim, and ought to aim, at increasing the chances of any member of society taken at random of having a high income, or, what amounts to the same thing, the chance that, whatever his share in total income may be, the real equivalent of this share will be as large as we know how to make it."

75. [75]. See Hayek, [B-16], Law, Legislation and Liberty, vol. II: The Mirage of Social Justice, p. xiii, for his endorsement of some aspects of Rawls' theory.

76. [76]. See Ronald Hamowy, "Law and the Liberal Society: F. A. Hayek's Constitution of Liberty," Journal of Libertarian Studies 2, no. 4 (Winter 1978): 287-297; J. Raz, "The Rule of Law and Its Virtue," in Liberty and the Rule of Law, ed. R. L. Cunningham, Texas A & M University Press, 1979, pp. 3-21; and John N. Gray, "F. A. Hayek on Liberty and Tradition," Journal of Libertarian Studies 4, no. 2 (Spring 1980): 119-137.

77. [77]. See footnote 76 above.

78. [78]. See footnote 76 above.

79. [79]. See my "F. A. Hayek on Liberty and Tradition," cited in footnote 76 above.

80. [80]. Hayek, [B-13], Studies in Philosophy, Politics and Economics, p. 168, ff.

81. [81]. Hayek, [B-13], Studies, pp. 116-117.

82. [82]. Raz, "The Rule of Law," [in Cunningham, ed.], p. 19.

83. [83]. Hamowy, "Law and the Liberal Society," pp. 291-292.

84. [84]. I draw heavily here on the account of universalization given in J. L. Mackie's Ethics: Inventing Right and Wrong, London: Penguin Books, 1977, pp. 83-102.

85. [85]. Hayek, [B-13], Studies, p. 168.

86. [86]. Hayek, [B-13], Studies, pp. 116-117: "What Kant had to say about this [justice] seems to derive directly from Hume."

87. [87]. See R. M. Hare, Moral Thinking, Oxford: Clarendon Press, 1981.

88. [88]. Hayek, [B-13], Studies, p.168.

89. [89]. Hayek, [B-13], Studies, p. 166.

90. [90]. See Hayek, [B-13], Studies, p. 163.

91. [91]. Hayek, [B-13], Studies, p. 116. Hayek's argument for a procedural conception of justice—an argument which, unlike Nozick's, does not depend on one's prior acceptance of Lockean rights theory—is one of the fundamentally important theses of his later philosophy, all the more important because his claim is that the procedural view of justice follows from the Kantian principle and is uniquely consonant with the requirements of the free market process.

92. [92]. Hamowy, "Law and the Liberal Society."

93. [93]. Hamowy is surely right that Hayek's account of coercion is faulty. On this see Murray N. Rothbard, The Ethics of Liberty, Atlantic Highlands, N.J.: Humanities Press, 1981, Chapter 28, "F. A. Hayek and the Concept of Coercion."

94. [94]. See J. L. Mackie, Ethics, p. 88: "This ... thesis is well formulated by Hobbes: 'that a man... be contented with so much liberty against other men, as he would allow other men against himself.' Hobbes equates this with the Golden Rule of the New Testament...."

95. [95]. See James M. Buchanan, "Cultural Evolution and Institutional Reform" (unpubl.) I am most grateful to Professor Buchanan for allowing me to read this paper.

96. [96]. James M. Buchanan, Freedom in Constitutional Contract, College Station: Texas A & M University Press, 1977, pp. 25-30.

97. [97]. Robert Nozick, Anarchy, State, and Utopia, New York: Basic Books, 1974, pp. 18-22. For a most penetrating discussion of some related aspects of social explanation, see Nozick's "On Austrian Methodology," Synthese 36 (1977): 353-392. See also Edna Ullmann-Margalit's "Invisible Hand Explanations," Synthese 30 (1978): 263-291. I am indebted to Professor Lester Hunt both for directing me to Ms. Ullmann-Margalit's article and for showing me his unpublished paper, "Toward a Natural History of Morality," in which some of Ullmann-Margalit's work is pushed further. See also Norman P. Barry, "The Tradition of Spontaneous Order," Literature of Liberty 5 (Summer 1982): 7-58, as well as Richard Vernon, "Unintended Consequences," Political Theory 7 (1979): 57-74.

98. [98]. See Oakeshott's "Rationalism in Politics," in the book of that name for his most explicit criticism of Hayek.

99. [99]. See Nozick, Anarchy, State, and Utopia, Part Three.

100. [100]. See Hayek's Law, Legislation and Liberty, vol. II, Chapter Ten, for the clearest acknowledgement of the role of chance in the alembic of catallaxy.

101. [101]. See Irving Kristol, Two Cheers for Capitalism, New York, 1978, Chapter 7, "Capitalism, Socialism and Nihilism."

102. [102]. See Hayek's "Dr. Bernard Mandeville," New Studies, pp. 249-266; and his remarks on contemporary morality in the Epilogue to vol. III of Law, Legislation and Liberty, pp. 165-166.

103. [103]. For their detailed comments on an earlier draft of this article, I am indebted to James M. Buchanan, Jeremy Shearmur, David Gordon, and Lester Hunt. I am also indebted to Michael Oakeshott and Robert Nozick for illuminating conversation on the themes addressed in this article.

I have learned much from three studies by Jeremy Shearmur: (1) "Abstract Institutions in an Open Society," in H. Berghel and others, eds. Wittgenstein, the Vienna Circle and Critical Materialism, Vienna: Holder-Pichler-Tempsky, 1979, pp. 349-354; (2) "The Austrian Connection: F. A. von Hayek and the Thought of Carl Menger," in B. Smith and W. Grassl, eds., Austrian Philosophy and Austrian Politics, Munich: Philosophia Verlag, forthcoming; and (3) Adam Smith's Second Thoughts (pamphlet), London: Adam Smith Club, 1982.

End of Notes.

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