Discoverers of “market failures” as well as advocates of the general efficiency of a “true, unhampered market” sometimes seem to disregard the fundamental fact that there is no such thing as a “market as such.” What we call a market is always a system of social interaction characterized by a specific institutional framework, that is, by a set of rules defining certain restrictions on the behavior of the market participants, whether these rules are informal, enforced by private sanctions, or formal, (...) enforced by a particular agency, the “protective state,” in J. M. Buchanan's terminology. (shrink)

In spite of the important discoveries made by Adam Smith and later by the economists of the Austrian School, Friedrich Hayek remained intellectually challenged by the miracle of the price mechanism. As it turned out there was still some pioneering to do in describing the price mechanism. This became clear when Hayek identified the dispersal of information relevant to exchange transactions as the central issue of economic study. In the context of his distinction between competition as a state of things (...) and as a process the price mechanism manifests itself as a powerful integrator of information which is at first sight hopelessly dispersed in modern society. In 1945 he pointed out another intellectual challenge which the miracle of the price mechanism poses: How could such a marvelous functionality come into existence? “I am convinced that if it [the price mechanism] were the result of deliberate human design, and if the people guided by the price changes understood that their decisions have significance far beyond their immediate aim, this mechanism would have been acclaimed as one of the greatest triumphs of the human mind”. It is precisely because the free determination of prices is obviously not an invention, and because actors on the market in general do not realize that their decisions are at once also signals for the information-processing system that the market is, that in general this market order is not highly estimated. The market order is nevertheless the best illustration of the dual principle that the most beautiful forms of complex functionality are not deliberately created and are not deliberately maintained. (shrink)

In his political writings, F. A. Hayek faces a classic liberal dilemma: he opposes coercion but recognizes that sometimes the state can help to minimize it. Hayek attempts to resolve the dilemma of the limits of state power by offering a definition of the rule of law that does not depend on a controversial conception of rights. However, his effort to formalize the rule of law fails. Not only does Hayek implicitly rely on an undefended theory of rights, but his (...) rule‐of‐law scheme is limited to the elaboration of general principles of good government, neglecting the need for reforms aimed directly at the political processes that result in the controversial forms of coercion he deplores. (shrink)

This paper examines the theoretical ideas of Friedrich von Hayek, arguably the key progenitor of the global economic orthodoxy of the past two decades. It assesses Hayek's thought as he presents it: namely as a form of liberalism. Section I argues that Hayek's thought, if liberal, is hostile to participatory democracy. Section II then argues the more radical thesis that neoliberalism is also in truth an illiberal doctrine. Founded not in any social contract doctrine, but a form of constructivism, neoliberal (...) thought at its base accepts the paradoxical need to "discipline subjects for freedom", however this might contravene peoples' natural, social inclinations. The argument is framed by reference to Aristophanes' great comedy, The Birds, whose off shore borderless empire ironically prefigures the dream of neoliberal social engineers, and their corporate supporters.
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Hayek's and Mises's argument for the impossibility of socialist planning is once again popular. Their case against socialism is predicated on an account of the nature of knowledge and social interaction. Hayek refined Mises's original argument by developing a philosophical anthropology which depicts individuals as tacitly knowledgeable rule-followers embedded in a 'spontaneous order' of systems of rules. Giddens, whose social theory is informed by his reading of Wittgenstein, has recently added his sociological support to Hayek's 'epistemological argument' against socialism. With (...) the aid of an interpretation of Wittgenstein which emphasizes his philosophy of praxis , I attempt to 'deconstruct' Giddens's and Hayek's 'picture' of tacit knowledge and rule-following on which their argument against socialism is predicated. (shrink)

Recent conflicts both within Europe and between Europe and the United States suggest that Europe's current political arrangements need to be adjusted. F.A. Hayek and Jürgen Habermas argued, albeit on very different grounds, for European political integration. Their arguments ultimately are not persuasive, but a “United States of Europe” can be justified—on the basis of its contribution to European security.

Christian social thinkers who strongly support the free-market system often have drawn connections between the social values of their faith and the ideas of Austrian economist Friedrich Hayek. Hayek's comments on religion, however, seem to predict its demise for the sake of progress, whereas his colleague Wilhelm Röpke posits “transcendent” religion and established moral traditions as essential to a humane economy. This essay contends that what Röpke described as “enmassment” has similarities to the present “financialization” of society, which involves the (...) rising influence of financial values in all institutions, exaggerated emphasis on quantitative performance measures, and reliance on technical processes in lieu of human relationships. Röpke's “Christian humanist” philosophy advances the kind of ethical entrepreneurialism needed to morally sustain a global society experiencing enmassment and financialization simultaneously. (shrink)

In Hayek's Social and Political Thought, Roland Kley argues that Hayek's defense of capitalism is instrumentalist: that is, that Hayek sees market societies as efficient mechanisms that have no independent ethical justification. But in fact, Hayek does have such a standard, one that is expressed in the notion of a discipline of freedom. This standard derives from the moral anthropology of the liberal‐conservative tradition.

The application of evolutionary ideas to socioeconomic systems has been an increasingly prominent theme in the work of Friedrich Hayek, and the motif has become dominant in his recent book. In an earlier issue of this journal, Viktor Vanberg raises two substantive criticisms of Friedrich Hayek' theory of cultural evolution that invoke some important questions concerning use of the evolutionary analogy in social science.

Hayek developed two contradictory epistemologies. The epistemology for which he is famous attributed dispersed knowledge to economic actors and credited the price system for aggregating and communicating this knowledge. The other epistemology attributed to human and non-human organisms alike the error-prone interpretation of stimuli, which could never truly be said to be “knowledge.” Several of the paradoxes of Hayek's economic and political thought that are explored in this symposium can be explained by the triumph of the first epistemology over the (...) second, including his historical interpretation of socialism as a planning mentality; his tendentious definitions of “liberty” and “justice”; and his opposition to economic redistribution even as he endorsed all manner of economic and social regulations. (shrink)

Hayek's attack on the ideal of social justice, though long ignored by political theorists, has recently been the subject of a number of largely unsympathetic studies (those of Lukes and Johnston being the most recent) in which his critique is dismissed as at best simply mistaken and at worst frivolous. The responses to Hayek's case against social justice, however, fail to draw any blood, for they do not seriously deal with Hayek's central claim that the very notion of social justice (...) is incoherent. (shrink)

Philosophy & Social Criticism, Volume 48, Issue 3, Page 386-415, March 2022. In light of a growing body of scholarship that has cast doubt on the analytic import of spontaneous order, the purpose of my article is to rethink the intellectual relationship between Edmund Burke and Friedrich Hayek by suggesting that reading spontaneous order into Burke’s thought introduces greater tensions between the two thinkers than prior scholars have suggested. One crucial tension, I suggest, is that Hayek believed that contractual arrangements, (...) competitive markets and the rule of law could sustain the growth of social order, while Burke maintained that particular social institutions and practices should remain protected from the full power of voluntary contracts and exchange relations. I conclude by suggesting that the tensions between Hayek and Burke could serve as complementary instruments, rather than as foes, in strengthening the liberal project in modernity. (shrink)

Friedrich Hayek’s defense of neoliberal free market capitalism hinges on the distinction between economies and catallaxies. The former are orders instituted via planning, whereas the latter are spontaneous competitive orders resulting from human action without human design. I argue that this distinction is based on an incomplete semantic history of “economy.” By looking at the meaning of “oikonomia” in medieval providential theology as explained by Giorgio Agamben and Joseph Vogl, I argue how Hayek’s science of catallactics is itself a secularization (...) of providential theology. This exposes Hayek to three criticisms: he unjustifiably neglects the possibility of tendencies toward spontaneous disorder in free markets, he condemns the “losers” of neoliberal competition to being providential waste on the road to general prosperity, and he imposes on people the duty to consent to a neoliberal order that hinders them from cultivating their inoperativity. (shrink)

The theory of cultural evolution proposed by economist Friedrich August von Hayek is without doubt the most harshly criticized component in his highly prolific intellectual corpus. Hayek depicted the emergence of the market order as the unintended consequence of an evolutionary process in which groups whose rules of behavior led to a comparative increase in population and wealth were favored over others. Key to Hayek’s theory was the claim that the rules of the market, on which modern civilization relies, evolved (...) at the meta-individual level and therefore surpass human reason. Hayek believed that his theory provided scientific explanation for the superiority of the market order over rational planning. In this article, I conduct a selective comparison between Hayek’s and Darwin’s theories of cultural group selection and analyze the role that demographic growth and reason play in their respective accounts. I first present Hayek’s theory of cultural group selection, its sources of inspiration, and its important place in his intellectual legacy. I then compare Hayek’s claims to Darwin’s views and highlight fundamental differences in their evaluation of the role of reason in moral evolution. Finally, I offer some comments concerning the place assigned to demographic growth in Hayek’s theory and his over-reliance on economics in explaining cultural evolution. (shrink)

This article discusses the challenges raised by the inclusion of evolutionary elements in the theories of Carl Menger, Joseph Schumpeter, and Friedrich Hayek. Each adopted an idiosyncratic position in terms of method of inquiry, focus, and general message. The breadth of the topics and phenomena they cover testifies to the great variety of interpretations and potential uses of evolutionary concepts in economics. Menger, who made no reference to Darwin’s theory, advanced an “organic” view of the emergence of social institutions. Schumpeter (...) elaborated an original theory of industrial development based on the recurrent emergence and dissemination of innovations. Hayek adopted the biological notion of group selection and made it the central element in his theory of cultural evolution and the rise of the free market. The chapter concludes with a preliminary evaluation of the possible role that evolutionary theorizing might play in the future development of Austrian economics. (shrink)

There are, familiarly, a range of distinct and competing accounts of the methodological underpinnings of Menger' s work. These include Leibnizian, Kantian, Millian, and even Popperian readings; but they include also readings of an Aristotelian sort, and I have myself made a number of contributions in clarification and defence of the latter. Not only, I have argued, does the historical situation in which Menger found himself point to the inevitability of the Aristotelian reading; this reading fits also very naturally to (...) the text of Menger's works. (shrink)

Friedrich Hayek was a fervent advocate of the methodological specificity of the social sciences. However, given his contact with Karl Popper, several historians and philosophers have characterized his final position as Popperian, that is, a position that would have accepted the unity of scientific method. A closer look at Hayek's philosophy and Popper's own intellectual course shows that such a thesis is based on misconceptions that can be overcome by taking the Hayekian concept of 'spontaneous order' as the foundation of (...) a methodology immune to any kind of methodological monism. (shrink)

Conservatism’s core claim is that traditions play an important, if not essential, role in the acquisition of normative knowledge. However, that thesis has never been adequately defended. Three things are missing from conservative political thought: a traditionalist account of propositional normative knowledge, an explicit and sustained positive argument for traditions’ role in the acquisition of normative knowledge, and deference to relevant work in other areas of philosophy, especially epistemology. In this thesis, I provide an argument for conservatism which remedies each (...) of these defects. I call it the Social Knowledge Argument. According to the Social Knowledge Argument, some beliefs formed out of deference to the traditions of one’s society constitute normative knowledge, since deference to the traditions of one’s society is a reliable process for normative belief formation in some societies. Deference to the traditions of one’s society is reliable in some societies because traditions are the outputs of cultural evolution and the latter tends to produce traditions that capture the demands of normative domains such as morality. The Social Knowledge Argument constitutes a traditionalist account of propositional normative knowledge, is an explicit argument for traditions’ epistemic role, and utilises intellectual resources unavailable to previous generations of conservative writers. Specifically, the Social Knowledge Argument assumes a process reliabilist theory of knowledge, and these are of recent provenance, and while conservatives have always appealed to cultural evolution, I am able to draw on fully-fledged scientific accounts of cultural evolution which were unavailable to or neglected by previous conservative writers. (shrink)

The article is devoted to the re-problematisation of F.A. Hayek's legacy in philosophy of law and social theory. Taking as an example the works of SPSU professor I.Y. Kozlikhin, and some other works about Hayek's theory of law, the author demonstrates several inadequacies of the current literature on Hayek's legal philosophy. In criticizing these highly debatable approaches, the author describes multiple but rarely considered nuances of Hayek's conception of law, which seem to be necessary for adequate understanding of his works. (...) In the author's view, only these details allow to cast some doubt on stereotypes about Hayek as a sort of “liberal ideologist” and unfold the true original potential of his philosophy. The main hypothesis of the article is that the key to this original potential lies not in Hayek's theory of freedom and market, but in his fundamental epistemological views. The ideal of freedom is not enough to discriminate between what is “just law” and what is not in hayekian theory. Only by the means of Hayek's epistemology we can separate law as “rules of just conduct” from other types of social institutions in his theory. This separation is based on broader epistemological separation of “simple” and “complex” phenomena in Hayek's theory of knowledge, which is reflected in his distinction between “organization” and “spontaneous order”. Since only the last of them represents a «complex phenomenon», it means that only a system of special meta-rational rules of conduct can provide an epistemically restricted social actor with an ability to act effectively in such a complex and rationally unknowable social structure. It is argued that only this “technical” capacity of meta-rational just law can be seen as the true basis of Hayek's theory of law. Neither hayekian theory of freedom, nor his theory of market can shed light on the Hayek’s most important and original contribution in the domain of legal theory. It is Hayek's epistemology that can be seen as the ultimate foundation of his conception of lawn. (shrink)