Front Page Titles (by Subject) Prediction vs. 'Complex Phenomena' - Literature of Liberty, Winter 1982, vol. 5, No. 4
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Prediction vs. ‘Complex Phenomena’ - Leonard P. Liggio, Literature of Liberty, Winter 1982, vol. 5, No. 4 
Literature of Liberty: A Review of Contemporary Liberal Thought was published first by the Cato Institute (1978-1979) and later by the Institute for Humane Studies (1980-1982) under the editorial direction of Leonard P. Liggio.
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Prediction vs. ‘Complex Phenomena’
Hayek's conception of knowledge, when taken in conjunction with the idea of a spontaneous social order, has important implications for the proper method for the practice of social science. To begin with, Hayek's affirmation of “the primacy of the abstract” in all human knowledge means that social science is always a theory-laden activity and can never aspire to an exhaustive description of concrete social facts. More, the predictive aspirations of social science must be qualified: not even the most developed of the social sciences, economics, can ever do more than predict the occurrence of general classes of events. Indeed, in his strong emphasis on the primacy of the abstract, Hayek goes so far as to question the adequacy of the nomothetic or nomological model of science (i.e. exact prediction through ‘laws’), including social science. At least in respect of complex phenomena, all science can aim at is an “explanation of the principle,” or the recognition of a pattern—“the explanation not of the individual events but merely of the appearance of certain patterns or orders. Whether we call these mere explanations of the principle or mere pattern predictions or higher level theories does not matter.”51 Such recognitions of orders or pattern predictions are, Hayek observes, fully theoretical claims, testable and falsifiable: but they correspond badly with the usual cause-effect structure of nomothetic or law-governed explanation.
In his most important later statement on these questions, “The Theory of Complex Phenomena,” [bibliography, A-109], Hayek tells us that, because social life is made up of complex phenomena, “economic theory is confined to describing kinds of patterns which will appear if certain general conditions are satisfied, but can rarely if ever derive from this knowledge any predictions of specific phenomena.”52 If we ask why it is that social phenomena are complex phenomena, part of the reason at any rate lies in what Hayek earlier characterized53 as the subjectivity of the data of the social sciences: social objects are not like natural objects whose properties are highly invariant relatively to our beliefs and perceptions; rather, social objects are in large measure actually constituted by our beliefs and judgments. Social phenomena are non-physical, and Hayek has stated that “Non-physical phenomena are more complex because we call physical phenomena what can be described by relatively simple formulae.”54 And, because of the subjectivity of its data, social life always eludes such simple formulae.
[51.] Hayek, µB-13Õ, Studies, p. 40.
[52.] Hayek, µB-13Õ, Studies, p. 35.
[53.] See F. A. Hayek, µB-9Õ, The Counter-Revolution of Science, Indianapolis: Liberty Press, 1979, Chapter Three.
[54.] Hayek, Studies, p. 26.