Front Page Titles (by Subject) Hayek\'s Utilitarianism & Liberty - Literature of Liberty, Winter 1982, vol. 5, No. 4
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Hayek's Utilitarianism & Liberty - 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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Hayek's Utilitarianism & Liberty
Again however, Hayek's utilitarian outlook is distinctive in that he explicitly repudiates any hedonistic conception of the content of utility itself.73 How, then, does he understand utilitarian welfare? Just how are we to assess different systems of rules in regard to their welfare-promoting effects? Here Hayek comes close to modern preference utilitarianism, but gives that view an original formulation, in arguing that the test of any system of rules is whether it maximizes an anonymous individual's chance of achieving his unknown purposes.74 In Hayek's conception, we are not bound to accept the historical body of social rules just as we find it: it may be reformed in order to improve the chances of the unknown man's achieving his goals. It will be seen that this is a maximizing conception, but not one that represents utility as a sort of neutral stuff, a container of intrinsic value whose magnitude may vary. Indeed, in taking as the point of comparison an hypothesized unknown individual, Hayek's conception (as he recognizes75 ) parallels John Rawls’ model of rational choice behind a veil of ignorance as presented in Rawls’ Theory of Justice.
Mention of Rawls’ contractarian derivation of principles of justice at once raises the question of how Hayek's indirect or system utilitarian argument is supposed to ground the rules of justice he defends, and, in particular, how Hayek's defense of the priority of liberty squares with his utilitarian outlook.
Several observations are apposite here. First, Hayek undoubtedly follows Hume in believing that, because they constitute an indispensable condition for the promotion of general welfare, the rules of justice are bound to take priority over any specific claim to welfare. Again, it is to be noted that Hume's second rule of justice, the transference of property by consent, itself frames a protected domain and so promotes individual liberty. Finally, Hayek argues forcefully that, if individuals are to be free to use their own knowledge and resources to best advantage, they must do so in a context of known and predictable rules governed by law. It is in a framework of liberty under the rule of law, Hayek contends, that justice and general welfare are both served. Indeed, under the rule of law, justice and the general welfare are convergent and not conflicting goals or values.
Justice, Liberty, and the Rule of Law In Hayek's Constitution of Liberty
These claims regarding the relations between justice, liberty, and the rule of law encompass the most controversial and the most often attacked portion of Hayek's social philosophy. Common to all criticisms of it is the objection that Hayek expects too much of the rule of law itself, which is only one of the virtues a legal order may display, and a rather abstract notion at that. Among classical liberals and libertarians, this objection has acquired a more specific character. It has been argued76 that upholding the rule of law cannot by itself protect liberty or secure justice, for these values will be promoted only if the individual rights are respected. Hayek's theory is at the very least radically incomplete, according to these critics, inasmuch as his conception of the rule of law will have the classical liberal implications he expects of it, only if it incorporates a conception of individual rights, which he seems explicitly to disavow. All these liberals and libertarians fasten upon Hayek's use of a Kantian test of universalizability to argue that such a test is almost without substance, in that highly oppressive and discriminatory laws will survive it, so long as their framers are ingenious enough to avoid mentioning particular groups or named individuals in them. The upshot of this criticism is that, in virtue of the absence in his theory of any strong conception of moral rights, Hayek is constrained to demand more of the largely formal test of universalizability than it can possibly deliver, and so to conflate the ideal of the rule of law with other political goods and virtues.
[73.] For Hayek's criticism of the standard variety of utilitarian theory, see especially µB-16Õ, Law, Legislation and Liberty, vol. II, pp. 17-23.
[74.] See Hayek, µB-13Õ, 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.] See Hayek, µB-16Õ, Law, Legislation and Liberty, vol. II: The Mirage of Social Justice, p. xiii, for his endorsement of some aspects of Rawls’ theory.
[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.