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Source: This essay first appeared in the journal Literature of Liberty: A Review of Contemporary Liberal Thought ,
vol. V, no. 4, Winter 1982 published by the Cato Institute (1978-1979)
and the Institute for Humane Studies (1980-1982) under the editorial
direction of Leonard P. Liggio. It is republished with thanks to the
original copyright holders.
The political philosopher John Gray has written on Hayek, Isaiah Berlin, John Stuart Mill, and the liberal tradition.
F.A. Hayek and the Rebirth of Classical Liberalism: A Bibliographical Essay by John Gray
Table of Contents
BIBLIOGRAPHY OF FRIEDRICH A. HAYEK
Introduction: The Revival of Interest in Hayek - A Unified
Research Program in Hayek's Writings?
In the recent revival of public and scholarly interest in the values
of limited government and the market order, no one has been more
centrally significant than Friedrich A. Hayek. His works have figured
as a constant point of reference in the discussions both of the
libertarian and conservative theories of the market economy; they have
also provided a focal point of attack for interventionist and
collectivist critics of the market. Hayek's return to such a pivotal
position in intellectual life is remarkable when we recall that for
several decades his work was subjected to neglect and obscurity. It was
not until 1974 at the age of 75 that he was belatedly acknowledged by
being awarded the Nobel Memorial Prize in Economic Science. During the
three decades after 1945, when certain Keynesian ideas seemed to have
been vindicated by the prevailing government policies of economic
interventionism, Hayek may have seemed an intransigent and isolated
figure, whose chief importance was that of an indefatigable critic of
the spirit of the age. It was, however, during these very same years,
in which he turned from economic theory to political thought, that
Hayek made his greatest contributions thus far to the formulation of a
public philosophy, including most notably his Constitution of Liberty
(1960), surely the most powerful and profound defense of individual
freedom in our time. It is noteworthy that, in the revival of interest
in Hayek's work, his contributions to political philosophy have
attracted as much interest as have his works in economic theory.
The Unity and Coherence of Hayek's Writings: Conception of Mind & Unity of Knowledge
In
all of this revival of scholarly interest, however, Hayek's work has
rarely been viewed as a whole. In fact, it has often been suggested
that what we find in his writings is a series of unconnected episodes,
in which questions are addressed in a variety of disciplines on a
number of disparate historical occasions, rather than a coherent
research program implemented over the years. Even Hayek's friends have
sometimes discerned important tensions and conflicts in his writings,
leading them to argue that his work encompasses methodological and
political positions which are in the last resort incompatible. Against
this view, to which I once subscribed myself, I want now to submit that
Hayek's work does indeed disclose a coherent system of ideas. Hayek's
system of ideas may not perhaps be wholly stable, but in this system
positions covering a range of academic disciplines are in fact informed
and unified by a small number of fundamental philosophical conceptions.
Identifying these basic philosophical positions, and showing how they
infuse his entire work, is the chief aim of this review of Hayek's
work. It will not be my argument that Hayek's system lacks difficulties
or internal tensions. I will try, however, to show that his work is
given a cohesive and unitary character by the claims in theory of
knowledge and in theoretical psychology which inform and govern his
contributions to many specific debates.
My strategy in this
survey of Hayek's work is to seek the unifying wellspring of his
thought in his conception of the mind and in his account of the nature
and limits of human knowledge. My argument will be that Hayek's general
philosophy - a highly distinctive development of post-Kantian critical
philosophy - informs and shapes his contributions to a variety of
academic disciplines (jurisprudence and social philosophy as much as
economic theory and the history of ideas), and Hayek's philosophy does
so in ways that have been persistently neglected or misunderstood. In
particular, Hayek's account of the structure of the mind, of the nature
and limits of human knowledge, and of the use and abuse of reason in
human life pervades his writings down to their last details, and gives
to his work over the years and across many disciplinary boundaries the
character of a coherent system. We can see the structure of Hayek's
system of ideas and we can realize its capacity to yield an integrated
view of man and society only when we have adequately specified its
philosophical foundations. It is only once we have grasped these
philosophical foundations of his thought, again, that we may fully
appreciate his originality as a thinker and the measure of his
achievement as a social theorist.
Overview of Topics Covered in This Essay
I
begin my survey by examining briefly the chief claims Hayek makes in
his centrally important but sadly neglected treatise in theoretical
psychology, The Sensory Order (1952), where he most
systematically and explicitly develops his account of the mind and of
human knowledge. Having set out the principal features of Hayek's view
of the mind and of the forms of human knowledge, I shall try to show
how these conceptions inform his account of a spontaneous order in
society, and how they condition his distinction between 'economy' and
'catallaxy,' his elaboration of the argument about economic calculation
under socialism, and his distinctive position as to the appropriate
theory and methods for economics. I proceed then to examine how Hayek
applies his general philosophy to the relations of individual liberty
with the rule of law. In the course of this survey I will canvass some
of the most important criticisms of Hayek's system, concentrating
particularly on the claim that his conception of a spontaneous order in
society is unclear, and his use of it objectionable. It is often argued
that, when taken in conjunction with its twin idea of cultural
evolution by the natural selection of rival social practices, the idea
of spontaneous social order has a conservative rather than any liberal
or libertarian implication, since it appears to entail blind submission
to the result of any unplanned social process. Against this criticism,
which expresses the common view that Hayek's political thought is an
unstable compound of conservative or traditionalist and liberal or
libertarian elements, I will argue that the idea of spontaneous social
order in Hayek's work is best seen as a value-free explanatory notion
and that invoking this idea illuminates rather than undermines the
bases for the commitment to liberty. [1a]
In
developing my argument by way of an examination of the criticisms of a
number of writers in opposed intellectual traditions - Michael
Oakeshott, James Buchanan, and Irving Kristol, for example - I will
conclude that Hayek's chief achievement is in his reviving the
intellectual tradition of classical liberalism of which varied strands
in contemporary conservatism and libertarianism are quarreling
offspring. In the course of this survey I will, also, identify three
principal achievements of Hayek's social philosophy: (1) his
demonstration of the import for social theory of an erroneous Cartesian
theory of the mind and the role of this theory in inspiring modern
attempts at the rational design of social life; (2) his theory of the
liberal order, which is a synthesis of the theories of justice of
Immanuel Kant (1724-1804) and David Hume (1711-1776) with a devastating
critique of contemporary conceptions of distributive justice; and (3)
his proposal for a resolution of a central difficulty of classical
liberal theory in the intriguing ideas of a market in traditions.
The
upshot of my assessment of Hayek's thought will be that, whereas his
critics have identified ambiguities, tensions, and unclarities in some
of his formulations, the interest and appeal of his system remains
unimpeached. Despite (or even because of) its problematic aspects,
Hayek's system of ideas remains a powerful and compelling research
program - in my own opinion, the most promising we have at our disposal
- for classical liberal social philosophy.
Hayek's General Philosophy - The Kantian Heritage
The
entirety of Hayek's work - and, above all, his work in epistemology,
psychology, ethics, and the theory of law - is informed by a
distinctively Kantian approach. In its most fundamental aspect, Hayek's
thought is Kantian in its denial of our capacity to know things as they
are or this world as it is. It is in his denial that we can know things
as they are, and in his insistence that the order we find in our
experiences, including even our sensory experiences, is the product of
the creative activity of our minds rather than a reality given to us by
the world, that Hayek's Kantianism consists. It follows from this
skeptical Kantian standpoint that the task of philosophy cannot be that
of uncovering the necessary characters of things. The keynote of
critical philosophy, after all, is the impossibility of our attaining
any external or transcendental standpoint on human thought from which
we could develop a conception of the world that is wholly
uncontaminated by human experiences or interest. We find Kant's own
writings - above all the Critique of Pure Reason (1781) - a
case against the possibility of speculative metaphysics which Hayek
himself has always taken to be devastating and conclusive. It is a
fundamental conviction of Hayek's, and one that he has in common with
all those who stand in the tradition of post-Kantian critical
philosophy, that we cannot so step out of our human point of view as to
attain a presuppositionless perspective on the world as a whole and as
it is in itself. The traditional aspiration of western philosophy - to
develop a speculative metaphysics in terms of which human thought may
be justified and reformed - must accordingly be abandoned. The task of
philosophy, for Hayek as for Kant, is not the construction of any
metaphysical system, but the investigation of the limits of reason. It
is a reflexive rather than a constructive inquiry, since all criticism
- in ethics as much as in science - must in the end be immanent
criticism. In philosophy as in life, Hayek avers, we must take much for
granted, or else we will never get started.
Hayek's uncompromisingly skeptical Kantianism is strongly evidenced in The Sensory Order (see Hayek bibliography, B-10).
There Hayek disavows any concern as to "how things really are in the
world," affirming that ". . . a question like 'what is X?' has meaning
only within a given order, and . . . within this limit it must always
refer to the relation of one particular event to other events belonging
to the same order."[1b] Above all, the distinction between appearance and reality, which Hayek sees as best avoided in scientific discourse,[2]
is not to be identified with the distinction between the mental or
sensory order and the physical or material order. The aim of scientific
investigation is not, then, for Hayek, the discovery behind the veil of
appearance of the natures or essences of things in themselves, for,
with Kant and against Aristotelian essentialism, he stigmatizes the
notion of essence or absolute reality as useless or harmful in science
and in philosophy. The aim of science can only be the development of a
system of categories or principles, in the end organized wholly
deductively, which is adequate to the experience it seeks to order.[3]
Hayek as a Skeptical Kantian
Hayek
is a Kantian, then, in disavowing in science or in philosophy any
Aristotelian method of seeking the essences or natures of things. We
cannot know how things are in the world, but only how our mind itself
organizes the jumble of its experiences. He is Kantian, again, in
repudiating the belief, common to empiricists and positivists such as
David Hume and Ernst Mach, that there is available to us a ground of
elementary sensory impressions, untainted by conceptual thought, which
can serve as the foundation for the house of human knowledge. Against
this empiricist dogma, Hayek is emphatic that everything in the sensory
order is abstract, conceptual and theory-laden in character: "It will
be the central thesis of the theory to be outlined that it is not
merely a part but the whole of sensory qualities which is . . . an
'interpretation' based on the experience of the individual or the race.
The conception of an original pure core of sensation which is merely
modified by experience is an entirely unnecessary fiction."[4]
Again, he tells us that "the elimination of the hypothetical 'pure' or
'primary' core of sensation, supposed not to be due to earlier
experience, but either to involve some direct communication of
properties of the external objects, or to constitute irreducible mental
atoms or elements, disposes of various philosophical puzzles which
arise from the lack of meaning of these hypotheses."[5]
The map or model we form of the world, in Hayek's view, is in no
important respect grounded in a basis of sheer sense-data, themselves
supposed to be incorrigible. Rather, the picture we form of the world
emerges straight from our interaction with the world, and it is always
abstract in selecting some among the infinite aspects which the world
contains, most of which we are bound to pass by as without interest to
us.
Three Influences on Hayek's Skeptical Kantianism: Mach, Popper, and Wittgenstein
Hayek's
theory of knowledge is Kantian, we have seen, in affirming that the
order we find in the world is given to it by the organizing structure
of our own mind and in claiming that even sensory experiences are
suffused with the ordering concepts of the human mind. His view of the
mind, then, is Kantian in that it accords a very great measure of
creative power to the mind, which is neither a receptacle for the
passive absorption of fugitive sensations, nor yet a mirror in which
the world's necessities are reflected.
1. Ernst Mach and Metaphysical Neutrality
There
are a number of influences on Hayek, however, which give his Kantianism
a profoundly distinctive and original aspect. The first of these
influences is the work of Ernst Mach (1838-1916), the positivist
philosopher whose ideas dominated much of Austro-German intellectual
life in the decades of Hayek's youth. Hayek's debts to Mach are not so
much in the theory of knowledge, as in the attitude both take to
certain traditional metaphysical questions. I have observed already
that Hayek dissented radically from the Humean and Machian belief that
human knowledge could be reconstructed on the basis of elementary
sensory impressions, and throughout his writings Hayek has always
repudiated as incoherent or unworkable the reductionist projects of
phenomenalism in the theory of perception and behaviorism in the
philosophy of mind. In these areas of philosophy, then, Hayek's work
has been strongly antipathetic to distinctively positivistic ambitions
for a unified science. At the same time, while never endorsing the
dogma of the Vienna Circle that metaphysical utterances are literally
nonsensical, Hayek has often voiced the view that many traditional
metaphysical questions express "phantom-problems."
In both The Sensory Order and later in The Constitution of Liberty, Hayek affirms that the age-old controversy about the freedom of the will embodies such a phantom-problem.[6]
Hayek's 'compatibilist' standpoint in respect of freedom of the will -
his belief that the casual determination of human actions is fully
compatible with ascribing responsibility to human agents for what they
do - is analogous with his stance on the mind-body question. In both
controversies Hayek is concerned to deny any ultimate dualism in
metaphysics or ontology, while at the same time insisting that a
dualism in our practical thought and in scientific method is
unavoidable for us. Thus he says of the relations of the mental and the
physical domains that "While our theory leads us to deny any ultimate
dualism of the forces governing the realms of the mind and that of the
physical world respectively, it forces us at the same time to recognize
that for practical purposes we shall always have to adopt a dualistic
view."[7] And Hayek concludes his study of the foundations of theoretical psychology in The Sensory Order with the claim that "to us
mind must remain forever a realm of its own, which we can know only
through directly experiencing it, but which we shall never be able to
fully explain or to 'reduce' to something else."[8]
Hayek's
thought has a Machian positivist aspect, then, not in the theories of
mind or perception, but in its attitude to traditional metaphysical
questions, which is dissolutionist and deflationary. There is yet
another link with positivism. Notwithstanding Hayek's opposition to any
sort of reductionism, whether sensationalist or physicalist, he seems
to be a monist in ontology, averring that "mind is thus the order
prevailing in a particular part of the physical universe - that part of
it which is ourselves."[9]
Hayek may seem here to be qualifying or withdrawing from that stance of
metaphysical neutrality which in Machian spirit he commends, but this
appearance may be delusive. There is much to suggest that, when Hayek
denies any ultimate dualism in the nature of things, he is not lapsing
into an idiom of essences or natural kinds, but simply observing - much
in the fashion of the American pragmatist philosopher, W. V. Quine -
that nothing in our experience compels us to adopt ideas of mental or
physical substance.[10]
Though Hayek has not to my knowledge ever pronounced explicitly on the
question, the whole tenor of his thought inclines to a Quinean
pragmatist view of ontological commitments. In his skeptical and
pragmatist attitude to ultimate questions in metaphysics and ontology,
Hayek lines up with many positivists rather than with Kantian critical
philosophy - though positivists themselves sometimes claim, with some
justification, to be treading a Kantian path.
2. Karl Popper: The Growth of Knowledge
A
second influence on Hayek's general philosophy which gives it a
distinctive temper is the thought of his friend, Karl Popper (b. 1902).
I mean here, not Popper's hypothetico-deductive account of scientific
method, which there is evidence that Hayek held prior to his meeting
with Popper,[11]
nor yet Popper's proposal (which Hayek was soon to accept) that
falsifiability rather than verifiability should be adopted as a
criterion of demarcation between the scientific and the non-scientific.
Again, Hayek has under Popper's influence come to make an important
distinction between types of rationalism,[12]
such that "critical rationalism" is commended and "constructivistic
rationalism" condemned. But this is not what I have in mind. I refer
rather to certain striking affinities between Hayek's view of the
growth of knowledge and that adumbrated in Popper's later writings on
"evolutionary epistemology." As early as the manuscript which later
became The Sensory Order (published in 1952, but composed in
the twenties), Hayek made it clear that the principles of
classification embodied in the nervous system were not for him fixed
data; experience constantly forced reclassification on us. In his later
writings, Hayek is explicit that the human mind is itself an
evolutionary product and that its structure is therefore variable and
not constant. The structural principles or fundamental categories which
our minds contain ought not, then, to be interpreted in Cartesian
fashion as universal and necessary axioms, reflecting the natural
necessities of the world, but rather as constituting evolutionary
adaptations of the human organism to the world that it inhabits.
The striking similarity between Popper's later views, and those expounded by Hayek in The Sensory Order, is shown by Popper's own application of the evolutionist standpoint in epistemology to the theory of perception:
...
if we start from a critical commonsense realism ... then we shall take
man as one of the animals, and human knowledge as essentially almost as
fallible as animal knowledge. We shall suppose the animal senses to
have evolved from primitive beginnings; and we shall look therefore on
our own senses, essentially, as part of a decoding mechanism - a
mechanism which decodes, more or less successfully, the encoded
information about the world which manages to reach us by sensory means.
[13]
J.W.N. Watkins' comment on this view is as apposite in the respect of Hayek as it is of Popper:
Kant saw very clearly that the empiricist account of sense experience creates and cannot solve the problem of how the manifold and very various data which reach a man's mind from his various senses get unified into a coherent experience.
Kant's solution consisted, essentially, in leaving the old
quasimechanistic account of sense-organs intact, and endowing the mind
with a powerful set of organizing categories - free, universal and
necessary - which unify and structure what would otherwise be a mad
jumble.
Popper's evolutionist view modifies Kant's view at both
ends: interpretative principles lose their fixed and necessary
character, and sense organs lose their merely causal and mechanistic
character.[14]
Hayek's
account of sense perception anticipates Popper's later views in a most
striking fashion, because in both sensation is conceived as a decoding
mechanism, which transmits to us in a highly abstract fashion
information about our external environment. Again, both Hayek and
Popper share the skeptical Kantian view that the order we find in the
world is given to it by the creative activity of our own minds: as
Hayek himself puts it uncompromisingly in The Sensory Order,
"The fact that the world which we know seems wholly an orderly world
may thus be merely a result of the method by which we perceive it."[15]
One difference between Hayek and Popper is in the fact that, at any
rate in his published work to date, Hayek has not followed Popper in
his ontological speculations about a world of abstract or virtual
entities or intelligibles.[16a]
3. Wittgenstein & Hayek
A
third influence on Hayek's thought which gives his view of knowledge
and the mind a very distinctive character is that of his relative,
Ludwig Wittgenstein (1899-1951).[16b] This influence runs deep, and is seen not only in the style and presentation of The Sensory Order, which parallels in an obvious way that of Wittgenstein's Tractatus,
but in many areas of Hayek's system of ideas. It is shown, for example,
in Hayek's recurrent interest in the way in which the language in which
we speak shapes our thoughts and forms our picture of the world. In
fact, Hayek's interest in language, and in a critique of language,
predates Wittgenstein's work, inasmuch as he had an early preoccupation
with the work of Fritz Mauthner, the now almost forgotten philosopher
of radical nominalism whom Wittgenstein mentions (somewhat
dismissively) in the Tractatus.[17]
There are, however, many evidences that Wittgenstein's work reinforced
Hayek's conviction that the study of language is a necessary
precondition of the study of human thought, and an indispensable
prophylactic to the principal disorders of the intellect. Examples
which may be adduced are Hayek's studies of the confusion of language
in political thought[18] and, most obviously, perhaps, of his emphasis on the role of social rules in the transmission of practical knowledge.
It is on this last point that one of the most distinctive features of Hayek's Kantianism, its pragmatist aspect, is clearest.[19a] Of course there is a recognition in Kant himself that knowledge requires judgment, a special faculty, the Urteilskraft,
which cannot be given any complete or adequate specification in
propositional terms, and whose exercise is necessary for the
application of any rule. In the sense that we must exercise this
faculty of judgment even before we can apply a rule, it is action which
is at the root of our very knowledge itself. Hayek's concern is not
with this ultimate dependency of rule following upon judgment - which
the later Wittgenstein, perhaps following Kant, emphasizes - but rather
with the way that knowledge of all sorts, but especially social
knowledge, is embodied in rules. Our perceptual processes, indeed all
our processes of thought, are governed by rules which we do not
normally articulate, which in some cases are necessarily beyond
articulation by us, but which we rely upon for the efficiency of all
our action in the world. Indeed, it is not too much to say that, for
Hayek (notwithstanding his stress on the abstract or conceptual
character of our sensory knowledge) all our knowledge is at bottom
practical or tacit knowledge: it consists, not in propositions or
theories, but in habits and dispositions to act in a rule-governed
fashion. There is here an interesting parallel with Popper's view,
which sees even our sense organs as being themselves embodied theories.[19b]
There is much in Hayek's writings to suggest that he takes what Gilbert Ryle calls "knowing how,"[20] what Michael Polanyi calls tacit knowing,[21] what Michael Oakeshott[22]
calls the traditional knowledge, to be the wellspring of all our
knowledge. It is in this sense - in holding the stuff of knowledge to
be at bottom practical - that Hayek may be said to subscribe to a
thesis of the primacy of practice in the constitution of human
knowledge. It is not indeed that Hayek disparages the enterprise of
theory-building, but he sees the theoretical reconstruction of our
practical knowledge as necessarily incomplete in its achievements.
Why
is this? Hayek argues that, not only human social life, but the life of
the mind itself is governed by rules, some of which cannot be specified
at all. Note that Hayek does not contend merely that we cannot in fact
specify all the rules which govern both social and intellectual life:
he argues that there must of necessity be an insuperable limit beyond
which we are unable to specify the rules by which our lives are
governed. As he puts it:
So far our argument has
rested solely on the uncontestable assumption that we are not in fact
able to specify all the rules which govern our perceptions and actions.
We still have to consider the question whether it is conceivable that
we should ever be in a position discursively to describe all (or at
least any one we like) of these rules, or whether mental activity must
always be guided by some rules which we are in principle not able to
specify.
If it should turn out that it is basically impossible
to state or communicate all the rules which govern our actions,
including our communications and explicit statements, this would imply
an inherent limitation of our possible explicit knowledge and, in
particular, the impossibility of ever fully explaining a mind of the
complexity of our own.
Hayek goes on to observe of
the inability of the human mind reflexively to grasp the most basic
rules which govern its operations that "this would follow from what I
understand to Georg Cantor's theorem in the theory of sets according to
which in any system of classification there are always more classes
than things to be classified, which presumably implies that no system
of classes can contain itself." Again, he remarks that "it would thus
appear that Gödel's theorem is but a special case of a more general
principle applying to all conscious and particularly all rational
processes, namely the principle that among their determinants there
must always be some rules which cannot be stated or even be conscious."
Hayek concludes this development of themes first explored in his Sensory Order
with the fascinating suggestion that conscious thought must be presumed
to be governed by "rules which cannot in turn be conscious - by a
"supraconscious mechanism," or, as Hayek prefers sometimes to call it,
a "meta-conscious mechanism" - "which operates on the contents of
consciousness but which cannot itself be conscious."[23]
The
third source of influence on Hayek's skeptical Kantianism, which I have
ascribed primarily to the work of his relative Wittgenstein, plainly
comprehends other influences as well. Hayek cites Ryle in support of
his observations that "'know how' consists in the capacity to act
according to rules which we may be able to discover but which we need
not be able to state in order to obey them," and glosses the point with
reference to Michael Polanyi.[24]
Here the insight is that all articulated or propositional knowledge
arises out of tacit or practical knowledge, the knowledge of how to do
things, which must be taken as fundamental. Nothing is said in Ryle or
Polanyi thus far about rule-governedness as a distinctive mark of human
(and, it may well be, not only human but also animal) intelligent
behavior.
It is for the insight that practical knowledge is
transmitted mimetically through the absorption of social rules that we
need to turn to Wittgenstein, from whom Hayek may have taken it. (There
are, to be sure, contrasts between Hayek's view of rule-governed
behavior and Wittgenstein's, particularly in regard to the skepticism
about rule-following expressed in Wittgenstein's On Certainty
and the dependency of social rules upon forms of life, stressed in
Wittgenstein but not discussed by Hayek; but these contrasts need not
concern us here.) What is original and novel in Hayek's account, and
(so far as I know) is nowhere to be found in Wittgenstein, is his
account, firstly, of the hierarchy of rules in perception and action,
with the most fundamental rules being meta-conscious rules beyond the
possibility of identification and articulation; and, secondly, Hayek's
systematic exploration of the selection of these rules in a process of
evolutionary adaptation.[25]
According to Hayek, in other words, the rules of action and of
perception by which both intellectual and social life are governed are
in the first place stratified or ordered in a hierarchy, with the most
fundamental rules (which shape the basic categories of our
understanding) always eluding conscious articulation. But secondly, all
of these rules, including even the most fundamental of them are
products of a process of evolutionary selection, by which they may be
further altered or eliminated. Systems of rules conferring successful
behavior are adopted by others without conscious reflection. It is this
disposition to emulate or copy successful behaviors which explains the
cultural evolution of which Hayek speaks, and which (though he
recognizes its primitive beginnings in the social lives of animals)
Hayek regards as the distinguishing mark of human life.
Hayek on Knowledge and Mind: Implications for Social Theory
Hayek's Kantian Philosophy of Mind
I
began by noting the striking Kantian attributes of Hayek's epistemology
and philosophy of mind - aspects which Hayek himself does not stress,
perhaps because he conceives the formative influence of Kantian
philosophy on his thought to be self-evident. As he puts it himself in
a footnote to his discussion in a recent volume of the government of
conscious intellectual life by super-conscious abstract rules: "I did
not mention . . . the obvious relation of all this to Kant's conception
of the categories that govern our thinking - which I took rather for
granted."[26]
Hayek's
Kantianism is seen, first in his repudiation of the empiricist view
that knowledge may be constructed from a basis of raw sensory data and,
second, in his uncompromising assertion of the view that the order we
find in the world is a product of the creative activity of the human
mind (rather than a recognition of natural necessity). His Kantian view
is distinctive in that it anticipates Popper in affirming that our
mental frameworks by which we categorize the world are neither
universal nor invariant, but alterable in an evolutionary fashion; his
Kantian view also follows Wittgenstein in grasping the role of social
rules in the transmission of practical knowledge. Hayek's Kantian view
is original, finally, in recognizing a hierarchy in the rules that
govern our perceptions and actions, and in insisting that the most
fundamental of these rules are "super-conscious" and beyond any
possibility of specification or articulation.
Hayek's Philosophy of Mind & His Social Theory: Beyond Kantianism
Hayek
himself is emphatic that these insights in the theories of mind and
knowledge have the largest consequences for social theory. The
inaccessability to reflexive inquiry of the rules that govern conscious
thought entails the bankruptcy of the Cartesian rationalist project and
implies that the human mind can never fully understand itself, still
less can it ever be governed by any process of conscious thought. The
considerations adduced earlier, then, establish the autonomy of the mind,
without ever endorsing any mentalistic thesis of mind's independence of
the material order. Where Hayek deviates from Descartes' conception of
mind, however, is not primarily in his denying ontological independence
to mind, but in his demonstration that complete intellectual
self-understanding is an impossibility.
Hayek's conception of
mind is a notion whose implications for social theory are even more
radical than are those of Hayek's Kantianism. It is the chief burden of
the latter, let us recall, that no external or transcendental
standpoint on human thought is achievable, in terms of which it may be
supported or reformed. In social theory, this Kantian perspective
implies the impossibility of any Archimedean point from which a
synoptic view can be gained of society as a whole and in terms of which
social life may be understood and, it may be, redesigned. As Hayek puts
it trenchantly: "Particular aspects of a culture can be critically
examined only within the context of that culture. We can never reduce a
system of rules or all values as a whole to a purposive construction,
but must always stop with our criticism of something that has no better
grounds for existence than that it is the accepted basis of the
particular tradition."[27]
This is a useful statement, since it brings out the Kantian implication
for social theory: that all criticism of social life must be immanent
criticism, just as in all philosophy inquiry can only be reflexive and
never transcendental.
Hayek goes beyond Kantianism, however, in
his recognition that, just as in the theory of mind we must break off
when we come to the region of unknowable ultimate rules, so in social
theory we come to a stop with the basic constitutive traditions of
social life. These latter, like Wittgenstein's forms of life, cannot be
the objects of further criticism, since they are at the terminus of
criticism and justification: they are simply given to us, and must be
accepted by us. But this is not to say that these traditions are
unchanging, nor that we cannot understand how it is that they do change.
In
social theory, Hayek's devastating critique of Cartesian rationalism
entails that, whatever else it might be, social order cannot be the
product of a directing intelligence. It is not just that too many
concrete details of social life would always escape such an
intelligence, which could never, therefore, know enough. Nor (though we
are nearer the nub of the matter here) is it that society is not a
static object of knowledge which could survive unchanged the
investigations of such an intelligence. No, the impossibility of total
social planning does not rest for Hayek on such Popperian
considerations,[28] or, at any rate, not primarily on them.
Such
an impossibility of central social planning rests, firstly, on the
primordially practical character of most of the knowledge on which
social life depends. Such knowledge cannot be concentrated in a single
brain, natural or mechanical, not because it is very complicated, but
rather because it is embodied in habits and dispositions and governs
our conduct via rules which are often inarticulable. But, secondly, the
impossibility of total social planning arises from the fact that, since
we are all of us governed by rules of which we have no knowledge, even
the directing intelligence itself would be subject to such government.
It is naive and almost incoherent[29]
to suppose that a society could lift itself up by its bootstraps and
reconstruct itself, in part at least because the idea that any
individual mind - or any collectivity of selected minds - could do
that, is no less absurd.
The Idea of a Spontaneous Social Order
If
the order we discover in society is in no important respect the product
of a directing intelligence, and if the human mind itself is a product
of cultural evolution, then it follows that social order cannot be the
product of anything resembling conscious control or rational design. As
Hayek puts it:
The errors of constructivist
rationalism are closely connected with Cartesian dualism, that is, with
the conception of an independently existing mind substance which stands
outside the cosmos of nature and which enabled man, endowed with such a
mind from the beginning, to design the institutions of society and
culture among which he lives ... The conception of an already fully
developed mind designing the institutions which made life possible is
contrary to all we know about the evolution of man.[30]
The master error of Cartesian rationalism[31]
lies in its anthropomorphic transposition of mentalist categories to
social processes. But a Cartesian rationalist view of mind cannot
explain even the order of mind itself. Hayek himself makes this point
when he remarks on "the difference between an order which is brought
about by the direction of a central organ such as the brain, and the
formation of an order determined by the regularity of the actions
towards each other of the elements of a structure." He goes on:
Michael
Polanyi has usefully described this distinction as that between a
monocentric and a polycentric order. The first point which it is in
this connection important to note is that the brain of an organism
which acts as the directing centre for the organism is in turn a
polycentric order, that is, that its actions are determined by the
relation and mutual adjustment to each other of the elements of which
it consists.[32]
Hayek
states his conception of social theory, and of the central importance
in it of undesigned or spontaneous orders, programmatically and with
unsurpassable lucidity:
It is evident that this
interplay of the rules of conduct of the individuals with the actions
of other individuals and the external circumstances in producing an
overall order may be a highly complex affair. The whole task of social
theory consists in little else but an effort to reconstruct the overall
orders which are thus formed . . . It will also be clear that such a
distinct theory of social structures can provide only an explanation of
certain general and highly abstract features of the different types of
structures . . . Of theories of this type economic theory, the theory
of the market order of free human societies, is so far the only one
which has been developed over a long period . . . [33]
Because
it is undesigned and not the product of conscious reflection, the
spontaneous order that emerges of itself in social life can cope with
the radical ignorance we all share of the countless facts on knowledge
of which society depends. This is to say, to begin with, that a
spontaneous social order can utilize fragmented knowledge,
knowledge dispersed among millions of people, in a way a holistically
planned order (if such there could be) cannot. "This structure of human
activities" as Hayek puts it "consistently adapts itself, and functions
through adapting itself, to millions of facts which in their entirety
are not known to everybody. The significance of this process is most
obvious and was at first stressed in the economic field."[34]
It is to say, also, that a spontaneous social order can use the
practical knowledge preserved in men's habits and dispositions and that
society always depends on such practical knowledge and cannot do
without it.
Examples abound in Hayek's writings of spontaneous
orders apart from the market order. The thesis of spontaneous order is
stated at its broadest when Hayek says of Bernard Mandeville
(1670-1733) that "for the first time [he] developed all the classical
paradigmata of the spontaneous growth of orderly social structures: of
law and morals, of language, the market and money, and also the growth
of technological knowledge."[35]
Note that whereas Hayek acknowledges that spontaneous order emerges in
natural processes - it may be observed, he tells us, not only in the
population biology of animal species, but in the formation of crystals
and even galaxies[36]
- it is the role of spontaneous order in human society that Hayek is
most concerned to stress. For applying what Hayek illuminatingly terms
"the twin ideas of evolution and of the spontaneous formation of an
order"[37]
to the study of human society enables us to transcend the view,
inherited from Greek, and, above all, from Sophist philosophy, that all
social phenomena can be comprehended within the crude dichotomy of the
natural (physis) and the conventional (nomos). Hayek wishes to focus
attention on the third domain of social phenomena and objects, neither
instinctual in origin nor yet the result of conscious contrivance or
purposive construction, the domain of evolved and self-regulating
social structures. It is the emergence of such self-regulating
structures in society via the natural selection of rules of action and
perception that is systematically neglected in much current sociology
(though not, it may be noted, in the writings of Herbert Spencer,[38]
one of sociology's founding fathers). It is because he thinks that the
sociobiologists view social order as being a mixture of instinctive
behavior and conscious control, and so neglect the cultural selection
of systems of rules, that Hayek has subjected this recent strain of
speculation to a sharp criticism.[39]
It may be noted, finally, that Hayek's repudiation of the Sophistic
nature-convention dichotomy sets him in opposition to Popper and his
talk of the critical dualism of facts and decisions and brings him
close to the Wittgensteinian philosopher, Peter Winch, for whom the
distinction is essentially misconceived.[40]
The Application of Spontaneous Order in Economic Life: The Catallaxy
The
central claim of Hayek's philosophy, as we have expounded it so far, is
that knowledge is, at its base, at once practical and abstract. It is
abstract inasmuch as even sensory perception gives us a model of our
environment which is highly selective and picks out only certain
classes of events, and it is practical inasmuch as most knowledge is
irretrievably stored or embodied in rules of action and perception.
These rules, in turn, are in Hayek's conception the subject of
continuing natural selection in cultural competition. The mechanism of
this selection, best described in Hayek's fascinating "Notes on the
Evolution of Systems of Rules of Conduct,"[41]
is in the emulation by others of rules which secure successful
behavior. It is by a mimetic contagion that rules conferring success -
where success means, in the last resort, the growth of human numbers[42]
- come to supplant those rules which are maladapted to the environment.
Finally, the convergence of many rule-following creatures on a single
system of rules creates those social objects - language, money,
markets, the law - which are the paradigms of spontaneous social order.
It
is a general implication of this conception that, since social order is
not a purposive construction, it will not in general serve any specific
purpose. Social order facilitates the achievement of human purposes:
taken in itself, it must be seen as having no purpose. Just as human
actions acquire their meaning by occurring in a framework that can
itself have no meaning,[43]
so social order will allow for the achievement of human purposes only
to the extent that it is itself purposeless. Nowhere has this general
implication of Hayek's conception been so neglected as in economic
life. In the history and theory of science, to be sure, where the idea
of spontaneous order was (as Hayek acknowledges) put to work by Michael
Polanyi, false conceptions were spawned by the erroneous notion that
scientific progress could be planned, whereas, on the contrary, any
limitation of scientific inquiry to the contents of explicit or
theoretical knowledge would inevitably stifle further progress.[44]
In economics, however, the canard that order is the result of conscious
control had more fateful consequences. It supported the illusion that
the whole realm of human exchange was to be understood after the
fashion of a household or an hierarchical organization, with limited
and commensurable purposes ranked in order of agreed importance.
This confusion of a genuine hierarchical 'economy' - such as that of an army, a school or a business corporation - with the whole realm of social exchange, the catallaxy,
informs many aspects of welfare economics and motivates its
interventionist projects via the fiction of a total social product.
This confusion between 'catallaxy' and 'economy' is, at bottom, the
result of an inability to acknowledge that the order which is the
product of conscious direction - the order of a management hierarchy in
a business corporation, for example - itself always depends upon a
larger spontaneous order. The demand that the domain of human exchange
taken as a whole should be subject to purposive planning is therefore,
the demand that social life be reconstructed in the character of a
factory, an army, or a business corporation - in the character, in
other words, of an authoritarian organization. Apart from the fateful
consequences for individual liberty that implementing such a demand
inexorably entails, it springs in great measure from an inability or
unwillingness to grasp how in the market process itself there is a
constant tendency to self-regulation by spontaneous order. When it is
unhampered, the process of exchange between competitive firms itself
yields a coordination of men's activities more intricate and balanced
than any that could be enforced (or even conceived) by a central
planner.
The Catallactic Order, Practical Knowledge, and the Calculation Debate
The
relevance of these considerations to Hayek's contributions to the
question of the allocation of resources in a socialist economic order
is central, but often neglected. It is, of course, widely recognized[45]
that one of Hayek's principal contributions in economic theory is the
refinement of the thesis of his teacher, Ludwig von Mises (1881-1973),
that the attempt to supplant market relations by public planning cannot
avoid yielding calculational chaos. Hayek's account of the mechanism
whereby this occurs has, however, some entirely distinctive and
original features. For Hayek is at great pains to point out that the
dispersed knowledge which brings about a tendency to equilibrium in
economic life and so facilitates an integration of different plans of
life, is precisely not theoretical or technical knowledge, but
practical knowledge of concrete situations - "knowledge of people, of
local conditions, and of special circumstances." As Hayek puts it: "The
skipper who earns his living from using otherwise empty or half-filled
journeys of tramp-steamers, or the estate agent whose whole knowledge
is almost exclusively one of temporary opportunities, or the
arbitrageur who gains from local differences of commodity prices - are
all performing eminently useful functions based on special knowledge of
circumstances of the fleeting moment not known to others." Hayek goes
to comment: "It is a curious fact that this sort of knowledge should
today be regarded with a kind of contempt and that anyone who by such
knowledge gains an advantage over somebody better equipped with
theoretical or technical knowledge is thought to have acted almost
disreputably."[46]
The "problem of the division of knowledge," which Hayek describes as
"the really central problem of economics as a social science,"[47]
is therefore not just a problem of specific data, articulable in
explicit terms, being dispersed in millions of heads: it is the far
more fundamental problem of the practical knowledge on which economic
life depends being embodied in skills and habits, which change as
society changes and which are rarely expressible in theoretical or
technical terms.
One way of putting Hayek's point, a way we owe
to Israel Kirzner rather than to Hayek himself but which is wholly
compatible with all that Hayek has said on these questions, is to
remark as follows: if men's economic activities really do show a
tendency to coordinate with one another, this is due in large part to
the activity of entrepreneurship. The neglect of the
entrepreneur in much standard economic theorizing, the inability to
grasp his functions in the market process, may be accounted for in part
by reference to Hayek's description above of the sort of knowledge used
by the entrepreneur. As Kirzner puts it, "Ultimately, then, the kind of
'knowledge' required for entrepreneurship is 'knowing' where to look
for 'knowledge' rather than knowledge of substantive market
information."[48]
It is hard to avoid the impression that the entrepreneurial knowledge
of which Kirzner speaks here is precisely that practical or
dispositional knowledge which Hayek describes.
It is the neglect
of how all economic life depends on this practical knowledge which
allowed the brilliant but, in this respect, fatally misguided Joseph
Schumpeter (1883-1950) to put a whole generation of economists on the
wrong track, when he stated in his Capitalism, Socialism and Democracy (1942) that the problem of calculation under socialism was essentially solved.[49]
It is the neglect of the same truth that Hayek expounded which explains
the inevitable failure in Soviet-style economies of attempts to
simulate market processes in computer modeling. All such efforts are
bound to fail, if only because the practical knowledge of which Hayek
speaks cannot be programmed into a mechanical device. They are bound to
fail, also, because they neglect the knowledge-gathering role of market
pricing. Here we must recall that, according to Hayek, knowledge is
dispersed throughout society and, further, it is embodied in habits and
dispositions of countless men and women. The knowledge yielded by
market pricing is knowledge which all men can use, but which none of
them would possess in the absence of the market process; in a sense,
the knowledge embodied or expressed in the market price is systemic or
holistic knowledge, knowledge unknown and unknowable to any of the
elements of the market system, but given to them all by the operation
of the system itself. No sort of market simulation or shadow pricing
can rival the operation of the market order itself in producing this
knowledge, because only the actual operation of the market itself can
draw on the fund of practical knowledge which market participants
exploit in their activities.
Hayek's Refinements of the Misesian Calculation Debate
Three
further points may be worth noting in respect of Hayek's refinements of
the Misesian calculation debate. First, when Hayek speaks of economic
calculations under socialism as a practical impossibility, he is not
identifying specific obstacles in the way of the socialist enterprise
which might someday be removed. Socialist planning could supplant
market processes only if practical knowledge could be replaced by
theoretical or technical knowledge at the level of society as a whole -
and that is a supposition which is barely conceivable. The kind of
omniscience demanded of a socialist planner could be possessed only by
a single mind, entirely self-aware, existing in an unchanging
environment - a supposition so bizarre that we realize we have moved
from any imaginable social world to a metaphysical fantasy in which men
and women have disappeared altogether, and all that remain are
Leibnizian monads, featureless and unhistorical ciphers.
Fortunately,
such a transformation is possible, if at all, only as a
thought-experiment. In practice, all supposedly socialist economies
depend upon precisely that practical knowledge of which Hayek speaks,
and which though dispersed through society is transmitted via the price
mechanism. It is widely acknowledged that socialist economies depend
crucially in their planning policies on price data gleaned from
historic and world markets. Less often recognized, and dealt with in
detail only, so far as I know, in Paul Craig Roberts' important Alienation in the Soviet Economy,[50]
is that planning policies in socialist economies are only shadows cast
by market processes distorted by episodes of authoritarian
intervention. The consequence of the Hayekian and Polanyian critiques
of socialist planning is not inefficiency of such planning but rather
its impossibility: we cannot analyze the "socialist" economies of the
world properly, unless we penetrate the ideological veil they secrete
themselves behind, and examine the mixture of market processes with
command structures which is all that can ever exist in such a complex
society.
The third and final implication of Hayek's contribution
to the calculation question is his clear statement of the truth that
the impossibility of socialism is an epistemological
impossibility. It is not a question of motivation or volition, of the
egoism or limited sympathies of men and women, but of the inability of
any social order in which the market is suppressed or distorted to
utilize effectively the practical knowledge possessed by its citizens.
Calculational chaos would ensue, and a barbarization of social life
result, from the attempt to socialize production, even if men possessed
only altruistic and conformist motives. For, in the absence of the
signals transmitted via the price mechanism, they would be at a loss
how to direct their activities for the social good, and the common
stock of practical knowledge would begin to decay. Only the
inventiveness of human beings as expressed in the emergence of black
and gray markets could then prevent a speedy regression to the
subsistence economy. The impossibility of socialism, then, derives from
its neglect of the epistemological functions of market
institutions and processes. Hayek's argument here is the most important
application of his fundamental insight into the epistemological role of
social institutions - an insight I will need to take up again in the
context of certain similarities between Hayek's conception of liberty
under law and Robert Nozick's meta-utopian framework.
Theory and Method in Economic Science
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 characterized[53]
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.
Hayek's Opposition to Apriori Science
A
number of points may be made briefly about Hayek's conception of method
in social and economic theory. First, whereas he follows his great
teachers in the Austrian tradition in emphasizing the subjective
aspects of social phenomena, Hayek's methodology of social and economic
science does not belong to that Austrian tradition in which social
theory is conceived as an enterprise yielding apodictic truths.
Specifically - contrary to T. W. Hutchinson, who periodizes Hayek's
work into an Austrian praxeological and a post-Austrian Popperian
period, and also contrary to Norman P. Barry who sees both trends
running right through Hayek's writings - Hayek never accepted the
Misesian conception of a praxeological science of human action which
would take as its point of departure a few axioms about the distinctive
features of purposeful behavior over time. In the Introduction to Collectivist Economic Planning [E-5,
1935] and elsewhere in his early writings, Hayek had (as Hutchinson
notes) insisted that economics yields "'general laws,' that is,
'inherent necessities determined by the permanent nature of the
constituent elements.'"[55] As Hutchinson himself acknowledges in passing, however, such laws or necessities function in Hayek's writings as postulates
(rather than as axioms), and they continue to do so even in his later
writings, in which (as I have already noted) a suspicion of the
nomothetic paradigm of social science is expressed. It is clear from
the context of the quotations cited by Hutchinson that, in speaking of
the general laws or inherent necessities of social and economic life,
Hayek meant to controvert the excessive voluntarism of historicism,
which insinuates that social life contains no unalterable necessities
of any sort, rather than to embrace the view that there can be an
apriori science of society or human action. To this extent Barry is
right in his observation that, "there is a basic continuity in Hayek's
writings on methodology."[56]
Certainly there seems little substance in a periodization of Hayek's
methodological writings by reference to the supposedly Popperian paper
of 1937 on "Economics and Knowledge" (A-34).
At
the same time, there seems little warrant for Barry's claim that
throughout his work Hayek tries "to combine two rather different
philosophies of social science; the Austrian praxeological school with
its subjectivism and rejection of testability in favour of axiomatic
reasoning, and the hypothetico-deductive approach of contemporary
science with its emphasis on falsifiability and empirical content."[57]
For there is no evidence, so far as I know, that Hayek ever endorsed
the Misesian conception of an axiomatic or apriori science of human
action grounded in apodictic certainties. Again, as we have seen,
Hayek's view that the social sciences are throughout deductive in form
antedates Popper's influence and is evidenced in the Introduction to Collectivist Economic Planning [E-5, 1935].
Popperian 'Conjectures & Refutations'
Hayek's
real debts to Popper are, I think, different from those attributed to
him by Hutchinson and Barry. It is not that Hayek under Popper's
influence abandoned an apodictic-deductive method that was endorsed (in
different versions, Kantian and Aristotelian) by Mises and Menger, but
rather that he came to adopt Popper's proposal that falsifiability be
treated as a demarcation criterion of science from non-science.[58]
Again, Hayek follows Popper in abandoning his earlier Austrian
conviction that there is a radical dualism of method as between natural
and social science: this conviction, he tells us, depended on an
erroneous conception of method in the natural sciences: as a result of
what Popper has taught him, Hayek says, "the differences between the
two groups of disciplines has thereby been greatly narrowed."[59]
Hayek's debts to Popper are, then, in his seeing that it is the
falsifiability of an hypothesis rather than its verifiability which
makes it testable and empirical, and, secondly, in his acknowledging
the unity of method in all the sciences, natural and social, where this
method is seen clearly to be hypothetico-deductive.
Even in
these Popperian influences, it is to be noted, there are differences of
emphasis from Popper himself. Hayek anticipates Lakatos in perceiving
that the theoretical sciences may contain a "hard core" of hypotheses,
well-confirmed and valuable in promoting understanding of the phenomena
under investigation, which are highly resistant to testing and
refutation.[60]
And Hayek explicitly states that in some fields Popper's ideas of
maximum empirical content and falsifiability may be inappropriate:
It
is undoubtedly a drawback to have to work with theories which can be
refuted only by statements of a high degree of complexity, because
anything below that degree of complexity is on that ground alone
permitted by our theory. Yet it is still possible that in some fields
the more generic theories are the more useful ones . . . Where only the
most general patterns can be observed in a considerable number of
instances, the endeavour to become more 'scientific' by further
narrowing down our formulae may well be a waste of effort . . . [61]
In
general, then, it seems fair to hold that Hayek acknowledges that the
proper method in social and economic studies, as elsewhere, is the
hypothetico-deductive method of conjectures and refutations set out by
Popper. On the other hand, he continues to recognize that in respect of
complex phenomena such as are found in the social studies, testability
may be a somewhat high-level and protracted process, and the ideal of
high empirical content captured in a nomothetic framework - a demanding
and sometimes unattainable ideal.
Some Applications of Hayek's Methodological Views: Keynes, Friedman, and Shackle on Economic Policy
Hayek's
view that we can at best attain abstract models of social processes,
whereas the concrete details of social life will always largely elude
theoretical formulation, has large and radical implications in the
field of public policy. In brief, it entails that the object of public
policy should be confined to the design or reform of institutions
within which unknown individuals make and execute their own, largely
unpredictable plans of life. In a free society, in fact, whereas there
may be a legal policy in respect of economic institutions, there cannot
be such a thing as economic policy as it is presently understood, for
adherence to the rule of law precludes anything resembling
macroeconomic management. Here I do not wish to take up this point,
which I will consider later, but rather to spell out the connection
between Hayek's methodological views and his belief that most, if not
all economic policy as practiced in the postwar world has had a
self-defeating effect.
Hayek contra Constructivism & Social Engineering
We
have seen that, for Hayek, the most we can hope for in understanding
social life is that we will recognize recurring patterns. Hayek goes on
to observe:
Predictions of a pattern are . . . both
testable and valuable. Since the theory tells us under which general
conditions a pattern of this sort will form itself, it will enable us
to create such conditions and to observe whether a pattern of the kind
predicted will appear. And since the theory tells us that this pattern
assures a maximisation of output in a certain sense, it also enables us
to create the general conditions which will assure such a maximisation,
though we are ignorant of many of the particular circumstances which
will determine the pattern that will appear.[62]
Hayek's
view stands in sharp opposition to any idea of a policy science or a
political technology aimed at producing specific desired effects. Such
a policy science demands the impossible of its practitioners, a
detailed knowledge of a changing and complex order in society. Even
Popper's conception of "piecemeal social engineering," Hayek tells us,
"suggests to me too much a technological problem of reconstruction on
the basis of the total knowledge of the physical facts, while the
essential point about the practical improvement is an experimental
attempt to improve the functioning of some part without a full
comprehension of the structure of the whole."[63]
Indeed Hayek's central point is that understanding the primacy of the
abstract in human knowledge means that we must altogether renounce the
modern ideal of consciously controlling social life: a better ideal is
that of cultivating the general conditions in which beneficial results may be expected to emerge.
Hayek's
critique of the constructivistic or engineering approach to social life
parallels in an intriguing way that of Michael Oakeshott and of the
Wittgensteinian philosopher Rush Rhees. Consider Oakeshott's statement:
"The assimilation of politics to engineering is, indeed, what may be
called the myth of rationalist politics."[64]
Or Rhees' observation (made in criticism of Popper): "There is nothing
about human societies which makes it reasonable to speak of the
application of engineering to them. Even the most important 'problems
of production' are not problems in engineering."[65]
The conception of social life which talk of social engineering
expresses is at fault not only because it presupposes an agreement on
goals or ends which nowhere exists but also because it promotes the
illusion that political life may become subject to a sort of technical
or theoretical control.
Hayek contra Keynes
These
general views illuminate much of the rationale of Hayek's opposition
not only to Keynesian policies of macroeconomic demand management but
also to Friedmanite monetarism. Of course, in the great debates of the
Thirties, Hayek had argued forcefully that Keynes in no way provided a
general theory of economic discoordination. Again, Hayek always argued
that the policies Keynes suggested, depending as they did for their
success upon institutional and psychological irrationalities which
their very operation would undermine, were bound over the longer run to
be self-defeating. In particular, Hayek maintained that Keynesian
policies of deficit financing depended for their success upon a
widespread money illusion which the policies themselves could not help
but erode. Hayek's further objection to Keynesian policies is that, in
part because they depend on a defective understanding of the business
cycle (which is seen as expressing itself in aggregative variations in
total economic activity rather than in a discoordination of relative
price structures brought about by a governmental distortion of the
structure of interest rates) Keynesian policy-makers, because of their
holistic and aggregative bias, find it hard to avoid committing a sort
of fallacy of conceptual realism: statistical artefacts or logical
fictions are allowed to blot out the subtle and complex relationships
which make up the real economy.
Now there is plainly much in
Hayek's subtle account of the business cycle, and in his contributions
to capital theory, which is difficult and disputable, and to comment on
such questions is in any case beyond my expertise. Quite apart from its
technical details, however, it is clear that Hayek's critique of
Keynesian policies is of a piece with his emphasis on the primacy of
the abstract and with his insight into the indispensability of
conventions for the orderly conduct of social life. Policies of
macroeconomic demand management ask more in the way of concrete
knowledge of the real relationships which govern the economy than any
administrator could conceivably acquire, and their operation is in the
longer run self-defeating. More generally, Hayek's challenge to
Keynesian theory is a demand that Keynesians specify in detail the
mechanisms whereby an unhampered market could be expected to develop
severe discoordination. Only if such mechanisms could be clearly
described and (crucially) given a plausible historical application,
would a serious challenge to Hayek's own Austrian view - in which it is
governmental intervention in the economy which is principally
responsible for discoordination - enter the realm of critical debate.
Hayek contra Friedman
In
respect to Friedman's proposals for monetary regulation by a fixed
rule, Hayek has argued that in a modern democracy no governmental or
quasi-governmental agency can preserve the independence of action
essential if such a monetary rule is to be operated consistently. More
fundamentally, such a policy of adopting a fixed rule in the supply of
money is opposed by Hayek on methodological grounds. Such a policy
calls for an exactitude in modeling and measuring economic life, and an
unambiguity in the definition of money, which it is beyond our powers
to attain. Hayek's own objection to Friedman's monetarist proposals is,
then, most substantially that money is not the sort of social object
that we can define precisely or control comprehensively; Hayek has even
suggested that, in recognition of the elusiveness of the monetary
phenomenon, we should treat "money" as an adjectival expression,[66]
applicable to indefinitely many distinct and disparate instruments.
Hayek's proposals in this area clearly open up technical questions in
monetary theory which I am unqualified to adjudicate. It seems clear,
though, that Hayek's proposal favoring currency competition by the
private issuance of money would be found objectionable by Friedmanites
(who would argue that Hayek exaggerates the effect such competition
would have in preventing currency debasement) and by advocates of the
classical gold standard. It is clear, nonetheless, that in arguing for
the establishment of a monetary catallaxy Hayek has illuminated
questions both in monetary theory and in political economy which had
hitherto gone largely neglected, but which it is critical that
supporters of the market order now examine.
Hayek and Shackle
One
objection to Hayek's view may be worth addressing at this point. There
is much in Hayek's account of the business cycle, as in his more
general account of spontaneous social order, to suggest that he
believes economic discoordination results always from institutional
factors, so that at any rate large-scale disequilibrium would be
impossible in a catallaxy of wholly unhampered markets. Against this
view, Hayek's brilliant and largely neglected pupil, G. L. S. Shackle,
has argued[67]
that the subjectivity of expectations must infect the market process
with an ineradicable tendency to disequilibrium. It must be allowed
that, if we accept Hayek's view of equilibrium as a process in which
men's plans are coordinated by trial and error over time, there can be
nothing apodictically certain about this process: conceivably, under
some conditions of uncertainty in which hitherto reliable expectations
are repeatedly confounded, large scale discoordination could occur in
the market process.
Three counter-observations are in order,
however. First, nothing in Shackle's argument tells against the point,
defensible both on theoretical grounds and as an historical
interpretation, that in practice by far the most destabilizing factor
in the market process is provided by governmental intervention.
Secondly, and relatedly, it is unclear that the kind of disequilibrium
of which Shackle speaks - disequilibrium generated by divergency in
subjective expectations - could amount to anything resembling the
classical business cycle, which is more plausibly accounted for in
Austrian and Hayekian terms as a consequence of governmental
intervention in the interest rate structure.
And thirdly, it is unclear that Shackle's argument shows the presence in the market process of any tendency to disequilibrium.
What we have in the market process is admittedly a 'kaleidic' world, in
which expectations, tastes, and beliefs constantly and unpredictably
mutate. Yet, providing market adaptation is unhampered, what we can
expect from the market process is an uninterrupted series of monetary
equilibrium tendencies, each of them asymptotic - never quite reaching
equilibrium - and each of them soon overtaken by its successor. In this
kaleidic world there may well be no apodictic certainty that we shall
never face large-scale, endogenous discoordination, but we are
nevertheless on safe ground in preferring that the self-regulating
tendencies of the process be accorded unhampered freedom and that
governmental intervention be recognized as the major disruptive factor
in the market process. We are on safe ground, then, in discerning in
the tendency to equilibrium in the market process the formation of
spontaneous order in the economic realm.
Hayek's Constitution of Liberty: Ethical Basis of the Juridical Framework of Individual Liberty
Clarifying Hayek's Moral Theory
Given
that we recognize governmental intervention to be the greatest
subverter of spontaneous order in the realm of economic exchange, what
legal framework is to be adopted for the regulation of economic life?
Here we come to one of the most fascinating and controversial of
Hayek's contributions to social philosophy, his account of individual
liberty under the rule of law. Before we can address ourselves to some
of the problems surrounding Hayek's contribution to philosophical
jurisprudence, however, a few words must be said about Hayek's moral
theory, since few aspects of Hayek's work are so often misunderstood.
Hayek has been characterized as a moral relativist, an exponent of
evolutionary ethics and, less implausibly but nonetheless incorrectly,
as a rule-utilitarian. Let us see if we can dissipate the confusion.
In
the first place, moral life for Hayek is itself a manifestation of
spontaneous order. Like language and law, morality emerged undesigned
from the life of men with one another: it is so much bound up with
human life, indeed, as to be partly constitutive of it. The maxims of
morality, then, in no way presuppose an authority, human or divine,
from which they emanate, and they antedate the institutions of the
state. But, secondly, the detailed content of the moral conventions
which spring up unplanned in society is not immutable or invariant.
Moral conventions change, often slowly and almost imperceptibly, in
accordance with the needs and circumstances of the men who subscribe to
them. Moral conventions must (or Hayek's account of them) be seen as
part of the evolving social order itself.
Now at this point it
is likely that a charge of ethical relativism or evolutionism will at
once be levelled against Hayek, but there is little substance to such
criticisms. He has gone out of his way to distinguish his standpoint
from any sort of evolutionary ethics. As he put it in his Constitution of Liberty:
It
is a fact which we must recognize that even what we regard as good or
beautiful is changeable - if not in any recognizable manner that would
entitle us to take a relativistic position, then in the sense that in
many respects we do not know what will appear as good or beautiful to
another generation ... It is not only in his knowledge, but also in his
aims and values, that man is the creature of his civilization; in the
last resort, it is the relevance of these individual wishes to the
perpetuation of the group or the species that will determine whether
they persist or change. It is, of course, a mistake to believe that we
can draw conclusions about what our values ought to be simply because
we realize that they are a product of evolution. But we cannot
reasonably doubt that these values are created and altered by the same
evolutionary forces that have produced our intelligence.[68]
Hayek's
argument here, then, is manifestly not that we can invoke the trend of
social evolution as a standard for the resolution of moral dilemmas,
but rather that we are bound to recognize in our current moral
conventions the outcome of an evolutionary process. Admittedly,
inasmuch as nothing in the detailed content of our moral conventions is
unchanging or unalterable, this means that we are compelled to abandon
the idea that they have about them any character of universality or
fixity, but this is a long way from any doctrine of moral relativism.
As Hayek observes in his remarks on the ambiguity of relativism:
...
our present values exist only as the elements of a particular cultural
tradition and are significant only for some more or less long phase of
evolution - whether this phase includes some of our pre-human ancestors
or is confined to certain periods of human civilization. We have no
more ground to ascribe to them eternal existence than to the human race
itself. There is thus one possible sense in which we may legitimately
regard human values as relative and speak of the probability of their
further evolution.
But it is a far cry from this general insight
to the claims of the ethical, cultural or historical relativists or of
evolutionary ethics. To put it crudely, while we know that all these
values are relative to something, we do not know to what they are
relative. We may be able to indicate the general class of circumstances
which have made them what they are, but we do not know the particular
conditions to which the values we hold are due, or what our values
would be if those circumstances had been different. Most of the
illegitimate conclusions are the result of erroneous interpretation of
the theory of evolution as the empirical establishment of a trend. Once
we recognize that it gives us no more than a scheme of explanation
which might be sufficient to explain particular phenomena if we knew
all the facts which have operated in the course of history, it becomes
evident that the claims of the various kinds of relativists (and of
evolutionary ethics) are unfounded.[69]
Hume's Influence on Hayek's Social Philosophy
Hayek
does not, then subscribe to any sort of ethical relativism or
evolutionism, but it is not altogether clear from these statements if
he thinks humanity's changing moral conventions have in fact any
invariant core or constant content. In order to consider this last
question, and to attain a better general understanding of Hayek's
conception of morality, we need to look at his debts to David Hume,
whose influence upon Hayek's moral and political philosophy is
ubiquitous and profound.
Hayek follows Hume in supposing that,
in virtue of certain general facts about the human predicament, the
moral conventions which spring up spontaneously among men all have
certain features in common or (in other words) exhibit some shared
principles. Among the general facts that Hume mentions in his Treatise, and which Hayek cites in "The Legal and Political Philosophy of David Hume" (in B-13),
are men's limited generosity and intellectual imperfection and the
unalterable scarcity of the means of satisfying human needs. As Hayek
puts it succinctly: "It is thus the nature of the(se) circumstances,
what Hume calls 'the necessity of human society,' that gives rise to
the 'three fundamental laws of nature': those of 'the stability of
possessions, of its transference by consent, and of the performance of
promises.'" And Hayek glosses this passage with a fuller citation from
Hume's Treatise: "Though the rules of justice be artificial, they are not arbitrary. Nor is the expression improper to call them Laws of Nature;
if by natural we understand what is common to any species, or even if
we confine it to mean what is inseparable from the species."[70]
Hume's
three rules of justice or laws of nature, then, give a constant content
to Hayek's conception of an evolving morality. They frame what the
distinguished Oxford jurist, H. L. A. Hart, was illuminatingly to call
"the minimum content of natural law."[71]
The justification of these fundamental rules of justice, and of the
detailed and changing content of the less permanent elements of
morality, is (in Hayek's view as in Hume's) that they form
indispensable conditions for the promotion of human welfare. There is
in Hayek as in Hume, accordingly, a fundamental utilitarian commitment
in their theories of morality. It is a very indirect utilitarianism
that they espouse, however, more akin to that of the late
nineteenth-century Cambridge moralist Henry Sidgwick[72]
(1838-1900) than it is to Jeremy Bentham or John Stuart Mill. The
utilitarian component of Hayek's conception of morality is indirect in
that it is never supposed by him that we ought or could invoke a
utilitarian principle in order to settle practical questions: for,
given the great partiality and fallibility of our understanding, we are
in general better advised to follow the code of behavior accepted in
our own society. That code can, in turn, Hayek believes, never properly
be the subject of a rationalist reconstruction in Benthamite fashion,
but only reformed piecemeal and slowly. In repudiating the claims that
utilitarian principles can govern specific actions and that utility may
yield new social rules, Hayek shows himself to be an indirect or system utilitarian,
for whom the proper role of utility is not prescriptive or practical
but rather as a standard of evaluation for the assessment of whole
systems of rules.
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 recognizes[75]) 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 argued[76]
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.
Criticisms of Hayek's Universalizable 'Rule of Law'
This fundamental criticism of Hayek, stated powerfully by Hamowy[77] and Raz[78] and endorsed in earlier writings of my own,[79]
now seems to me to express an impoverished and mistaken view of the
nature and role of Kantian universalizability in Hayek's philosophical
jurisprudence. It embodies the error that, in Hayek or indeed in Kant,
universalizability is a wholly formal test.
In his "Principles of a Liberal Social Order," (A-115, in B-13)
Hayek tells us: "The test of the justice of a rule is usually (since
Kant) described as that of its 'universalizability,' i.e. of the
possibility of willing that rules should be applied to all instances
that correspond to the conditions stated in it (the 'categorical
imperative')."[80] As an historical gloss, Hayek observes that:
It
is sometimes suggested that Kant developed his theory of the Rechtstaat
by applying to public affairs his conception of the categorical
imperative. It was probably the other way round, and Kant developed his
theory of the categorical imperative by applying to morals the concept
of the rule of law which he found ready made (in the writings of Hume).[81]
Hayek's
own argument, that applying Kantian universalizability to the maxims
that make up the legal order yields liberal principles of justice which
confer maximum equal freedom upon all, has been found wanting by nearly
all his critics and interpreters. Thus Raz quotes Hayek as follows:
"The
conception of freedom under the law that is the chief concern of this
book rests on the contention that when we obey laws, in the sense of
general abstract rules laid down irrespective of their application to
us, we are not subject to another man's will and are therefore free. It
is because the judge who applies them has no choice in drawing the
conclusions that follow from the existing body of rules and the
particular facts of the case, that it can be said that laws and not men
rule ... As a true law should not name any particulars, so it should
especially not single out any specific persons or group of persons."
Raz
comments on this passage: "Then, aware of the absurdity to which this
passage leads, he modifies his line, still trying to present the rule
of law as the supreme guarantee of freedom. . ."[82]
Similarly,
discussing Hayek's criteria that laws should not mention proper names
and that the distinctions which the law makes be supported both within
and without the group which is the subject of legislation, Hamowy
comments:
That no proper name be mentioned in a law
does not protect against particular persons or groups being either
harassed by laws which discriminate against them or granted privileges
denied the rest of the population. A prohibition of this sort on the
form laws may take is a specious guarantee of legal equality, since it
is always possible to contrive a set of descriptive terms which will
apply exclusively to a person or group without recourse to proper names
... [83]
How are these standard objections to be rebutted?
Meeting Objections to the Universalizability Test
We
must first of all note that, even in Kant and in Kantian writers other
than Hayek, such as R. M. Hare and John Rawls, the test of
universalizability does far more than rule out reference to particular
persons or special groups. The test of universalizability does indeed,
in the first instance, impose a demand of consistency as
between similar cases, and in that sense imposes a merely formal
requirement of non-discrimination. This is the first stage or element
of universalization, the irrelevance of numerical differences. But the
next stage of universalization is that of asking whether one can assent
to the maxim being assessed coming to govern the conduct of others
towards oneself: this is the demand of impartiality between
agents, the demand that one put oneself in the other man's place. And
this element or implication of universalizability leads on to a third,
that we be impartial as between the preferences of others, regardless
of our own tastes or ideals of life - a requirement of moral neutrality.
I do not need to ask here exactly how these elements of
universalizability are related to one another, to ask (most obviously)
if the second is entailed by the first in any logically inexorable way,
or similarly the third by the second. It is enough to note that there
is a powerful Kantian tradition according to which strong implications
do link the three phases of universalization, and that this is a
tradition to which Hayek himself has always subscribed.[84]
Applying
the full test of universalizability to the maxims that go towards
making a legal order, we find that, not only are references to
particulars ruled out, but the maxims must be impartial in respect of
the interests of all concerned, and they must be neutral in respect of
their tastes or ideals of life. If it be once allowed that the test of
universalizability may be fleshed out in this fashion, it will be seen
as a more full-blooded standard of criticism than is ordinarily
allowed, and Hayek's heavy reliance on it will seem less misplaced.
For, when construed in this fashion, the universalizability test will
rule out (for example) most if not all policies of economic
intervention as prejudicial to the interests of some and will fell all
policies of legal moralism. Two large classes of liberal policy,
supposedly allowable under an Hayekian rule of law, thus turn out to be
prohibited by it.
Hayek himself is explicit that the test of
universalizability means more than the sheerly formal absence of
reference to particulars. As he puts it:
The test
of the justice of a rule is usually (since Kant) described as that of
its 'universalizability,' i.e. of the possibility of willing that the
rules should be applied to all instances that correspond to the
conditions stated in it (the 'categorical imperative'). What this
amounts to is that in applying it to any concrete circumstances it will
not conflict with any other accepted rules. The test is thus in the
last resort one of the compatibility or non-contradictoriness of the
whole system of rules, not merely in a logical sense but in the sense
that the system of actions which the rules permit will not lead to
conflict.[85]
The
maxims tested by the principle of universalizability, then, must be
integrated into a system of nonconflictable or (in Leibniz'
terminology) compossible rules, before any of them can be said to have
survived the test.
Again, the compatibility between the several
rules is not one that holds in any possible world, but rather that
which obtains in the world in which we live. It is here that Hayek
draws heavily on Hume's account of the fundamental laws of justice,
which he thinks to be, not merely compatible with, but in a large
measure the inspiration for Kant's political philosophy.[86]
As I have already observed, the practical content of the basic rules of
justice is given in Hume by anthropological claims, by claims of
general fact about the human circumstance. It is by interpreting the
demands of universalizability in the framework of the permanent
necessities of human social life that we derive Hume's three laws of
natural justice.
Kantian Universalizability & Liberal Justice
Note
again that, in Hume, as in Hayek, the laws of justice are commended as
being the indispensable condition for the promotion of general welfare,
i.e. their ultimate justification is utilitarian. But in order to
achieve this result, neither Hayek nor Hume need offer any argument in
favor of our adopting a Principle of Utility. Rather, very much in the
spirit of R. M. Hare's Kantian reconstruction of utilitarian ethics,[87]
Hayek's claim is that an impartial concern for the general welfare is
itself one of the demands of universalizability. A utilitarian concern
for general welfare is yielded by the Kantian method itself and is not
superadded to it afterwards. Hayek's thesis, like Hume's, is that a
clear view of the circumstances of human life shows justice to be the
primary condition needed to promote general welfare. But, like Hare and
Kant, he thinks concern for both justice and the general welfare to be
dictated by universalizability itself.
Hayek's argument, then,
is that the maxims of liberal justice are yielded by applying the
Kantian universalizability test to the principles of the legal order.
As he puts it:
It will be noticed that only
purpose-independent ('formal') rules pass this (Kantian) test because,
as rules which have originally been developed in small
purpose-connected groups ('organizations') are progressively extended
to larger and larger groups and finally universalized to apply to the
relations between any members of an Open Society who have no concrete
purposes in common and merely submit to the same abstract rules, they
will in the process have to shed all reference to particular purposes.[88]
Again, in listing the essential points of his conception of justice Hayek asserts:
...
a) that justice can be meaningfully attributed only to human actions
and not to any state of affairs as such without reference to the
question whether it has been, or could have been, deliberately brought
about by somebody; b) that the rules of justice have essentially the
nature of prohibitions, or, in other words, that injustice is really
the primary concept and the aim of rules of just conduct is to prevent
unjust action; c) that the injustice to be prevented is the
infringement of the protected domain of one's fellow men, a domain
which is to be ascertained by means of these rules of justice; and d)
that these rules of just conduct which are in themselves negative can
be developed by consistently applying to whatever such rules a society
has inherited the equally negative test of universal applicability - a
test which, in the last resort, is nothing less than the
self-consistency of the actions which these rules allow if applied to
the circumstances of the real world.[89]
There
seem to be several elements, then, in Hayek's contention that applying
the Kantian test to the legal framework yields a liberal order. First,
though he does not explicitly distinguish the three stages or phases of
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