F. Hayek, The Constitution

of Liberty and other works

Bienvenido “Nonoy” Oplas Jr.

Pres., Minimal Government Thinkers

Fellow, SEANET

Open House forum by UP Libertad

UP NCPAG, Diliman, QC

20 May 2016

OUTLINE

I. Friedrich Hayek, econ and political papers

II. The Constitution of Liberty

III. Liberalism, socialism and conservatism

IV. Policy implications

I. Friedrich A Hayek, prolific

writer, author of many books,

manuscripts

A. Economic papers

1931. “Prices and Production”. London:

Routledge & Sons. Second revised edition,

London: Routledge & Kegan Paul, 1935.

1933a. “Monetary Theory and the Trade Cycle”. London: Jonathan Cape.

1933b. "The Trend of Economic Thinking." Economica 13: 121-37. Reprinted in

Hayek, 1991, pp. 17-34.

1937. "Economics and Knowledge." Economica N.S. 4: 33-54. Reprinted in Hayek,

1948a, pp. 33-56.

1939. "Price Expectations, Monetary Disturbances, and Malinvestments." In Hayek,

Profits, Interest, and Investment. London: Routledge and Kegan Paul, pp. 135-56.

1941. The Pure Theory of Capital. Chicago: University of Chicago Press.

1963. "The Economics of the 1930s as Seen from London."

"Personal Recollections of Keynes and the 'Keynesian Revolution.'"

1968a. "Competition as a Discovery Procedure.“

1975. "Two Types of Mind." In Hayek, The Trend of Economic Thinking. Edited by

W. W. Bartley III and Stephen Kresge. Vol. 3 of The Collected Works of F. A. Hayek.

1976. Denationalisation of Money : An Analysis of the Theory and Practice of

Concurrent Currencies. London: Institute of Economic Affairs.

1978a. "Coping with Ignorance." Imprimis 7, no. 7 (July): 1-6. Reprinted in

Champions of Freedom. Hillsdale, Mich.: Hillsdale College Press, 1979.

1978b. New Studies in Philosophy, Politics and Economics. Chicago: University of

Chicago Press.

Hayek, F. A. 1991. The Trend of Economic Thinking: Essays on Political Economists

and Economic History. Edited by W. W. Bartley III and Stephen Kresge. Chicago.

A. Economic papers

B. Political papers

1944. The Road to Serfdom. Chicago: University of Chicago Press.

1945. "The Use of Knowledge in Society." American Economic Review 35, 519-30.

1948a. Individualism and Economic Order. Chicago: University of Chicago Press.

1948b. "The Meaning of Competition."

1952. The Sensory Order. Chicago: University of Chicago Press.

1956. "In Honour of Professor Mises."

1960. The Constitution of Liberty. Chicago: University of Chicago Press.

1968b. "The Confusion of Language in Political Thought."

1973-79. Law, Legislation, and Liberty. Three volumes. University of Chicago Press.

1988. The Fatal Conceit: The Errors of Socialism. Edited by W. W. Bartley III. Vol. 1 of

The Collected Works of F. A. Hayek. University of Chicago Press, 1989.

1992. The Fortunes of Liberalism. Ed. Peter G. Klein. Vol. 4, Collected Works of Hayek.

―If in the first attempt to create a world of

free men we have failed, we must try

again. The guiding principle that a policy of

freedom for the individual is the only truly

progressive policy remains as true today

as it was in the nineteenth century.

The power which a multiple millionaire,

who may be my neighbour and perhaps

my employer, has over me is very much

less than that which the smallest

functionaire possesses who wields the

coercive power of the state, and on whose

discretion it depends whether and how I

am to be allowed to live or to work.‖

―The problem of a rational economic order is

determined precisely by the fact that the

knowledge of the circumstances of which we must

make use never exists in concentrated or

integrated form but solely as the dispersed bits of

incomplete and frequently contradictory

knowledge which all the separate individ. possess.

One reason why economists are increasingly apt to forget about the

constant small changes which make up the whole economic picture is

probably their growing preoccupation with statistical aggregates, which

show a very much greater stability than the movements of the detail.

The comparative stability of the aggregates cannot, however, be

accounted for—as the statisticians occasionally seem to be inclined to

do—by the "law of large numbers"

The Pretence of Knowledge Nobel Prize lecture, December 11, 1974

―To act on the belief that we possess the

knowledge and the power which enable us to

shape the processes of society entirely to our

liking, knowledge which in fact we do not

possess, is likely to make us do much harm.

―If man is not to do more harm than good in

his efforts to improve the social order, he will

have to learn that in this,… he cannot acquire

the full knowledge which would make mastery

of the events possible.

―The recognition of the insuperable limits to his knowledge ought indeed to

teach the student of society a lesson of humility which should guard him

against becoming an accomplice in men‘s fatal striving to control society – a

striving which makes him not only a tyrant over his fellows, but which may

well make him the destroyer of a civilization which no brain has designed

but which has grown from the free efforts of millions of individuals.‖

―The curious task of economics is to

demonstrate to men how little they really

know about what they imagine they can

design.

―The disdain of profit is due to ignorance,

and to an attitude that we may if we wish

admire in the ascetic who has chosen to

be content with a small share of the riches

of this world, but which, when actualised in

the form of restrictions on profits of others,

is selfish to the extent that it imposes

asceticism, and indeed deprivations of all

sorts, on others.

―The creation of wealth is not simply a physical process and cannot

be explained by a chain of cause and effect. It is determined not by

objective physical facts known to any one mind but by the separate,

differing, information of millions, which is precipitated in prices that

serve to guide further decisions.‖

II. The Constitution of Liberty

2005, “The Constitution of Liberty in Asia”, roundtable discussion whole

day about the book, Phuket, Thailand. Sponsored by the Atlas Economic

Research Foundation (USA) and Friedrich Naumann Foundation for

Freedom (FNF). Moderated by famous modern classical liberal scholar,

Leonard Liggio (RIP) of Atlas.

Among the participants

were “Hayek of China” Liu

Junning, “Hayek of

Korea” Chung-ho Kim,

others from Japan,

Pakistan, Vietnam, India,

Georgia, Malaysia,

Cambodia, Phils.

―While the uses of liberty are many,

liberty is one. Liberties appear only

when liberty is lacking. Difference

between liberty and liberties -- that

which exists between a condition in

which all is permitted that is not

prohibited by general rules and one in

which all is prohibited that is not

explicitly permitted…‖ (Ch. 1)

"Liberty is essential in order to leave

room for the unforeseeable and

unpredictable. Because every

individual knows so little that we trust

the independent and competitive

efforts of many to induce the

emergence of what we shall want

when we see it.― (Ch. 2)

―The aim of assigning responsibility is to make man

different from what he is or might be… The knowledge

that he will be held responsible will influence a person‘s

conduct in a desirable direction. Assigning of responsibility

makes people observe certain rules.‖ (Ch. 5)

―In the long run, the existence of

groups ahead of the rest is

clearly an advantage of those

who are behind, in the same

way that, if we could suddenly

draw on the more advanced

knowledge which some other

men on a previously unknown

continent or on another planet

had gained under more

favorable conditions, we would

all profit greatly.‖ (Ch. 3)

―By ‗law‘ we mean the general rules that apply equally to

everybody…

Even general, abstract rules, equally applicable to all, may possibly

constitute restrictions on liberty. But this is unlikely. The chief

safeguard is that the rules must apply to those who lay them down

and those who apply—that is, to the government as well as the

governed – and that nobody has the power to grant exceptions.‖

(Ch. 10)

―The great aim of the struggle for

liberty has been equality before

the law… Equality of the general

rules of law and conduct,

however, is the only kind of

equality conducive to liberty and

the only equality which we can

secure without destroying

liberty… (which) is bound to

produce inequality in many

respects… ― (Ch. 6)

―That any law should apply equally to all. General and equal

laws provide the most effective protection against infringement

of individual liberty. It is this fact that all rules apply equally to all,

including those who govern, which makes it improbable that any

oppressive rules will be adopted.‖ (Ch. 14)

Recap:

* Liberty means absence of coercion.

* Freedom is inseparable from responsibility; fear of

responsibility is fear of freedom itself.

* Equality before the law; the law applies equally to unequal

people.

* Rule of law means no exception. No one is exempted and no

one can grant an exemption.

3. Liberalism, Socialism and Conservatism

• Lao Tzu or Laozi (600 BC), considered

the first intellectual in China and the

world (he came earlier than Plato),

championed individual liberty.

• ―The more restrictions and limitations

there are, the more impoverished men

will be... The more rules and precepts

are enforced, the more bandits and

crooks will be produced.‖

• ―Through my non-action, men are spontaneously

transformed.

Through my quiescence, men spontaneously become

tranquil.

Through my non-interference, men spontaneously

increase their wealth.‖

“Every individual...generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it…. he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.” --TWN, Book IV Chapter II “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our necessities but of their advantages.” -- TWN, Book I Chapter II

The whole, or almost the whole public revenue, is in most countries employed in maintaining unproductive hands... Such people, as they themselves produce nothing, are all maintained by the produce of other men's labour... Those unproductive hands, who should be maintained by a part only of the spare revenue of the people, may consume so great a share of their whole revenue… all the frugality and good conduct of individuals may not be able to compensate the waste and degradation of produce occasioned by this violent and forced encroachment. -- TWN, Book II, Chapter III

"The characteristic feature of modern

capitalism is mass production of goods

destined for consumption by the masses.

The result is a tendency towards a

continuous improvement in the average

standard of living, a progressing

enrichment of the many. Capitalism

deproletarianizes the 'common man' and

elevates him to the rank of a 'bourgeois'.

"On the market of a capitalistic society the common man is the

sovereign consumer whose buying or abstention from buying

ultimately determines what should be produced and in what quantity

and quality...

Wealth can be acquired only by serving the consumers. The

capitalists lose their funds as soon as they fail to invest them in

those lines in which they satisfy best the demands of the

public.‖

"To cure the British disease with

socialism was like trying to cure

leukaemia with leeches.

We want a society where people

are free to make choices, to

make mistakes, to be generous

and compassionate. This is

what we mean by a moral

society; not a society where the

state is responsible for

everything, and no one is

responsible for the state.‖

―I came to office with one deliberate intent: to change Britain

from a dependent to a self-reliant society -- from a give-it-to-

me, to a do-it-yourself nation. A get-up-and-go, instead of a sit-

back-and-wait-for-it Britain.‖ (February 1984)

“Raison d’etre” (reason for

existence) of government is to

provide only services B or C, yet

government spent up to services D

and E, even if “zero stealing”

happened, it’s still corruption

because more tax money were

confiscated from the citizens to

spend on sectors that do not deserve

to be subsidized forever.

Chart from James Buchanan’s book, “The Calculus of

Consent” (1962).

IV. Policy Implications: Limited government