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POL3046: Dissertation in Politics

Name: Craig Johnson

Title: The Spontaneous Order: A Contribution to Hayeks Liberalism?

Student number: 092729535

Advisor: Professor Peter Jones

Submitted: April 2012

SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF BACHELOR OF

ARTS IN POLITICS

SCHOOL OF GEOGRAPHY, POLITICS AND SOCIOLOGY

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CRAIG JOHNSON1

THE SPONTANEOUS ORDER: A CONTRIBUTION TO HAYEKS LIBERALISM

ABSTRACT

This paper considers Hayeks concept of the spontaneous order, and questions its contribution to his

liberalism. Many offer that the spontaneous order cements his place as a liberal or as a libertarian, whilst

others put forward that his scepticism of human reason and rational thought mark him as a conservative.

In this article, I put forward that Hayeks definition of the economy as a spontaneous order sits

comfortably as a doctrine of classical liberalism. However, his methods of analysing such spontaneity, and

his support for tradition and the limits of human understanding leave him with a conservative nature

similar in places to that of Michael Oakeshott. Following a detailed overview of the concept of the

spontaneous order, I assess Hayeks view of knowledge, rationalism and tradition, and place his thought

within the context of both liberalism and conservatism. The underlying message of this article is that

Hayeks social theory, like many before him, sits amongst the competing philosophies of liberalism and

conservatism.

CONTENTS

INTRODUCTION 3

THE SPONTANEOUS ORDER: A THEORY OF KNOWLEDGE 6

RATIONALISM 14

HAYEKS CONSERVATIVE LIBERALISM 23

1 School of Geography, Politics and Sociology, University of Newcastle. This paper builds upon research

conducted in a module on liberal political thought, led by Dr David Walker. I am indebted to him for fuelling my interest in Friedrich Hayek. I have also benefited greatly from the advice and supervision of Professor Peter Jones, and thank him for his detailed and considered comments on sections of this paper.

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INTRODUCTION

When Friedrich Hayek died in 1992, effusive tributes labelled him one of the great thinkers of the 20th

Century. The award of the Nobel Prize in Economics in 1974 represented a watershed for the

previously disillusioned thinker, whose economic and political thought had occupied a small share of

support compared to the rise of socialism and revisionism. Influenced by the thought of Immanuel Kant

(see Sullivan 1989) and Karl Popper (1945 and 1957)2, Hayek had continuously argued, previously to

little or no avail, that governments did not have the ability to manage economies, and that the results

for society would be disastrous if attempts to do so were realised. Hayek argues that the economic

market, and the formation of society that we know, has been formed spontaneously. This formation

should not be altered by a government intent on designing a different product. In this sense Hayek seeks

to defend the economic frameworks that have evolved over time. His writings represent a library of

work determined to rescue liberalism.

Throughout his career, Hayek contributed to many different academic disciplines, from economics and

psychology, through to political science and philosophy, never fully resting himself in one. In an era of

intellectual specialisation, he stood apart. He was a prolific writer unbounded by any longstanding

commitments to public policy or governance, and his collection of work stands as one of the most

substantial contributions to modern liberalism since John Stuart Mill. As the spontaneous order, for

Hayek, is liberalisms central concept (Hayek 1967: 162), it is important to analyse the influence this

notion had on his liberal philosophy.

This paper will assess the extent to which the concept of the spontaneous order, guided by his view of

human nature, contributes to his liberalism. It will show that whilst there are undoubtedly strong

elements of his economic thought which are unquestionably liberal, his view of human reason and

2 The debate goes on about the true influences on Hayek. Popper and Kant were undoubtedly important in Hayeks early work, but Forsyth (1988: 238-241) suggests that Hayeks thought is un-Kantian in its nature, and equates his thought more to the philosopher Ernst Mach, particularly for his work on the capability of the human mind.

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tradition leaves him susceptible to the criticism that he is a conservative, despite his strenuous efforts to

deny it3. Following an introduction to the context of this discussion, this paper will offer a detailed

analysis of Hayeks theory of the spontaneous order. It will demonstrate the relationship between his

concept of spontaneity, and his theories of knowledge, rationalism, and tradition. It will then question

the contribution of his spontaneous order to his liberalism. Hayek has long been regarded as a liberal,

seeking to offer a theory of philosophy more resonant with the values offered by the classical liberal

generation, before the rise of socialism and revisionism. However, many of the positions he defends can

often be identified with a conservative view of society rather than a liberal one. This paper concludes by

arguing that Hayeks spontaneous order, whilst contributing to his liberalism, offers an amalgamation of

conservative and liberal political thought.

Despite the rising nature of his profile, Hayek has received relatively little critical analysis. It is still

suggested that Hayek is more of an ideologue than a social theorist (see Downing and Thigpen 1984).

Consequently, he is often labelled as nothing more than a classical liberal who is unable to construct a

coherent political theory applicable to modern society. In assessing Hayeks contribution to liberalism,

this paper will dispel many of the myths that have arisen about Hayek. The rise of economic liberalism

in the 1980s in Britain and America, led by the New Right movement, suggested that the very ideas for

which he had been criticised were now being realised and supported, and subsequently improved his

standing as a philosopher and social theorist. However, since his name was used to provide intellectual

credibility and inspiration to the governing creeds of Thatcherism and other New Right movements, it

is perhaps inevitable that many of the ideas associated with the New Right wrongly became affiliated

with him. Whilst this improved his public standing, it also committed his philosophy to association with

an ideological stereotype far distant from the ideas that he was advocating. A brief assessment of the

Thatcher government represents a commitment to intervention. Whilst radically different from the

3 See Hayek (1960: 519-535) for a detailed postscript chapter entitled Why I am not a conservative. The use of criticism to imply conservatism in his thought is to echo his personal feelings towards the notion.

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interventions of socialist and revisionist governments before, it still embodied a government of radical

intervention4.

Hayek developed the concept of the spontaneous order as a means of explaining how society could

operate peacefully. Whilst not his own creation, it is ubiquitous throughout his social theory (Hunt and

McNamara 2007), and is the concept which underpins his theory of social justice, and from which he

seeks to promote and defend liberalism (Hayek 1982: 37) from the design arguments of socialism. He

uses the examples of law and legislation as a means of distinguishing between spontaneity and design.

Law, on the one hand, has evolved spontaneously, consisting of a system of rules regulate society in an

abstract and general fashion. Whilst the law applies equally to all, it reflects the conventions that have

emerged instinctively over time through the assorted efforts of actors (Bellamy 1994: 421-422).

Legislation on the other hand belongs to a constructed order, with rules submitted to society for the

direct achievement of specific ends (Hayek 1973: ch. 2).

Hayek admits that it was once possible to have a society operated through a more consciously ordered

programme. In this context, he refers to the former small scale agricultural societies, where this may

have been conceivable. However, now society has evolved to become a Great Society5, and to attempt

to plan these through legislation will inevitably fail, and descend a society into one of great inefficiency

and coercion. It is Hayeks view that the rise of socialism, followed by the evolution of social liberal

theory, led many thinkers to hold a harmful view of the power of human reason. They placed too much

faith in their ability to understand social knowledge and to order the way in which society should be

structured, instead of understanding the limits of human reason. It is from this premise that he offers his

concept of the spontaneous order, which will be fully explored in the following chapter.

4 This is not to suggest that Hayek himself was against radical intervention. However, Thatcher often intervened in ways that made the state larger. Hayek would never support such action. This debate often features the terms enterprise association and civic association, labels used predominantly by the conservative thinker Michael Oakeshott. Hayek disagreed with Oakeshott and said that the state was an enterprise association, but one which must be kept strictly limited to perform its purpose, which was provide only a framework for the market mechanism to take place. The similarities of Hayeks later writings with Oakeshott warrants much greater inspection, but will be discussed briefly in the latter stages of this paper. 5 Hayek compares his conception of the Great Society to Poppers Open Society. For a more detailed analysis of this relationship, see Rowland (1988) and Vernon (1976).

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THE SPONTANEOUS ORDER: A THEORY OF KNOWLEDGE

Order represents the way in which things exist. For Hayek, order is:

a state of affairs in which a multiplicity of elements of various kinds are so related to each other that we may learn from our acquaintance with some spatial or temporal part of the whole to form correct explanations concerning the rest, or at least expectations which have a good chance of proving correct (Hayek 1973: 36).

Orders can be designed. Businesses exist by being ordered by method of design. People create them

from the outset, and employ other people to perform certain tasks specifically to contribute to that

business order. Alternatively, orders can be formed without design, caused instead by the collaboration

of elements. Whilst the conditions can be created to benefit the generation of such orders, an intended

method of design cannot be applied. They are created spontaneously, an ideal which can be applied

extensively across our society. Frameworks of morality that we follow, or concepts of law that we

accept, have evolved through generations of change and adaptation. Whilst they appear to us as

structured edifices, man has never been solely capable of the conception of such a framework applicable

to, and accepted by society. Such structures were not designed in any process of unvarying continuity,

but have undergone a permanent process of change, as adaptation to such structures takes place.

Hayek puts forward that the order of society is the product of forces not of the control of man, but at

the mercy of spontaneity. It is an order of events that are not the product of specific human intention,

but with the order of events that are the product of human action (Barry 1982: 7-8). The spontaneous

order arises out of the multifarious practices of a wide group of actors, each unaware of the direct

intention of the other. Knowledge arises in a process of experimental interaction of widely dispersed,

different and even conflicting beliefs of millions of communicating individuals (Hayek 1988: 80).

Hayek argues that knowledge is intrinsically hostile to organised assembly, and a mechanism is required

to ensure that knowledge can be most usefully capitalised upon (Connin 1990: 309-310). This

mechanism is the spontaneous order.

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In its most humble form, the spontaneous order represents the notion that individuals are restrained by

rules of conduct not designed by individual human mind. The rules of conduct are generated naturally

over time through the evolution of institutions and through a process of selection based on their success.

The selection process is not specific, but more a general acceptance by society. Human wisdom cannot

decide this, but more the ultimate decision about what is good or bad will be made by the decline of

groups that have adhered to the wrong beliefs (Hayek 1960: 36).

The concept of the spontaneous order was not coined by Hayek. He traces the concept back to the

writings of Bernard Mandeville in the early 18th Century, and was committed to the cause of developing

this theory. He even offered new terms which he felt more accurately described the nature of the order

he was describing. For Hayek, the typical language used previously in economic and social theory

exhibited a socialist bias, engrained in the available vocabulary. Hayeks analysis instead offers a battery

of concepts, often twinned with others. For instance, economy implies that each of the actors within

an entire order share a specific goal, something Hayek strenuously denies. Instead, he offers the term

catallaxy, which is more the result of individual economies adjusting to a spontaneous order (Hayek

1976: 108).

Original terms are also used for Hayeks concepts of order: taxis and kosmos (Hayek 1973: 36-38).

A taxis represents an object of human design, with a single source of authority, which is rarely

compromised (Gamble 1996: 37)6. A kosmos on the other hand represents spontaneity; an order not

consciously designed or created. Some have misinterpreted Hayeks differentiations (see Barry 1984) to

mean that Hayek is against taxis as a rule. This isnt true. He is not against single authority, designed

institutions, but opposes the attempt of evolving this element of design into a construction of a social

order. This is an important distinction and one which Hayek develops in his critique of socialism.

6 Hayek fails to acknowledge here, and throughout his writings, that authority can be exercised in manners other than hierarchical. In doing so, he ignores the possibility of more democratic methods of authority.

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Hayek is in fact enthusiastic for the organised factory system. He supports the infliction of authority

upon the work-force. His view of the Great Society contains many taxis, organised from the top down

and enacting a planned and coordinated model of practice. However, they are only able to do this freely

because the society within which they operate does not have a taxis at its centre. The development of

society to this point was dependent upon no single authority or will, but instead the experimentation of

individuals. Often, the experimentation will not have been successful, and will have failed, but it is the

experimentation that is successful that makes the Great Society. Without a kosmos, but a taxis, society

would never be able to allow such experimentation.

Hayeks most prevalent example of a kosmos is the spontaneous market order, or catallaxy. It isnt

perfect. It is Hayeks objective that this can and will never be the case. It is the correct order for society

precisely because it is imperfect, and fragmented to account for each individual. It cannot be attributed

to Hayeks earlier writings on general equilibrium7, but more to the aim of uncertainty.

The market order in particular will regularly secure only a certain probability that the expected relations will prevail, but it is, nevertheless, the only way in which so many activities depending on dispersed knowledge can be effectively integrated into a single order (Hayek 1973: 42). The aim of the market order is to cope with the inevitable ignorance of

everybody of most of the particular facts which determine this order. By a process which men did not understand, their activities have produced an order much more extensive and comprehensive than anything they could have comprehended, but on the functioning of which we have become utterly dependent (Hayek 1983: 19).

What becomes important for Hayek is the observation of rules of conduct. These rules need not be

commanded, but present to allow the will of individuals participating in society to come to fruition

(Gamble 1996: 38)8.

7 In a speech in 1936, Hayek defines equilibrium as "the different plans which the individuals composing [a society] have made for action in time are mutually compatible" (Hayek 1937 (reprinted in Hayek 1952): 41). Hayek was not seeking to achieve equilibrium, but more to ascertain if the market process created a tendency towards equilibrium. 8 Hayeks assertion of the qualities of the spontaneous order can be challenged here. Is the spontaneous order really the best method of utilising dispersed knowledge? If a health emergency within society (such as a flu epidemic or something similar) was to occur, the spontaneous forces of society would surely struggle to cope and

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MARKETS

Hayeks theory of the spontaneous order arises from his study of economics. His account of the organic

nature of human development and decline represents a submission of faith to the market. Rowland

(1988: 224-225) goes further to label it blind submission. Hayek (1944: 17-19) argues that mans

submission to the market, and its impersonal nature, has allowed individuals to adjust to changes which

they cannot understand, and themselves within society have evolved as a consequence. Hayek (1933)

sought to address how human action could be coordinated without a central controlling authority,

building upon the work of Menger (1883) and Mises (1936). He developed a fascination with

spontaneity and order in response to the more interventionist ideas forward by Keynes and Lange.

Oskar Lange, like the Austrian economists, also sought to address what Mises considered the key

weakness of socialism: how an absence of a market for capital goods and for production would reflect

what enterprises in the consumer sector required (Gamble 1996: 64-66). Lange proposed that a central

board would be able to set prices for capital goods, which would trigger a response from enterprises,

and prices would be adjusted through trial and error, depending upon the performance of the economy.

In essence, socialism for Lange was maintaining the principles of economic calculation that had arisen

under market conditions, but replacing the mechanism for carrying out its function9. Implicit in Langes

work was that, since market economies were renowned for being inefficient, socialism may actually

respond to the situation effectively? Governments on the other hand are able to fund research into a cure, issue information quickly to the public via national media outlets and broadcasters, and provide helpful information. As Kley (1994: 121-122) points out, it is unlikely that the will of each individual within the catallaxy for large parts of society to be killed. 9 Langes work represents part of a growing trend at the time of responding to Mises claim that socialism simply was not possible. Langes work was aided by the work of non-socialist economists who were simply keen to explore whether Mises claim could be upheld; in particular, Vilfredo Pareto and Enrico Barone (see Schumpeter 1950), who displayed signs more of intrigue than of support for socialism. Both demonstrated a socialist economy was theoretically possible, so long as the cost of production was as low as possible, and that prices were equated to the cost of production. Lange began from this premise to counter Mises theory.

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achieve something close to general equilibrium between supply and demand, and a flexible set of prices

as a result (Gamble 1996: 66)10.

Hayeks contribution to the debate of economic calculation aimed to demonstrate that the arguments of

Lange and Schumpeter were wrong, and that working from the assumptions of neoclassical economics

was the wrong method by which to approach this discussion. In doing so, he developed a theory of

social knowledge which perhaps stands as his most important contribution to social science11, and builds

upon the work of the Scottish school, encompassing philosophers such as David Hume, Bernard De

Mandeville and Edmund Burke, and the Austrian school. Key insights of the Austrian school become

evident in Hayeks thought: first, that knowledge is always imperfect in human societies, and second,

that the cost of any economic activity is subjective (Gamble 1996: 67). Hayeks own work refines these

insights, warning that society must cope with ignorance, and recognise that the only things which can

help us are the evolved institutions of the market, the rule of law and limited government (Connin

1990: 300). The only way in which the entire knowledge of society can be collected is through the

market, bringing it together into some coordinated form.

Hayeks thought represents a commitment to the epistemological foundations of political thought. In

defending the principles of ignorance from a liberal perspective, he is using a theory of social knowledge

as an explanation for the social and political landscape we encounter. In doing so, his theory of

knowledge demonstrates Kantian ideals (Gray 1986: 4-8):

What I contend, in short, is that the mind must be capable of performing abstract operations in order to perceive particulars, and that this capacity appears long before we can speak of conscious awareness of particulars. When we want to explain what makes us tick, we must start with the abstract relations governing the order which, as a whole, gives particulars their distinct place (Hayek 1978: 36-37).

10 The demonstration of arguments by Lange and Barone led commentators such as Charles Lindblom (1965) and Joseph Schumpeter (1950) to conclude that socialism had won this particular debate. Whatever its merits, socialism was possible. 11 There can be no doubt that the spontaneous order provides the largest contribution to Hayeks writings, but the more original nature of Hayeks theory of knowledge suggests a greater importance.

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Evolving from his work in The Sensory Order (Hayek 1952), Hayek agrees with Kant in recognising the

ability of the mind to perceive external stimuli. However, he suggests that our classificatory is further

defined by our impulses and experiences, which are received by our sensory order. It is this which

determines us from other individuals: the uniqueness of our individual experiences, and their

subsequent classification. The theory of the mind acts as a genesis for the further theoretical approaches

that Hayek develops elsewhere (Connin 1990: 302).

In society, knowledge is ultimately fragmented. It is the combined knowledge of each person in society

that makes society work. A modern economy can only work if it can cope with the fragmentation of

knowledge (Hayek 1973: 14).

The economic problem of society is thus not merely a problem of how to allocate given resources if given is taken to mean given to a single mind which deliberately solves the problem set by these data. It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know. Or, to put it briefly, it is a problem of the utilisation of knowledge, which is not given to anyone in its totality (Hayek 1948: 77-78).

Nobody can know, in any entirety, what members preferences and choices are. Nor can they know

which kinds of things or services are wanted, and how urgently they are wanted (Hayek 1978: 182).

To respond to Langes (and others) comments, Hayek maintains that even if a central organisation knew

all that was required to detail the preferences of individuals, it would not be able to organise an

economy efficiently (Kley 1994: 50-51). Lack of knowledge of each local economy, and each individual

economy, would make any kind of knowledge gathering futile. Along with this ultimate dilemma,

Hayeks theory of knowledge has a temporal dimension. Even if we were to accept that sufficient

knowledge could be gathered to warrant a painstaking collection process, the fugacity of such data

would lag behind reality to such an extent it would be rendered worthless. A solution to this problem

for Hayek is not possible due to the embryonic nature of relevant knowledge. Once it has been

discovered, it will already have served its purpose. Once collected, the purpose has passed.

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Hayeks critique of perfect knowledge is at the heart of his critique of socialism. The market is not

something to be praised for because of its greater efficiency or user satisfaction; the market is to be

praised because it is the only means by which the correct conditions can be set for society to be ordered.

The market is imperfect, in the same way that human knowledge is imperfect. The market is simply less

imperfect than anything else (certainly socialism).

The market itself was something which had developed, according to Hayek, spontaneously. It was a

natural phenomenon that had evolved without planning (Gamble 1996: 68). The role of government, or

whatever the title of the central authority, was not to fashion how the market should operate, or

propose grand claims as to what goals it should achieve, but simply to ensure that the basic conditions

are in places so it can function effectively. Basic conditions include the protection of property and the

maintenance of contracts. It can certainly be said at this juncture that Hayeks analysis of the emergence

of the market is misleading at best; false at worst. States have often being prolific in their ability to

maintain and strengthen the market economy. Whilst some of the market has undoubtedly arisen

spontaneously, it is not a universally natural evolution.

Economic history reveals that the emergence of national markets was in no way the result of the gradual and spontaneous emancipation of the economic sphere from governmental control. On the contrary, the market has been the outcome of a conscious and often violent intervention on the part of government (Polanyi 1944: 258).

Whilst the strength of Polanyis argument can be discussed elsewhere, the potency of his underlying

point is undeniable. As the market order has evolved throughout history, particularly during Hayek's

conception of the Great Society, it has been assisted and strengthened by the actions of various and

successive governments. When Hayek and the Scottish school devote their time to analysis of the free

market and the promotion of its ideals, they often do so in the hope of ensuring its longevity (Hodgson

1984).

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In spite of this analysis, Hayek argued against attempts to simulate the character of the market, as its key

character was spontaneity. For Hayek, the market is a process of discovery, and the only means of

achieving this process is through competition. This position was shared by fellow supporters of

capitalism such as Mises, but also by Marx. Marx viewed competition as necessary for creating and

maintaining insecurity. This was necessary to force companies and individuals to constantly drive down

expenditure and cut labour. This allowed actors to then provide stimulus for new products and new

industries (Gamble 1996: 71). Competition was the force that made capitalism productive12.

Competition was therefore the result of spontaneity, and necessary for maintaining the market order as

it stood. Competition led to coordination of the market and of the complex economy that existed13.

This chapter has demonstrated Hayeks theory of the spontaneous order within the context of

knowledge and the economy. However, as the concept of spontaneity is ubiquitous within Hayeks

thought, there are other notions and ideas which need to be explored to fully understand Hayeks

political philosophy. The following chapter will explore Hayeks theories of rationalism and tradition.

12 Much of the Marxist analysis of competition was shared by Mises. The obvious difference was that Marx thought that capitalism was the transitory process to socialism. Mises, and Hayek subsequently, maintained that this was as good as it got. 13 Hayeks unfailing support for competition conflicts with the wider experiences of society, and it is a conflict which he never truly resolves. Hayeks assertion that the market economy would continue to allow individuals to make full use of the knowledge known only to them, and subsequently encourage further competition, was and has not being realised in practice. Instead, there has been an increasing emergence of monopolies, each centrally organised and limiting competition and individual participation in the economy (Gamble 1996: 72-73). Many liberals urged political action to limit this rise of monopoly companies. Hayek (1960: 264-267) was not one of them, insisting that there was no coercion by these organisations, and that they were in fact the embodiment of competition.

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Rationalism

Hayek commonly puts forward arguments in terms of dichotomies. Many of the concepts within his

thought can be set out as polarities:

kosmos taxis;

catalaxxy economy

spontaneity organisation

freedom coercion

abstract concrete

justice - social justice

These concepts represent a key argument of Hayek: that society has been formed spontaneously,

through a process of unplanned development. The tenets on the left hand side of the polarity represent

liberalism for Hayek; the right represents rationalism. His own stance is to staunchly argue against

rationalism. Whilst influential on events, human reason can never be in control of their environment,

or attempt to design a better one (Gamble 1996: 31-32). They can make small improvements, but

anything more is doomed to fail. Rationalism for Hayek comes in two forms, and could be placed on the

list of dichotomies above: constructivist rationalism and evolutionary rationalism.

Constructivist rationalism comprises three underlying features. It presupposes firstly that all social

institutions are, and ought to be, the product of deliberate design (Hayek 1973: 5). It assumes secondly

that reason is a sufficient tool by which to know how to shape the institutions of the social order

according to the preferences of the humans who comprise its membership (Hayek 1973: 29-33). Its

final aspect contests that existing institutions are not capable of achieving the ends that are possible.

Constructivism, Hayek argues, insists that institutions not visibly serving approved ends should be

discarded (Hayek 1978: 13)14

14 This third tenet of constructivism will be explored in more detail in the section entitled Tradition.

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Constructivist rationalists would not be inhibited by caution, but would believe in the power of human

reason to propose untried and untested practices and institutions for the perceived good of society. This

brand of social thought was developed primarily by philosophers from the French tradition, namely

Descartes, Rousseau and Comte. It is also present in the utilitarianism offered by Jeremy Bentham. For

Hayek, it is not difficult to find the similarity between these traditions and the ideas offered by the

socialists and New Liberals of a more contemporary time.

Hayeks theory of knowledge (or lack thereof) clashes with these ideas. Hayek contends that it is not

possible to achieve the aims and objectives that those of constructivism seek to realise. The acquisition

of such knowledge is not conceivable. Hayeks Nobel laureate address stressed this very principle,

claiming that the thinkers of the French tradition had begun from the belief that we possess the

knowledge and the power which enables us to shape the processes of society to our liking, knowledge

which in fact we do not possess (Hayek 1978: 33). The knowledge, for Hayek, that is required to be

able to control the conclusions of events we wish to order is simply not able to be obtained. Social

knowledge is unlike the knowledge of the natural sciences; it is fragmented, dispersed and ultimately

subjective; belonging to and making sense only to each particular agent (Connin 1990: 299).

Evolutionary rationalism allows change, but in a manner which promotes caution. It promotes change

only in incremental form. The concern for the evolutionary rationalist is how society has developed.

Those in favour of evolutionary rationalism were able to maintain a healthy dose of scepticism in a time

when the power of reason was becoming ever more appealing. Their insights stand parallel to Hayeks

concept of the spontaneous order. They identified that society was the product not of human design,

but of human action. The best practices were of spontaneous evolution. They were not from the

designing mind of a creator, who could not be aware of the intricate details of each individuals

circumstances. Only spontaneous evolution could facilitate each specific circumstance into an order able

to be maintained. For Hayek, we are guided (or even operated) by rules of which we are not aware,

and conscious reason can therefore always only take account only of some of the circumstances which

determine our actions (Hayek 1967: 87).

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The philosophers of the Scottish school were the first to recognise the value of spontaneity. Orders that

arose by a process of evolution were such that they enabled actors to experiment and try new methods

of creativity. Some would be unsuccessful, clearly, but those that worked would be accepted by general

society, and would be developed to improve the way in which the common order operated. The

Scottish philosophers, housing theorists such as Adam Smith and David Hume, argued that the best

outcomes in economics and in society had evolved in the absence of central planning. Hayek (1967: 87)

pays particular tribute to David Hume, sharing the view that whilst reason has role, it is a limited role.

It serves our values but does not determine them, and coincides with Humes view that the rules of

morality are not the conclusions of our reason (Hume 1739 (1978): 454). Hayek also dedicates a great

deal of time and attention to Bernard De Mandeville15. Mandeville observed a disjunction between

individual behaviour and social outcomes. Instead of arguing for a control of private lives to ensure the

public good, Mandeville observed that the public good would only be realised if individuals were able to

pursue their own private vices16.

Whilst Hayek claims to be an anti-rationalist, this does not mean that he is irrational. He is against

constructivist rationalism. He discusses the theft of the term rationalism from the true liberal thinkers

by those who placed greater faith in the capacity of human reason than him. Those who did not agree

with their views on the proper use of reason should have been labelled anti-rationalists (Hayek 1967:

84). Rationalists see human reason in all human behaviour, and argue for a remodelling of society

according to rational criteria (Gamble 1996: 32). Hayek says that this is a fallacy, and that constructivism

represents the error that society has been designed by some rational mind. In arguing this point, Hayek

commits himself more to the ideas of Mandeville, Hume and Burke, than to the propositions of

constructivism. For the latter, order is imposed upon the world by the exercise of reason. For Hayek,

this is a dangerous premise, and false. The mind is as much a force of spontaneity as society is, and our

15 See Hayek (1978: ch. 15). 16 As Gamble (1996: 33-34) notes, Mandevilles insight can be seen as constructivist thinking. Hayek prefers to draw upon his work as a reinforcement of his own view about the lack of available knowledge of what is good for society.

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ideas are merely the visible exfoliation of spontaneous forces (Gray 1986 (1998): 30). Constructivism

mistakenly neglects the primacy of spontaneity over reason within the mind, and in doing so wrongly

combines tacit and explicit knowledge. Reason is not capable of performing the role of design in this

context. Constructivism wrongly claims that it is17.

Hayek continues to stress that he is not against reason as a concept. He refers back to the damage that

those philosophers have caused by not recognising the limits of individual reason18. He argues that reason

has lost its meaning, and was changed during that period, from one which understood a capacity to

recognise the capacity of truth, evolving to one which sought to deduce reasons from explicit premises

(Hayek 1967: 84-85). It is from this point that Hayek defines their concept of reason as rationalist

constructivism, and couples it with his use of scientism which he first used in 1952.

17 This view of rationalism places Hayek in a rather difficult and tangled position. Often this debate becomes simplified to the notions of planning and free markets. Hayek does not accept this view. For Hayek, the supporters of the free market still support planning, but planning of individual lives as much as is possible. Hayeks position of the worthiness of design relates to the comprehensiveness of the objectives that are being

proposed. The market economy was still a product of planning, but planning at an individual and autonomous level. The following quote from Hayek (1978: 234) summarises this view: Planning is popular because it means that we should use as much foresight as we can command. In this sense

everybody who is not a complete fatalist is a planner but what our planners demand is a central direction of all economic activity according to a single plan, laying down how the resources of society should be consciously

directed to serve particular ends in a definite way. The dispute between the modern planners and their opponents is, therefore, not a dispute on whether we ought to choose inteliigently between the various possible organisations of society; it is a dispute about what is the best way of employing foresight and systematic

thinking in planning our common affairs. The question is whether for this purpose it is better that the holder of coercive power should confine himself in general to creating conditions under which the knowledge and initiative of individuals are given the best scope so that they can plan most successfully or whether a rational utilization of our resources requires central direction and organization of all our activities according to some consciously constructed blueprint. Rowland (1988: 227-228) defines this as individual constructivism. Hayek (1948: 19-22) himself likens this section of his thought to the liberal individualist aspect: the theory of individualism contributes to techniques of

constructing a suitable legal framework and of improving the institutions which have grown up spontaneously it allows almost unlimited scope to human ingenuity in the designing of the most effective set of rules. It is at the

least dubious to claim that this form of constructivism is so radically separate from the very people he criticises. 18 He singles out Rene Descartes at this particular moment (Hayek 1967: 84).

18

Rationalism in this sense is the doctrine which assumes that all institutions which

benefit humanity have in the past and ought in the future to be invented in clear awareness of the desirable effects that they produce; that they are approved and respected only to the extent that we can show that the particular effects they will produce in any given situation are preferable to the effects another arrangement would produce; that we have it in our power so to shape our institutions that of all possible sets of results that which we prefer to all others will be realised; and that our reason should never resort to automatic or mechanical devices when conscious considerations of all factors would make preferable an outcome different from that of the spontaneous process. It is from this kind of social rationalism or constructivism that all modern socialism, planning and totalitarianism derives (Hayek 1967: 85).

The theoretical attempts of Lange and others to centralise knowledge is an example of constructivist

thinking. Working from a neoclassical approach to economics, Hayek was unable to firmly decompose

the arguments of those against Mises. Hayek admitted that conventional economic approaches could

support socialism, but it was the conventional approaches that Hayek was aiming to critique; they had

abandoned the concept of the market order.

TRADITION

In order to ensure that political philosophy can offer more than wishful thinking and irrelevant

rationalism, Hayek believes that we need a correct understanding of how the social order operates and

the limitations of human beings to alter it. Hayeks lifelong research leads him to the conclusion that the

spontaneous order is the only concept capable of accounting for both the restrictions and possibilities of

society. Hayeks justification of the spontaneous order is both a promotion of its qualities and a defence

of its existence. Kley (1994: 185) labels the first the proceduralist argument and the second the

traditionalist argument19. The proceduralist argument was explored in this paper through Hayeks

account of the market mechanism. Only a market can co-ordinate each individual economy and secure

19 Hayek himself does not distinguish between these two arguments. Kleys distinction is not perfect; Hayeks concepts each overlap and can be viewed as an overall coherent theory. However, the distinction between the proceduralist and traditionalist arguments is a useful one, as they provide a premise for the inconsistencies in Hayeks political philosophy, which will be explored later in this paper.

19

prosperity (in a general sense) and a peaceful outcome. The traditionalist argument is explored in this

segment.

The traditionalist argument that Hayek advances builds upon the evolutionary rationalism that was the

explored in the previous section. Hayek rejects what I outlined as the third tenet of constructivism: that

the worth of an institution should be judged upon it existing as a rational means to a defined end20.

Hayek rejects this requirement of an institution, as he feels it would leave him powerless to present a

valid defence of the liberal order (Hayek 1988: 60-62 and 71). His rejection is based on two claims:

firstly that market institutions represent tacit embodiments of the accumulated experience of

consecutive generations, and secondly that the ignorance of each individual as to how a collective

catallaxy works means that we cannot defend explicitly what an institution has or can achieve (Kley

1994: 188): man has certainly more often learnt to do the right thing without comprehending why it

was the right thing, and he still is often served better by custom than understanding (Hayek 1973: 157).

This argument reiterates Rowlands view, referred to earlier, that Hayeks commitment to the market

represents a blind submission. For Hayek, the market is the only tool available to secure the well-

being of the individual within the wider social order, repudiating why this needs to be so in the process.

His scepticism rules out any justification of the legality and morality of institutions.

that traditional morals, etc. are not rationally justifiable, this is also true of any possible moral code, including any that socialists might ever be able to come up with. Hence no matter what rules we follow, we will not be able to justify them as demanded; so no argument about morals- or law- can legitimately turn on the issue of justification (Hayek 1988: 68).

20 This is not to say that Hayek believes that institutions have no worth in terms of achieving ends, but more that their achievements are more than can be explicitly explained.

20

The belief that justification is necessary is, for Hayek, one of the fundamental mistakes of constructivism

(Hayek 1988: 67). He rejects even that he is justifying it on the grounds that it enables us to survive.

This is not a justification, but merely a statement21.

Hayeks statement of the spontaneous order represents an attempt to describe the features of the

economic market mechanism. Attempts to alter the mechanism are what Hayek labels the fatal conceit

(1988). To suggest a course of sweeping reform is to put at risk the traditional rules which have evolved

over time and now possess a wisdom that the individual human mind cannot match. This then begs the

question as to how the market came into existence. Hayek attributes this to cultural evolution; an

invisible hand account of the social order. The market represents the product of a slow process of

evolution in the course of which much more experience and knowledge has been precipitated in them

than any one person can fully know (Hayek 1967: 92). The competitive nature arose from the process

in which practices which had first been adopted for other reasons, or even purely accidentally, were

preserved because they enabled the group in which they had arisen to prevail over others (Hayek 1973:

9). It is important to note the apparent random nature of this evolution. It was not due to rational choice

by public bodies, but more it was those groups who happened to fall (upon these practices that)

prospered and multiplied (Hayek 1983: 46). Far from selecting the rules and constraints of the market,

these constraints selected us: they enabled us to survive (Hayek 1988: 14).

As noted, Hayek does not ascribe an author to these rules. Whilst the market economy represents

genuine knowledge, it is not explicit, and is not based on some theory of cause and effect (Hayek

1978: 10). The rules of the market do not provide a historic account of the evolving interdependency of

man and society, but they prescribe general constraints that have proved most conducive to successful

individual agency (Kley 1994: 159). They are thus an adaptation to a factual regularity on which we

depend but which we know only partially and on which we can count only if we observe those norms

(Hayek 1967: 80). Hayeks silence on how we can observe rules successfully is, according to him, self-

21 Hayek does at least concede that since the market does enable us to survive, there is something perhaps to be said for that (Hayek 1988: 70).

21

explanatory. These rules did not arise out of some process of logic of perception (Hayek 1973: 30) nor

did they arise as a result of genetic evolution, as such an argument fails to explain the rapidity at which

social and economic institutions have changed (Hayek 1979: 154). These rules exist because the groups

who practised them were more successful and displaced others (Hayek 1973: 18)22 23.

Hayeks ambiguity about the scope of this evolution hampers critical discussion of his argument. He is

never fully clear as to how the selection process works in practice. This ambiguity is striking as he

attributes almost every cultural aspect of the social order to an evolutionary argument: Our habits and

skills, our emotional attitudes, our tools, and our institutions all are in this sense adaptations to past

experience which have grown up by selective elimination of less suitable conduct (Hayek 1960: 26).

When grouped with the conventions, customs, rules, practices, traditions, morals, languages, law,

money and values that he also attributes to cultural evolution (see Hayek 1979: 153-178), the

significance becomes apparent.

It is Hayeks argument of cultural evolution that reveals the largest tension within his thought. If the

market mechanism, and the wider social order, has evolved over a long period of time, it is logical that

the only direction that society can go next will be decided by the process of further cultural evolution.

However, his endorsement of controlled legal rules and limits defines the further development that the

social order can take, going against the evolution which has made the order he praises. It is an

22 Hayek (1967: 67-79 and 163-168, and 1973: 9-19) outlines the process by which these rules emerged. He asks us to imagine an initial equilibrium situation. Various groups, each with their own rules of social theory and co-ordination, exist within the social order. A chance mutation occurs in one of the groups, and there is a transformation of the way their members synchronise their activities. Hayek offers that three outcomes are possible. Firstly, nothing changes. The mutation has no significant effect on the groups operation. Secondly, the

group shows signs of deterioration. If the group does not return to its former method of procedure, then the group must disband and members will join other groups. The final outcome is that the group becomes more efficient, and begins to benefit from the new methods it follows. If the other groups do not adjust to the new rules, then they instead will fall behind and eventually disband themselves. It is such situations that Hayek believes have led to the evolution of the market mechanism from the hunter gathers into the Great Society. Elster (1979: 28-35) offers a helpful account of this explanation. 23 There is both a collectivist and individualist tendency to this explanation. The group success theory both relates to the success of the group as an entity and also the success of the aggregate of each individual.

22

inconsistent position that Hayek fails to resolve, and one which he is incapable of resolving with the

position he takes.

Hayeks theory of tradition and cultural evolution can be equated to a Burkean theme of the social order.

Hayeks discussion of Burke is positive, respectful and appreciative24. Hayek does not view Burke as the

original author of the ideas he aspires to develop, but is the philosopher who reiterated them during a

period of revolutionary doctrine (Rowland 1988: 230). His view on the connection between tradition

and the free society is also admired25. In his seminal chapter Why I am not a conservative, Hayek pays

direct tribute to Burke and fellow conservatives, whose loving and reverential study of the value of

grown institutions we owe some profound insights which are the real contributions to our

understanding of a free society (Hayek 1960: 399). Hayeks awe at the human ability to create things

greater than they know (Hayek 1952: 9) echo Burkes own reverence of the fact. They share the

assertion that society develops as the individual develops.

It is consequential from this that Hayeks account of rationalism and tradition reflects an embedded

conservatism. Whilst liberals may use the concept of the spontaneous order as a means of establishing

and defending the free market, conservatives use it to promote the customary practices built up through

existing institutions. In the concluding chapter, I will assess the extent to which Hayeks conception of

spontaneity commits him to the philosophies of liberalism and conservatism.

24 To the point where in a book published after his death in 1994 (25), he claimed to be becoming a Burkean Whig. 25 Hayeks view is certainly inspired by the vision articulated by Burke. Men are qualified for civil liberty in exact proportion to their disposition to put moral chains upon their own appetites; in proportion as their love of justice is above their rapacity; in proportion as their own soundness and sobriety of understanding is above their vanity and presumption (Hayek 1952: 23-24).

23

Hayeks Conservative Liberalism

Hayek stands as one of the most influential critics of socialism. Although Murray Rothbard may attempt

to liken Hayek to the socialists he criticises, there arent many that would mistake him for such ideas.

However, to argue for the spontaneous market order in place of socialism does not necessarily equate

Hayek as a liberal. Is Hayek best described as a liberal, as a conservative, an amalgamation of the two, or

as something else? Is he a neo-liberal? A libertarian? A Burkean Whig? In this chapter, I outline Hayeks

relationship with each different strand of political philosophy.

The debate over the convergence of conservatism and liberalism was not limited to Friedrich Hayek.

The New Right movements that emerged in the late 1960s in Britain and America represented

combined elements of each ideology. Some suggested that the hijacking of liberalism with socialism

meant a more permanent interlinking was taking place: a realignment of both the political forces and the

political ideas of conservatism and liberalism (Gamble 1996: 101). Yet, the connection was not

supported universally. Defining this new group of thinkers was difficult, and the term libertarian

became increasingly popular in the United States. However, this term provided some undesirable

connotations. To conservatives, it implied support for the rampant individualism to which they had been

opposed for generations previous. To Hayek, it implied the same degree of constructivism that he spent

his career criticising so fiercely.

It is significant then that Hayek stands as an intellectual figurehead for the New Right. Margaret

Thatcher often recommended his books to colleagues in the House of Commons, and once told an

adviser, of a more One Nation tendency, that The Constitution of Liberty is what we believe (Ranelagh

1991). It is significant therefore that the man who refused to be labelled as a conservative or as a

libertarian stands as a beacon for both the intellectual and political movements of the New Right. To

determine the philosophical grounding of Hayek and his concept of the spontaneous order, I will analyse

their relation to three key components of the New Right movement, each linked with him:

conservatism, libertarianism, and finally liberalism.

24

CONSERVATISM

It is important to note that I will not reduce conservatism to a form of pragmatism. Instead, I offer that

conservatism, as with any strand of political philosophy, is made up of underlying principles which allow

ideas and concepts to reside under its name. Conservatism stresses the importance of the individual, but

within the context of their responsibility to society, built upon the values of tradition, consensus and the

rule of law. This is best upheld through order and authority based upon a framework of morality

(Scruton 1982).

Hayeks postscript to The Constitution of Liberty, Why I am not a Conservative aimed to dismiss the idea

that conservatism could be unified with liberalism. Whilst conservatism had certain admirable qualities,

it offered no intellectual defence to the collectivist arguments put forward by socialism. He labelled it

inevitable that many of the positions which he espoused were identified as conservative. The true

conservatives and liberals had been forced to come together in common opposition to developments

which threaten their different ideals equally (Hayek 1960: 397). It far from warms Hayek to the

association that exists, however. His objection is decisive:

It is that by its very nature it cannot offer an alternative to the direction in which we are moving. It may succeed by its opposition to current tendencies in slowing down undesirable developments but, since it does not indicate another direction, it cannot prevent their continuance. It has, for this reason, invariably been the fate of conservatism to be dragged along the path not of its own choosing. The tug of war between conservatives and progressives can only affect the speed, not the direction, of contemporary development. But, though there is need for a brake on the vehicle of progress, I personally cannot be content with simply helping to apply the brake.

What the liberal must ask, first of all, is not how fast or how far we should move, but where we should move (Hayek 1960: 398).

Implicit in Hayeks comments about conservatism is a support for rationalism, despite his strenuous

efforts to reject it. The character of the conservative opposition to Hayeks rationalist tendency is

captured best in Michael Oakeshotts repudiation of Hayek in Rationalism in Politics: this is, perhaps,

the main significance of Hayeks Road to Serfdom-not the cogency of his doctrine, but the fact that it is a

25

doctrine. A plan to resist all planning may be better than its opposite, but it belongs to the same style of

politics (Oakeshott 1962: 21). Oakeshott, as a conservative, rejects progress as a theory, and accuses

Hayek of converting the resource of resistance into a principle of resistance. In essence, Hayek does not

reject this, in turn criticising conservatism for being nothing more than a useful practical maxim, that

cannot be a political philosophy, since it does not give us any guiding principles which can influence

long-range developments (Hayek 1960: 411).

Hayeks criticism of rationalism is not rationalism itself, but a rationalism that does not recognise the

limits of the social order. In this regard, he is separate from the notions we associate with conservatism.

Order appears to the conservative as the result of the continuous attention of authority, which, for this purpose, must be allowed to do what is required by the particular circumstances and not be tied to rigid rule. A commitment to principles presupposes an understanding of the general forces by which the efforts of society are co-ordinated, but it is such a theory of society and especially of the economic mechanism that conservatism conspicuously lacks (Hayek 1960: 401).

Unlike conservatives, Hayek wishes to understand how to utilise the spontaneous ordering process.

Whilst the conservative concerns him or herself with a fear of change, the liberal places confidence in

the spontaneity of the market to change, despite the lack of awareness of the adaptations that the market

will make (Hayek 1960: 398-402).

Hayek does not reject conservatism completely, but faults them for their aversion to change when it is

the right step to take. They are right to appreciate the spontaneously grown institutions such as language

and law, but their failure to convert their insights into a positive recognition of new developments sets

them apart from the true liberals (Gamble 1996: 103), conservatives are inclined to use the powers

of government to prevent changes or to limit its rate to whatever appeals to the more timid mind

(Hayek 1960: 400).

Hayek saw a direct relationship between conservatives lack of understanding of economic forces and

their uncontrolled trust in authority. Whilst Hayek, and liberals more widely, are concerned with the

26

limitation of government power, conservatives are more concerned with who wields that power. The

conservative is therefore like the socialist, (as) he regards himself as entitled to force the value he holds

on other people (Hayek 1960: 401). Hayeks priority is that a society exists which does not exert force

upon other people. In doing so, it promotes peace. A consequence of this is that people are allowed to

pursue ends which are different to the ideal of those in power. To Hayek, this is irrelevant, so long as

those ends can be pursued freely and not at the expense of others freedom. Whilst Hayek agrees with

many of the values of the conservative (Hayek 1960: 402), he condemns the approach that allows the

promotion of these values via coercion, to live and work successfully with others requires more than

faithfulness to ones concrete aims. It requires an intellectual commitment to a type of order in which

even on issues which to one are fundamental, others are allowed to pursue different ends (Hayek 1960:

402).

In essence, the obscurantism apparent in conservatism is Hayeks main objection. He states that many of

the ideals that conservatives promote were first offered by liberals anyway26. Yet they still insist on

rejecting new knowledge out of an inherent distrust of the consequences that might arise from it. It is

this insistence that Hayek believes establishes a bridge not between conservatism and liberalism, but

conservatism and collectivism.

The growth of ideas is an international process, and only those who fully take part in the discussion will be able to exercise a significant influence to think in terms of

our industry or resource is only a short step away from demanding that these

national assets can be directed in the national interest the more a person dislikes the strange and thinks his own ways superior, the more he tends to regard it as his mission to civilise others (Hayek 1960: 405-406, footnote omitted).

Hayeks conclusion in his postscript is that conservatives are useful allies in the short term fight against

collectivism, but are unable to unite with liberals in the long term fight for peace and the right social

order due to their fragmented understanding of the economic mechanism. However, this postscript,

26 So unproductive has conservatism in producing a general conception of how a social order is maintained that its modern votaries, in trying to construct a theoretical foundation, invariably find themselves appealing almost exclusively to authors who regarded themselves as liberal (Hayek 1960: 401). As always, Hayeks definition of

liberal is very specific to his own ends. He includes Burke as a liberal in this regard instead of a conservative.

27

written in 1960, represents only a section of Hayeks ideological thought. Despite his best efforts, there

is a vast proportion of his thought, particularly in relation to the spontaneous order, that represents a

conservative tendency. To deconstruct this, it is important to recognise the change in Hayeks political

thought over time. In essence, a pre-1960 Hayek, and a post-1960 Hayek.

Taking the most abstract view of political philosophy, Hayek never truly offers a coherent theory of the

complicated relationship between freedom and reason that arises from his writings27. The pre-1960

Hayek maintains that no morality is justifiable and that we should be free to do as we wish, safe from the

impediments of the rationally imposed ideas of others. Freedom and reason can be characterised in a

consistent manner if there are rules and conduct that constrain our moral actions but do not prescribe

them (Hayek 1944: 13). However, the post-1960 Hayek puts forward that all we can do is hope for the

best (Hayek 1973: 169). His pessimism for the possibilities of society to maintain the market

mechanism increasingly commits him to a concrete support for traditional institutions which made

civilisation possible (Hayek 1979: 168).

Hayeks combination of pessimism and blind faith in the market mechanism rejects the state as artificial,

and promotes capitalism as spontaneous. As the evolutionary process of the spontaneous order cannot of

itself be a guarantee of the preservation of the market order, Hayeks task is to revive the case for

limited government, there to free the process of spontaneous growth from the obstacles and

encumbrances that human folly has erected (Hayek 1960: 410). Hayeks consequential desire to

promote the individualist aspect of society requires a significant changing of the order, informed by

classical liberal principles. This does not equate with a definition of conservatism. Whilst there are

undoubtedly aspects of Hayeks thought which mirror the conservative tradition (he admits this himself),

he cannot universally be described as a conservative.

27 The reconciliation of these two positions is often the task of moral political philosophy (see Kukathas 1989: 189-190, and Hare 1963).

28

LIBERTARIANISM

Whilst Hayek disagreed with many in the New Right movement, he shared with many of them the

desire to reconnect liberalism with the individualist aspects of thought that were associated with the

liberals of the nineteenth century. Certain thinkers began to use the term libertarianism as a label of

their philosophy. Defining the term, as with any philosophy, is difficult. W. H. Greenleaf (1983: 15-20)

puts forward four elements which he considers to be crucial: the importance of the individual; the

inalienable title of the individual to a free real of self-regarding action; opposition to central

concentration of power; support for the rule of law. The definition is helpful, but incredibly vague.

Whilst it would not exclude Hayek, it would also not exclude many of the liberals that Hayek would

characterise as false individualists, such as Locke and Mill. It would also arguably allow the social

liberals of the 20th Century, such as Hobhouse, Gore and Green to be characterised in this manner.

Roger Scruton seeks to offer a more precise definition. For Scruton, libertarianism is the form of

liberalism which believes in freeing the people not merely from the constraints of traditional political

institutions, but also from the inner constraints imposed by their mistaken attribution of power to

ineffectual things (it is) a radical form of the theory of laissez-faire, which believes that economic

activity must be actively liberated from the bondage of needless political constraints in order to achieve

true prosperity (Scruton 1982: 271, emphasis omitted). This definition rather clouds issue in the

context of Hayek. Hayeks concept of the spontaneous order is undoubtedly libertarian if we follow

Scrutons terms. Hayek strongly believed in advancing a programme of economic liberalism that called

for the removal of the political constraints which had hindered the free market for so long. However, his

support for this concept as an evolutionary process meant that he was unable to support little or no

restraint on individual behaviour, if this went against the traditional wisdom that had prevailed

previously.

Scrutons definition highlights the disjointed relationship that exists between Hayek and libertarianism.

This can be appreciated if we consider Hayeks political philosophy in comparison to two leading

29

libertarian thinkers: Murray Rothbard and Robert Nozick. Murray Rothbard put forward the most

radical form of economic liberalism, often referred to as anarcho-capitalism. Rothbards premise is

that since all government actions must be funded by taxes, they are funded by coercion. Whether

government comprises of a heavily taxed economy or a liberal economy promoted by Hayek, it is an

economy of coercion. Rothbard insists that there need be no exceptions of his proposals, and that every

government service can be privatised. It is possible to conceive of a truly free market, in which no

invasion of property takes place either because everyone voluntary refrains from such aggression or

because whatever method of forcible defence exists on the free market is sufficient to prevent any such

aggression (Rothbard 1977: 1-2).

Rothbard is against the idea that state action can be justified in any sphere. There are no public goods in

Rothbards vision of society. His position draws attention to Hayeks view that the state must exist to

ensure that the rules of the economic order are followed. Rothbard holds no such view.

how can the rightist trumpet his devotion to private property and free enterprise

while at the same time favouring war, conscription, and the outlawing of non-invasive activities and practices that he deems immoral? And how can the rightist favour a free market while seeing nothing amiss in the vast subsidies, distortions, and unproductive inefficiencies involved in the military-industrial complex? (Rothbard 1978: 24)

Such is the absolutist nature of Rothbards position, all existing state controls would wither away as

private agencies took over their application. In this context, Hayek cannot be a libertarian. However,

there is a libertarian recognition of the role of the state, and that is made in the strongest terms by

Robert Nozick.

Robert Nozick (1974) sought to provide a rights-based argument for a state which was minimal but in

existence. Whilst he accepts many of the arguments that Rothbard puts forward, he offers that certain

parts of society would not function properly without a state monopoly; the classically liberal functions of

defence and justice are Nozicks exceptions to a market led economy. Nozicks argument is the result of

a simple cost/benefit analysis. The cost to the individual citizen of taking part in each of the competing

30

protection agencies would outweigh the cost of giving the state the monopoly power. The benefits

would be the same in this field. The similarities between Nozick and Hayek are much more apparent

than with Rothbard. Hayek remained avid in his critique of the state, but kept the view that in certain

cases it was a necessary evil. If the wishes of both thinkers were realised, the differences may well be

small. However, it is worth noting the objectives of each thinker. Whilst Hayek seeks a small state that

preserves the framework of the market mechanism, Nozick prioritised a politics based on abstract rights

of the individual.

Nozick and Rothbard disagreed on the means of achieving a libertarian style of politics, but agreed on

the end objectives. They offered concrete principles from which politics and policy could be tested and

judged. Hayeks ambiguity partially separates him from this strand of philosophy. Whilst he articulated

the role of the state, it was in a manner more prudential than philosophical. Hayek sought to achieve the

conditions that would allow the Great Society to develop. For libertarians, this is not a sufficient test of

the state; where will the line be drawn in order to ensure the development and evolution of the

spontaneous order? For libertarians, there can be no guarantee in Hayeks model of a minimal state.

Whilst Hayek can be associated with certain aspects of libertarian thought, he cannot be regarded as a

libertarian in the style advocated by Nozick or Rothbard.

LIBERALISM

Hayeks philosophy cannot be described as universally conservative or libertarian. The question remains

as to whether this can be done for any philosopher, but Hayek demonstrates the difficulty more than

most. In this final and concluding section, I will articulate why Hayeks concept of the spontaneous

order contributes to his liberalism, but in a manner that fails to establish his philosophy in any absolute

form. Throughout, I have sought to compare Hayeks spontaneous order to broader principles of

liberalism. This section will aim to be more specific in the comparison. There are clearly many

definitions of liberalism, aimed at covering the many branches of the philosophy that have arisen over

time. Even if we restrict the definition to classical liberalism, the form usually associated with Hayek,

31

the definition is far from easy to provide. However, this does not make it impossible, or irrelevant, to

define the principles which are at the core of the classical liberal movement.

Harold Laski claimed that liberalism arose to launch a concerted attack upon:

the claims of the nobility, the legal system, the habits of government, [and] the economic basis of society [all of which needed to be] examined afresh... on the dangerous assumption that most of the traditions they represented were evil. It was the age of reason; and the philosophers used the weapon of rational criticism to declare that freedom is good and restraint on its nature bad. They sought quite consciously to evade whatever limited the right of individual personality to make its own terms with life (Laski 1971: 107).

In this regard, classical liberals sought prosperity via freedom for the individual. The liberal doctrine,

according to Laski, put forward that the old traditions and customs of how people should live were not

great pearls of wisdom, but were merely dictating terms to the general population, and shaping their

human development as a consequence28. By investigating the true nature of society, we could begin to

rationally reconstruct the way the social order to one that served prosperity and liberty. Such a theory

subscribes to the view that instead of accepting tradition, one should believe in human reason to shape

and direct the social order29.

By this definition, Hayek does not qualify as a liberal. Hayeks support for tradition is as strong as his

critique of rationalism However, Hayek claims to be rescuing liberalism from this hubris. Hayek claims

that in believing a superiority of reason over others, liberals have fallen into an equally frightening trap;

one which recreates the same problems of past eras. The only way in which institutions and social orders

can improve is through trial and error. The only thing guaranteed from rationally designing the social

order, for Hayek, is error. It is the most distinctive feature of Hayeks conception of liberalism that man

is incapable of self-determinism. To be a liberal, is to submit to the lowly position that one occupies

28 Liberalism, Hayek argues, 'derives from the discovery of a self-generating or spontaneous order in social affairs..., an order which made it possible to utilize the knowledge and skill of all members of society to a much greater extent than would be possible in any order created by central direction...' (Hayek 1967: 162). Whilst this definition may have value, it demonstrates more than anything the tendency of defining terms in such a manner that suits your own argument. 29 This echoes Voltaires statement, "If you want good laws, burn those you have and make new ones."

32

within the social order, and to submit to the natural processes that arise from it. It is against liberalism to

think conversely, that man is capable of anything more. Hayek views freedom as something which is

often impeded by reason, or more accurately, rationalism. Rationalism for Hayek is held by all of the

liberals that strive to know the details of the universe, and to design the social order from that point. It

is from this point that Hayek runs into difficulty, and leads Forsyth (1989) to refer to Hayeks bizarre

liberalism. In his analysis of the social order and of spontaneity, Hayeks prescription stands in direct

contrast to his diagnosis.

His diagnosis of the problems of the social order leads him to divide liberalism into the true liberals and

the false liberals, the evolutionaries and the constructvists, and consequently suggest that the problems

of Western civilisation are of intellectual making. If this is the case, then evolution should surely have

abandoned constructivism by now? Rationalist liberalism has been a central part of the Western tradition

for the last four hundred years, yet Hayek implies that it has no place in society.

The ideological cast of is thought means that on several questions he fails to purse

some of his most important arguments and insights. These closures include his failure to apply his concept of evolution to the explanding role of the state and democracy, to apply his concept of coercion to the subordiante position of workers in factories, and to apply his concept of dependency to the organisation of industry (Gamble 1996: 189-190, footnote omitted).

His diagnosis is to reject the authenticity of so much of the tradition that he claims to value30. His

prescription is no less contradictory, and arises directly from his diagnosis. In order to achieve his

desired outcome, Hayek is forced to abandon the evolutionary argument, and employ a method of

design himself. In attempting to ensure the correct rules and laws of the market mechanism are in

place, Hayek is forced to construct an order. This order is no longer one of spontaneity but one of

constructed design. The implications of his philosophy would be to undertake a radical transformation of

the social order as great as the socialist ideal he avidly criticised.

30 Forsyth (1989: 250): Far from being a classical liberalism purged of its errors, it is a classical liberalism purged of its truths.

33

Hayeks attempt to delegitimise the socialist facet of Western political tradition prevents him from

accepting any other framework of society, even if that framework is inherently liberal. Hayeks

expectation that socialism as a creed would retreat may have partially been realised, but his failure to

recognise some of its political success renders him incapable of moving from his rigid position. As

socialism failed, social democracy, and eventually neo-liberal capitalism, flourished. Each of them has a

very active state, offering wide ranging welfare programmes, state education and health care and many

other public services. Hayeks problem, and the problem for the wider Austrian critique of the

economic order, is that his arguments worked very well against a centrally planned economy, but not

against the liberal welfare state. Hayeks philosophy never reaches a coherent political doctrine because

he fails to recognise that the spontaneous order cannot provide a universally accepted theory. It is this

ideological closure that sets him apart from a lucid theory of liberalism.

CONCLUSION

I described earlier the temporal change in Hayeks thought. Pre-1960, the spontaneous order occupied

the majority of his analysis. Post-1960, the argument shifted towards one of evolutionary rationalism,

and an advocation of a more cautious attitude to change and reform31. Even so, his attitude still reflected

one of rationalist constructivism as opposed to the evolutionary behaviour he was supposedly promoting

(Gamble 1996: 187-188). It is Hayeks constructivism that marks him as a liberal, and explains the

strong criticisms that conservatives continue to put forward. As noted earlier, comparing Hayek to the

conservative thinker Michael Oakeshott helps to explain his philosophy.

Just as there is a debate over the validity of Hayeks liberalism, there is a debate over the validity of

Oakeshotts conservatism. Oakeshotts philosophy is liberal in that he promotes the liberal tenets of

moral individualism, the free market, and limited government. However, his justification for each is

31 This does not equate him to a conservative disposition. In his final publications, he still advocated huge changes in trade union legislation and monetary policy.

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grounded more in support for tradition and authority than in support for classical liberalism. In the same

manner, Hayeks thought can be characterised as conservative in his distrust of experimentation and an

increasingly significant support of tradition and authority. Like Oakeshott, Hayek was a critic of

democracy, though not to the same extent. Hayek did not go as far to support unlimited authority for

the state as an association. The state is a burden; a necessary burden, but a burden all the same. Hayeks

preference remained never for authority as an end, but for any proposal which resulted in the reduction

in power of government. It is Hayeks aversion to the state and his support for the spontaneity of the

market mechanism that represents his contribution to liberalism. His concept of the spontaneous order

is one in which the insights of each actor are independent, and as each action comes together with every

other action, the sum total will prove its worth over time.

It is therefore apparent that Hayeks theory does not represent a coherent philisophical defence of

liberalism. His spontaneous order is not one which seeks to defend liberalism on the grounds of

theology, as John Locke attempted to do. It does not seek to defend liberalism on the basis of a

utilitarian appeal to reason, as Jeremy Bentham or John Stuart Mill attempted to do. Nor does it seek to

defend liberalism on the basis of sociological truisms, as Herbert Spencer put forward. Hayeks defence

is more a proposition of what practicing liberalism should be. His theory of knowledge, the markets,

rationalism, and tradition, together represent the spontaneous order, and together represent a blind

submission to a form of conservative liberalism offered by no other. As I hope will have become

apparent throughout this paper, it is the unequivocal conclusion of this paper that Hayeks concept of the

spontaneous order is an inherentently flawed one. It also remains the conclusion of this paper that it is

without doubt a contribution to his liberalism.

35

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