Hayek: His Contribution to the Political and Economic Thought of Our Time (Institute for Humane Studies Political Economists Series) Hardcover – 1 Apr 1985
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One thing I found interesting was how Hayek mentions that somethings are natural while other things are the creation of man and how some consider that all institutions, being fashioned by man, can therefore be done away with or reshaped if one so pleases. Hayek points out though, that many institutions are not only man's creation by are also influenced by nature, concepts like private property and marriage likely were not consciously planned and established, but came about and eventually law and religion helped enforce the institutions that had proven so useful. The example was given of one finding the easiest way somewhere, and thus creating a trail for others to follow, sure the trail is the result of man, but the way was originally chosen because it was best way to get from point A to Z.
Hayek considers how during the days of tribalism, people knew each-other and submitted to the authority of the chef and how in this context, they enjoyed a sort of socialism, but as more and more people begin to trade with others and society grew and people begun to do business with people they didn't know, concepts like private property, money and fixed laws that apply to all equally were quite necessary in this new setting. Hayek thinks there is this deep desire though for many to return to the socialism, which really a longing to return to that tribalism of old, something that just can't be done in our global world. Socialism worked in the former context, but cannot work in our present context.
I liked how Hayek wrote against Scientism in the social sciences, science works so well when dealing with the material world, but when dealing with humans and the economy, it is fraught with problems, because of a complex mix of motivations, purposes and other factors that muddy the water. But though Hayek doesn't think the behavior of individuals is predictable, he does believe it possible to make more general predictions of what a large group of people are likely to do given X, Y or Z and how this kind of thing can be tested.
Hayek is at his best when showing the weakness of central planning, how it always results in more tyranny. In the economy, there are millions upon millions of individuals making choices, these choices influence the prices and when companies make items or charge prices that the public doesn't want, they must adjust or go bust. But with central planners we find that they decide what people should buy or not buy; what is to be produced or not produced; what the prices and wages are to be etc.... since these planners are not omniscient (ever aware of whatever individual wants and needs and the ever changing prices, the worth of labor, supply and demands), the economy will always suffer and people will lose their freedom. Central will have to subjectively decide what the value of things are, without any regard for the individuals values and desires.
Image 100s of people saying they wanted to go on a trip, but never stating where they wanted to go, if they elect a group of people to lead, they may find themselves forced to go where they don't want to go. Thus is the absurdity of many deciding there needs to be central planners, without anyone being clear what that plan should be, the small group that now does the planning will even be in disagreement on what should be done, therefore, the most power hungry and cruel will like start stepping to the plate, also since the only way to enforce the plan is with a strong hand, typically it results in the Stalin's of the world to bring about the changes.
Hayek shared the utter vacuity of Social Justice, showing how the concept is largely based upon flawed analogies, one being a father who has children and is going to give them pie, we know it is only fair that he gives each an equal piece of the pie. But when we consider the economy and society, there is no individual nor any pie being is distributed, so the analogy doesn't work. He had a lot more to say on it, but my mind is struggling to recall it all.
There is so much more, this is definitely a book I want to re-read.
After a single paged preface and a 14 paged introduction "Hayek's life and work" are 6 chapters and an Epilogue: Chapter 1) Understanding how society works; Chapter 2) The market process; Chapter 3) Hayek's critique of socialism; Chapter 4) The criticism of social justice; Chapter 5) The institutions of a liberal order; Chaper 6) The constitution of a liberal state; Epilogue) Sense and sorcery in the social sciences. These chapters and epilogue are followed by notes, a select bibliography, and an index.
Some interesting tidbits are that "Hayek's 1941 work, "The Pure Theory of Capital", continues the same theme of looking under the surface of the averages and aggregates which economists like to talk about" and this same "theme was taken up again in "The Counter-Revolution of Science". Butler says that the "problem for any planner is that the 'facts' he must deal with are not concrete things, but are the relationships and behaviour [sic] of individuals themselves, something which nobody can predict in advance" (pp8-9). I suppose somebody forgot to pass Butler's insight along to the American advertising and marketing sector, because they spend 100 billion a year attempting to do what Butler maintains cannot be done - predict the behavior of consumers.
Another interesting aside is the story of Antony Fisher, who founded the Institute of Economic Affairs in London, England, at the suggestion of Hayek who "advised him to avoid politics, and do what he could in the field of ideas"(p12). Unwittingly, these free marketeers provided the camouflage for state corporatism that was appropriated by the Tories in both major parties. See Richard Cockett's "Thinking the Unthinkable".
Hayek is not just an economist, he is also a sociologist: "If we are to understand how society works, we must attempt to define the general nature and range of our ignorance concerning it" he wrote in "The Constitution of Liberty" on page 23(p13). Hayek came up with a sociological term he dubbed "constructivism": "man's mind is itself a product of the civilisation in which he has grown up and . . . it is unaware of much of the experience which has shaped it - experience that assists it by being embodied in the habits, conventions, language and moral beliefs which are part of its makeup"(p152). He adds that "we can only know the world as it is filtered through past experience"(p153). Hayek's recognition of cultural programming stands in contradiction of his earlier view that the actions of consumers cannot be predicted. Butler adds "Note the crucial distinction between Hayek's liberalism [of Scottish influence] and the 'laissez-faire' caricature"(p155).
Hayek is properly critical of socialism, but remains silent on corporate statism. He ignores the fact that corporations are creatures of the state and that in a free market there are no corporations. His silence is strange because he reviewed George Orwell's "1984", which told of Orwell's 1944 days at the BBC doing war propaganda for the British state in the guise of a futuristic novel. Hayek also wrote a nice piece on "The Confusion of Language in Political Thought" in "New Studies" that indicated he was familiar with the attempts of statists to camouflage their activities with the rhetoric of the free market.
In short, Hayek is no Murray Rothbard who understood that government is the problem, not the solution. Hayek, on the other hand, believes some government is necessary. Hayek does not address Robert Nozick's warning that government is similar to a cudgel where parties and individuals compete in order to wield it over others - the larger the cudgel, the more damage it can do. Witness the state terrorism being waged by Bush, Blair and their cronies by wielding the enormous cudgels in the form of U.S. and British governments. The result is American-powered British Empire in contradiction to every value that George Washington and the other Founding Fathers fought for when they fought 'against' the British, not for them as Bush does today. Hayek would be alarmed at today's growing collectivism.