On Reading Hayek: LL&L and the new statement of liberal principles of justice and political economy

|Peter Boettke|

My history with reading Hayek is somewhat checkered.  As a college student, I actually viewed Hayek as a sellout, who similar to John Stuart Mill distanced himself from the very intellectual tradition that he worked within.  What Mill did for classical liberalism in the 19th century, Hayek did to libertarianism in the 20th century.  My working copy (the one with my extensive notes in it) of The Road to Serfdom still has a broken binding from where I threw it against my dorm room wall for his "leaking" from what I considered the appropriate free market position.  Hayek was in many ways too subtle for me to fully understand what he was up to when I read him at that stage in my life (18-22 years of age).  I preferred reading Mises, Sennholz, and especially Rothbard.  In many ways this was because the way I read Murray Rothbard at that time, he did all the hard thinking for me and I just could agree to his conclusions.  This is how I judged all thinkers at the time --- do I agree with them on X, Y, or Z -- with very little critical attention paid to how they arrived at X, Y, or Z.  I was a Rothbardian because I agreed with Rothbardian conclusions that followed from the action axiom (economics), the non-aggression axiom (politics), and the compelling narrative that emerged when combining that framework to do policy analysis and/or address questions of history (revisionist history).

But when I entered in graduate school in 1984 after taking time off to get married and work as a tennis pro, I revisited Hayek's work.  Actually, I engaged in a process of self-education in the Great Books in Western Civilization as well as my course load at GMU.  I was taking four courses (micro, macro, math, and history of thought), but at that time all the courses at GMU were from 7:20-10:00pm at night.  My wife was teaching school in Alexandria, VA and had playground duty prior to school every morning and we had 1 car.  She would drop me off at GMU between 5:30 and 6:00am M-F and pick me up around 10:30pm M-Th and at 5:30pm on Fridays (after the weekly CSMP colloquium).  Moreover, my office was in a converted closet outside of the department proper and I was alone for most of the 15 or so hours a day I was at GMU.  In short, I had long period of times with absolute no distractions and nothing to do but study economics.

I had a great college experience at Grove City College and I majored in economics and minored in philosophy (missing the major by I believe 1 class), but I also had a blast in college playing on the tennis team and hanging out with my frat brothers.  Yes, I was part of Dr. Sennholz's "graduate seminar" for my junior and senior year, but my devotion to becoming a scholar was still a work in progress.  But when I decided that Law School wasn't really what I wanted to do, and I was giving tennis lessons 60+ hours that summer after graduation, the burning desire to study economics at the advanced level became an obsession for me.  I would read economics books and articles at the pool or in the clubhouse on the couch between lessons, but I really couldn't talk about the ideas with others.  Philosophy was slightly different, as there was one local tennis pro that I used to practice with that studied philosophy in college and another one who studied poetry and viewed poetry as a window into major philosophical ideas.  As much as I enjoyed those conversations -- mixed appropriately with long discussions about tennis technique and strategy -- I longed for something more, and specially more economic theory and policy oriented. So I decided to get a PhD. But I also knew that I would be behind the 8-ball educationally since I didn't really take my studies as seriously as I imagined other would-be professors of economics and philosophy did when I was at Grove City College.  To remedy that, I actually took a trip after I was accepted to GMU with Rosemary (my wife) and her parents to Annapolis, where while they visited various shops and the Naval Academy campus (her brother graduated from there), I visited St. John's College and got their booklet on the Great Books curriculum (how I came to know of St. John's and their educational program I don't know because there was no internet at the time).  I didn't have Latin or Greek language capabilities, but the books they listed were all available in English, and most were available through Penguin in cheap paperbacks.  And since it wasn't economic thought that  I was looking to supplement my education with I didn't worry that the classics on St. John's list at that time were Smith, Marx and Keynes.

So I simultaneously embarked on graduate studies in economics (including attending a fantastic micro course with Shelly Kirby [a student of Hirschleifer] and working with a math tutor) and an attempted path of intellectual self-improvement, and I did this 24/7.  I lived a corner solution, that in many ways only having children pulled me out of.  And about 3 months into this process of reinventing myself I revisited Hayek.  At this time, all the things that frustrated me when I tried to read him as an undergraduate, now intrigued me.  I still valued Mises over Hayek analytically, but on other margins Hayek became the thinker I most wanted to wrestle with.  It wasn't the Hayek of The Road to Serfdom, nor even the Hayek of Prices and Production that intrigued me, but the Hayek of Law, Legislation and Liberty, Studies in Philosophy, Politics and Economics, and New Studies in Philosophy, Politics, Economics and the History of Ideas.  I was hooked and then Prices and Production, The Road to Serfdom, Individualism and Economic Order, and The Counter-Revolution all took on a new significance to me.

Now I teach Hayek's work in two separate PhD courses each year.  In the Austrian Theory of the Market Process course, I focus on his work in economics and the methodology of economics, whereas in Constitutional Economics, we focus on his work in legal philosophy, political theory, and political economy. In my way of thinking, Hayek studies is best done when one sees the continuity in Hayek's work from his first work on imputation theory to his last work in what could be termed philosophical anthropology.  In other words, I don't see a disconnect in his work, but a lifetime evolution of dealing with essentially the same fundamental dilemma (complex coordination) and the search to find the right institutional patterns that enable that dilemma to be resolved.  Hayek was an inspiring scholar because he was a life-long learner, but he is also an inspiring scholar because he had a coherent research agenda that he pursued persistently and consistently from his student days till his death in 1992.  Of course, Jerry O'Driscoll's Economics as a Coordination Problem helped me come to that reading of Hayek, just as Bruce Caldwell's Hayek's Challenge has reinforced it.  And in both my "Which Enlightenment, Whose Liberalism" (apology to Steve Horwitz) and "Hayek and Market Socialism: Science, Ideology and Public Policy" (my 2004 Hayek Memorial Lecture at LSE) this unity thesis of Hayek's work in philosophy, politics and economics is presented.

On Monday of next week, my graduate class will be discussing Law, Legislation and Liberty and its contribution to our understanding of the constitutional project at restraining leviathan and establishing a liberal society of limited government and free markets.  I think I have read LL&L now at least 25 times cover to cover, and consulted it hundreds perhaps thousands of times for research and teaching purposes yet I continue to find new research ideas every time I revisit it.  This time through, I wanted to call attention to the way he contrasts (once again) between our "incurable ignorance" and the "synoptic delusion" of the rational constructivist in volume 1.  In this context, Hayek makes his claim that economics must augment the attention paid to the division of labor with an appreciation of the fragmentation of knowledge that entails, and also his claim that in advanced society it is not so much the knowledge that any one individual can acquire but the greater benefit that individuals can enjoy because of the knowledge possessed by others.  This is the Hayekian twist on the benefits of specialization and exchange and social cooperation under the division of labour.  For institutional analysis, we are led to ask what rules of the game and mechanisms of enforcement best serve to enable a society to realize the benefits of fragmented knowledge.

Consider the following passage from the beginning of chapter 1 in Vol. 1:

"This structure of human activities constantly adapts itself, and functions through adapting itself, to millions of facts which in their entirety are not known to anybody.  The significance of this process is most obvious and was at first stressed in the economic field.  As it has been said, 'the economic life of a non-socialist society consists of millions of relations or flows between individual firms and households.  We can establish certain theorems about them, but we can never observe all.'  The insight into the significance of our institutional ignorance in the economic sphere, and into the methods by which we have learnt to overcome this obstacle, was in fact the starting point for those ideas which in the present book are systematically applied to a much wider field.  It will be one of our chief contentions that most of the rules of conduct which govern our actions, and most of the institutions which arise out of this regularity, are adaptations to the impossibility of anyone taking conscious account of all the particular facts which enter into the order of society.  We shall see, in particular, that the possibility of justice rests on this necessary limitation of our factual knowledge, and that insight into the nature is therefore denied to all those constructivists who habitually argue on the assumption of omniscience." (p. 13)

To me this is an amazingly powerful passage and does set the stage for so much of what Hayek does in Vol. 2 and even in Vol. 3.  But it also points back to his work (at least in the 1930s) on knowledge and coping with our ignorance.  It also reflects, in my mind, how Hayek situates his work in the broader context of the cultural sciences and the disciplines of philosophy and political and moral theorizing.

Comments

[Roger Koppl]

Right on, Pete. We often think of science and reason as our best epistemic tools. But accumulated tradtion allows us to respond adaptively to a host of unobserved and unobservable facts of the past. That is a deeply conservative message that lets us be sceptical about science from, oddly enough, from a strictly scientific perspective. True conservatives (in the really old fashioned sense from which Hayek rightly distanced himself) must simply cleave to tradition and sniff at any scientific challenges to it. They can have no real *critique* of science. Left liberals may have a critique of science, but it must be based solely on considerations such as power, bias, corruption, and the supposed "ideology" of different scientists or sciences. Only the critical rationalist of the Humean liberal tradition can have a truly scientific critique of science itself.

[Rafe Champion]

You can read a lot of Hayek and Popper on society and agree with most of it but find it very hard to explain to other people why it is so good, especially if they are just looking for support for a party political program. Not being a good party person I was looking for something different and the penny dropped when I realised that Popper was talking about the rules of the game and the way that so many of the greatest thinkers of all time put into play rules (including the rules about the questions that you are supposed to ask, like "who shall rule?") that undermine the rules that make for peace, freedom and prosperity. And then it was apparent that Hayek was doing the same thing.

This approach keeps you in touch with practical problems, the possible solutions and whatever branch of theory is appropriate to the problem at hand. This reminds me of something in the Caplan Boettke debate, about keeping undergrads out of policy. Pete would have none of that and quite right. The strength of rural research in Australia (where I come from) is the way so many Ag Scientists came off the land or small country towns so whatever bizarre theoretical problems they attacked (like the penetration of clay by root hairs) they never forgot about practical things and they were always alert to the practical implications of the research. Pete calls it looking out the window. You need to track in and out of the work, to see it close and to see it in relation to a bigger picture (surrounding disciplines, practical problems).

Taking up Roger's point, science and reason are tools, not authorities.

It also helps to see that the common factor in Popper's work on scientific method and politics is the critical appraisal of the rules of the game. You have to be seriously interested in the game and you have to be critical as well (but with a light touch). Any game will do, if you get serious about what is happening in baseball or cricket or anything else you will soon encounter many of the fundamental problems in philosophy and the social sciences. Like the problem of induction, how people generate plans and expectations and what it is that stops society from being a chaos of uncertainty (another point from the debate).

[Barkley Rosser]

Pete,

Thanks for the interesting account of your own intellectual evolution.

[Greg Ransom]

This theme:

"the possibility of justice rests on this necessary limitation of our factual knowledge"

is worked out in detail in Hayek's _TCofL_ and builds on the ideas pioneered in his _The Sensory Order_.

I've always though his account of the connection beween our ignorance and our holding people responsible for their violations of negative rules of just conduct is among the most important developments in all of his work -- a real landmark in the history of philosophy, which deserves great recognition.

[Greg Ransom]

Roger, philosopher Ed Feser has a really good article on Hayek and the claims of tradition against simple-minded accounts of the claims of "reason" or "science" here:

http://mises.org/journals/jls/17_1/17_1_2.pdf

[Troy Camplin]

I use precisely this reasoning in the paper I presented on the arts as a spontaneous order at the Fund for the Study of Spontaneous Orders conference, the paper of which will be appearing soon at www.studiesinemergentorder.org

The model solves all sorts of problems in the sociology of the arts, including the source of the canon of great works. Current theories essentially boil down to claims of conspiracies -- the theory of spontaneous order explains how the Canon emerged naturally, and why it emerged as it did.

[Bogdan Enache]

The basic message (one also stated by Mises, but not explored as much) is that there is something more than the old, ancient Greek distinction between nature (physis) and convention (nomos), natural science and morality, determinisc natural laws and artificial, value-laden convention and so on which most of the social and philosophical European tradition has been explicitly built.

[topills.com review]

The model solves all sorts of problems in the sociology of the arts, including the source of the canon of great works. Current theories essentially boil down to claims of conspiracies -- the theory of spontaneous order explains how the Canon emerged naturally, and why it emerged as it did.