Daily Archives: May 9, 2011

Sidney Hook’s 1960 review of Hayek’s “The Constitution of Liberty”

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Michael Giberson

Francis Fukuyama’s review of the new edition of F. A. Hayek’s “The Constitution of Liberty” has prompted a small eruption of commentary in the econoblogosphere.  (See here and here, for example.)

I thought there might be some interest in Sidney Hook’s review of the original edition of “The Constitution of Liberty,” published in the New York Times Book Review on February 12, 1960. Here is an extensive selection from the review:

Of Tradition and Change

by Sidney Hook

Even those who accept little of his argument will find Friedrich A. Hayek’s comprehensive analysis of the nature of freedom an interesting and provocative work. “The Constitution of Liberty” develops the basic assumptions from which he derived the views expressed fifteen years ago in his book “The Road to Serfdom.” They are applied in a free-ranging way to an impressive variety of themes and social disciplines. The result is a reflective, often biting, commentary on the nature of our society and its dominant thought by one who is passionately opposed to the coercion of human beings by the arbitrary will of others, who puts liberty above welfare, and is sanguine that greater welfare will thereby ensure.

Admitting that there are few who would openly oppose the value of liberty, Mr. Hayek, who is Professor of Social and Moral Science at the University of Chicago, contends that its traditions and safeguards are constantly being eroded in the democratic welfare states of Europe and America. Economic and other social controls have invaded what should be regarded as man’s private sphere. While the Communist threat to the survival of free society may be more immediate, the more formidable danger comes from within in the form of a poisonous ideology wrapped in a dough of flabby rhetoric about democracy, iced over with sugary formulae of goodwill and social justice.

The first two parts of the book concern themselves with the value of freedom and its relation to the rule of law; the third is devoted to showing how these are subverted by the measures of the welfare state all along the line. In a concluding eloquent postscript, “Why I am not a conservative,” the author indicts the Conservatives, especially in England, for being somewhat infected with socialist principles, as shown by their fear of uncontrolled social forces, and their efforts to discredit free enterprise, especially in agriculture. […]

There are two clear merits possessed by this book outside of the validity of its argument. It has a courage and honest not often avowed by those opposed to modern trends of social legislation. The author does not believe in mitigating social inequalities or even establishing equality of opportunity. He is opposed to any measures which would curtail the accidental advantages not only of being better endowed by nature but of being socially better born.

The law can protect mean only in their liberty to get as much property as the rules of the market permit; it should not be used to redistribute income and consequent privilege merely because it turns out that to those who hath shall be given and from those who hath not shall be taken away. Progressive taxation is discriminatory against the rich. A tax should consist of the same proportion of a man’s income whether he earns ten hundred or ten million dollars. That this would cut into one man’s food, but only into another’s number of yachts is irrelevant. The price of liberty, so conceived, is so high one wonders why anyone not well endowed would want it.

The second and greater merit of Mr. Hayek’s work is that it challenges the first principles of any view in which in the interest of human welfare and social justice seeks some control of the economy. This embraces not only Socialists, New and Fair Dealers but also Herbert Hoover. Every generation takes its first principles too much for granted. It is a salutary experience to rethink them in light of their alternatives.

Only a treatise as long as Mr. Hayek’s could do critical justice to it. One can challenge his failure to grasp the ways in which private property as well as public can be used to control the lives and freedom of those dependent upon it for their livelihood. One can challenge his assumption that a theory of market prices can take the place of a theory of social justice. More far reaching, however, in its practical implications is his notion that the original sin of the social reformer consists in the view that human intelligence can direct or control social change. According to the author wisdom must rely only on the slow non-rational processes of trial and error, on the traditions and customs of the past rather than on human plans and contrivance. […]

It is demonstrable that Hayek suffers from the defects of the very rationalism he condemns. His antitheses between tradition and reason, experience and experiment, are analytically untenable and historically unjustifiable. Intelligent social control always learns from experience and history. It no more need take the form of a Utopian blueprint than concern for history need make a fetish of the past. Revolutions have more often been the result of unendurable evils that intelligent reforms would have abolished … than of the imperialism of reason.

In the light of the evidence it is the author who appears doctrinaire, as one who refuses to learn from history. A generation ago he predicted that planning would lead to the eclipse of our freedoms. The state of liberty in England is healthier than when he made his dire prediction; and in this country, far better than in the heyday of unregulated capitalism. In countries where freedom has been lost, its destruction preceded the introduction of planning.

Planning need not be all or none. In a political democracy, it can take plural forms resulting in a mixed economy. That there are threats to freedom in some types of planning cannot by gainsaid. But there are also threats to freedom, even if more indirect, in a pure market economy. It is doubtful whether free cultures could survive severe depressions again. […]

The tendency of the author to think in terms of either-or instead of more-or-less vitiates the discussion of other basic themes. Although the essence of freedom for him is equality before the law, he ignores the extent to which social inequalities result in the imposition of unequal penalties under the law. His conception of the just law makes it compatible both with treating and mistreating everybody equally under the same rule. […]

As a cautionary voice Mr. Hayek is always worth listening to. He is an intellectual tonic. But in our present time of troubles, his economic philosophy points the road to disaster.

The review noted that the price of the original 570 page hardback from the University of Chicago Press was $7.50 in 1960, or about $54.59 in today’s dollars according to the inflation calculator. That compares to $81.22 for the hardback of the new “definitive edition” at Amazon today and $16.50 for the paperback version.

Hayek and Dennett on the design fallacy

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Lynne Kiesling

Since we’re riffing off of Hayek today, I’ll take one of his most pithy and insightful quotes, from The Fatal Conceit:

The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.

I want to use that quote to tee up a video I’ve been meaning to share for some time — philosopher Daniel Dennett discussing evolution, and how the attempt to infer “intelligent design” in evolutionary processes reveals just how deeply the design fallacy runs in human cognition.

Why do humans have so much difficulty with emergence, with spontaneous/unplanned order? Why do so many people believe that ordered and coordinated outcomes must be intentionally designed?

Hayek’s birthday, Hayek’s week, Hayek’s century

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Lynne Kiesling

Yesterday was F.A. Hayek’s 112th birthday, and as Hayek’s work inspired the name of this blog, and continues to inspire my work every day, I encourage you all to celebrate this anniversary by reading (or re-reading, I hope!) his seminal Use of Knowledge in Society (1945):

The peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess. 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 utilization of knowledge which is not given to anyone in its totality.

Knowledge problem, indeed.

As it happens, I was writing at the same time as Mike was posting his remarks about Fukuyama’s NYT review of the new edition of Hayek’s Constitution of Liberty … I’ve been quite struck by the juxtaposition this past week of two quite dramatic partially-misguided and incorrect readings of Hayek. Fukuyama’s was one, and the analyses by Easterly, Boudreaux, and Boettke cover much of my reaction to his misreading.

The other dramatic partial misreading came last week from George Soros, at a panel discussion at the Cato Institute (with fellow panelists Bruce Caldwell, Richard Epstein, and new edition CoL editor Ron Hamowy) discussing Hayek’s Constitution of Liberty in celebration of the release of the new edition. David Boaz provides some summary remarks about the panel, and Soros’ reading of Hayek, in this post from Cato @ Liberty. I watched the panel live online, and was struck by Soros’ claim that Hayek would have supported the efficient markets hypothesis and was a “Chicago school” economist — my reading of Hayek says that nothing is farther from the truth! Boaz’s post recounts Caldwell’s response to Soros:

First of all, Hayek and the Austrians in my estimation reject the usefulness of an efficient market hypothesis and a theory of rational expectations for capturing the workings of a market process. So if the acceptance of those two theories is the defining characteristic of being a market fundamentalist, then he’s not the sort of market fundamentalist that you’re describing. I think a pithy way of putting this is that there’s definitely a difference methodologically and in other realms between Chicago and Vienna.

I actually think that public intellectual exchanges such as those following Fukuyama’s review and Soros’ panel comments are highly salutary, and not just because they create opportunities for Hayek scholars to correct misperceptions about his ideas that others hold. The more we share ideas around the multidimensional political and philosophical spectrum, the more we understand where we have common cause and where we don’t.

David Boaz has a post reviewing the Hayek-related discourse over the past week at the Encyclopedia Britannica blog, and I recommend it, in addition to the other links in this post and Mike’s earlier one.

Fukuyama reviews new edition of Hayek’s Constitution of Liberty

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Michael Giberson

The Sunday New York Times Book Review carried a review by Francis Fukuyama of the new edition of Hayek’s The Constitution of Liberty. The review does Hayek the favor of distinguishing his views from those of a certain recent talk-radio enthusiast. Fukuyama noted that Hayek’s views are more complex than they are usually rendered in public discourse (both by supporters of Hayek and his opponents), and Fukuyama’s discussion provides some evidence to support that reading. Then, strangely, Fukuyama concludes his review with an overly simplistic caricature of Hayek’s work.

The review is worth reading, but complement it by reading William Easterly’s response, which asserts: ”To sum up,  Hayek’s skepticism about government was NOT based on his certainty, as Fukuyama would have it,  but on his awareness of his ignorance (and everyone else’s).”

Pete Boettke’s response, “Come on Frank, you can do better than this” works as an elaboration of Easterly’s line. Boettke buries his substance in the middle of a long paragraph, here is the meaty goodness of it:

But Frank produces a caricature of Hayek’s The Road to Serfdom and then conflates that with The Constitution of Liberty, and then produces a confused reading of Hayek’s description of the problem situation we face as economic actors with the epistemic critique of government decision makers attempting to plan (or intervene optimally) in the economic reality that emerges from the mutual adjustments of economic actors who faced that problem situation.  To understand how we cope with our ignorance, Hayek focused on the institutions of the market economy (property, prices and profit/loss). In short, it is a cute attempt to claim that Hayek suffers from a Cartesian hubris, but it simply isn’t true.  Frank would have been much better off had he tried to take Hayek as his word in The Constitution of Liberty, and that is that he is pursuing a Humean project of ‘using reason to whittle down the claims of reason.’

For more reactions, see Don Boudreaux 1 and Don Boudreaux 2 at Cafe Hayek, and at the The Future of Capitalism blog Ira Stoll produces a letter to the editor in response from Hayek himself.

ADDED: Also see David Boaz posting at the Brittannica blog:

Reagan and Thatcher may have admired Hayek, but he always insisted that he was a liberal, not a conservative. He titled the postscript to The Constitution of Liberty “Why I Am Not a Conservative.” He pointed out that the conservative “has no political principles which enable him to work with people whose moral values differ from his own for a political order in which both can obey their convictions. It is the recognition of such principles that permits the coexistence of different sets of values that makes it possible to build a peaceful society with a minimum of force. The acceptance of such principles means that we agree to tolerate much that we dislike.” He wanted to be part of “the party of life, the party that favors free growth and spontaneous evolution.”

STILL MORE, HT to Greg Ransom at Taking Hayek Seriously: Tibor Machan and Anton Howes.

AND not every critic of Fukuyama’s review favors Hayek’s views; see Peter Drier at Huffington Post.