Freeman

BOOK REVIEW

Contending With Hayek: On Liberalism, Spontaneous Order and the Post-Communist Societies in Transition

Hayek's Ideas Receive the Thorough and Serious Exploration They Deserve

JUNE 01, 1996 by JOHN ATTARIAN

Filed Under : Socialism, Spontaneous Order, Central Planning, F. A. Hayek

Dr. Attarian is a free-lance writer in Ann Arbor, Michigan.

Friedrich Hayek is celebrated as a scourge of socialist fallacies and a champion of liberty. As Eastern Europe’s former Communist countries pursue a freer state, what can Hayek’s ideas teach them?

Those seeking answers to that question should consult this volume of essays, the result of a colloquium in Zurich in 1992, sponsored by the Liberales Institut, which was founded in 1979 to explore basic political concepts in light of classical liberalism. Thirteen European scholars critically scrutinize Hayek’s main social and political ideas and his relevance for the post-Communist societies.

John Gray (Jesus College, Oxford) argues that Hayek’s ideas don’t provide guidance for the transition out of socialism, and that following his prescriptions will be disastrous. The notion of spontaneous order proves central planning’s failure, but markets don’t just evolve spontaneously; they require institutional underpinnings, such as property and contract law, which post-Communist societies lack. But Anthony de Jasay responds cogently that historical evidence shows that voluntary exchange systems, supported by privately enforced rules, often pre-dated state authority, and that “constructivists” like Gray have it backwards: the post-socialist states lack the means to create a new order. “A spontaneous process, however its critics may scold it for being anarcho-capitalist and exploitative, generates its own wherewithal for an emergent order,” as in the Czech Republic’s case.

Lauding Hayek’s long-term perspective, Robert Nef (Liberales Institut) counsels patience for the transition, noting that the destruction of mutual trust and good faith were the worst casualties inflicted by socialism and that the market greatly promotes their restoration.

Students of Hayek’s “spontaneous order” and its ethical implications and his epistemological concerns—how to use knowledge and how to elicit it—will find the sophisticated essays by Gerard Radnitzky (University of Trier) and Hardy Bouillon (Gerda Henkel Foundation) useful. Radnitzky expounds and upholds Hayek’s epistemology, notion of cultural evolution, and descriptive ethics; Bouillon unmasks various conceptual confusions in Hayek, e.g., of “freedom” and “power,” and reformulates as necessary.

Roland Kley (University of St. Gallen) contends that Hayek errs in seeing the clash between liberalism and socialism as one of different means to shared ends, which can be resolved scientifically without value judgments. Moreover, pace Hayek, the market does not reconcile conflicting claims, and Hayek evades the issue of social justice. Hayek’s liberalism, then, has shaky foundations.

Hans-Hermann Hoppe (University of Nevada, Las Vegas) concurs—from a classical liberal perspective. His essay is one of the book’s best; friends of freedom would do well to peruse it. He exposes serious pitfalls in Hayek’s thought, e.g., an “absurd” notion of coercion, under which one “coerces” others if one doesn’t provide what they need. Government, Hayek asserts, should ensure a minimum income, spend to augment deficient private investment, regulate for health and safety, provide public amusements, and so on. In short, Hayek’s position is indistinguishable from a statist social democrat’s. Hayek’s fame, Hoppe concludes, arose because “his theory poses no threat whatsoever” to social democracy. Those seeking a free-market champion must look instead to “the great and unsurpassed Ludwig von Mises.”

Other essays present Hayek’s key ideas, explore the circumstances of Hayek’s intellectual beginnings, and trace the development of his notion of spontaneous order. Throughout, Hayek’s ideas receive the thorough and serious exploration they deserve. Wide-ranging and timely, its essays models of scholarship and rigorous argument, Contending with Hayek is a must for liberty-loving scholars, especially students of Hayek and of Austrian economics.

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June 1996

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Unfortunately, educating people about phenomena that are counterintuitive, not-so-easy to remember, and suggest our individual lack of human control (for starters) can seem like an uphill battle in the war of ideas. So we sally forth into a kind of wilderness, an economic fairyland. We are myth busters in a world where people crave myths more than reality. Why do they so readily embrace untruth? Primarily because the immediate costs of doing so are so low and the psychic benefits are so high.
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