The late professor Ludwig von Mises, leading spokesman for many years of the “Austrian School” of economics, used to emphasize the importance of analyzing seriously any economic “fashion” or “fad,” no matter how unrealistic or utopian it might appear. Mises’ fellow- countryman, economist and personal friend, Nobel Prize Laureate F. A. Hayek, has carefully analyzed one of the most “fashionable” and yet one of the most destructive doctrines of modern economic thought—the idea that the methods of the physical sciences are applicable also to the study of society.
In his The Counter-Revolution of Science, first published in 1952 and now reissued in a beautifully printed and bound new edition, Hayek carefully dissects and systematically analyzes positivism and historicism—two sociological doctrines which helped provide the basis for modern socialistic theories. This critique is profound and well worth the while of anyone seriously interested in the methodology of the social sciences and the history of economic thought.
Many Social Scientists Turn Reason Upside Down
Hayek’s concern is with the way reason has been turned upside down by many social scientists. The predecessors of modern socialism, whose ideas Hayek criticizes, were writing in the early 19th century. Scholars had by then pretty well freed themselves from the restrictions and taboos of mythology and medieval religious superstitions. Knowledge about the physical world was being expanded by leaps and bounds. The “industrial revolution,” with its many new inventions, was improving production, communication and transportation. With goods and services more readily available, living conditions were improving noticeably for everyone, especially the “common man” and the poor. More babies were surviving and people were living longer and healthier lives. The increasing population furnished eloquent testimony to the advances that could be made by applying the methods of the physical sciences to mechanics and technology. It is not very surprising, therefore, that it became fashionable to try to adapt the physical science methods to almost every discipline. However, they are completely inappropriate to the study of human action and society. Explaining why this is the case is the subject of Hayek’s book.
Hayek points out that all science starts with classification. In the physical sciences, objects are classified by unchanging characteristics that are both measurable and distinguishable by controlled and objective tests. But not in the social sciences. The social sciences deal with the actions of men. And men are not automatons. Men think. They have different values, varied goals and many purposes. Men choose among alternatives. They act purposively. Their actions cannot be classified without reference to their subjective (personal) ideas, values and goals. The results of their actions cannot be quantified, measured or predicted in advance. Moreover, changes are always taking place. The ideas, values, aims, choices and actions of men vary from time to time, depending on actual conditions and the knowledge available to them.
Modern socialists, and their intellectual predecessors whose doctrines Hayek examines, sought to analyze and plan society as a whole. In doing this, they ignored individuals and their ideas, values and purposes. And they also overlooked the inevitability of change. Yet many professors and authors, whose teachings and books are widely respected today, are still influenced by the fallacies Hayek criticizes, which stem from the belief that society may be analyzed and planned by using the methods of the physical sciences—observation, experimentation and measurement.
Hayek devotes more than half of this book to several little known Frenchmen who originated and advocated this theory. He considers their ideas influential in the intellectual development of Karl Marx and, thus, responsible for practically all varieties of modern socialism. He examines, in some detail, this particular phase in the history of economic thought because he hopes that it may “help us become aware of much that governs our own thought without our explicitly knowing it . . . and perhaps assist us to purge our minds from influences which seriously mislead us on questions of our own day.”
In addition to analyzing the errors in the methods of those whose doctrines led to modern forms of socialism, Hayek also explains the origin of social institutions such as the market, prices, money, language, etc. Hayek points out that society itself, which provides many benefits to its individual members is the unplanned outcome of the actions of many individuals. Their separate, independent, purposive and voluntary ideas and actions led unintentionally to its formation. And changes are now going on that will be responsible for society’s evolution into something very different in the future. Those who seek to reform society and cope with social problems must learn to appreciate the role of freedom in the evolution of useful, if unplanned, social institutions.
This book should help readers recognize the impossibility of successful central planning and of trying to create social institutions by design. It will also explain to serious scholars the important distinctions between the methodologies of the physical and social sciences.