This book has several levels of interest. Its sweeping condemnation of socialism parallels the picture of economic stagnation which is increasingly acknowledged as the grim reality of the Soviet and Chinese experiments. It signals a broadening of the liberal agenda into a range of cultural, historical and anthropological interests, beyond its traditional strongholds in philosophy and economics. In the 'unmasking' tradition of Marx and Neitzsche it offers a critique of that simple-minded rationality which treats traditional mores with contempt and refuses to acknowledge the overwhelming importance of unconscious rule following behaviour.
At the same time it raises fundamental questions about the coherence of Hayek's own philosophical scheme and it has provoked a lively debate in liberal circles, intensified by rumbles of discontent among his colleagues as they detect a retreat from the robust individualism of The Road to Serfdom. Chandran Kukathis published an article in Quadrant (Aug 1988) which he described as
An attempt to persuade the new Hayek (or his readers) that, although there is much of value in all his writings, his recent work represents a danger to liberalism because it tends to subvert it. It does this by over-emphasising the importance of evolutionary forces, by neglecting the importance of defending moral principles, and by casting doubt on the possibility of individual moral choice.
With the appearance of this book, the rumbles have become more pronounced, as instanced by some comments under the heading 'Who'll Be Persuaded?' by Robert Higgs in Humane Studies Review (Winter 1988-89).
Hayek has chosen to take still another whack at the intellectually dead horse of central planning...The novice might well gain the impression that the future of economic and political life on earth will turn on the outcome of a debate between, on the one hand, Hayek virtually alone, and on the other hand, an enormous number of half-witted socialist intellectuals.
It remains to be seen whether the socialists who are the major targets of the work will take is as seriously as their opponents.
The book is the first volume of a major publishing program at the University of Chicago Press. The ten-year plan is to bring out a uniform set of twenty or more volumes of Hayek's collected works, with other items including the debate with Keynes during the 1930s and the Popper/Hayek correspondence. The senior editor for this venture was William W Bartley who was also the authorised biographer for both Hayek and Popper.
Morality and the Extended Order of Civilisation
The main concern of the book is the continuing appeal of socialism among Western intellectuals despite its theoretical shortcomings and its failure in practice. Many strands of thought, many errors and illusions have contributed to this situation and at various stages of his career Hayek has criticised most of them. This book aims to pull together these disparate strands of argument to make a rope that will hang socialism for good and all.
He defines the basic problem of the book as 'how does our morality emerge, and what implications may its mode of coming into being have for our economic and political life?'.
Central to his case is the notion of an extended order of civilisation that is held together by the largely unconscious influence of traditional moral codes and practices. According to Hayek the cardinal intellectual error of socialism is its failure to grasp the true nature of these rules and principles, and the way that they evolve. Evolution has become a keynote of his recent thought and he regards the book as 'a tributary of a growing stream apparently leading to the gradual development of an evolutionary ethics'. He considers that this stream runs parallel to the developments in evolutionary epistemology which have been notably advanced by his longtime friend Karl Popper.
In his view the essential insight of this evolutionary ethic is that
Our morals are neither instinctual nor a creation of reason, but constitute a separate tradition - between instinct and reason - a tradition of staggering importance in enabling us to adapt to problems and circumstances far exceeding our rational capacities. Our moral traditions, like many other aspects of our culture, developed concurrently with our reason, not as its product. Surprising and paradoxical as it may seem to some to say this, these moral traditions outstrip the capacities of reason (p. 10).
Hayek's admirers have ascribed a degree of originality to this concept of social control by non-rational moral codes, so it is important to note that this is a well worn path. The theorists of social solidarity from Durkheim to Parsons have pursued this theme, as have the philosophers of rule-following behaviour such as Wittgenstein and Winch. Indeed the whole functionalist school in sociology has explored the pre-rational, non-rational and sometimes even irrational folkways and mores that shape our thoughts and our actions.
The conceptual challenge in this area is to reconcile methodological individualism and moral autonomy with the reality of situational constraints and unconscious motivation based on genetic and cultural factors. As Kukathis pointed out, the main thrust of Hayek's work has been in the direction of individualism and moral autonomy but his views on tradition now seem to place him in the rival camp.
The novelty of Hayek's argument lies with the use that he has made of the 'extended moral order' concept in his critique of socialists and central planners and their 'constructivist rationalism'. He proceeds by way of a reconstruction of Western history to explain the function of a number of moral rules, especially those that regulate dealings in private property, which he calls 'several property'. Other important rules concern honesty, contracts, exchange, trade and privacy. He undertakes some 'conjectural history' to chart the origins of liberty, property and justice and the linked evolution of markets and civilisation.
He emphasises the importance of approved methods for transfer of property, noting that the Spartans resisted the early commercial revolution, did not recognise private property and even encouraged theft. He depicts commerce and trade as the great driving forces for the rise of modern society, generating wealth which made possible population growth and the specialisation of labour. These in turn raised productivity and hence the availability of leisure time and resources for cultural pursuits.
He suggests that the role of governments has been over-rated in the rise of civilisation because monarchs and states tend to create architectural and documentary monuments to themselves. Consequently we know more about government activities than about the results of the spontaneous coordination of individual efforts.
The philosophers come in for heavy criticism because they have tended to ignore the importance of trade. Plato's Republic would not trade at all with its neighbours for fear of contamination by foreign ideas. Aristotle similarly held an ideal of self-sufficiency and scorned market activity beyond the scale of the household or the single farm. Popper noted the derogatory attitude that Aristotle adopted towards professionalism and money earning activities generally, using the term "banausic" to describe a person who makes money other than by the honourable inheritance of land. A similar attitude was prevalent among the landed gentry in Britain. In this moral universe, actions for personal gain must be bad and systematic production for gain was regarded as unnatural. According to Hayek these retrogressive ideas passed from Aristotle to St Thomas Aquinas and become the official view of the Roman Catholic Church. In this way Hayek postulates that the dominant moral influence in the West for some centuries was based upon an intellectual tradition that had become detached and alienated from a vigorous and evolving system of commercial practice and customs that underpinned the spread of an extended order of civilisation.
The Socialist Revolt
With this conjectural history in place, Hayek then describes the revolt of the modern socialists against the discipline (and the opportunities) of the extended order. This revolt has two bases; one is instinctive or 'atavistic', the other is a perversion of reason that Hayek calls 'constructivist rationalism'. However his account of the 'atavistic' roots of socialism does not do justice to the reasons for the moral and emotional appeal of socialism.
He claims that the instinctive resistance to the extended order of capitalism arises from the conflict between the 'old' and 'new' moral codes. The first of these is 'the innate morality, so-called, of our instincts (solidarity, altruism, group decision, and such like). This he contrasts with the evolved morality (savings, several property, honesty, and so on) that created and sustained the extended order. He argues that socialism can be explained, in part, as an emotional response in favour of a particular form of justice - the justice of 'equal shares' - inherited from some tribal past when the solidarity of the herd or the tribe depended on this type of 'altruism'.
Against this essentially psychological thesis it is more likely that the attraction of socialism has to be explained by the conjunction of several strands of thought, at least three in fact. (1) the tradition of utopian social thought which can be traced from Plato, whereby the social system is planned and directed by a central authority. (2) the tradition of helping the weak, which in the West is essentially the moral legacy of Christianity. (3) a cluster of ideas including utopianism and collectivism, with the aim of shifting wealth from the haves to the have-nots using the power of the state to impose the desired changes.
A similar point was made in an interview reported in The Economist August 12, 1989.
Marxism is one part of a long tradition, which goes back to the Bible, the Reformation, the French Revolution. This tradition admires compassion, and dislikes injustice. It puts its emphasis on the idea that some people need help, and other people would like to help them, and that there is a role for government in assisting this to happen.
A vital task for classical (non-socialist) liberals is to find some common ground with other would-be humanitarian reformers and to work out in collaboration with them what will work to achieve the desired results and what does not. We can share the aim of helping the poor and the weak, but what is the best way to do so? This calls for intensive scrutiny of the three strands of thought noted above and especially the role of the government as opposed to indivdual effort and voluntary charity.
Taking account of Popper's critique of Plato and the downsides of the French and Russian revolutions, it would appear that the Platonic strand of authoritarian rule, collectivism, utopian central planning and violent revolution to "clean the canvas" of society leave much to be desired. So much for the first strand of ideas that supports modern socialism.
The tradition of helping the poor and the weak is important and valuable, and needs to be sustained. This is the common ground where radicals, moderate socialists,clasical liberals and conservatives of most kinds can meet. During the so-called age of laissez faire in the nineteenth century to poor made huge advances and this has been attributed by some to the activities of entrepreneurs in the marketplace and by others to the rise of the trade unions, the extension of the welfare state and other activities by the State. It may be argued whether the notion of Christian charity applies best to individuals or Governments, but this does not need to be decided here. The point is that the desire to render aid to the sick and needy may be based on 'atavistic' relicts of solidarity in small groups but it is equally likely to be a relatively recent development, an 'emergent' moral principle associated with the rise of civilisation, and one that was made possible by the accumulation of wealth to a point where groups can afford to make provision for non-contributing members.
Therefore it is plausible to argue, against Hayek, that the moral force of socialism derives not from primitive emotional sources but from the fact that it recruits the power of Christian charity with its drive to help the poor and the weak. The tragedy of socialism is that the means do not achieve the objective and so the need is to review the methods and the strategies of socialism to correct its mistaken view of the way the world works, and especially its view of the scope and function of human rationality.
Ambiguity in the Critique of Reason
Hayek's critique of reason is distinctly ambiguous and it is no more satisfactory than his psychological critique of socialism. He seeks to identify the kind of mindset which is prepared to embrace what he regards as the pinnacle of folly and superstition - the centrally planned economy. To understand Hayek's animus on this point it is helpful to realise that he is convinced that he and von Mises produced a watertight logical demolition of the concept of central planning in the 1920s and he attributes the loss of many millions of lives to subsequent attempts to put the principle into practice.
His search for the 'deep structural' ideas that underpin socialism leads him to identify a cluster of theories which he considers to be untenable in the form that they are usually embraced. These are the doctrines of rationalism, empiricism, positivism and utilitarianism. Rationalism denies the acceptability of beliefs founded on anything but experience and reasoning, empiricism maintains that all statements claiming to express knowledge are limited to those depending for their justification on experience. Positivism combines the previous two positions in the view that all true or rational knowledge is scientific, that is, based on empirically observed regularities. And utilitarianism takes the pleasure and pain of everyone affected by it to be the criterion of the action's 'rightness'.
These doctrines have two malign consequences in Hayek's eyes. They collectively represent 'declarations of war against moral traditions', and so threaten the integrity of the extended order. Secondly, they underpin the pathology of thought that he calls 'constructivist rationalism'. This is expressed in the view that blueprints for social engineering can be derived from concepts of society and its destination which form by a rational process in the minds of individuals or members of elite groups. An earlier critique of this stance occurs in 'The errors of constructivism', a 1970 paper reprinted in his New Studies in Philosophy, Politics, Economics and the History of Ideas. At this stage in his thinking the individual still retained a high degree of autonomy and the critical function assigned to human reason was compatible with an evolutionary approach that recognized the significance of tradition.
Let me clearly state the consequences that seem to follow from what I have said about the principles of legitimate criticism of social formations...I must at once warn you, however, that the conservatives among you, who up to this point may be rejoicing, will now probably be disappointed. The proper conclusion from the considerations that I have advanced is by no means that we may confidently accept all the old and traditional values. Nor even that there are any values or moral principles which science may not occasionally question. The social scientist who endeavours to understand how society functions, and to discover where it can be improved, must claim the right to examine critically, and even to judge, every single value of our society. The consequence of what I have said is merely that we can never at one and the same time question all its values. Such absolute doubt could lead only to the destruction of our civilisation...Complete abandonment of all traditional values is, of course, impossible, it would make man incapable of acting. (p 18-19).
This view of the critical role of reason is restated very briefly in The Fatal Conceit, but so briefly and adjacent to so much argument in favour of the benefits of submitting to tradition that the impression is one of confusion. It is unfortunate that Hayek has chosen to pursue a line of argument which lends itself to interpretation as a subversion of reason because a very important (and reasonable) conception of the function of moral and political philosophy emerges from his work, and from that of Popper in The Open Society and its Enemies. This is the view that the task of moral and political philosophers is to discover, formulate and critically probe the implications of those principles which function as the 'rules of the game' in social life. Ian Jarvie has argued that Popper's approach to science is very much a "social turn" to explore the role of conventions (regulative principles) in the 'game' of science, with a great deal of emphasis on the use of evidence for the critical appraisal of theories.
The 'rules of the game' range from the possibly innate rules of grammar, through the tacit knowledge of local traditions and folkways to the rules of games and other codified forms of procedure. They include the laws of the land embodied in common law, statutes and constitutions. At another level they include the unformalized rules of the extended order, an area where Durkheim did valuable work after he escaped from his early period of positivism and constructivist rationalism. The study of these rules would need to probe the way that different sets of rules support or undermine each other and the effect of changing from one set to another. This would be essentially an ecological study with the emphasis on unintended 'downstream' effects of changes in the prevailing order. This does not imply a rigidly conservative attitude to the status quo, it merely signals that we need to learn from our conscious or unconscious social experiments.
This approach would supplement the methods of conceptual analysis and crude 'positivist' empirical description of social and political systems. It would have the theoretical advantage of linking disciplines and the practical merit of being continually in touch with problems and their possible solutions. All of this is consistent with the thrust of Hayek's previous work but it is a thrust that has gone missing to some extent in this book. In view of the dubious critique of the 'atavistic' roots of socialism and the ambiguous critique of reason, The Fatal Conceit is a distinctly flawed jewel.
Quadrant, August 1989