Bryan Caplan  

Rejoinder on Hayek

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Inspiration from Ayn Rand... Hayek on Knowledge...
Many people I know objected to my last post on Hayek.  Arnold jokingly called me a troll.  My colleague Russ Roberts urged me to learn greater patience:
Five blog posts, huh? I guess that's something like saying Coase only wrote a few good articles. Or only had a few good ideas.
Russ then lists some simple ideas - like spontaneous order - that fascinate him, and observes:
These are pretty simple ideas. When you give people the one sentence version or paragraph version they nod and tell you they agree with the essence of the idea. But I find these ideas to be quite deep. They are easy to understand but very difficult to absorb. The more I think about them, the deeper is my understanding. I give Hayek credit for [spontaneous order]. He didn't invent the idea. But he made me think about it the most.
This sounds wise, but I'm not buying it.  Yes, Coase and Hayek are both famous for a few big but simple ideas.  So far, so good.  Yet there are crucial differences in Coase's favor:

1. Coase did invent his main ideas.

2. Coase got to the point instead of rambling on for thousands of pages.

3. Coase explained his ideas with memorable, persuasive examples.  If a few simple ideas are your claim to fame, this is a must.  Where in Hayek can you find any example that compares with Coase's classic farmer/railroad story?  Or Coase's lighthouse

4. Coase actually engaged contemporary critics and fence-sitters, instead of straw men.

When I was first exposed to Hayek twenty years ago, I moderately revered him.  After all, didn't most of the smart people I knew say I should?  Since then, I've read all of Hayek's main works.  I've listened to scores of his fans sing his praises.  I was even the research assistant on his autobiography.   Yet the more I learned, the more overrated he seemed. 

My question for Russ: Under the circumstances, how much more patience is it reasonable to expect of me?


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COMMENTS (19 to date)
Greg Ransom writes:

The dating of goods, making possible the IE construct, is due to Hayek, and Hayek provides a memorable example in the regular chaning relative price of fuit across the different seasons.

This is but one example.

The evidence is you don't know what you are talking about in your repeated efforts to trash Hayek.

Your failures of imagination and understanding don't reflect badly on Hayek, they reflect badly on you.

Here are some more original ideas in Hayek.

The many-many problem blocking reduction in psychology / brain science, with examples.

The idea of imitated patterns of behavior, expressed in action bu not fully capturable in linguistic articulations (the only thing closemto this profound idea in the literature is Wittgenstein).

The idea that intertemporal equilibrium construct helps us better "see" a global emperical pattern of order in the economy, and the related idea that this pattern has a causal explanation in emtepreneurial learning in the context of changing local conditions and global relative prices. All of this coherently explains the logical status and scientific nature of economics, something every other economist has failed to succeed in providing.

I've got a dozen more, but I fear Bryan's tastes are for simpler and less substantive achievements.

RL writes:

One of the challenges of appreciating complex ideas in a historical context is that they can often seem simple in retrospect. Once you take an undergraduate physics course and examine the implications of what it means for light to always travel at the same speed--once you understand Einstein's thought experiments--special relativity and the change of mass, length, and time with relative velocity DOES seem straight forward. But physicists still have enough humility to recognize that at the time this was a great breakthrough.

Understanding (albeit not originating) the notion of spontaneous order, of prices as a discovery mechanism, of the impossibility of socialist calculation all seem obvious in retrospect, but many people with impressive degrees argued against the last for many decades until their prototype example collapsed of its own dead weight.

The fact an idea is obvious now is not evidence that the person who made it look obvious was capable of pointing out only the obvious.

Wilmot of Rochester writes:

This sounds wise, but I'm not buying it.


What more can they say then? If wise statements don't impress upon Bryan a respect for something or someone, then maybe it's just that Bryan really doesn't like Hayek?

Obviously, some people are really into Hayek; maybe Bryan just isn't one of them. Not a big deal - I personally can't see what's all the to-do about Stiglitz or Samuelson - but does he really need to dwell on it so much? Why not write another blog about similar economists he dislikes?

Adam writes:

This is a silly game. Hayek and Coase were both brilliant. Both belong in the pantheon of great economists. "The Use of Knowledge in Society" alone is worth a membership in the pantheon--there is nothing like it in identifying the magnificence and efficiency of free trade, markets and entrepreneurial pricing. Our only lament should be that great economists like the late Paul Samuelson were so tardy in accepting "Knowledge".

Randy writes:

I was just watching "Darwin's Darkest Hour" the other night and had the same thought. Natural Selection seems obvious now. It wasn't then.

Daniel Kuehn writes:

I think your first point - that Coase DID come up with his ideas - is the most important one.

Note that Russ had to qualify "but he made me think about it the most". He knew he couldn't get away with attributing spontaneous order to Hayek because it's a widely recognized and appreciated phenomenon. In no way do you have to be "Hayekian" or "libertarian" to appreciate spontaneous order.

So that's great that Russ admires Hayek for introducing him to the concept. It's perfectly fine to have a soft spot in your heart for someone that really opened your mind to something new. But is that enough to qualify Hayek to be one of the greats? I'm not so sure.

And don't get me wrong - Hayek is a great and important economist. I'm just not sure he's as foundational or as central as a lot of people make him.

Greg Ransom writes:

Daniel:

"Hayek is a great and important economist. I'm just not sure he's as foundational or as central as a lot of people make him."

Note well. Not a few of these people are Noble Prize winners in economics, including the two most recent.

Mike Rulle writes:

This "debate" seems centered on aesthetics. I watched a lecture given by a "pro-Hayek" U of Chicago professor (part of a lecture series on Hayek) whose name escapes me. As a student he had taken classes from Hayek. He and his student colleagues, apparently, universally agreed he was the most tedious and boring lecturer imaginable.

Given the sheer volume of his writings it does not seem surprising he was repetitive etc. My guess is Bryan also suffers a littler bit from "familiarity breeds contempt" syndrome.

I would be more interested in Bryan's views on Hayek's errors as well as his insights. The fact that FH could "ramble on for thousands of pages" is interesting---but not that interesting.

E. Barandiaran writes:

Bryan,
As I said in a comment to your first post on Hayek, I like very much the epilogue to LLL and I'm sure I'll read it again a few times--the beauty of a complex, insightful text is that you find something new everytime you read it.

fundamentalist writes:

"Yet the more I learned, the more overrated he seemed."

I feel that way about some of the George Mason professors, too. The more Hayek I read, the greater I think his intellect. I wonder what the value is of expressing opinions like this. I could agree or disagree with your reasoning for arriving at the opinion, but what is the point of just expressing an opinion? Is it an attempt to boost your image by trying to trash that of another?

You might be interested in some PR research I read years ago. It said that when a person of low credibilty attacks one with high credibility, the person with low credibility doesn't damage the high credibilty person, but only lowers his own.

liberty writes:

"3. Coase explained his ideas with memorable, persuasive examples. If a few simple ideas are your claim to fame, this is a must. Where in Hayek can you find any example that compares with Coase's classic farmer/railroad story? Or Coase's lighthouse? "

Like Hayek's tin example? That kind of thing?

Your post reads to me like that of an envious academic frustrated that, despite learning the maths and techniques and always being clever, is in the shadow of someone who didn't bother with all that tricky stuff--but still made far greater insightful contributions. It must be terrible to be stuck at Mason, huh?

Since Bryan links to one of my small criticisms of Hayek, I want to disassociate myself from his absurd dismissal of Hayek overall.

Yes, it is true that Hayek failed as an intellectual historian by claiming that the left is (still) motivated by "constructivist rationalism." The left is motivated by a sense of injustice, period. "Constructivist rationalism" is just a self-absorbed take on what must be motivating the left to support, against injustice, government action.

It's self-absorbed b/c only after you've fully digested the Hayekian story about our ignorance of all we'd need to know in order to make government action work could one then project this story into the heads of people who support government action and say that they deny the story. But that's not it at all; they've never heard the story! (THEY ARE IGNORANT OF HAYEK.) The left supports government action because it blames the profit motive for the injustices of capitalism; and the silly claims of public-choice theory have not convinced the left that the profit motive is really behind all government action. So the left turns to the powerful and sometimes well-meaning government to counter the evil big businesses. End of story.

That said, Hayek was the most insightful social theorist of all time (with Popper a close second) because he took human ignorance--for most social theorists, an abstraction or minor annoyance at best--seriously. He realized that the ignorance of central planners would foil their plans. The same point could be applied to regulators, who impose one idea (say, about prudent banking compositions) on the whole economy at a time. And conversely, market competition can be seen as a sorting mechanism for testing which of the bright ideas of entrepreneurs are worthwhile and which are, in the event, ignorant of some crucial fact.

This ignorance-centric approach could be used to demolish and rebuild both economics and political science.

And what do we get as the non-Hayekian alternative? "Ignorance is unimportant. Anything worth knowing can be looked up on Wikipedia if you have an incentive to look it up. So when people make mistakes, it's not because they're truly, radically ignorant; it's because they don't have an incentive to become well informed, because they prefer to retain irrational beliefs."

What a cool notion, easily expressed in a short sentence or a short book, but also trivial when true, and wrong when important.

Only someone so thoroughly steeped in the very thing Hayek spent his life attacking--the [functionally] perfect-knowledge assumptions of mainstream economics--would take it seriously.

Perhaps Bryan is increasingly annoyed at Hayek simply because they disagree on this fundamental point.

"prudent banking regulations," I meant.

Tim writes:

This is an interesting application of the principle, I'm not up-to-speed on names, where the collective belief has been violated. The majority believe that Hayek was a great man, and there is a tiny group that think he wasn't as great as everyone else. I don't think Bryan is right or wrong, but apparently a lot of other people think he's quite wrong.

Bryan, by gaining yourself an audience, you have also limited the subject matter to which you can speak without fear of "reprisal" in the comments section.

Interesting...

John writes:

Surely I can't be the only regular reader of EconLog who thought this post was more or less spot-on. Besides his org stuff, I'm generally underwhelmed by Hayek's rabidness.

Ryan Vann writes:

Tim,

It has been speculated (joked) that Mr. Caplan doesn't read the comments, so the limits wouldn't be constrictive at all.

Ludwig van den Hauwe writes:

So if Hayek did not invent any new original ideas, and on top of that was a bad writer, history should perhaps prove you right. In 20 or 30 years from now close to nobody should still be reading Hayek. Let´s wait and see...

Actually, spontaneous order was not obvious and it was not widely accepted at the time Hayek wrote -- far, far less now than it is now. Systems theory as a whole is still fighting for its rightful place among and across the disciplines. Hayek was around when spontaneous order and systems theory was fist being formulated, and he developed it more than any of his contemporaries. In my readings of contemporary systems scientists, I see them mostly rediscovering what Polanyi and Hayek already said. We would be further along in systems science and theory if they were much more widely read.

drtaxsacto writes:

I understand your concern but disagree. (Sorry to log in so late on this discussion.) I would argue that his writing style is often murky but the clarity of his ideas especially about knowledge (the knowledge of time and place) and about the problems with relying on numbers for understanding (the Counter-revolution of Science) are worth the price of admission and then some. I find I go back to the uses of knowledge in society as often as I go back to some of Buchanan's gems and Tullock's pearls (like the charity of the uncharitable).

Finally anyone who pointed out the obvious errors of Keynes deserves a special place.

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