Emily Skarbek  

Happy Birthday, F. A. Hayek!

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Today is F.A. Hayek's birthday. To celebrate, I'd like to briefly comment on particular facet of Hayek's thought that has influenced the way I see the world - his view of individualism 'true'.

In his brilliant essay, Individualism: True and False, Hayek lays out the distinguishing features of the ideas of individualism stemming from Mandeville, Hume, Smith, and the Scottish Enlightenment. First, and foremost, individualism is a theory of society.

This fact should by itself be sufficient to refute the silliest of the common misunderstandings: the belief that individualism postulates (or bases its arguments on the assumption of) the existence of isolated or self-contained individuals, instead of starting from men whose whole nature and character is determined by their existence in society. (pg 6).

Individualism starts with a rich understanding of the human character (think both Mandeville and Smith here) - not an atomistic idea of man in a bubble. From this, individualism begins with the premise that there is no other way to understand social phenomena but through our understanding of individual actions and choices directed toward other people and guided by their expected behaviour. In other words, individualism 'true' is a choice-focused theory of social behaviour populated by often irrational and fallible humans. The individualism handed down from the Scottish Enlightenment was concerned with finding a social system that "does not depend for its functioning on our finding good men for running it, or on all men becoming better than they now are, but which makes use of men in all their given variety and complexity, sometimes good and sometimes bad, sometimes intelligent and more often stupid.(pg. 12)"

It is only through the course of a social process (like Smithian sympathy or commercial interaction under particular institutions) that individual errors come to be corrected through trial and error. Thus, the second step in this theoretical orientation is the recognition that much of the orderliness of social life is often the result of human action, but not of human design.

The distinguishing feature of this brand of individualism is that it takes the self-interest of the individual (which includes caring for one's friends and family) as a psychological fact of human action, not as endorsing the unattractive characteristic of selfishness or greed. For Hayek, the intellectual confusion that leads to the belief that individualism approves and encourages human selfishness (which it does not) is one of the main reasons why so many people dislike it.

Instead, the second pillar of individualism is the fundamental limitation of man's knowledge.

All the possible differences in men's moral attitudes amount to little, so far as their significance for social organization is concerned, compared with the fact that all man's mind can effectively comprehend are the facts of the narrow circle of which he is the center; that, whether he is completely selfish or the most perfect altruist, the human needs for which he can effectively care are an almost negligible fraction of the needs, of all members of society.

The real question, therefore, is not the morality that guides human motives but whether the rules in which his actions are embedded are suited to allow him to act on his own knowledge. This contrasts with the basic idea that fallible people need to be directed by someone who supposedly has better knowledge or "fuller comprehension of the significance of these actions to society as a whole (pg. 14)."

Examples abound of public policy predicated on the idea that bureaus and policy makers know what's best for regular people. Here in the UK, we actually have "behavioural insights team" or "Nudge Unit". This is a group of 'experts' tasked with designing policies to "encourage people to make better choices for themselves and society".

Hayek clarifies this point further. It's not that every person actually knows his or her best interest. For Hayek, that is "neither plausible nor necessary for the individualist's conclusions" (pg.15). The argument is that "nobody can know who knows best and that the only way by which we can find out is through a social process in which everybody is allowed to try and see what he can do."(pg. 15)

It is from this theory of social life that the normative propositions of individualism are derived. The limitations of individual knowledge crucially provide the foundation for the desirability of limiting all coercive power. Hayek elaborates further on what he calls the "pretence of knowledge" in his Nobel Speech. For those who have tried to read this work with difficulty or have never approached the ideas, here is a nice attempt at summarizing and simplifying the argument.


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COMMENTS (6 to date)
ThaomasH writes:

"This contrasts with the basic idea that fallible people need to be directed by someone who supposedly has better knowledge or "fuller comprehension of the significance of these actions to society as a whole (pg. 14).""

No, the contrast is not complete. There are some kinds of action for which it is impossible (so far) to embed in such a way that acting on one's own knowledge does not unjustly harm others (actions leading to the accumulation of CO2 in the atmosphere) and some kinds of consumption that can only be effects by public action (Asteroid strike detection and prevention).

The difference between Libertarians and Liberals seems to be over whether Hyeck is 100% correct or only 85%-90%.

Maniel writes:

Excellent post! Very timely.

José Romeu Robazzi writes:

I just realized that Hayek´s birthday is the victory day in Europe, which is a fortunate coincidence! Hayek fought hard in the field of ideas against totalitarian states, one such state was defeated that day, may 8 1945. We have two very strong reasons to celebrate May 8! Thanks for sharing this info.

John Alcorn writes:

@ ThomasH:
"The difference between Libertarians and Liberals seems to be over whether Hayek is 100% correct or only 85%-90%."
By what metric? And by what definitions of Libertarian and Liberal?
If, for example, the metric is the ratio of taxes to GDP, then present-day Liberals would seem to believe that Hayek is only 50%-60% correct.
However, this simple metric neglects the weight and growth of regulatory constraints on private ordering. Thus the gap between Hayek and Liberals is substantially greater than the ratio of taxes to GDP indicates.
Prof. Skarbek highlights yet another dimension of erosion of private ordering; namely, growth in the apparatus and scope of government, for "nudging."
To complicate matters, there are also "Bleeding Heart Libertarians," who sometimes cite Hayek against pure Libertarians. The gap between Bleeding Heart Libertarians and Liberals seems not so great as the gap between pure Libertarians and Liberals.

Bedarz Iliaci writes:

Individualism does have a reductionist view of society. It does start with individuals and then tries to determine optimal social arrangements for them. It does try to derive political authority from self-ownership that individuals have over themselves.

This contrasts with the classical view, that may be found in Aristotle, for instance, that regards the City (or polity), the family and the individual as three irreducibles, none of which may be derived from the others. Thus, the classical view does not try to derive political authority from sovereign individuals or from paternal authority.

FletchforFreedom writes:

ThaomasH writes:

"There are some kinds of action for which it is impossible (so far) to embed in such a way that acting on one's own knowledge does not unjustly harm others (actions leading to the accumulation of CO2 in the atmosphere)..."

Quite the contrary, the concept of law (distinct from regulation) is entirely consistent with the individualist position acting in society - agreed upon redress for harms inflicted upon others. There;s even a large body of literature on private law (and extra-governmental means of redress such as arbitration and mediation). Similarly, it is no accident that actual environmental issues have been more than adequately dealt with in such a manner (hence the material improvement in environmental conditions in the US in a trend dating back to long before creation of the EPA while Siberia became a landfill, China became a cesspool and Eastern Europe was buried in soot. It is the very effectiveness of capitalism in dealing with such real issues that has led to the fabrication of fanciful ones (CO2 scare, etc.)

"...and some kinds of consumption that can only be effects by public action (Asteroid strike detection and prevention)"

There is no evidence to support this. In fact, private efforts to map the skies abound. Private space travel companies now exist and who's to say there would not be many more in the absence of governmental crowding out. It may be true (and it may not) that only governments might stockpile weapons that can destroy incoming asteroids but costs and risks must be weighed - the chances that an asteroid would wipe out the earth vs. the chances that nuclear stupidity would.

Neither complaint leveled at the individualist position survives even cursory scrutiny.

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