Reason and Evolution

Wirkman Virkkala

At the end of a long and productive career, Herbert Spencer — one of the most influential libertarian theorists of the nineteenth century — retained only enough of his native optimism to predict that the world would have to endure a century of socialism and war before individualism could come into its own. Spencer was right: the tide of ideology is turning away from socialism, and once again the classical liberal vision is gaining ascendency. There are many reasons for this change, of course, not the least is that socialism has obviously failed to live up to its promises. But one of the more important reasons is the intellectual influence of those who have opposed socialism all along.

Prominent among them is F. A. Hayek, who has been widely acknowledged, ever since publication of his The Road to Serfdom (1944), as a leading anti-socialist thinker. He has developed his case in several novel ways. His most important achievement, perhaps, is his replacement of the standard economic defense of capitalism — the better bathtub ploy, which argues that capitalism produces more and better goods than any other system — with a sophisticated reformulation of Adam Smith's invisible hand theory. According to Hayek, markets are capable of forming a spontaneous order that no conscious, human plan could duplicate, much less surpass. This ordering process, he claims, is similar to natural selection in biology; attempts to redesign the whole of society in terms of conscious ends and means are as wrong-headed as are attempts to explain biological change in pre-Darwinian terms. Hayek sees socialist ideas as expressions of a crude rationalism that does not know the nature and limits of reason itself.

Hayek has argued this case in a variety of books and essays. Appropriately, his thinking has itself undergone evolutionary changes.

He began as a straightforward economist, and achieved his first fame for developing Ludwig von Mises' theory of the trade cycle. His theory was briefly the rage among economists in the 1930s, until John Maynard Keynes's more politically savvy treatment swept through Academe and the State like wildfire. During the course of the debate over it and another of Mises' contributions — the argument that economic calculation under socialism could not yield results anywhere near those of a market economy — Hayek abandoned a reliance on standard equilibrium theory in economics, and began articulating a more realistic process approach. This turn of mind, though in many ways simply a recognition of the differences between the Austrian and more standard approaches, yielded some important ideas: the concept of competition as a discovery procedure and the idea of markets as coordinators of dispersed knowledge. It was for this work, completed before the century's midpoint, that Hayek was awarded the Nobel Prize for Economics in 1974.

But since his early work, he has gone beyond economics, so to speak, devoting most of his energy to social philosophy. Now, at the end of his career, he has written The Fatal Conceit, the perfect summation of — and introduction to — this latter half of his life's work. The Fatal Conceit is the most thoroughly engaging of Hayek's books. It clearly and succinctly states his case against socialism and for the open society, displaying his vision of how societies change and what makes institutions work, in the process revealing his own, distinctive world-view. This is not to say, however, that the book's value is wholly the result of Hayek's intention. His clarity of exposition allows the reader to examine easily (and critically) aspects of his philosophy that have remained obscure. It is possible to explain just where Hayek goes wrong. Though subtitled The Errors of Socialism, the book's most interesting revelations (for me, at least) pertain to the Errors of Hayek.

Deconstructing Anti-Rationalism

Hayek's major contention is, I think, indisputably true: Our civilisation depends, not only for its origin but also for its preservation, on what can be precisely described only as the extended order of human cooperation (p. 6).

The fatal conceit of socialism, as he sees it, is a presumption of reason, that since people had been able to generate some system of rules coordinating their efforts, they must also be able to design an even better and more gratifying system (7, 8). Hayek sees socialism as an essentially reactionary movement, relying on moral notions appropriate to life in the small roving bands or troops in which the human race and its immediate ancestors evolved during the few million years while the biological constitution of homo sapiens was being formed (11), but absolutely destructive when practiced by people in a modern, industrial society.

Unfortunately, Hayek is not content to attack the socialists' presumption of reason. Though he is by no means an irrationalist — he defends reason properly used, a reason that recognises its own limitations (8) — he embraces a concept that not only limits reason but seems to preclude it wherever applied. That concept is instinct, which he plays as a sort of trump card that outranks reason whenever played.

He uses the word from the very beginning of the book. Socialists, we are told, seek to overthrow civilized traditions by applying a rationally designed moral system whose appeal depends on the instinctual appeal of its promised consequences (7, emphasis added). He argues that cooperation in primitive societies is steered by the genetically inherited instincts of solidarity and altruism, but that the rules allowing civilization to flourish were handed down by tradition, teaching and imitation, rather than by instinct (11, 12), and were adopted almost by accident. This morality of the extended order cannot be justified by reason, and so stands Between Instinct and Reason (which is the title of the first chapter). Like a virus attached to a DNA molecule, this word is embedded in Hayek's exposition, mutating the argument from something reasonable to something very mistaken.

In his delightful seventh chapter, Our Poisoned Language, Hayek himself ironically provides the perfect term for what has happened here: As a weasel is said to be able to empty an egg without leaving a visible sign, so can these words deprive of content any term to which they are prefixed while seemingly leaving them untouched. A weasel word is used to draw the teeth from a concept one is obliged to employ, but from which one wishes to eliminate all implications that challenge one's ideological premises (11617). Social is the weasel word Hayek decries, but instinct is surely as disastrous.

The concept that Hayek is obliged to employ, but that he is loathe to confront, is the reasons people have for acting, and (especially) for following rules. Though he elsewhere praises the marginal utility theory of value, rightly linking value to human purposes (95), and though he makes several positive references to economists who are developing the property rights approach to law and resources, it does not cross his mind to extend this sort of analysis to ethics. According to him, people do not select rules according to their purposes and values, at least not to a significant extent. In fact, Hayek's whole theory of cultural group selection sees it as happening the other way around: Learnt moral rules . . . displaced innate responses, not because men recognised by reason that they were better but because they made possible the growth of an extended order exceeding anyone's vision, in which more effective collaboration enabled its members, however blindly, to maintain more people and to displace other groups (23).

This theory of displacing groups seems out of line with what actually happens. It is an extreme natural selection theory applied to whole societies. This sort of selection of cultural practices is surely not the only way in which certain sets of rules tend to predominate: people emulate more successful rules and living strategies all the time. No matter how much constraints on the practices of the small group . . . are hated (13), people do indeed adopt the restrictions of an extended civilization so they can participate in its prosperity. In the Third World examples of this sort of adaptive behavior abound. (See David Ramsay Steele, Hayek's Theory of Cultural Group Selection, Journal of Libertarian Studies, Vol. VIII, No. 2, pp. 171195, for an excellent critique.)

Though there may be a sense in which rules select people, the plain fact of the matter is that people also select rules. This even goes for Hayek's beloved collectivist savages, whose regulatory institutions of ceremony, nascent religion, and rudimentary industry can all be explained — at least in part — by attention to human purposes and values. But Hayek smears the word instinct over the whole subject, and never even mentions all the work being done in other fields — for example, game theory, general systems theory, public choice — that help explain this connection.

Further, though he quite rightly notes that the Hobbesian state of nature is a myth (which Hobbes, by the way, would have readily admitted), his own vision of primitive man is hardly any more anthropologically accurate. Over and over again he describes the natural morality of pre-civilized men as altruistic and instinctual, but the truth, of course, is that the moral traditions of these people are incredibly diverse (see the sociological writings of Herbert Spencer, for instance, or Spencer's The Ethics of Kant, Essays, Vol. 3, [New York: D. Appleton and Company, 1891] pp. 192–195). Though the smallness of their societies tended to personalize and thus to reinforce the reasons for following traditional customs, I have never seen any evidence — and Hayek supplies none — for regarding their moral habits as acquired and maintained in any other way than the one he ascribes to the habits of civilized men: handed on by tradition, teaching and imitation, rather than by instinct. . . . Parents in primitive societies raise children according to moral norms just as do parents in developed ones.

Hayek's discussion of tradition seems to present a rather weird picture of what tradition is. Tradition does not merely prescribe; one becomes a part of it. As it changes each individual, so each individual changes it. Hayek's picture of tradition and morals is one-sided: man is influenced by tradition — never tradition by man. Though it is true that single individuals do not completely remake a tradition, innovation on the individual level constantly occurs, and changes mount up.

The perennial appeal of communitarian ethics and programs need not be explained by recourse to an instinctual rule-following behavior, programmed into man during the long course of biological evolution. Man is a purpose-oriented creature first, and a rule-following creature second; he follows rules for a variety of complex reasons, one of which is simply the need to economize on attention to the multitude of options that are always potentially present to acting human beings. Communitarian ethics have a special attraction because they seem to follow from a simple vision of causation in the social world, one in which purposes are clearly defined and options clearly marked. Coordination of behavior in a vast array of the market, on the other hand, is hard for people to imagine; it is simply too complex. Thus they support simplistic political programs not because they are fundamentally rule-followers, but because they are fundamentally purposive. Hayek's own eloquent discussion of the Mysterious World of Trade and Money (his sixth chapter) provides ample evidence for this thesis, though he doesn't draw the correct conclusion.

This is not to say, however, that his distrust of rationalism has no ground. Many of the reasons people have for adopting ethical norms are not of the kind that rationalists admire — or even notice. Furthermore, it is possible — indeed, quite common in the evolution of society — for people to practice moral behavior for one or more reasons, and have moral behavior yield beneficial effects that were no part of their intention. This applies also to whole societies. Because of this, most of Hayek's arguments against constructivist rationalism still hold true: there is indeed a hubris in many radical thinkers' methods, a presumptuousness that can lead to disaster.

However, Hayek's failure to consider important details of basic theory is amazing (though many readers may appreciate the breezy sketchiness of his argument). Not only does he neglect to present a cogent theory of rule-following (and -advocating) behavior, he also makes no explorations into the economics of tribal endeavors, families, firms, or states, and he allows the socialist calculation debate to go by with but one short discussion! But I should not be too hard on him, I suppose — the whole Austrian school of economics seems content with masticating old issues, reluctant to push on to new territories. At least he is not arguing endlessly over method!

Progress As Differentiation

But perhaps he should have spent some time doing so. Hayek has, over the years, distanced himself from Ludwig von Mises' praxeological grounding for economic and social science (a grounding that explains social events in terms of human purposes). He has denied not only its Neo-Kantian a-priorism but its claims to fundamental and exhaustive explanatory power, as well. Though Hayek has often mentioned his disagreements with Mises on the fundamentals of social analysis, he has not, to my knowledge, ever given Misesian theory a thorough critique.

This is unfortunate. The Austrian school of economics has always placed a great deal of importance on method, and Hayek's unexplained dismissal of Misesian method presents problems for present-day economists working in the tradition. Hayek's broadening the scope of economic inquiry to include subjects normally covered by anthropologists, sociologists, and linguists (and others) makes for an attractive research program, but must Austrians who wish to extend their theory abandon Misesian praxeology in the process? Hayek gives them no good reason to do so. Not surprisingly, the Austrian school of economics, though more active now than at any time since the death of Hayek's teacher, Friedrich von Wieser, is in danger of coming apart at the seams, disrupted by arcane disputes and divergent goals.

Though comparisons with Mises are obvious and important, it is Herbert Spencer (1820–1903) who provides the most interesting parallels and contrasts. Though Hayek never defines evolution in as straightforward a way as did Spencer — that is, as an increasing degree of heterogeneity, complexity and integration — the manner in which he uses the term in relation to the spontaneous order of civilization suggests a Spencerian usage (a usage that has, alas, fallen out of favor among neo-Darwinists). His depiction of the extended order of civilisation is certainly reminiscent of Spencer's. Though unlike Spencer he does not care to mention the possibility of a systematic study of dissolution (destructuring processes), this does not make him an historicist; he recognizes that societies do not follow a uniform, unilinear path to an ideal condition (a belief often misattributed to Spencer). Like Hayek, Spencer had a concept of instinct. Happily, it was much less disastrous for his system; the fact that there was so much more to his theory than there is to Hayek's helps.

In many ways, Spencer's thinking on social evolution is better developed than Hayek's. For one thing, Spencer tried to develop his theory according to the facts (though many readers find Spencer's seemingly endless listing of anthropological detail in his Principles of Sociology the perfect cure for insomnia). More important, however, is Spencer's boldness in identifying evolution with progress. Though now completely out of favor with the intellectual elites, Spencer's formulation of evolution always was a constant reminder of what the evolutionists needed to explain: the origin of increasingly complex orders out of simpler ones. Evolution is not a matter simply of change but of a specific type of change. Darwin's exposition of speciation processes was not controversial merely because Darwin explained how species could change: it was controversial because it was designed to explain how new and more complex beings could develop. Neo-Darwinists tend to forget that these days.

Spencer did not hesitate to describe one being as more evolved than another. A man, according to Spencer, is more evolved than a dog because man can perform a greater variety of actions and adapt to a greater variety of environments: man is more purposive. Similarly, a super-organic system (society) is more evolved than another if it can accommodate a greater variety of members, each able to perform a greater variety of actions, reflecting a greater diversity of values. This is relevant to the issue at hand because Spencer was able to draw an ethical conclusion from all this: Because values pertain to ends and means and human purposes, there is always an imperative to progress toward a more evolved condition. Though Spencer sometimes expressed his position rather crudely, it need not involve the dreaded naturalistic fallacy (as G. E. Moore argued in his Principia Ethica). Though Spencer's imperative does not look like the imperatives of most other moral philosophers, and needs recasting in terms of universalizability and prescriptivism to put it into an acceptable, modern form, it nevertheless remains an impressive philosophical achievement.

Compared to it, Hayek's tentative imperative seems almost comic in its meekness. It yields the same conclusion, but its skeptical, oh-so-modern hesitancy strikes me as very peculiar: Although this morality [of the extended order of human cooperation] is not 'justified' by the fact that it enables us to do these things, and thereby to survive, it does enable us to survive, and there is something perhaps to be said for that (70, emphasis in original).

Libertarian Hubris?

It will be a long time before scholars come to a consensus over Hayek's work, and I will not hazard to guess what that consensus will look like — though I can only hope that he will be treated better than Spencer was treated after his death. Perhaps if libertarian ideas gain greater currency, Hayek's reputation will be protected.

One aspect of his theories has vexed libertarians for some time. It has often been suggested that Hayek's chief weapon against socialism — his critique of constructivist rationalism — seems also to apply to libertarianism. Rand's and Rothbard's ethics are often cited as examples of rationalistic hubris. Do not Hayek's arguments against socialism also destroy libertarianism?

I do not think so. There are three reasons why Hayek's critique should not be stretched to include libertarianism.

First, elements of his critique of reason in ethics are wrong. As I suggested earlier, we can understand both the origins of ethical norms and the effects of those norms in a more systematic way than Hayek admits, thus weakening his argument against conscious manipulation of morality (this does not weaken the case against socialism one bit, however).

Second, Hayek himself gives strong reasons why we should not extend his arguments against libertarian theory.

I wish neither to deny reason the power to improve norms and institutions nor even to insist that it is incapable of recasting the whole of our moral system in the direction now commonly conceived as social justice. We can do so, however, only by probing every part of a system of morals. If such a morality pretends to be able to do something that it cannot possibly do, e.g., to fulfil a knowledge-generating and organisational function that is impossible under its own rules and norms, then this impossibility itself provides a decisive rational criticism of that moral system. It is important to confront these consequences, for the notion that, in the last resort, the whole debate is a matter of value judgements and not of facts has prevented professional students of the market order from stressing forcibly enough that socialism cannot possibly do what it promises. (8)

This is one of the best passages in the book, and it is a pity that Hayek did not extend the analysis in the manner I suggested earlier; such an extension would have backed up this passage much better than his main argument does. Later in the book, when he discusses the differences between the positive and negative ideas of freedom, Hayek reaffirms his version of classical liberalism — a form that, though not identical to libertarianism, is certainly compatible with its spirit:

The question is how to secure the greatest possible freedom for all. This can be secured by uniformly restricting the freedom of all by abstract rules that preclude arbitrary or discriminatory coercion by or of other people. . . . In short, common concrete ends are replaced by common abstract rules. Government is needed only to enforce these abstract rules, and thereby to protect the individual against coercion, or invasion of his free sphere, by others. Whereas enforced obedience to common concrete ends is tantamount to slavery, obedience to common abstract rules (however burdensome they may still feel) provides scope for the most extraordinary freedom and diversity. Although it is sometimes supposed that such diversity brings chaos threatening the relative order that we also associate with civilisation, it turns out that greater diversity brings greater order. Hence the type of liberty made possible by adhering to abstract rules . . . is, as Proudhon once put it, the mother, not the daughter, of order. (63–4)

This paragraph so powerfully undermines the idea that Hayek's critique applies against libertarianism that it is almost a wonder that the subject ever came up. That it did, I believe, is the result of a mistaken view of what libertarians have attempted — which brings us to the third reason to reject the idea that Hayek's critique applies to libertarianism: the libertarian method, though indeed radical, differs from socialism in a crucial way.

Contrary to some of the pretensions of the more a priori-minded libertarian theorists, even the most rationalistic libertarian does not start with an ethical nothing. He starts with the morality with which he has grown up, and theorizes outward. But the morality of this constructivist is not just any old morality, it is the morality that has allowed the extended order of human cooperation to flourish. Libertarianism is a refinement of certain ethical and legal principles that have evolved during the course of civilization. It is not an expansion of the ethos of the family, or of the firm, or of a local cooperative. Hayek's strictures against applying the ethics appropriate to a small group to all of society do not really apply to libertarians because that is not what libertarians are doing. They have sometimes seen themselves as doing this only because they are so acclimated to the morality of the extended order that they do not see that other moralities also make sense in certain situations!

I have focused on the problems with Hayek's thinking as they are laid bare in The Fatal Conceit. But it covers far more ground than I have discussed here. For example, many readers will find his chapter The Extended Order and Population Growth to be worth the price of the book. There is not a single passage whose meaning is not plain, and Hayek and Bartley maintain an enviable elegance.

Regarding the opening quotation from Herbert Spencer, the citation was lost in a mess of poorly scribbled notes, and may not have been by Spencer at all (deeply embarrassing the author of this review). Other than minor punctuation changes (Mises's changed to Mises', for example), a few changes above the text itself, and two minor corrections in the last few paragraphs, this posting is identical to the original Liberty review. For this reason, this review does not reflect any of the information gleaned from later confessions of the assistant to the book's editor indicating that the said editor, W.W. Bartley III, may have written whole sections of the book under review! (Yes, one of Hayek's best books may have been written by committee.)

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