When I heard on the radio one morning in 1974 that Friedrich Hayek had won the Nobel Prize in economics, my first thought was, “Not our Friedrich Hayek?” A few hours later, upon meeting a libertarian acquaintance of some prominence, I asked, “Did you hear about Hayek?” The reply was: “No. Did he die?”

I offer these vignettes because they illustrate how dramatically the assessment of Hayek, even among his most ardent admirers, has changed over the last decade and a half. It is hard to recall, now that a small army of freemarket theorists has followed Hayek to Stockholm, what an unexpected sea change in the world’s approach to economics was heralded by his receipt of the Nobel. Or how unlikely it seemed in 1974 that Hayek, who at 75 years of age had produced an unusually voluminous but uniformly profound body of scholarly writing on a wide range of subjects, was nearer to the midpoint of his distinguished career than to its end.

Far from resting on his laurels, Hayek has pursued his scholarly mission with undiminished vigor and acuity. His latest book, The Fatal Conceit: The Errors of Socialism, is being published by the University of Chicago Press as Volume I of a new collection of Hayek’s work, a series that is projected to comprise 22 volumes. The book takes its title from what Hayek, after many years of study, has concluded is man’s most dangerous folly: undue pride of intellect, the indulgence in an unreasonable form of “reason” that does not know its own limitations. This “fatal conceit” manifests itself in several forms. In one aspect, it is the notion, which has been a central pillar of socialism, that man, through his reason, “is able to shape the world around him according to his wishes,” not marginally or in a limited manner but to the nth degree. Another manifestation is the self-satisfied belief that man has no obligation to obey or respect rules the purposes of which are not fully transparent to his momentary intellect. Yet another variation is the belief that unless a civilized order can be shown to be the product of a comprehensive, rational, man-made design, it has no value or right to exist.

Like his teacher, Ludwig von Mises, Hayek sees institutions such as private property and the price system as indispensable to human welfare. These institutions, Hayek notes, make it possible for millions of individuals—each acting independently with the widely diverse knowledge and ability available to him—to satisfy human needs and desires far more efficiently than any central planning agency could accomplish. But, unlike Mises, who tended to view free-market institutions as the products of conscious choice based on abstract reason, Hayek is sensitive to the high degree to which these institutions are dependent for their existence on traditions, customs, and rules developed over millennia whose full value man only dimly perceives.


“Learning how to behave is more the source than the result of insight, reason, and understanding,” Hayek writes. “Man is not born wise, rational and good, but has to be taught to become so. It is not our intellect that created our morals; rather, human interactions governed by our morals make possible the growth of reason and those capabilities associated with it. Man became intelligent because there was tradition . . . for him to learn. This tradition, in turn, originated not from a capacity rationally to interpret observed facts but from habits of responding. It told man primarily what he ought or ought not to do under certain conditions rather than what he must expect to happen.”

Hayek attributes the strong emotional appeal of socialism to its flattery of “genetically inherited instincts” of solidarity and altruism that are anachronistic—throwbacks to a time long ago when men lived in “small roving bands or troops.” Such instincts were highly useful to a primitive order in which all of the members were known personally to each other and “were guided by concrete, commonly perceived aims,” Hayek argues. But they are largely unsuited—hence inimical—to life in our present, highly complex order, which enables millions upon millions of individuals to serve the needs of people about whose existence they are unaware and in turn to have their own needs served by these multitudes of unknown others.

Though emphasizing that he does “not claim that the results of group selection of traditions are necessarily ‘good,'” Hayek adds:

I do claim that, whether we like it or not, without the particular traditions I have mentioned, the extended order of civilization could not continue to exist . . . ; and that if we discard these traditions, out of ill-considered notions . . . of what it is to be reasonable, we shall doom a large part of mankind to poverty and death. . . .


While facts alone can never determine what is right, ill-considered notions of what is reasonable, right and good may change the facts and the circumstances in which we live; they may destroy, perhaps forever, not only developed individuals and buildings and art and cities (which we have long known to be vulnerable to the destructive powers of moralities and ideologies of various sorts), but also traditions, institutions, and interrelations without which such creations could hardly have come into being or ever be recreated.

If there is any weakness in Hayek’s treatment of these issues, it is a tendency to equate morality with procreation and survival. In so doing, he blurs the distinction between economics and ethics: categories that, while overlapping, are not identical. Though Hayek points convincingly to Aristotle’s static conception of human affairs as a philosophical weakness that was to have substantial adverse repercussions on Western thought for the next two thousand years, Hayek’s own line of thinking might benefit from Aristotle’s dictum that man’s goal should not be a mere life but the good life. Moreover, because Hayek identifies morality with rules that change in response to historical circumstances, he concludes that, “reluctant as we may be to accept this, no universally valid system of ethics can ever be known to us.” Yet it is a relatively short distance from Hayek’s position to the “value-centered historicism” outlined by Claes G. Ryn in his Will, Imagination and Reason, which demonstrates that ethical universality is not incompatible with change and diversity. Specifically, by identifying man’s higher purpose with a special quality of will rather than with abstract rationality, value-centered historicism shows how universality is capable of being synthesized with ever-new circumstances.

But these criticisms, though pertaining to a central issue, are limited reservations about a body of work that merits the highest respect and is well-represented by this volume. It is noteworthy that Hayek, like very few of his contemporaries, has persistently asked the right questions about extremely complex matters and, with impressive frequency, has thought his way to penetrating answers.


[The Fatal Conceit: The Errors of Socialism, by F.A. Hayek (Chicago: University of Chicago Press) 180 pp., $24.95]