by F.A. Hayek
Looking over this after a night's sleep makes me think this needs significant editing. I may get around to this later today. One thing I'd like to add is that the central issue with this is the same with any theory that tries to extend from economic analysis to explain political and social developments. This method doesn't work. Economic factors were secondary throughout most of history. Most cultures didn't even regard them as important enough to write about (for example, last week's book mentions this, many other histories do the same). Any theory that tries to make economic factors primary suffers greatly because they necessarily become grossly ahistorical. It is necessary to assume away far too much of what drove human action and the theory becomes a caricature of reality. Try reading Marxist history that goes beyond systemic analysis, it's bizarre. Economic factors are very important today for a variety of reasons but you cut away far too much of actual reality to use them to explain social and political developments or to make an argument that economic factors can control other motivations. They never have, no good reason to believe they ever will. Though it is easy to make a logical argument that they will if you ignore the problem of not being able to actually explain history in this fashion. I'd also like to add I need to clean up the section on individualism, it's too long. The short version is that the assumption that the individual is the proper unit for economic, political, and moral analysis isn't all that strong. In our culture, with great effort we have made the individual the proper unit of political action (and this differs greatly from the individual in previous eras) and we have gone a long way to making this true in the economic sphere (which can't be all that easily separated from other spheres when you really start unpacking it), but there are significant issues in the moral sphere, my example has to do with not being able to really isolate punishments effectively but it shows that individualism is an abstraction and isn't a good enough approximation that a theory such as Hayek's can lean so heavily on it without problems.
This is a continuation of yesterday's more positive look at this book. Today's agenda will be much more critical. I do wish to draw a distinction from the start that I feel the book works well in a narrow sense as a response to the socialist ideas of Hayek's day but that it is not easily used in a modern context and rests upon a model that suffers from fundamental flaws. The basic problem is the same issue that Marxism has, it is ahistorical and lacks agency (I have drawn parallels between Marxism and the far right before, this book reinforces those views. Given the importance of socialist philosophy in Hayek's day it is less surprising that he would have been influenced by these views, still the popularity of these assumptions at the time and the need to incorporate them does not make them any less flawed). I will get into specifics in later paragraphs but Hayek's basic model seems to make problematic assumptions about the importance of the idea of individualism to economic and political society, which does not track well with the actual historical development of democracy or modern economic systems, and to presuppose that markets and the rule of law can be operate without significant agency controlling them.
The first major problem is with Hayek's division of individualism and collectivism. These are concepts that play a critical role across the entire work, liberalism is associated with individualism while collectivism with planning. The problem is that these identities are not historically constant and the division between them, while clear at the extremes used here, is ultimately arbitrary. To Hayek's credit, there seems to be a recognition that individual identity was not a constant, in the early chapters he discusses what I assume to be his view of the development of capitalism and this seems somewhat conflated with the development of individualism. It is unclear whether he regards the era preceding this as being a form of collectivism as well.
That there is some confusion over the terms shows clearly in how he labels both the Soviet Union and Germany as collectivist. Both regimes had different conceptions of identity. The Soviet's attempted to indoctrinate people in what can most easily be described as a completely atomized individual identity where the only relationship was that between the individual and the state. They actively sought (before the abject failure of many of these policies at any rate) to suppress any form of collective identity such as religion or nationalism, and to some extent even tried to break down normal family bonds which would interfere with the relationship between the individual and society. For Germany I'm on shakier ground but the basic thrust of the policies seemed to be to strengthen forms of identity that were more corporatist in conception, such as nation and race.
Conflating these two very different forms of identity makes me question whether Hayek has considered the concept with an open mind. He seems to have a very particular idea of what individualism means, and seems to decry how it is eroding with people being influenced by collective identities, and to assume that his particular conception is fairly constant and identifiable. While his definition of individualism seems constant, even if he does not precisely define it, he seems not to have adequately considered how flexible the term is. What stands out is that he cites in a few sections ideas of the Greeks and Romans regarding individuality alongside modern liberalism. That these are not the same things should be fairly obvious when one considers that the modern concept led in the direction of expanding suffrage, including extending suffrage to women. This is radically different from the Roman conception where this would have been unthinkable.
I've already probably gone too far on a tangent of little interest to people not as interested in the subject as myself (though I'll admit I'm stretching my level of knowledge a bit in this critique, I'm fascinated by the subject but have not yet found the time to seriously research the changing concept of self across time and societies, I do know enough to realize that the concept depends heavily on which culture you're examining it from) so I'll just finished by saying this is a concept that varies on several different aspects with the concept of the role of the individual having different political, economic, and moral dimensions.
If you're asking why this matters today, with the role of the individual largely sacrosanct in the US, I'll just note that people continue to have qualms about the individual role in the moral sphere, specifically in regards to how a punishment meant to punish a single individual supposedly individually responsible for a crime also punishes many others linked to him who bear no personal responsibility but suffer anyway. Under different conceptions of the relation between the individual, family, and society this dilemma would be dealt with differently from ours. Reading about medieval (and up into early modern really) history, there are many instances where the effect on the family is an important consideration and a great deal of attention is paid to this when a ruler is deciding on punishments. Also, since the family is regarded as having a role in politics and economics families are often regarded as fair game for punishment, either to worsen the punishment or to punish someone that can't be reached. Blood feuds show another conceptualization of the relation of the individual to morality. My main point here is that Hayek's model makes some very strong assumptions about the difference between individualism and other conceptions of identity but these rest on extremely shaky ground. I regard the length of this section as necessary because I rarely see this particular aspect problematized in political literature, though it is a pretty frequently examined concept in any history that includes a section on social history. I disagree with Hayek's conception of fundamental differences between individualist and collectivist societies and think he is mistaking a very fluid and changeable concept for irreconcilable differences. Though I would like to add that I do think the strong individual identity that develops in modern times was probably essential for the development of democratic society. I think its role in maintaining and spreading this is far less and its economic role to be pretty much nil.
From here on I'll try to be quicker with pointing out the flaws. The rest is narrower in scope and closer to the standard economic critiques rather than a narrow cultural critique unlikely to be heard outside of academic journals as the last one was. My next major problem is that Hayek seems to have little consideration for how markets actually formed. This is a significant agency problem. Around page 69 he explains his development of capitalism and specifically “the conscious realization that the spontaneous and uncontrolled efforts of individuals were capable of producing a complex order of economic activities” and in much of the rest of the work speaks of private property as if it were a stable concept, though he does admit of situations where government must intervene because the conditions for competition cannot be created. A big problem here is that the notion of property rights is inconstant. A simple example would be the frequent problems with water rights, which while settled today in our borders, is problematic abroad and historically was a sticking point. Modern problems such as resistance to extending property rights to new forms of property, such as fish stocks or indirectly to the atmosphere by market mechanisms to control pollution, also show that there is fierce opposition to extending property rights from existing property holders. Historical problems with extending property rights where there previously were none are also evidence that there are significant problems with Hayek's desire to draw sharp distinctions between political and economic spheres.
This is getting long so I'll proceed with a short list of my other issues without developing the argument. His favoring of decentralization seems odd giving that capitalism doesn't really start until the rise of the unprecedentedly powerful centralized state. It is really hard to deal with the rise of capitalism historically without noticing the need for very powerful state institutions and seeing that decentralization served as a very effective bar to this development. He relies heavily on competition as a means of checking the growth of individual power. This is problematic for several reasons. Most obviously, history is full of non-state groups using completely legal means to develop rival power centers to the government. There are significant centrifugal forces in society and private competition does nothing to check this. Competition also does nothing to check the tyranny of man vs. man, though Hayek rather breezily dismisses this by effectively saying (I couldn't find the section I was looking for quickly and it's getting late) that competition would prevent power from becoming too concentrated and is far more effective than the state. All I can really say to this is that in just about any society that lasts awhile non-state concentrations of power become problematic, whether you're looking at Rome, the later Roman Empire (or Byzantium if you must), China, or anywhere else for that matter. In all of these political bodies separate power groupings compete heavily with each other and this doesn't reduce (and can sometimes cause the threat) how much of a threat these forces are to stability or their ability to influence the state or oppress the people without state authority.
Most all of this comes down to a basic disagreement I have with Hayek. I don't see the state and private sectors as being intelligibly separate and I think the relation between political and economic sectors is highly dynamic. The notion of property shifts, sometimes rapidly with changes in culture, so laws regarding property rights can't create a firm basis for competition. He relies heavily on a notion of individualism that doesn't seem well grounded in the historical development of the concept nor is it clearly defined how individualism is conceived of. Individualism is also a highly culture bound concept and doesn't seem to fit well with developments in other societies, nor does the modern concept really accurately reflect the notion in European history. Individualism is too dynamic a concept with too much of the difference between societies hanging on a distinction that doesn't seem grounded in the actual development of capitalism, though it does play a more intelligible role in democracy (I do believe Hayek has another book whose title makes me think it will deal in more detail with individualism, I may have to follow up on this to see if a stronger concept is developed). The state, or other relevant bodies, can define the grounds for competition, what is property, and define spheres of action for competition. We've channeled competition into something loosely definable as an economic sphere, but this hasn't prevented non-state organizations from creating political influence or from seeking to bind individuals to them through non-economic means. It's all very messy and the clear distinctions Hayek is trying to draw seem very arbitrary and philosophically empty. Too many assumptions are used that don't hold up well to historical analysis and seem to be based more on an idealistic logical construction than they actually are on observations. I could go on at some length, I don't believe I've ever written so many notes in a book, though I was probably more critical of Marx he's wordy enough there weren't many pages worth writing on. Basically, I don't believe that Hayek's theory has much grounding at all in actual historical development and it relies far too much on extremely problematic concepts. I haven't even touched on why I believe he has a truncated concept of liberalism. I found myself having to refer back to Locke a few times cause I was pretty sure this wasn't the same Locke I read. There was also a section on supposed “totalitarians in our midst,” which I felt was somewhat out of place in a book this abstract. I also thought it grossly misrepresented “The Twenty Years Crisis” by Carr, though since Carr did go more Marxist later on this may not have been as much a misrepresentation of his later work.
I think I'll stop now. I could easily right a very, very long essay on all of the philosophical problems I have with this book. I actually may take up problems regarding his ideas of competition being a sufficient check on non-state power later (I refuse to use the term individual power since I think there are other organizations, particularly corporations but not only them, which represent significant concentrations of power separate from the state that are not properly checked under Hayek's system).
Next week I'll be reviewing “The Thirty Years War” by Peter H. Wilson, which I find much more congenial. Since the Peace of Westphalia is often given as the starting point of the modern system of states this fits in a political blog. I'll also probably be going out of my way to show how much political ideas have changed and how concepts such as the individual as political unit had not fully developed even this recently, family was still more important as a political unit in this period.