Asheville – The Fatal Conceit: The Errors of Socialism (1988) was written by Friedrich A. Hayek after coming to terms with the impossibilities of organizing a debate of socialism v. capitalism that socialists would consider fair and balanced. The book remains, unfortunately, perhaps best known for the slaughter job some prankster pulled on the fonts. Much of the text is conjectural. Many points appear unfounded, but, like many good writers addressing complex issues, Hayek required time to get around to explaining his premises.
The fatal conceit, according to Hayek, is to presume that man, by reason, can create a system as resilient as the one created by the minds of a world of people, down through the generations. He viewed “the extended order of human cooperation” as similar to Lamarckian evolution. He contended that no amount of logic could protect people from an unforeseeable disaster. Instead, various groups make decisions about how to deal with catastrophes, and the groups that weather a storm advance to the next round. In everyday life, practices with strategic advantages would likely spread via adoption by other groups.
Civilization and tradition, according to Hayek, are the results of trial and error. Competition was beneficial to the human race because it allowed diverse groups to pursue their interests in their own ways, whereas dictatorships resulted in brittle societies that were untrained in the arts of innovation and adaptation. Hayek thought it foolish to throw away all the decisions that went into creating capitalism. Like socialism, capitalism survives to this day, but unlike socialism, it is shown by study after study to generate healthier and wealthier societies.
Hayek referred to markets, where millions of minds continually make real-time decisions suited to their values and ambitions, as “information gathering institutions.” Anyone who doesn’t believe this might think of how Amazon.com, right now, is using buying and selling habits to build consumer profiles. Hayek would likely consider this attempt to improve on self-ordered traditions with centralized control not only anathema, but a fool’s errand. Hayek preferred free-market economies in which strangers end up helping each other in ways they may never know by participating.The concept is a basic tenet of price theory.
Hayek disagreed with figures from the Enlightenment who taught that liberty was the product of intentional reaching toward that goal. Instead, in light of the pervasiveness of irrationality in humanity, he attributed it to tradition, his word for self-organizing economies. In his time, Hayek found a lot of intellectuals abusing the scientific method by claiming utopias would be the product of social engineering. He had harsh words for John Maynard Keynes, who boasted about his immorality, pushed Machiavellian instant gratification, treated labor as an economic output rather than an input, rejected the idea of foregoing consumerism to allow for investment, and drove the world to inflation and unemployment while famously arguing, “In the long run, we are all dead.”Keynes was, in fact, a classic example of dismissing the traditions that worked in the long run.
After naming a few examples of intellectuals “speaking beyond their competence” and “talking much nonsense,” he refrained from “piling up” more accusations to address flaws common to their arguments. One, which Hayek dissected much further, claims man should take no action other than on courses he can understand through the scientific method; “therefore,” socialist economies should be adopted. Besides the glaring non sequitur, Hayek said this assumes, without justification, that there are no limits to human knowledge. Further, the purveyors’ lack of curiosity about those limits creates a slight paradox.
Another commonality is the complaint that the “morality and institutions of capitalism” impinge on liberty. Hayek argued there must be “domains within which each can dispose of means known to him for his own ends.” This is a variation on the theme that one’s freedom to swing one’s fist ends in another’s face. The social organizations that survived the test of time were not those that allowed one artist to steal another’s supplies. As to the intellectual argument that rules cause unhappiness by cramping one’s style, Hayek countered, “The possibility that the evolved order in which we live provides us with opportunities for happiness that equal or exceed those provided by primitive orders to far fewer people should not be dismissed.”
Hayek also called out the irony of whining against rules to discredit moral orders while clamoring for centralized control. This, no less, is done in the name of rationality.
Beyond arguing about which system is the fittest, socialists and capitalists will disagree about property rights, even though it is not uncommon for activists to appear before local government bodies and bash capitalism while demanding funding for their particular cause. Hayek aligned himself with John Locke and others in believing, “Where there is no property, there is no justice.” That is, it would be difficult to believe a person had liberty if he wanted to be an artist, but others kept appropriating his supplies, and no amount of exertion on his part would empower him to build back his supplies. “Protection of several properties, not the direction of its use by government, laid the foundations for the growth of the dense network of exchange and services that shaped the extended order,” wrote Hayek.
“Governments strong enough to protect individuals against the violence of their fellows,” he wrote, “make possible the evolution of an increasingly complex order of spontaneous and voluntary cooperation. Sooner or later, however, they tend to abuse that power and to suppress the freedom they had earlier secured in order to enforce their own presumedly greater wisdom and not to allow ‘social institutions to develop in a haphazard manner.’” This is doubly concerning when, as in recent years, the “greater wisdom” of government leaders presumes to control institutions like the real estate and jobs markets while renouncing responsibility for safeguarding against violence. Regardless, government typically gets historical credit for steering economies because, until recently, government was behind any record-keeping.
This short review covers only the build-up to the chapter on fatal conceit. The reader is invited to pull up a copy online, not to take a wild ride through the fonts, but to weigh and consider the ideas of an honest and careful author, and when presented with foreign concepts, search for the truths behind his imperfect vision or expression.