Hayek's Liberalism and Its Origins

Christina Petsoulas

• Publisher: Routledge
• Year: 2013
• ISBN:
  9781135115814
• Edition: 1
• Topic: Betriebswirtschaft
• Subtopic: Business allgemein

By exploring the writings of Mandeville, Hume and Smith, this book offers a critique of Hayek's theory of cultural evolution and explores the roots of his powerful defence of liberalism.
This book is an original contribution to the debate, and vital reading for researchers in politics, political theory, and economics.

1 F.A. Hayek's theory of
spontaneous order

The idea of spontaneous order plays a central role in Hayek's social theory: ‘it would be no exaggeration to say that social theory begins with — and has an object only because of — the discovery that there exist orderly structures which are the product of the action of many men but are not the result of human design’.¹ The theory of spontaneous order accounts for the formation of patterns which, though they have not (and could not have) been brought about by anyone's intentions, may still appear to be the product of deliberate design. What makes such patterns look like deliberate creations is the ‘orderliness’ they exhibit. Yet, Hayek claims, contrary to what our ‘anthropomorphic habits of thought’² lead us to believe, not every orderly pattern should be interpreted as the product of human design.

Spontaneous orders can be either (1) natural formations, occurring independently of human action, such as biological organisms and the formation of crystals and galaxies, or (2) the outcome of human action but not of human design, such as, arguably, religion, morals, language, law, money and the market. The fact that spontaneous orders are unintended consequences of human action does not mean, however, that every unintended consequence can be considered a spontaneous order. A spontaneous formation can be characterised as an order when it has a structure, and also when it is beneficial for the individuals involved. It is the study of spontaneous orders resulting from human activity which lies at the centre of Hayek's social thought. Throughout his work, he stresses that the idea of spontaneous order should form the core of any social theory which claims to reflect social reality. Following Hayek, I shall restrict the application of the idea of spontaneous order to the explanation of social phenomena.

Spontaneous orders and made orders

One of the striking features of Hayek's thought is his ‘Manichean’ view of the world.³ Everything he considers superior — spontaneous order, ‘evolutionary rationalism’, individualism, capitalism, liberalism — is juxtaposed against its opposite — made/designed order, ‘constructivist rationalism’, collectivism, socialism, totalitarianism. According to this binary vision of the world, order exists either as cosmos or as taxis. ‘Cosmos’ refers to ‘grown’ or spontaneous order; ‘taxis’ refers to ‘made’ order or organisations. Institutions like ‘morals, religion and law, language and writing, money and the market’⁴ are instances of spontaneous order. Examples of social institutions which are made orders are ‘the family, the farm, the plant, the firm, the corporation and the various associations, and all the public institutions including government’.⁵ Such made orders or organisations are integrated into the overall spontaneous order of society. What primarily distinguishes these two types of order is the way in which they are brought about: ‘made’ orders rely for their formation on prior collective agreement, and require for their maintenance a directing command centre; spontaneous orders, by contrast, are not the result of concerted action, and are self-co-ordinating. As this distinction illustrates, Hayek is more interested in the process whereby order is produced, than in what exactly constitutes order once it has been formed.

In addition to the process through which they are brought about, the distinction between ‘spontaneous’ and ‘made’ orders is drawn along three key dimensions: complexity, purpose and abstraction.

Complexity While made orders are created ‘exogenously’ by a designing, external agent, spontaneous orders are ‘endogenous’ or self-generating. Since they are designed, made orders are bound to be relatively simple, comprising only such elements as the human mind can grasp. Spontaneous orders, by contrast, without necessarily being complex, may achieve any degree of complexity, irrespective of what the human mind can master. In short, ‘very complex orders, comprising more particular facts than any brain could ascertain or manipulate, can be brought about only through forces inducing the formation of spontaneous orders’.⁶ Consequently, man has only limited control over spontaneous complex orders. Hayek maintains that we can merely alter to a limited extent some of the rules contributing to the formation of spontaneous orders.

Purpose Being deliberate constructions, made orders have been created with a specific purpose in mind and thus serve the purpose of the maker. A spontaneous order does not serve any particular purpose, although its existence is explicable in terms of its contribution to the successful pursuit of many different individual purposes. In a different sense, however, it may be said that a spontaneous order rests on the purposive action of its constituent elements. In this context, an action is ‘purposive’ when it tends to preserve the order to which the element belongs. ‘Purposive’ is a sort of ‘teleological shorthand’, meaning that ‘the elements have acquired regularities of conduct conducive to the maintenance of the order — presumably because those who did act in certain ways had within the resulting order a better chance of survival than those who did not’.⁷ The elements whose conduct did not contribute to the preservation of the order were gradually eliminated. Since the order is unintended, we barely need to note that the use of ‘purposive’ here does not imply any awareness of purpose on the part of the individuals whose actions contribute to the preservation of the order. Hayek notes that, to avoid any misconception, the word ‘purpose’, when referring to the contribution of the elements' activity to maintaining the order, can be replaced by the word ‘function’.

Abstraction Made orders are concrete in the sense that they present themselves to our senses and can thus ‘be intuitively perceived by inspection’. Spontaneous orders, such as the mind, society and the market, consist of ‘a system of abstract relations between elements which are also defined only by abstract properties’. Such orders are not perceived intuitively but can only be mentally reconstructed ‘on the basis of a theory accounting for their character’.⁸ The abstract character of complex spontaneous orders is determined by the set of abstract rules which their constituent elements obey. Hayek writes: ‘the rules which determine it [the spontaneous order] determine only its abstract character, while the detail depends on the particular circumstances known only to its individual members’.⁹ We can only hope to discover the rules¹⁰ which bring about the order, but we will not be able to know all the elements comprising it, or the particular circumstances in which they are placed. We can influence only the general character rather than particular details of spontaneous orders.¹¹ Even accounting for the rules on which the formation of spontaneous orders depends is not an easy task: ‘most of the rules which do govern existing society are not the result of our deliberate making, and in consequence we often understand only very imperfectly what depends on them’.¹² Our knowledge is, therefore, bound to be of the abstract character of the order rather than of all its particular details; in practice, by availing ourselves of the ordering forces of spontaneous order (the rules its individual members obey), ‘we at the same time limit our power over the details of that order’.¹³ For Hayek, the significance of the abstract character of spontaneous orders ‘rests on the fact that they may persist while all the particular elements they comprise, and even the number of such elements, change’.¹⁴ What contributes to the formation of an abstract order, such as society, is neither the character nor the number of particular individuals, but the fact that they act in accordance with the appropriate set of abstract rules of conduct, the mechanism whereby coordination of their separate individual actions is achieved.

These three dimensions help clarify the distinction between spontaneous and made order. Made orders do not present explanatory difficulties, for their appearance can be traced back to the intentions of those who establish them. The object of the theory of spontaneous formations, on the other hand, is to explain the mechanism whereby orderly systems emerge as the unintended outcome of a multiplicity of separately pursued individual goals. For Hayek, the theory of spontaneous order offers an explanatory device with far-reaching practical implications — not least as the basis for his attack on central planning. Yet, one basic difficulty is that he does not provide a systematic analysis of the idea of spontaneous order. The closest he comes to doing so is to note two general features of such orders. First, an order is said to be spontaneous when it is formed by the mutual adjustment of its constituent element...

Table of contents

• Cover
• Half Title
• Routledge studies in social and political thought
• Full Title
• Copyright
• Dedication
• Contents
• Acknowledgements
• Introduction
• 1 F. A. Hayek's theory of spontaneous order
• 2 Spontaneous order and the limits of reason
• 3 Mandeville's paradox: ‘private vices, public benefits’
• 4 Artifice and order in Hume
• 5 Adam Smith: sympathy, ‘invisible hand’ and the ‘man of public spirit’
• Conclusion
• Bibliography
• Index