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Wednesday, February 16, 2005 - 6:39amSanction this postReply
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A very thought-provoking article, Ed.  I'm in the middle of an interview on Hayek's contributions and I've been revisiting themes from my own book, Marx, Hayek, and Utopia, so my mind has been wrapped around this material for a couple of weeks now. 

While I certainly agree that Hayek has real, even profound, problems, and I've criticized him especially in the area of ethics, I do believe that there are certain aspects of Hayek's non-economic writings that can be profitably mined for insightful gems.  And, needless to say, his economic writings, especially on the trade cycle, economic calculation, the epistemic role of the price system, etc., are classic, and deserve their privileged place in the pantheon of Austrian theory.

One thing that Hayek stressed, as you mention, was the "tacit" dimension of knowledge.  This had profound implications for the socialist calculation debate precisely because "central planners" almost always equated "knowledge" with explicit bits of information.  Hence, for the planners, it was always a matter of bringing together all these bits of information and filtering them through a super-computer, as if the computer could make "decisions" based on the collected bits. But these bits were disconnected from the real contexts of individuals, who have their own interests and who are situated concretely in the circumstances of a particular time and place.  Knowledge is, indeed, decentralized, individual, personal, situational, and essentially dispersed.  And because it consists of both explicit and implicit aspects, it cannot simply be disconnected from the individual decision-maker's context and "collected" for the purposes of system-wide decision-making made by a central planner.   More importantly, Hayek suggests that entrepreneurial "creativity" itself is something that cannot be easily "quantified"---it is a combination of explicit and implicit knowledge, hunches, innovation, discovery, risk, the peculiarly individual capacity to grasp specific relationships within a given context, etc.  None of this is captured by a quantitative, explicit, articulated approach, upon which central planners rely.

Another thing to stress here---as you mention correctly in the essay---is that Hayek himself was critical of a very specific kind of "reason," what he called a "constructivist rationalist" version of reason, rather than a "critical" reason.  This was a limitless, boundless, undefined reason---that is, a reason with no identity, one that implied a kind of omniscience based on the assumption that it was possible to achieve a "synoptic" view of all reality.  A reason that can do everything is actually a faculty that can do nothing.  Hayek was right to reject that rationalist view of reason; he was right to view it as based on a "synoptic delusion," as he put it.  And it is precisely that type of rationalist approach that, he maintained correctly, was bound up with the notion of central planning.  Central planning is, indeed, rationalism writ large, rationalism with a vengeance.  In a sense, those writers who have viewed socialism as a vestige of the Enlightenment are correct:  what the socialists inherited was the hyper-rationalism of the Enlightenment.

Whatever Hayek's faults---and they are many---his anti-rationalist turn shares much with Ayn Rand's own anti-rationalism.  My point is not that we need to embrace Hayek in toto, but that his argument in favor of "reason properly used" can be put upon a more objective foundation and appreciated for its contribution to a nonrationalistic---and therefore correct---view of reason. 

His understanding of the "unintended consequences" of human action is something that is equally important to our understanding of what reason actually is, which can help us to understand further its real potential.  The potential emerges from the actual; if we start with an unrealistic, "hubristic" view of reason, our whole projection of what is possible slams up against the hard realities. 

Some writers are just shattered over the prospect of "unintended consequences" because they think that this is an attack on the "efficacy" of human reason and a celebration of "uncertainty."  But it is neither. 

I have always liked a quote from Barbara Branden (I cite it in my book Total Freedom) on this specific point, and it's worth recalling here.  Barbara states that "the inability to live with uncertainty ... is the root of dogmatism, true belief, fanaticism, etc.  My personal definition of maturity is precisely the ability to live with uncertainty ... perhaps even to welcome it as a challenge."  I stress here a point made with equal intensity by Nathaniel Branden in his essay on "Alienation" (in Capitalism: The Unknown Ideal):   The notion that the world can be made completely predictable, that every action must bring about a known effect, with no "externalities," no "side-effects," no "unintended consequences," is nothing less than a flight from psychological maturity. 

Insofar as Hayek offers us insights into the rationalist pitfalls of such an approach, I think we can and should use those insights, simply placing them on an even surer philosophical foundation.

Anyway, sorry to go on at length, but it's a good piece.




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Wednesday, February 16, 2005 - 8:33amSanction this postReply
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Thank you both - you've articulated why have never been enthralled by Hayek, as have with other economists like Menger, von Mises, and yes, Rothbard.....



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Wednesday, February 16, 2005 - 9:28amSanction this postReply
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I found this interesting.  At the start, I was nodding my head because most of what he began with made a lot of sense, but the further away from economics he drifted, the more and more his ideas seemed to dissipate into BS.  The problem, I feel, was that he was guilty of some of the same things central planners were.  What I mean is, a central planner takes rationalism out of context and believes that he can solve all problems through his "hyper-reasoning" and then Hyek takes the idea that you can't know everything and stretches that out of its proper bounds too.  i think it is similar to using the Heisenberg Uncertainty Principal to make statements such as "nothing can be known with certainty" - it is a gross distortion of the context within which the principal applies.



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Wednesday, February 16, 2005 - 12:35pmSanction this postReply
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I agree that the connections between Hayek and Wittgenstein are important -- particularly the necessary dependence of explicit knowledge-that on tacit knowledge-how (something I think they were both right about). But I have to quarrel with the description of Wittgenstein as a "logical positivist." The positivists certainly took themselves to be inspired by Wittgenstein, but Wittgenstein always accused them of making a hash of his ideas. Moreover, he strongly and emphatically rejected both the view that "the purpose of philosophy is to analyze and clarify the meaning of words" and the view that "the only road to knowledge was through controlled experiments employing quantitative and scientific methods."



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Wednesday, February 16, 2005 - 12:53pmSanction this postReply
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I also think it's too strong to say that Hayek dismisses individual rationality. After all, it was precisely Hayek who always said that the alternative to central planning was not no planning but rather individual planning. And his alternative to the pretense of knowledge was not to claim that there's no knowledge but to show how the market makes use of the knowledge that actually exists. (That's why he wrote "The Use of Knowledge in Society" rather than "The Absence of Knowledge in Society.")



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Wednesday, February 16, 2005 - 4:54pmSanction this postReply
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Thank you Robert and Kurt:

I am pleased that you liked my essay.

Also many thanks to Chris and Roderick for pointing out that I was somewhat hard on Hayek (mostly by not concentrating on his many positive contributions) and for Roderick's clarification of Wittgenstein's actual relationship to the logical positivists.

Hayek certainly made a lot of fine contributions to economics particularly with respect to the impossibility of economic calculation by central planners and the role of tacit knowledge in society. In fact, Steve Horwitz has a fine piece on Hayek's contributions in the forthcoming issue of the Journal of Ayn Rand Studies (JARS). This issue is a Symposium on Ayn Rand among the Austrians.

Hayek characterized himself as a muddler and a puzzler who was mot necessarily consistent across his many books.Both Chris and Roderick have pointed out that, in many of his writings, Hayek was in favor of reason properly understood (i.e., individual rationality).

Ed




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Thursday, February 17, 2005 - 2:50amSanction this postReply
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Hayek was "poison" - exactly as Rand described him. Tomorrow I'll reprise my own article about him. It's not couched in effete academese, but calls him what he was. In New Zealand, the influence of Hayekians has been a major stumbling block to the progress of genuine libertarianism. Ayn Rand's description of him in her marginalia as a "complete, total, vicious bastard" is spot on.

Linz



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Thursday, February 17, 2005 - 8:17pmSanction this postReply
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Thank you for the interesting discussion of Hayek, and for the intelligent comments by readers.

Am I grossly over simplifying in assuming that Mises, Hayek, Friedman, and in fact, most neo-classical economists, implicitly reject free will? My assumption about this follows from the observation that neo-classical economics is, as Tibor Machan points out, neo-Humean. In other words, this perspective tends to view humans as essentially matter-in-motion. There are, of course, important differences among economists about how this Humean Scientism plays out as concerns the methods and conclusions of economics. But a feature of this outlook that seems basic is the supposed subjectivity of human values--not just for the purpose of economic analysis, but for the purpose of understanding man as revealed through "science". If values were interchangeably subjective, as most neo-classicals argue, then what (important) function would volition serve?

Is logical positivism simply rationalism? What is it exactly? Is it the perspective that ideas are divorced from reality, and that logic therfore deals in the detached and artificial world of ideas?

Which three books of Hayek give the best coverage of his thinking?




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