New Studies in Philosophy, Politics, Economics and the History of Ideas

New Studies in Philosophy Politics, Economics and the History of Ideas is a book written by Friedrich Hayek published in 1978.  It is a collection of twenty essays and lectures, most of which were previously published between 1966 and 1976.  The scope of topics range from constructivism, the 'atavism of social justice', liberalism, the dangers of economic planning, the ideas of Mandeville, Smith, and Keynes, and a variety of other topics on philosophy, politics, economics, and the history of ideas.  This collection supplements Hayek's earlier collection, Studies in Philosophy, Politics and Economics.

Quotes

The Errors of Constructivism (1970)

F. A. Hayek, "The Errors of Constructivism," ch. 1 of New Studies in Philosophy Politics, Economics and the History of Ideas (Routledge, 1978).  An inaugural lecture delivered on 27 January 1970 on the assumption of a visiting professorship at the Paris-Lodron University of Salzburg and originally published as Die Irrtümer des Konstruktivismus und die Grundlagen legitimer Kritik gesellschaftlicher Gebilde (Munich, 1970; reprinted Tübingen, 1975).  The first two paragraphs referring solely to local circumstances have been omitted from this translation.

• The picture of man as a being who, thanks to his reason, can rise above the values of his civilisation, in order to judge it from the outside, or from a higher point of view, is an illusion.  It simply must be understood that reason itself is part of civilisation.  …  [S]udden complete reconstruction of the whole is not possible at any stage of the process, because we must always use the material that is available, and which itself is the integrated product of a process of evolution.

The Pretence of Knowledge (1974)

I confess that I prefer true but imperfect knowledge, even if it leaves much indetermined and unpredictable, to a pretence of exact knowledge that is likely to be false.

To act on the belief that we possess the knowledge and the power which enable us to shape the processes of society entirely to our liking, knowledge which in fact we do not possess, is likely to make us do much harm.

Cultivate a growth by providing the appropriate environment, in the manner in which the gardener does this for his plants …

F. A. Hayek, "The Pretence of Knowledge," Nobel Memorial Lecture delivered in Stockholm (11 December 1974), reprinted as ch. 2 of New Studies in Philosophy Politics, Economics and the History of Ideas (Routledge, 1978) from Les Prix Nobel en 1974 (Stockholm, 1975).

• On the other hand, the economists are at this moment called upon to say how to extricate the free world from the serious threat of accelerating inflation which, it must be admitted, has been brought about by policies which the majority of economists recommended and even urged governments to pursue.  We have indeed at the moment little cause for pride: as a profession we have made a mess of things.

• It seems to me that this failure of the economists to guide policy more successfully is closely connected with their propensity to imitate as closely as possible the procedures of the brilliantly successful physical sciences—an attempt which in our field may lead to outright error.  It is an approach which has come to be described as the 'scientistic' attitude—an attitude which, as I defined it some thirty years ago, 'is decidedly unscientific in the true sense of the word, since it involves a mechanical and uncritical application of habits of thought to fields different from those in which they have been formed'.

• Unlike the position that exists in the physical sciences, in economics and other disciplines that deal with essentially complex phenomena, the aspects of the events to be accounted for about which we can get quantitative data are necessarily limited and may not include the important ones.  While in the physical sciences it is generally assumed, probably with good reason, that any important factor which determines the observed events will itself be directly observable and measurable, in the study of such complex phenomena as the market, which depend on the actions of many individuals, all the circumstances which will determine the outcome of a process, for reasons which I shall explain later, will hardly ever be fully known or measurable.  And while in the physical sciences the investigator will be able to measure what, on the basis of a prima facie theory, he thinks important, in the social sciences often that is treated as important which happens to be accessible to measurement.  This is sometimes carried to the point where it is demanded that our theories must be formulated in such terms that they refer only to measurable magnitudes.

• [T]here may thus well exist better 'scientific' evidence for a false theory, which will be accepted because it is more 'scientific', than for a valid explanation, which is rejected because there is no sufficient quantitative evidence for it.

• [T]he social sciences, like much of biology but unlike most fields of the physical sciences, have to deal with structures of essential complexity, i.e. with structures whose characteristic properties can be exhibited only by models made up of relatively large numbers of variables.  Competition, for instance, is a process which will produce certain results only if it proceeds among a fairly large number of acting persons.

• [A]llow me to define more specifically the inherent limitations of our numerical knowledge which are so often overlooked.  I want to do this to avoid giving the impression that I generally reject the mathematical method in economics.  I regard it in fact as the great advantage of the mathematical technique that it allows us to describe, by means of algebraic equations, the general character of a pattern even where we are ignorant of the numerical values which will determine its particular manifestation.  We could scarcely have achieved that comprehensive picture of the mutual interdependencies of the different events in a market without this algebraic technique.  It has led to the illusion, however, that we can use this technique for the determination and prediction of the numerical values of those magnitudes; and this has led to a vain search for quantitative or numerical constants.

• There may be few instances in which the superstition that only measurable magnitudes can be important has done positive harm in the economic field: but the present inflation and employment problems are a very serious one.

• I confess that I prefer true but imperfect knowledge, even if it leaves much indetermined and unpredictable, to a pretence of exact knowledge that is likely to be false.  The credit which the apparent conformity with recognized scientific standards can gain for seemingly simple but false theories may, as the present instance shows, have grave consequences.

• [T]o entrust to science—or to deliberate control according to scientific principles—more than scientific methods can achieve may have deplorable effects.  The progress of the natural sciences in modern times has of course so much exceeded all expectations that any suggestion that there may be some limits to it is bound to arouse suspicion.  Especially all those will resist such an insight who have hoped that our increasing power of prediction and control, generally regarded as the characteristic result of scientific advance, applied to the processes of society, would soon enable us to mould society entirely to our liking.

• [T]he confidence in the unlimited power of science is only too often based on a false belief that the scientific method consists in the application of a ready-made technique, or in imitating the form rather than the substance of scientific procedure, as if one needed only to follow some cooking recipes to solve all social problems.  It sometimes almost seems as if the techniques of science were more easily learnt than the thinking that shows us what the problems are and how to approach them.

• The conflict between what in its present mood the public expects science to achieve in satisfaction of popular hopes and what is really in its power is a serious matter because, even if the true scientists should all recognize the limitations of what they can do in the field of human affairs, so long as the public expects more there will always be some who will pretend, and perhaps honestly believe, that they can do more to meet popular demands than is really in their power.  It is often difficult enough for the expert, and certainly in many instances impossible for the layman, to distinguish between legitimate and illegitimate claims advanced in the name of science.

• If I am not mistaken, psychology, psychiatry and some branches of sociology, not to speak about the so-called philosophy of history, are even more affected by what I have called the scientistic prejudice, and by specious claims of what science can achieve.

• The chief point we must remember is that the great and rapid advance of the physical sciences took place in fields where it proved that explanation and prediction could be based on laws which accounted for the observed phenomena as functions of comparatively few variables—either particular facts or relative frequencies of events.

• As we advance we find more and more frequently that we can in fact ascertain only some but not all the particular circumstances which determine the outcome of a given process; and in consequence we are able to predict only some but not all the properties of the result we have to expect.  Often all that we shall be able to predict will be some abstract characteristic of the pattern that will appear—relations between kinds of elements about which individually we know very little.  Yet, as I am anxious to repeat, we will still achieve predictions which can be falsified and which therefore are of empirical significance.

  Of course, compared with the precise predictions we have learnt to expect in the physical sciences, this sort of mere pattern predictions is a second best with which one does not like to have to be content.  Yet the danger of which I want to warn is precisely the belief that in order to have a claim to be accepted as scientific it is necessary to achieve more.  This way lies charlatanism and worse.  To act on the belief that we possess the knowledge and the power which enable us to shape the processes of society entirely to our liking, knowledge which in fact we do not possess, is likely to make us do much harm.  In the physical sciences there may be little objection to trying to do the impossible; one might even feel that one ought not to discourage the over-confident because their experiments may after all produce some new insights.  But in the social field the erroneous belief that the exercise of some power would have beneficial consequences is likely to lead to a new power to coerce other men being conferred on some authority.  Even if such power is not in itself bad, its exercise is likely to impede the functioning of those spontaneous ordering forces by which, without understanding them, man is in fact so largely assisted in the pursuit of his aims.  We are only beginning to understand on how subtle a communication system the functioning of an advanced industrial society is based—a communications system which we call the market and which turns out to be a more efficient mechanism for digesting dispersed information than any that man has deliberately designed.

  If man is not to do more harm than good in his efforts to improve the social order, he will have to learn that in this, as in all other fields where essential complexity of an organized kind prevails, he cannot acquire the full knowledge which would make mastery of the events possible.  He will therefore have to use what knowledge he can achieve, not to shape the results as the craftsman shapes his handiwork, but rather to cultivate a growth by providing the appropriate environment, in the manner in which the gardener does this for his plants.

• The recognition of the insuperable limits to his knowledge ought indeed to teach the student of society a lesson of humility which should guard him against becoming an accomplice in men's fatal striving to control society—a striving which makes him not only a tyrant over his fellows, but which may well make him the destroyer of a civilization which no brain has designed but which has grown from the free efforts of millions of individuals.

The Atavism of Social Justice (1976)

F. A. Hayek, "The Atavism of Social Justice," the 9th R. C. Mills Memorial Lecture delivered at the University of Sydney (6 October 1976), published as ch. 5 of New Studies in Philosophy Politics, Economics and the History of Ideas (Routledge, 1978), reprinted from The Morgan Guaranty Survey (New York, January 1976).

• To discover the meaning of what is called 'social justice' has been one of my chief preoccupations for more than 10 years.  I have failed in this endeavour—or rather, have reached the conclusion that, with reference to a society of free men, the phrase has no meaning whatever.

The Confusion of Language in Political Thought (1968)

F. A. Hayek, "The Confusion of Language in Political Thought," ch. 6 of New Studies in Philosophy Politics, Economics and the History of Ideas (Routledge, 1978).  A lecture originally delivered in 1967 in German to the Walter Eucken Institute at Freiburg in Breisgau, and published in 1968 as an Occasional Paper by the Institute of Economic Affairs in London.

• The fundamental condition from which any intelligent discussion of the order of all social activities should start is the constitutional and irremediable ignorance both of the acting persons and of the scientist studying this order, of the multiplicity of particular, concrete facts which enter this order of human activities because they are known to some of its members.

• Without the knowledge of such an order of the world in which we live, purposeful action would be impossible.

• The insight that not all order that results from the interplay of human actions is the result of design is indeed the beginning of social theory.  Yet the anthropomorphic connotations of the term 'order' are apt to conceal the fundamental truth that all deliberate efforts to bring about social order by arrangement or organisation (i.e. by assigning to particular elements specified functions or tasks) take place within a more comprehensive spontaneous order which is not the result of such design.

The Constitution of a Liberal State (1967)

F. A. Hayek, "The Constitution of a Liberal State," ch. 7 of New Studies in Philosophy Politics, Economics and the History of Ideas (Routledge, 1978), first published in Il Politico (Turin, 1967).

• The fundamental condition from which any intelligent discussion of the order of all social activities should start is the constitutional and irremediable ignorance both of the acting persons and of the scientist studying this order, of the multiplicity of particular, concrete facts which enter this order of human activities because they are known to some of its members.

• Historically, individual liberty has arisen only in countries in which law was not conceived to be a matter of arbitrary will of anybody but arose from the efforts of judges or jurisconsults to articulate as general rules the principles which govern the sense of justice.

Economic Freedom and Representative Government (1973)

F. A. Hayek, "Economic Freedom and Representative Government," the Fourth Wincott Memorial Lecture delivered at the Royal Society of Arts (London, 21 October 1973), published as ch. 8 of New Studies in Philosophy Politics, Economics and the History of Ideas (Routledge, 1978), previously published as Occasional Paper 39 (Institute of Economic Affairs).  Hayek acknowledges indebtedness to the Editorial Director of that institute, Mr. Arthur Seldon, "for his careful and sympathetic editing of my text."

• This older liberal conception of the necessary limitation of all power by requiring the legislature to commit itself to general rules has, in the course of the last century, been replaced gradually and almost imperceptibly by the altogether different though not easily distinguished conception that it was the approval of the majority which was the only and sufficient restraint on legislation.  And the older conception was not only forgotten but no longer even understood.  It was thought that any substantive limitation of the legislative power was unnecessary once this power was placed in the hands of the majority, because approval by it was regarded as an adequate test of justice.  In practice this majority opinion usually represents no more than the result of bargaining rather than a genuine agreement on principles.  Even the concept of the arbitrariness which democratic government was supposed to prevent changed its content: its opposite was no longer the general rules equally applicable to all but the approval of a command by the majority—as if a majority might not treat a minority arbitrarily.

• Today it is rarely understood that the limitation of all coercion to the enforcement of general rules of just conduct was the fundamental principle of classical liberalism, or, I would almost say, its definition of liberty.

• Differences in wealth, education, tradition, religion, language or race may today become the cause of differential treatment on the pretext of a pretended principle of social justice or of public necessity.  Once such discrimination is recognised as legitimate, all safeguards of individual freedom of the liberal tradition are gone.  If it is assumed that whatever the majority decides is just, even if what it lays down is not a general rule, but aims at affecting particular people, it would be expecting too much to believe that a sense of justice will restrain the caprice of the majority…

• I am certain, however, that nothing has done so much to destroy the juridical safeguards of individual freedom as the striving after this mirage of social justice.

• I hope that what I have said so far has made it clear that the task we shall have to perform if we are to re-establish and preserve a free society is in the first instance an intellectual task: it presupposes that we not only recover conceptions which we have largely lost and which must once again become generally understood, but also that we design new institutional safeguards which will prevent a repetition of the process of gradual erosion of the safeguards which the theory of liberal constitutionalism had meant to provide.

• Freedom and risk are thus inseparable.

Liberalism (1973)

F. A. Hayek, "Liberalism," ch. 9 of New Studies in Philosophy Politics, Economics and the History of Ideas (Routledge, 1978), written in 1973 for the Italian Enciclopedia del Novicento where the article "will appear in an Italian translation at about the same time as this book."

• During the period of their formation these ideas, which in the nineteenth century came to be known as liberalism, were not yet described by that name.  The adjective 'liberal' gradually assumed its political connotation during the later part of the eighteenth century when it was used in such occasional phrases as when Adam Smith wrote of 'the liberal plan of equality, liberty, and justice'.  As the name of a political movement liberalism appears, however, only at the beginning of the next century, first when in 1812 it was used by the Spanish party of Liberales, and a little later when it was adopted as a party name in France.  In Britain it came to be so used only after the Whigs and the Radicals joined in a single party which from the early 1840s came to be known as the Liberal Party.  Since the radicals were inspired largely by what we have described as the Continental tradition, even the English Liberal Party at the time of its greatest influence was based on a fusion of the two traditions mentioned.

  In view of these facts it would be misleading to claim the term 'liberal' exclusively for either of the two distinct traditions.  They have occasionally been referred to as the 'English', 'classical' or 'evolutionary', and as the 'Continental' or 'constructivistic' types respectively.  In the following historical survey both types will be considered, but as only the first has developed a definite political doctrine, the later systematic exposition will have to concentrate on it.

  • The different concepts of liberalism (§3)

• The liberal conception of freedom has often been described as a merely negative conception, and rightly so.  Like peace and justice, it refers to the absence of an evil, to a condition op ening opportunities but not assuring particular benefits; though it was expected to enhance the probability that the means needed for the purposes pursued by the different individuals would be available.  The liberal demand for freedom is thus a demand for the removal of all manmade obstacles to individual efforts, not a claim that the community or the state should supply particular goods.  It does not preclude such collective action where it seems necessary, or at least a more effective way for securing certain services, but regards this as a matter of expediency and as such limited by the basic principle of equal freedom under the law.  The decline of liberal doctrine, beginning in the 1870s, is closely connected with a re-interpretation of freedom as the command over, and usually the provision by the state of, the means of achieving a great variety of particular ends.
  • The liberal conception of freedom (§7)

Competition as a Discovery Procedure (1968)

F. A. Hayek, "Competition as a Discovery Procedure," ch. 12 of New Studies in Philosophy Politics, Economics and the History of Ideas (Routledge, 1978), reprinted from The Morgan Guaranty Survey (New York, January 1976).

• Apart from the fact that there is in such countries so much more to be discovered, there is still another reason why the greatest freedom of competition seems to be even more important there than in more advanced countries. This is that required changes in habits and customs will be brought about only if the few willing and able to experiment with new methods can make it necessary for the many to follow them, and at the same time to show them the way. The required discovery process will be impeded or prevented, if the many are able to keep the few to the traditional ways. Of course, it is one of the chief reasons for the dislike of competition that it not only shows how things can be done more effectively, but also confronts those who depend for their incomes on the market with the alternative of imitating the more successful or losing some or all of their income. Competition produces in this way a kind of impersonal compulsion which makes it necessary for numerous individuals to adjust their way of life in a manner that no deliberate instructions or commands could bring about. Central direction in the service of so-called ‘social justice’ may be a luxury rich nations can afford, perhaps for a long time, without too great an impairment of their incomes. But it is certainly not a method by which poor countries can accelerate their adaptation to rapidly changing circumstances, on which their growth depends.

The New Confusion About 'Planning' (1976)

F. A. Hayek, "The New Confusion About 'Planning'," ch. 14 of New Studies in Philosophy Politics, Economics and the History of Ideas (Routledge, 1978), reprinted from The Morgan Guaranty Survey (New York, January 1976).

• Is it really likely that a National Planning Officer would have a better judgement of 'the number of cars, the number of generators, and the quantities of frozen foods we are likely to require in, say, five years,' than Ford or General Motors, etc., and, even more important, would it even be desirable that various companies in an industry all act on the same guess?

Nature v. Nurture Once Again (1971)

F. A. Hayek, "Nature v. Nurture Once Again," ch. 19 of New Studies in Philosophy Politics, Economics and the History of Ideas (Routledge, 1978), a comment on C. D. Darlington, The Evolution of Man and Society (London, 1969) reprinted from Encounter (February 1971).

• Cultural evolution, because it also rests on a sort of natural selection, looks very much like biological evolution.

• Since I put together the preceding essays two comments by famous socialist economists on subjects on which I have devoted much of my published efforts over the past forty years have further shaken my hope of ever reaching their minds by rational argument.

Quotes about New Studies in Philosophy, Politics, Economics and the History of Ideas

• How could liberal values be renewed in a time of political tribalism? It was a question Hayek could not answer. Instead, he came up with a mix of evolutionist pseudo-science and rationalistic designs for an ideal liberal regime. Having abandoned his youthful socialism under the influence of the doctrinaire market economist Ludwig von Mises (1881-1973), Hayek came to believe that a process of social evolution would impel humankind in the direction of the values he favoured. His legacy to liberal thinking has been a type of scientism – the mistaken attempt to apply the methods of the natural sciences when examining the human world. It’s an ironical outcome, given that he was a forceful critic of scientism in economics. In his speech on receiving the Nobel Prize in 1974, Hayek described the efforts of economists to mimic the methods of the natural sciences as having produced a “pretence of knowledge”.
  • John Gray (philosopher), "The Friedrich Hayek I knew, and what he got right - and wrong" (30 July 2015)