What are we to make of Hayek’s view of individualism with a happy face, a view which takes for granted the institution of the market as the ideal venue and the system of private property for its natural foundation? Hayek’s thought does represent the best of conservative thought, after the tradition of such venerable thinkers as Edmund Burke, de Tocqueville and Lord Acton, so we can’t just dismiss it offhand. Yet, subject it to a thoughtful critique we must.
As far as I’m concerned, Hayek’s blind spot, his idée fixe, consists in having subjected the notion to a false contrast: to socialism, nationalism, fascism, all forms of totalitarianism, to any government, in short, where central planning and from top-down control are the defining features. It’s not exactly as though Hayek’s concerns were misplaced. Plenty of writers from the left shared the exact same concerns: Hannah Arendt and George Orwell come immediately to mind, and it might be instructive to compare their responses to those of Hayek. Which doesn’t negate the fact that Hayek, no less so than the rest, was a child of his age. He lived and wrote under the specter of socialism; and his brand of individualism represented the bulwark, the last line of defense against the totalitarian state, against the evils of collectivism under all its guises.
Another theorist of note who invites immediate comparison with Hayek is Ayn Rand, a writer who is molded by the same set of circumstances and concerns. But whereas Rand’s representation of the individual was heroic, Hayek’s verges on the trivial; the average player is an indolent kind of fellow, narrow-minded, lazy and by and large, ignorant. And yet, in spite of it all, in spite of Hayek’s rather unflattering view of the human condition, he beams nothing but optimism. The market is for Hayek the underlying mechanism, the venue, the invisible hand which miraculously transforms all the unenlightened and shortsighted individual decisions for the good of all.
Needless to say, this serves Hayek’s purposes just fine: not only is his core assumption as to the general fickleness and unreliability of human nature justified, by the same token the institution of the market is being elevated to the status of an unquestioned principle of social organization, the prerequisite for any orderly and rational human society. The one feeds off the other, and vice versa of course. But that’s the essence of any functional type of explanation; its strength derives from its appeal to the rather dubious fact that things “work.” It’s never asked, by the way, how well do they work or whether they could be made to work better.
Let’s leave aside, however, the question of whether Hayek’s unreserved brand of optimism as to the unmitigated virtues of the market is fully justified. Let’s also leave aside the rather crucial question of whether the markets are really free, whether they could exist or even come into being without at least the tacit support and encouragement by the state, an institution which, unless I be convinced otherwise, is bent on controlling all activities pertaining to trade and commerce if for no other reason than managing such activities surely must count among the state’s most vital interests. In fairness to Hayek, let’s try to reconstruct his vision of the market and the freedoms it is presumed to accord on his own terms, unencumbered by the aforementioned concerns.
Let’s clear up one possible misunderstanding first. When Hayek speaks of the average citizen, consumer, and generally speaking, the average participant in market-related activities as shortsighted and uninformed, he speaks in a restricted sense: he or she may be uninformed but only insofar as their decisions, choices and actions impact the whole of society in some macro way, with a mind to how their decisions and choices might affect the wellbeing of all. And it’s true that none of us have this kind premonition or foreknowledge of the future, which is why Hayek delimits the scope of our personal knowledge to our immediate affairs and concerns, as affecting our family, friends, acquaintances, neighbors, what have you. It is in this and only in this respect that we are as knowledgeable as can be, and we can’t ask for anything more. Again, no disagreement here. In this respect, Hayek’s account is as refreshing as it is realistic.
Notice, however, the underlying assumption: the invisible hand will see to it that all our shortsighted and uninformed decisions, even as they affect only our immediate circle, will translate to the good of all. I have no philosophical objection to methodological individualism per se; the idea that aggregate social phenomena are ultimately determined by, or derived from, individual decisions and choices; that they do represent the sum total, the resultant, the composite, whatever the case may be, of all our individual decisions. What I do object to, however, is the idea of endowing the process, namely, the accretion of the social from what starts out as merely individual, with any kind of (social) value, with saying, in other words, that the results are bound to be beneficial. There’s no justification whatever for adopting such a stance other than on purely ideological grounds. Again, we’re being treated here to a functional type of argument, an argument from the rather dubious fact that “things work,” regardless of how well or how poorly they work. It is thus that function becomes endowed with value.
But even aside from the invisible-hand hypothesis, there is another one buttressing it as well: the idea that the existing social norms, mores, ways of habit, represent the repository of human (social) knowledge, and that one can’t go wrong playing by the established rules, that in the final result, one is only bound to end up a winner for so doing; the typical conservative mantra best articulated perhaps by Edmund Burke but readily picked up by other writers as well, Hayek among them. It’s not exactly an off-the-wall proposition (except for some of its ramifications); and if I had my druthers, I’d reserve it for the faculty of language. Be that as it may, the postulated supremacy of the established social norms and mores as the ultimate guide to human conduct, the only reliable guide according to Hayek, only serves to reinforce the invisible-hand mechanism as the ultimate generator of social value.
None of which is to say that Hayek’s purposes aren’t served by this formulation. Quite the contrary, his conceptual system is as logical and airtight as can be. Individuals, in order not to be dominated by any extraneous agency, the institution of the state included, must be accorded autonomous spheres within which to act and to act responsibly. Considering the rather low threshold that Hayek ascribes to the average human, concerned and knowledgeable as he or she may be only about their immediate circle, it’s only natural that he’d restrict the area of individual freedom of action, along with responsibility, to that circle only. Not only is this consistent with his methodological individualism thesis, whereby aggregate, social phenomena are determined by micro events; by the same token, it gives Hayek a perfect out. His view of the average individual as lazy and indolent is dutifully preserved; and yet, paradoxically, either because or in spite of it, it serves as a guarantee of individual freedom.
But here’s the catch. The system of personal property, of what’s mine and what’s thine, is the only thing which, according to Hayek, his so-called average individual can understand and act logically and rationally, given his respective autonomous spheres within which to think and act. Only in that context, defined by private property, will Hayek’s agents act sensibly and rationally while pursuing their own interests.
Why should those individual decisions, however, restricted as they are to one’s personal circle (and rational as they well may be in that limited context), benefit the society as a whole?
Here’s another ace up Hayek’s sleeve: the market!