F A Hayek Quotes

The curious task of economics is to demonstrate to men how little they really know about what they imagine the can design.

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.

The mind can never foresee its own advance

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

The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.

Unemployment or the loss of income which will always affect some in any society is certainly less degrading if it is the result of misfortune and not deliberately imposed by authority.

Economic control is not merely control of a sector of human life which can be separated from the rest; it is the control of the means for all our ends. And whoever has sole control of the means must also determine which ends are to be served, which values are to be rated higher and which lower-in short, what men should believe and strive for.

Cuando el curso de la civilización toma un giro insospechado, cuando, en lugar del progreso continuo que esperábamos, nos vemos amenazados por males que asociábamos con las pasadas edades de barbarie, culpamos, naturalmente, a cualquiera menos a nosotros mismos.

To understand our civilisation, one must appreciate that the extended order resulted not from human design or intention but spontaneously: it arose from unintentionally conforming to certain traditional and largely moral practices, many of which men tend to dislike, whose significance they usually fail to understand, whose validity they cannot prove, and which have nonetheless fairly rapidly spread by means of an evolutionary selection – the comparative increase of population and wealth – of those groups that happened to follow them.

Conservatism, in its original sense, has no specific ideological content at all, since everything depends on what one is trying to conserve. In the last days of the Soviet Union, for example, those who were trying to preserve the existing Communist regime were rightly referred to as “conservatives,” though what they were trying to conserve had nothing in common with what was advocated by Milton Friedman, Friedrich Hayek or William F. Buckley.

There is one aspect of the change in moral values brought about by the advance of collectivism which at the present time provides special food for thought. It is that the virtues which are held less and less in esteem and which consequently become rarer and precisely those on which the British people justly prided themselves and in which they were generally agreed to excel. The virtues possessed by Anglo-Saxons in a higher degree than most other people, excepting only a few of the smaller nations, like the Swiss and the Dutch, were independence and self-reliance, individual initiative and local responsbility, the successful reliance on voluntary activity, noninterference with one's neighbor and tolerance of the different and queer, respect for custom and tradition, and a healthy suspicion of power and authority.

It is necessary to guard ourselves from thinking that the practice of the scientific method enlarges the powers of the human mind. Nothing is more flatly contradicted by experience than the belief that a man distinguished in one or even more departments of science, is more likely to think sensibly about ordinary affairs than anyone else. Wilfred Trotter

«el peligro es muy grande porque podemos elegir la vía equivocada, no deliberadamente ni por decisión común, sino porque parece que ya estamos en ella».

Lo que ha hecho siempre del Estado un infierno sobre la tierra es precisamente que el hombre ha intentado hacer de él su paraíso. F. HÖLDERLIN

para poder planificar, la autoridad planificadora debe imponer al pueblo ese detallado código de valores que falta».

«la lógica inherente del colectivismo hace imposible contenerlo en una esfera limitada», e insinuaba que la acción colectiva lleva necesariamente a la coerción,

constataba que el sistema de precios es un mecanismo para coordinar el conocimiento;

We must raise and train an army of fighters for freedom.

Habría amado la libertad, creo yo, en cualquier época, pero en los tiempos en que vivimos me siento inclinado a adorarla. A. DE TOCQUEVILLE

No hay nada en los principios básicos del liberalismo que haga de éste un credo estacionario, no hay reglas absolutas establecidas de una vez para siempre.

luchamos por la libertad para forjar nuestra vida de acuerdo con nuestras propias ideas.

Hemos abandonado progresivamente aquella libertad en materia económica sin la cual jamás existió en el pasado libertad personal ni política.Aunque

It is less accurate to suppose that thinking man creates and controls his cultural evolution than it is to say that culture, and evolution, created his reason.

Western democracies have progressively abandoned that freedom in economic affairs without which personal and political freedom has never existed

Individualism has a bad name today, and the term has come to be connected with egotism and selfishness.7 But the individualism of which we speak in contrast to socialism and all other forms of collectivism has no necessary connection with these. Only gradually in the course of this book shall we be able to make clear the contrast between the two opposing principles.

There will always exist inequalities which will appear unjust to those who suffer from them, disappointments which will appear unmerited, and strokes of misfortune which those hit have not deserved. But when these things occur in a society which is consciously directed, the way in which people will react will be very different from what it is when they are nobody's conscious choice.

R. F. Kahn asked, “If I went out tomorrow and bought a new overcoat, that would increase unemployment?” “Yes,” said Hayek, “but … it would take a very long mathematical argument to explain why.

Social justice does not belong to the category of error but to that of nonsense, like the term 'a moral stone'. —F.A. Hayek, Law, Legislation and Liberty, Volume 2: The Mirage of Social Justice, 1976

The man of system, on the contrary, is apt to be very wise in his own conceit; and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. He goes on to establish it completely and in all its parts, without any regard either to the great interests, or to the strong prejudices which may oppose it. He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might chuse to impress upon it. If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder.

algunos de los mayores pensadores políticos del siglo XIX,como De Tocqueville y Lord Acton, nos advirtieron que socialismo significa esclavitud, hemos marchado constantemente en la dirección del socialismo.

libertad individual y colectivismo. Las diversas clases de colectivismo: comunismo, fascismo, etc., difieren entre sí por la naturaleza del objetivo hacia el cual desean dirigir los esfuerzos de la sociedad.

The extended order depends on this morality in the sense that it came into being through the fact that those groups following its underlying rules increased in numbers and in wealth relative to other groups.

El reconocimiento del individuo como juez supremo de sus fines, la creencia en que, en lo posible, sus propios fines deben gobernar sus acciones, es lo que constituye la esencia de la posición individualista.

Social Darwinism is wrong in many respects, but the intense dislike of it shown today is also partly due to its conflicting with the fatal conceit that man is able to shape the world around him according to his wishes.

there is no known way, other than by the distribution of products in a competitive market, to inform individuals in what direction their several efforts must aim so as to contribute as much as possible to the total product.

Fourth, there is the important point that an order arising from the separate decisions of many individuals on the basis of different information cannot be determined by a common scale of the relative importance of different ends.

Competition is a procedure of discovery, a procedure involved in all evolution, that led man unwittingly to respond to novel situations; and through further competition, not through agreement, we gradually increase our efficiency.

«La democracia extiende la esfera de la libertad individual», decía en 1848; «el socialismo la restringe. La democracia atribuye todo valor posible al individuo; el socialismo hace de cada hombre un simple agente, un simple número.

the Mediterranean region was the first to see the acceptance of a person’s right to dispose over a recognised private domain, thus allowing individuals to develop a dense network of commercial relations among different communities.

If you talk here with people over 40 years of age— except Hansen—they sound sane and relatively conservative. It is the generation brought up by Keynes and Hansen, which is blind to the political implications of their economic views.

Such new rules would spread not because men understood that they were more effective, or could calculate that they would lead to expansion, but simply because they enabled those groups practising them to procreate more successfully and to include outsiders.

We can unfortunately not indefinitely extend the sphere of common action and still leave the individual free in his own sphere. Once the communal sector, in which the state controls all the means, exceeds a certain proportion of the whole, the effects of its actions dominate the whole system. Although the state controls directly the use of only a large part of the available resources, the effects of its decisions on the remaining part of the economic system become so great that indirectly it controls almost everything.

«el socialismo puede llevarse a la práctica sólo con métodos que la mayoría de los socialistas desaprueba».[104] Y aunque tuviera que empezar como un experimento «liberal socialista» (en ninguno de los casos reales en todo el mundo ocurrió así, podríamos añadir),

Cuando el curso de la civilización toma un giro insospechado, cuando, en lugar del progreso continuo que esperábamos, nos vemos amenazados por males que asociábamos con las pasadas edades de barbarie, culpamos, naturalmente, a cualquiera menos a nosotros mismos. ¿No

From this the individualist concludes that the individuals should be allowed, within defined limits, to follow their own values and preferences rather than somebody else’s; that within these spheres the individual’s system of ends should be supreme and not subject to any dictation by others.

It is important to confront these consequences, for the notion that, in the last resort, the whole debate is a matter of value judgements and not of facts has prevented professional students of the market order from stressing forcibly enough that socialism cannot possibly do what it promises.

What led the greatly advanced civilisation of China to fall behind Europe was its governments’ clamping down so tightly as to leave no room for new developments, while, as remarked in the last chapter, Europe probably owes its extraordinary expansion in the Middle Ages to its political anarchy

Estamos abandonando rápidamente, no sólo las ideas de Cobden y Bright, de Adam Smith y Hume e incluso de Locke y Milton,[5] sino una de las características de la civilización occidental tal como se ha desarrollado a partir de sus fundamentos establecidos por el Cristianismo y por Grecia y Roma.

En él,Hayek refuta la opinión corriente afirmando que el Nacionalsocialismo era un «auténtico movimiento socialista».[15] En apoyo de esta interpretación constata su oposición al liberalismo, su política económica restrictiva, el origen socialista de algunos de sus líderes, y su antirracionalismo.

In Law, Legislation, and Liberty, Hayek lamented how western democracies were increasingly circumventing the spirit of liberal constitutionalism by passing coercive legislation, typically under the guise of achieving social justice, but in reality serving well-organized coalitions of special interests.

La transformación gradual de un sistema organizado rígidamente en jerarquías en otro donde los hombres pudieron, al menos, intentar la forja de su propia vida, donde el hombre ganó la oportunidad de conocer y elegir entre diferentes formas de vida, está asociada estrechamente con el desarrollo del comercio.

Rousseau’s heady brew of ideas came to dominate ‘progressive’ thought, and led people to forget that freedom as a political institution had arisen not by human beings ‘striving for freedom’ in the sense of release from restraints, but by their striving for the protection of a known secure individual domain.

El control económico no es sólo intervención de un sector de la vida humana que puede separarse del resto; es el control de los medios que sirven a todos nuestros fines, y quien tenga la intervención total de los medios determinará también a qué fines se destinarán, qué valores serán calificados como más altos y cuáles como más bajos:

In the marketplace (as in other institutions of our extended order), unintended consequences are paramount: a distribution of resources is effected by an impersonal process in which individuals, acting for their own ends (themselves also often rather vague), literally do not and cannot know what will be the net result of their interactions.

One’s initial surprise at finding that intelligent people tend to be socialists diminishes when one realises that, of course, intelligent people will tend to overvalue intelligence, and to suppose that we must owe all the advantages and opportunities that our civilisation offers to deliberate design rather than to following traditional rules, and likewise to suppose that we can, by exercising our reason, eliminate any remaining undesired features by still more intelligent reflection, and still more appropriate design and ‘rational coordination’ of our undertakings. This leads one to be favourably disposed to the central economic planning and control that lie at the heart of socialism.

Learnt moral rules, customs, progressively displaced innate responses, not because men recognised by reason that they were better but because they made possible the growth of an extended order exceeding anyone’s vision, in which more effective collaboration enabled its members, however blindly, to maintain more people and to displace other groups.

The ‘unity of consciousness’ means, above all, that conscious events occupy a definite position in the same spatial and temporal order, that they are ‘dated’ and ‘placed’ in relation to other conscious events, and that all sensory and affective events which ‘enter consciousness’, together with the reproductions or images of such experiences, belong to the same order or universe.

While our moral traditions cannot be constructed, justified or demonstrated in the way demanded, their processes of formation can be partially reconstructed, and in doing so we can to some degree understand the needs that they serve. To the extent we succeed in this, we are indeed called upon to improve and revise our moral traditions by remedying recognisable defects by piecemeal improvement

Although I attack the presumption of reason on the part of socialists, my argument is in no way directed against reason properly used. By ‘reason properly used’ I mean reason that recognises its own limitations and, itself taught by reason, faces the implications of the astonishing fact, revealed by economics and biology, that order generated without design can far outstrip plans men consciously contrive.

The question then is how to secure the greatest possible freedom for all. This can be secured by uniformly restricting the freedom of all by abstract rules that preclude arbitrary or discriminatory coercion by or of other people, that prevent any from invading the free sphere of any other (see Hayek 1960 and 1973, and chapter two above). In short, common concrete ends are replaced by common abstract rules.

To the naive mind that can conceive of order only as the product of deliberate arrangement, it may seem absurd that in complex conditions order, and adaptation to the unknown, can be achieved more effectively by decentralising decisions, and that a division of authority will actually extend the possibility of overall order. Yet that decentralisation actually leads to more information being taken into account.

When individuals combine in a joint effort to realize ends the have in common, the organizations, like the state, that they form for this purpose are given their own system of ends and their own means. But any organization thus formed remains one "person" among other, in the case of the state much more powerful than any of the others, it is true, yet still with its separate and limited sphere in which alone its ends are supreme.

They assume that, since people had been able to generate some system of rules coordinating their efforts, they must also be able to design an even better and more gratifying system. But if humankind owes its very existence to one particular rule-guided form of conduct of proven effectiveness, it simply does not have the option of choosing another merely for the sake of the apparent pleasantness of its immediately visible effects.

The more one learns about economic history, the more misleading then seems the belief that the achievement of a highly organised state constituted the culmination of the early development of civilisation. The role played by governments is greatly exaggerated in historical accounts because we necessarily know so much more about what organised government did than about what the spontaneous coordination of individual efforts accomplished.

it is indeed true not only that our current scientific laws are not justified or justifiable in the way that constructivist methodologists demand, but that we have reason to suppose that we shall eventually learn that many of our present scientific conjectures are untrue. Any conception that guides us more successfully than what we hitherto believed may, moreover, although a great advance, be in substance as mistaken as its predecessor

The undoubted historical connection between religion and the values that have shaped and furthered our civilisation, such as the family and several property, does not of course mean that there is any intrinsic connection between religion as such and such values. Among the founders of religions over the last two thousand years, many opposed property and the family. But the only religions that have survived are those which support property and the family.

What I have described as the liberal position shares with conservatism a distrust of reason to the extent that the liberal is very much aware that we do not know all the answers and that he is not sure that the answers he has are certainly the rights ones or even that we can find all the answers. He also does not disdain to seek assistance from whatever non-rational institutions or habits have proved their worth. The liberal differs from the conservative in his willingness to face this ignorance and to admit how little we know, without claiming the authority of supernatural forces of knowledge where his reason fails him. It has to be admitted that in some respects the liberal is fundamentally a skeptic - but it seems to require a certain degree of diffidence to let others seek their happiness in their own fashion and to adhere consistently to that tolerance which is an essential characteristic of liberalism.

So, priding itself on having built its world as if it had designed it, and blaming itself for not having designed it better, humankind is now to set out to do just that. The aim of socialism is no less than to effect a complete redesigning of our traditional morals, law, and language, and on this basis to stamp out the old order and the supposedly inexorable, unjustifiable conditions that prevent the institution of reason, fulfilment, true freedom, and justice.

Governments have more often hindered than initiated the development of long-distance trade. Those that gave greater independence and security to individuals engaged in trading benefited from the increased information and larger population that resulted. Yet, when governments became aware how dependent their people had become on the importation of certain essential foodstuffs and materials, they themselves often endeavoured to secure these supplies in one way or another.

adding that there are other strands within what might be called rationalism which treat these matters differently, as for example that which views rules of moral conduct as themselves part of reason. Thus John Locke had explained that ‘by reason, however, I do not think is meant here the faculty of understanding which forms trains of thoughts and deduces proofs, but definite principles of action from which spring all virtues and whatever is necessary for the moulding of morals

the extended order resulted not from human design or intention but spontaneously: it arose from unintentionally conforming to certain traditional and largely moral practices, many of which men tend to dislike, whose significance they usually fail to understand, whose validity they cannot prove, and which have nonetheless fairly rapidly spread by means of an evolutionary selection – the comparative increase of population and wealth – of those groups that happened to follow them.

While people will submit to suffering which may hit anyone, they will not so easily submit to suffering which is the result of the decision of authority. It may be bad to be just a cog in an impersonal machine; but it is infinitely worse if we can no longer leave it, if we are tied to our place and to the superiors who have been chosen for us. Dissatisfaction of everybody with his lot will inevitably grow with the consciousness that it is the result of deliberate human decision.

If morals and tradition, rather than intelligence and calculating reason, lifted men above the savages, the distinctive foundations of modern civilisation were laid in antiquity in the region surrounding the Mediterranean Sea. There, possibilities of long-distance trade gave, to those communities whose individuals were allowed to make free use of their individual knowledge, an advantage over those in which common local knowledge or that of a ruler determined the activities of all.

Thus the word ‘society’ has become a convenient label denoting almost any group of people, a group about whose structure or reason for coherence nothing need be known – a makeshift phrase people resort to when they do not quite know what they are talking about. Apparently a people, a nation, a population, a company, an association, a group, a horde, a band, a tribe, the members of a race, of a religion, sport, entertainment, and the inhabitants of any particular place, all are, or constitute, societies.

cultural evolution is brought about through transmission of habits and information not merely from the individual’s physical parents, but from an indefinite number of ‘ancestors’. The processes furthering the transmission and spreading of cultural properties by learning also, as already noted, make cultural evolution incomparably faster than biological evolution. Finally, cultural evolution operates largely through group selection; whether group selection also operates in biological evolution remains an open question

Production for use’ means here the kind of work which, in the small group, is guided by anticipating for whose use the product is intended. But this sentiment fails to take into account the sorts of considerations advanced in the foregoing chapters, and to be argued again in the following: only the differences between expected prices for different commodities and services and their costs, in the self-generating order of the market, tell the individual how best to contribute to the pool from which we all draw in proportion to our contribution.

Nobody can communicate to another all that he knows, because much of the information he can make use of he himself will elicit only in the process of making plans for action. Such information will be evoked as he works upon the particular task he has undertaken in the conditions in which he finds himself, such as the relative scarcity of various materials to which he has access. Only thus can the individual find out what to look for, and what helps him to do this in the market is the responses others make to what they find in their own environments

Mankind achieved civilisation by developing and learning to follow rules (first in territorial tribes and then over broader reaches) that often forbade him to do what his instincts demanded, and no longer depended on a common perception of events. These rules, in effect constituting a new and different morality, and to which I would indeed prefer to confine the term ‘morality’, suppress or restrain the ‘natural morality’, i.e., those instincts that welded together the small group and secured cooperation within it at the cost of hindering or blocking its expansion.

Rousseau’s heady brew of ideas came to dominate ‘progressive’ thought, and led people to forget that freedom as a political institution had arisen not by human beings ‘striving for freedom’ in the sense of release from restraints, but by their striving for the protection of a known secure individual domain. Rousseau led people to forget that rules of conduct necessarily constrain and that order is their product; and that these rules, precisely by limiting the range of means that each individual may use for his purposes, greatly extend the range of ends each can successfully pursue.

The Austrian born Von Hayek has long been under the control of David Rockefeller, and Von Hayek theories have been fairly widely accepted in the United States for some time, especially in “conservative” circles. According to Von Hayek, a future United States economic platform must be based on (a) urban black markets, (b) small Hong Kong type industries utilizing sweatshop labor, (c) the tourist trade, (d) free enterprise zones where speculators can operate unhindered and where the drug trade can flourish, (e) the end of all industrial activity and (f) closing down of all nuclear energy plants.

Nonetheless it is true that the greater part of our daily lives, and the pursuit of most occupations, give little satisfaction to deep-seated ‘altruistic’ desires to do visible good. Rather, accepted practices often require us to leave undone what our instincts impel us to do. It is not so much, as is often suggested, emotion and reason that conflict, but innate instincts and learnt rules. Yet, as we shall see, following these learnt rules generally does have the effect of providing a greater benefit to the community at large than most direct ‘altruistic’ action that a particular individual might take.

only calculation and distribution in terms of market prices make it possible to utilise our discoverable resources intensively, to guide production to serve ends lying beyond the range of the producer’s perception, and to enable the individual to participate usefully in productive exchange (first, by serving people, mostly unknown to him, to the gratification of whose needs he can nonetheless effectively contribute; and second, by himself being supplied as well as he is only because people who know nothing about his existence are induced, also by market signals, to provide for his needs: see the previous chapter).

To call by the same name such completely different formations as the companionship of individuals in constant personal contact and the structure formed by millions who are connected only by signals resulting from long and infinitely ramified chains of trade is not only factually misleading but also almost always contains a concealed desire to model this extended order on the intimate fellowship for which our emotions long. Bertrand de Jouvenel has well described this instinctive nostalgia for the small group – ‘the milieu in which man is first found, which retains for him an infinite attraction: but any attempt to graft the same features on a large society is utopian and leads to tyranny

Similarly, of the revival of European civilisation during the later Middle Ages it could be said that the expansion of capitalism – and European civilisation – owes its origins and raison d’être to political anarchy (Baechler, 1975:77). It was not under the more powerful governments, but in the towns of the Italian Renaissance, of South Germany and of the Low Countries, and finally in lightly-governed England, i.e., under the rule of the bourgeoisie rather than of warriors, that modern industrialism grew. Protection of several property, not the direction of its use by government, laid the foundations for the growth of the dense network of exchange of services that shaped the extended order.

Freedom requires that the individual be allowed to pursue his own ends: one who is free is in peacetime no longer bound by the common concrete ends of his community. Such freedom of individual decision is made possible by delimiting distinct individual rights (the rights of property, for example) and designating domains within which each can dispose over means known to him for his own ends. That is, a recognisable free sphere is determined for each person. This is all-important. For to have something of one’s own, however little, is also the foundation on which a distinctive personality can be formed and a distinctive environment created within which particular individual aims can be pursued.

What our generation is in danger of forgetting is not only that morals are of necessity a phenomenon of individual conduct but also that they can exist only in the sphere in which the individual is free to decide for himself and is called upon voluntarily to sacrifice personal advantage to the observance of a moral rule. Outside the sphere of individual responsibility there is neither goodness nor badness, neither opportunity for moral merit nor the chance of proving one’s conviction by sacrificing one’s desires to what one thinks right. Only were we ourselves are responsible for our own interests and are free to sacrifice them has our decision moral value. We are neither entitled to be unselfish at someone else’s expense nor is there any merit in being unselfish if we have no choice. The members of a society who in all respects are made to do the good things have no title to praise. As Milton said: “If every action which is good or evil in a man of ripe years were under pittance an prescription and compulsion, what were virtue but a name, what praise should then be due to well-doing, what gramercy to be sober, just, or continent?” Freedom to order our own conduct in the sphere where material circumstances force upon us, and responsibility for the arrangement of our own life according to our own conscience, is the air in which alone moral sense grows and in which moral values are daily re-created in the free decision of the individual. Responsibility, not to a superior, but to one’s conscience, the awareness of a duty not exacted by compulsion, the necessity to decide which of the things one values are to be sacrificed to others, and to bear the consequences of one’s own decision, are the very essence of any morals which deserve the name. That in this sphere of individual conduct the effect of collectivism has been almost entirely destructive is both inevitable and undeniable. A movement whose main promise is the relief from responsibility cannot but be antimoral in its effect, however lofty the ideals to which it owes its birth. Can there be much doubt that the feeling of personal obligation to remedy inequities, where our individual power permits, has been weakened rather than strengthened, that both the willingness to bear responsibility and the consciousness that it is our own individual duty to know how to choose have been perceptibly impaired? …There is much to suggest that we have in fact become more tolerant toward particular abuses and much more indifferent to inequities in individual cases, since we have fixed our eyes on an entirely different system in which the state will set everything right. It may even be, as has been suggested, that the passion for collective action is a way in which we now without compunction collectively indulge in that selfishness which as individuals we had learned a little to restrain.

When the course of civilization takes an unexpected turn—when, instead of the continuous progress which we have come to expect, we find ourselves threatened by evils associated by us with past ages of barbarism—we naturally blame anything but ourselves. Have we not all striven according to our best lights, and have not many of our finest minds incessantly worked to make this a better world? Have not all our efforts and hopes been directed toward greater freedom, justice, and prosperity? If the outcome is so different from our aims— if, instead of freedom and prosperity, bondage and misery stare us in the face—is it not clear that sinister forces must have foiled our intentions, that we are the victims of some evil power which must be conquered before we can resume the road to better things? However much we may differ when we name the culprit—whether it is the wicked capitalist or the vicious spirit of a particular nation, the stupidity of our elders, or a social system not yet, although we have struggled against it for half a century, fully overthrown—we all are, or at last were until recently, certain of one thing: that the leading ideas which during the last generation have become common to most people of good will and have determined the major changes in our social life cannot have been wrong. We are ready to accept almost any explanation of the present crisis of our civilization except one: that the present state of the world may be the result of genuine error on our own part and that the pursuit of some of our most cherished ideals has apparently produced results utterly different from those which we expected.

The importance and value of order will grow with the variety of the elements, while greater order in turn enhances the value of variety, and thus the order of human cooperation becomes indefinitely extensible. If things were otherwise, if for example all men were alike and could not make themselves different from one another, there would be little point in division of labour (except perhaps among people in different localities), little advantage from coordinating efforts, and little prospect of creating order of any power or magnitude. Thus individuals had to become different before they could be free to combine into complex structures of cooperation. Moreover, they had to combine into entities of a distinct character: not merely a sum but a structure in some manner analogous to, and in some important respects differing from, an organism.

Our earlier claim, that acquired traditions serve as ‘adaptations to the unknown’, must then be taken literally. Adaptation to the unknown is the key in all evolution, and the totality of events to which the modern market order constantly adapts itself is indeed unknown to anybody. The information that individuals or organisations can use to adapt to the unknown is necessarily partial, and is conveyed by signals (e.g., prices) through long chains of individuals, each person passing on in modified form a combination of streams of abstract market signals. Nonetheless, the whole structure of activities tends to adapt, through these partial and fragmentary signals, to conditions foreseen by and known to no individual, even if this adaptation is never perfect. That is why this structure survives, and why those who use it also survive and prosper.

Which kind of values figure less prominently in the picture of the future held out to us by the popular writers and speakers than they did in the dreams and hopes of our fathers? It is certainly not material comfort, certainly not a rise in our standard of living or the assurance of a certain status in society which ranks lower. Is there a popular writer or speaker who dares to suggest to the masses that they might have to make sacrifices of their material prospects for the enhancement of an ideal end? Is it not, in fact, entirely the other way round? Are not the things which we are more and more frequently taught to regard as "nineteenth-century illusions" all moral values-liberty and independence, truth and intellectual honesty, peace and democracy, and the respect for the individual qua man instead of merely as the member of an organised group?

An increase of value – crucial in exchange and trade – is indeed different from increases in quantity observable by our senses. Increase in value is something for which laws governing physical events, at least as understood within materialist and mechanistic models, do not account. Value indicates the potential capacities of an object or action to satisfy human needs, and can be ascertained only by the mutual adjustment through exchange of the respective (marginal) rates of substitution (or equivalence) which different goods or services have for various individuals. Value is not an attribute or physical property possessed by things themselves, irrespective of their relations to men, but solely an aspect of these relations that enables men to take account, in their decisions about the use of such things, of the better opportunities others might have for their use. Increase

Though biologically determined differences among individual men are probably smaller than those of some domesticated animals (especially dogs), this long learning period after birth allows individuals more time to adapt themselves to particular environments and to absorb the different streams of tradition into which they are born. The varieties of skills that make division of labour possible, and with it the extended order, are largely due to these different streams of tradition, encouraged by underlying dissimilarities in natural gifts and preferences. The whole of tradition is, moreover, so incomparably more complex than what any individual mind can command that it can be transmitted at all only if there are many different individuals to absorb different portions of it. The advantage of individual differentiation is all the greater in that it makes large groups more efficient.

I believe that 'social justice' will ultimately be recognized as a will-o'-the-wisp which has lured men to abandon many of the values which in the past have inspired the development of civilization- an attempt to satisfy a craving inherited from the traditions of the small group but which is meaningless in the Great Society of free men. Unfortunately, this vague desire which has become one of the strongest bonds spurring people of good will to action, not only is bound to be disappointed. This would be sad enough. But, like most attempts to pursue an unattainable goal, the striving for it will also produce highly undesirable consequences, and in particular lead to the destruction of the indispensable environment in which the traditional moral values alone can flourish, namely personal freedom. —F.A. Hayek, Law, Legislation and Liberty, Volume 2: The Mirage of Social Justice, 1976

Some rationalists would want to advance an additional complaint that we have hardly considered: namely, that the morality and institutions of capitalism not only fail to meet the logical, methodological, and epistemological requirements reviewed already, but also impose a crippling burden on our freedom – as, for example, our freedom to ‘express’ ourselves unrestrainedly. This complaint cannot be met by denying the obvious, a truth with which we opened this book – that moral tradition does seem burdensome to many – but can only be answered by observing again, here and in subsequent chapters, what we derive from bearing this burden, and what the alternative would be. Virtually all the benefits of civilisation, and indeed our very existence, rest, I believe, on our continuing willingness to shoulder the burden of tradition. These benefits in no way ‘justify’ the burden. But the alternative is poverty and famine.

This book has shown mankind as torn between two states of being. On one hand are the kinds of attitudes and emotions appropriate to behaviour in the small groups wherein mankind lived for more than a hundred thousand years, wherein known fellows learnt to serve one another, and to pursue common aims. Curiously, these archaic, more primitive attitudes and emotions are now supported by much of rationalism, and by the empiricism, hedonism, and socialism associated with it. On the other hand there is the more recent development in cultural evolution wherein we no longer chiefly serve known fellows or pursue common ends, but where institutions, moral systems, and traditions have evolved that have produced and now keep alive many times more people than existed before the dawn of civilisation, people who are engaged, largely peacefully though competitively, in pursuing thousands of different ends of their own choosing in collaboration with thousands of persons whom they will never know.

There is one point of phraseology which I ought to explain here to forestall any misunderstanding. I use throughout the term "liberal" in the original, nineteenth-century sense in which it is still current in Britain. In current American usage it often means very nearly the opposite of this. It has been part of the camouflage of leftish movements in this country, helped by the muddleheadedness of many who really believe in liberty, that "liberal" has come to mean the advocacy of almost every kind of government control. I am still puzzled why those in the United States who truly believe in liberty should not only have allowed the left to appropriate this almost indispensable term but should even have assisted by beginning to use it themselves as a term of opprobrium. This seems to be particularly regrettable because of the consequent tendency of many true liberals to describe themselves as conservatives. It is true, of course, that in the struggle against the believers in the all-powerful state the true liberal must sometimes make common cause with the conservative, and in some circumstances, as in contemporary Britain, he has hardly any other way of actively working for his ideals. But true liberalism is still distinct from conservatism, and there is danger in the two being confused. Conservatism, though a necessary element in any stable society, is not a social program; in its paternalistic, nationalistic, and power-adoring tendencies it is often closer to socialism than true liberalism; and with its traditionalistic, anti-intellectual, and often mystical propensities it will never, except in short periods of disillusionment, appeal to the young and all those others who believe that some changes are desirable if this world is to become a better place. A conservative movement, by its very nature, is bound to be a defender of established privilege and to lean on the power of absolute government for the protection of privilege. The essence of the liberal position, however, is the denial of all privilege, if privilege is understood in its proper and original meaning of the state granting and protecting rights to some which are not available on equal terms to others

Thus when people object, as they do, to me and others pointing out that the rich are getting richer and the poor are getting poorer—by commenting that wealth is not finite, that statist and globalist solutions and handouts will merely strip the poor of their human dignity and vocation to work, and that all this will encourage the poor toward a sinful envy of the rich, a slothful escapism, and a counterproductive reliance on Caesar rather than God—I want to take such commentators to refugee camps, to villages where children die every day, to towns where most adults have already died of AIDS, and show them people who haven't got the energy to be envious, who aren't slothful because they are using all the energy they've got to wait in line for water and to care for each other, who know perfectly well that they don't need handouts so much as justice. I know, and such people often know in their bones, that wealth isn't a zero-sum game, but reading the collected works of F. A. Hayek in a comfortable chair in North America simply doesn't address the moral questions of the twenty-first century.

Nevertheless, 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 (which is not to say that such matters can be calculated). Much of the ‘alienation’ or unhappiness of modern life stems from two sources, one of which affects primarily intellectuals, the other, all beneficiaries of material abundance. The first is a self-fulfilling prophecy of unhappiness for those within any ‘system’ that does not satisfy rationalistic criteria of conscious control. Thus intellectuals from Rousseau to such recent figures in French and German thought as Foucault and Habermas regard alienation as rampant in any system in which an order is ‘imposed’ on individuals without their conscious consent; consequently, their followers tend to find civilisation unbearable – by definition, as it were. Secondly, the persistence of instinctual feelings of altruism and solidarity subject those who follow the impersonal rules of the extended order to what is now fashionably called ‘bad conscience’; similarly, the acquisition of material success is supposed to be attended with feelings of guilt (or ‘social conscience’). In the midst of plenty, then, there is unhappiness not only born of peripheral poverty, but also of the incompatibility, on the part of instinct and of a hubristic reason, with an order that is of a decidedly non-instinctive and extra-rational character.

There is an excellent short book (126 pages) by Faustino Ballvè, Essentials of Economics (Irvington-on-Hudson, N.Y.: Foundation for Economic Education), which briefly summarizes principles and policies. A book that does that at somewhat greater length (327 pages) is Understanding the Dollar Crisis by Percy L. Greaves (Belmont, Mass.: Western Islands, 1973). Bettina Bien Greaves has assembled two volumes of readings on Free Market Economics (Foundation for Economic Education). The reader who aims at a thorough understanding, and feels prepared for it, should next read Human Action by Ludwig von Mises (Chicago: Contemporary Books, 1949, 1966, 907 pages). This book extended the logical unity and precision of economics beyond that of any previous work. A two-volume work written thirteen years after Human Action by a student of Mises is Murray N. Rothbard’s Man, Economy, and State (Mission, Kan.: Sheed, Andrews and McMeel, 1962, 987 pages). This contains much original and penetrating material; its exposition is admirably lucid; and its arrangement makes it in some respects more suitable for textbook use than Mises’ great work. Short books that discuss special economic subjects in a simple way are Planning for Freedom by Ludwig von Mises (South Holland, 111.: Libertarian Press, 1952), and Capitalism and Freedom by Milton Friedman (Chicago: University of Chicago Press, 1962). There is an excellent pamphlet by Murray N. Rothbard, What Has Government Done to Our Money? (Santa Ana, Calif.: Rampart College, 1964, 1974, 62 pages). On the urgent subject of inflation, a book by the present author has recently been published, The Inflation Crisis, and How to Resolve It (New Rochelle, N.Y.: Arlington House, 1978). Among recent works which discuss current ideologies and developments from a point of view similar to that of this volume are the present author’s The Failure of the “New Economics”: An Analysis of the Keynesian Fallacies (Arlington House, 1959); F. A. Hayek, The Road to Serfdom (1945) and the same author’s monumental Constitution of Liberty (Chicago: University of Chicago Press, 1960). Ludwig von Mises’ Socialism: An Economic and Sociological Analysis (London: Jonathan Cape, 1936, 1969) is the most thorough and devastating critique of collectivistic doctrines ever written. The reader should not overlook, of course, Frederic Bastiat’s Economic Sophisms (ca. 1844), and particularly his essay on “What Is Seen and What Is Not Seen.” Those who are interested in working through the economic classics might find it most profitable to do this in the reverse of their historical order. Presented in this order, the chief works to be consulted, with the dates of their first editions, are: Philip Wicksteed, The Common Sense of Political Economy, 1911; John Bates Clark, The Distribution of Wealth, 1899; Eugen von Böhm-Bawerk, The Positive Theory of Capital, 1888; Karl Menger, Principles of Economics, 1871; W. Stanley Jevons, The Theory of Political Economy, 1871; John Stuart Mill, Principles of Political Economy, 1848; David Ricardo, Principles of Political Economy and Taxation, 1817; and Adam Smith, The Wealth of Nations, 1776.

The belief that order must be intentionally generated and imposed upon society by institutional authorities continues to prevail. This centrally-directed model is premised upon what F.A. Hayek called “the fatal conceit,” namely, the proposition “that man is able to shape the world according to his wishes,”3 or what David Ehrenfeld labeled “the arrogance of humanism.”4That such practices have usually failed to produce their anticipated results has generally led not to a questioning of the model itself, but to the conclusion that failed policies have suffered only from inadequate leadership, or a lack of sufficient information, or a failure to better articulate rules. Once such deficiencies have been remedied, it has been supposed, new programs can be implemented which, reflective of this mechanistic outlook, will permit government officials to “fine tune” or “jump start” the economy, or “grow” jobs, or produce a “quick fix” for the ailing government school system. Even as modern society manifests its collapse in the form of violent crime, economic dislocation, seemingly endless warfare, inter-group hostilities, the decay of cities, a growing disaffection with institutions, and a general sense that nothing “works right” anymore, faith in the traditional model continues to drive the pyramidal systems. Most people still cling to the belief that there is something that can be done by political institutions to change such conditions: a new piece of legislation can be enacted, a judicial ruling can be ordered, or a new agency regulation can be promulgated. When a government-run program ends in disaster, the mechanistic mantra is invariably invoked: “we will find out what went wrong and fix it so that this doesn’t happen again.” That the traditional model itself, which is grounded in the state’s power to control the lives and property of individuals to desired ends, may be the principal contributor to such social disorder goes largely unexplored.