What are we to make of Hayek’s conception of individualism with a happy face, which conception 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 on the subject, after the tradition of such venerable thinkers like Edmund Burke, de Tocqueville, and Lord Acton, so we can’t just dismiss it offhand. Yet, expose it to a thoughtful critique, we must.
In my thinking, 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 are misplaced. Plenty of writers from the left had shared the same worries. 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 philosopher molded by the same set of circumstances and concerns. But whereas Ayn Rand’s representation of the individual was heroic, Hayek’s verges on the trivial; his average actor is an indolent kind of fellow, narrow-minded, lazy, and by and large, ignorant. And yet, despite it all, despite Hayek’s rather unflattering view of the human condition, he beams with nothing but confidence. For him, the market is the underlying mechanism, the venue, the invisible hand that miraculously transforms all the unenlightened and short-sighted individual decisions for the good of all.
This ambiguity serves Hayek’s purposes just fine. His core assumption as to the general fickleness and unreliability of human nature is not only justified; the institution of the market is being elevated at the same time to the status of an unquestioned principle of social organization, the prerequisite for an 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 somewhat dubious fact that things “work.” It’s never asked, by the way, how well do they work or whether they could work better.
But let’s leave aside, for now, the question of whether Hayek’s unreserved brand of optimism as to the unmitigated virtues of the market is fully justified. Let’s also put aside the rather crucial question of whether the markets are free, whether they could exist or even come into being without at least the tacit support and encouragement by the state — an institution that is bent on controlling all activities related 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 Hayek’s terms, unencumbered by said 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 short-sighted and uninformed, he does so in a restricted sense. Hayek’s actors may be ill-informed but only insofar as their decisions, choices, and actions impact the entire society in some macro way, with a mind to how those decisions and choices might affect the well-being of all.
Indeed, it’s true that none of us have this kind of premonition or foreknowledge of the future, which is why Hayek delimits the scope of our knowledge to our immediate affairs and concerns, as affecting our family, friends, acquaintances, neighbors, what have you. In this and only in this respect, we are as knowledgeable as can be, and we can’t ask for anything more. Again, no disagreement here. So far, 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 short-sighted 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 and represent the total, the resultant, the composite of all our decisions. However, I do object to endowing the process – i.e., the accretion of the social from what starts as the individual — with any (social) value, saying 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 somewhat 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 precisely 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 primary generator of social value.
None of this is to say that this formulation doesn’t serve Hayek’s purposes. Quite the contrary, his conceptual system is as logical and airtight as can be. To not be dominated by any external agency, the state included, individuals must be accorded autonomous spheres within which to act and act responsibly.
Considering the relatively 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 alone. Not only is this consistent with his methodological individualism thesis whereby aggregate, micro-events determine social phenomena. It also gives Hayek a perfect out. His view of the average individual as lazy and indolent is dutifully preserved, and yet, paradoxically, it serves as the guarantor of individual freedom.
But here’s the catch. According to Hayek, the system of personal property — of what’s mine and what’s yours — is the only thing that his so-called average individual can understand and act logically and rationally, given his or her 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 interests.
But why should those individual decisions, restricted as they may be to one’s immediate circle (and rational in that limited context), benefit society as a whole?
Here’s another ace up Hayek’s sleeve: the market!