HAYEK AND AFTER This book offers a distinctive treatment of Hayek’s ideas as a ‘research programme’. It presents a detailed account of aspects of Hayek’s intellectual development and problems that arise within his work, and offers some broad suggestions of ways in which the programme initiated in his work might be developed further. The book opens with an overview, and then discusses how Popper and Lakatos’s ideas about research programmes might be applied within political theory. There then follows a distinctive presentation of Hayek’s intellectual development up to The Road to Serfdom, together with critical engagement with his later ideas. The discussion draws on a full range of his writings, makes use of some neglected earlier work on social theory and law, and also draws on archival material. The book also makes some unusual comparisons, including discussions of Gaventa and of E.P.Thompson, and presents controversial suggestions on how a ‘Hayekian’ approach should be further developed. The book will appeal to anyone with an interest in Hayek’s work and to those concerned with twentieth century intellectual history. It offers a distinctive interpretation of his views and a particularly wide-ranging survey of what in the author’s view now needs to be done in the pursuit of a Hayekian approach to classical liberalism. Jeremy Shearmur was educated at the London School of Economics, where he also worked as Assistant to Professor Sir Karl Popper. He has taught at the universities of Edinburgh and Manchester, at George Mason University and is a former Director of Studies at the Centre for Policy Studies in London. He is currently a Senior Lecturer at the Department of Political Science at the Australian National University. ROUTLEDGE STUDIES IN SOCIAL AND POLITICAL THOUGHT 1 HAYEK AND AFTER Hayekian liberalism as a research programme Jeremy Shearmur 2 CONFLICTS IN SOCIAL SCIENCE Edited by Anton van Harskamp 3 POLITICAL THOUGHT OF ANDRE GORZ Adrian Little HAYEK AND AFTER Hayekian liberalism as a research programme Jeremy Shearmur London and New York First published 1996 by Routledge 11 New Fetter Lane, London EC4P 4EE This edition published in the Taylor & Francis e-Library, 2003. Simultaneously published in the USA and Canada by Routledge 29 West 35th Street, New York, NY 10001 © 1996 Jeremy Shearmur All rights reserved. No part of this book may be reprinted or reproduced or utilized in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloguing in Publication Data Shearmur, Jeremy, 1948– Hayek and after: Hayekian liberalism as a research programme/ Jeremy Shearmur. (Routledge studies in social and political thought) Includes bibliographical data and index. 1. Hayek, Friedrich A.von (Friedrich August). 1899– —Contributions in political science. 2. Liberalism. 3. Free enterprise. 4. Socialism I. Title. II. Series JC273.H382S54 1996 330’.092–dc20 96–5067 CIP ISBN 0-203-43834-5 Master e-book ISBN ISBN 0-203-74658-9 (Adobe eReader Format) ISBN 0-415-14058-7 (Print Edition) To Pam CONTENTS Acknowledgements ix 1 INTRODUCTION 1 2 FROM SOCIALISM TO THE ROAD TO SERFDOM 26 3 HAYEK’S LATER THOUGHT 65 4 COMMERCIAL SOCIETY, SOCIAL JUSTICE AND DISAGGREGATION 118 5 POST-HAYEKIAN POLITICAL ECONOMY 152 6 WHY OUR FREEDOM MATTERS TO OTHERS 176 7 KNOWLEDGE AND IMPERFECTION IN A MINIMAL STATE 198 Notes 221 Index 249 vii ACKNOWLEDGEMENTS I have been at work, in various ways, upon this project for so long that proper acknowledgements would amount to an exercise in intellectual autobiography. All that I can sensibly say here, is that I would like to thank again all those whom I thanked in the acknowledgements to my University of London Ph.D. dissertation, ‘The Political Thought of F.A.von Hayek’, especially Kenneth Minogue, and in addition Norman Barry and John Gray, with whose important work on Hayek I have been engaged over such a period that it is difficult to identify specific influences upon what I have written here. In addition, I would like to thank, in relation to the present volume, Tyler Cowen, David Schmidtz and Leif Wenar for their extensive comments on an earlier version, and also anonymous academic referees for their reactions to successive versions of the manuscript. I would also like to thank Knud Haakonssen and Chandran Kukathas for useful conversations; Bruce Caldwell for his particularly useful comments on a very late version of the manuscript; everyone at the Institute for Humane Studies, George Mason University, for their assistance and encouragement, and finally my wife, for her forbearance in not reminding me too often that the book was not yet finished. I would also like to thank the Earhart Foundation for their support of research in the Popper Archives at the Hoover Institution. The ideas set out in this volume build on, and extend, the argument of my 1987 Ph.D. dissertation. In addition, chapters five and six draw on material previously published in, respectively, ‘From Hayek to Menger: Biology, Subjectivism and Welfare’, in B.Caldwell (1990) (ed.), Carl Menger and his Legacy in Economics, History of Political Economy, Annual Supplement to vol. 22, Durham, NC and London: Duke University Press; and ‘From Dialogue Rights to Property Rights’, Critical Review, 4(1 and 2), winter-spring, 1990, pp. 106–32. The argument developed in this volume at several points complements that of my (1996) The Political Thought of Karl Popper, London and New York: Routledge. The reader may wonder why, given the time at which the book is written, ix ACKNOWLEDGEMENTS my examples refer to ‘he’ rather than to ‘she’, or some random mix. My reason is not that I think that issues raised by feminists are to be disregarded, but, rather, that I agree with Susan Moller Okin in her Justice, Gender and the Family (New York: Basic Books, 1989) that simply swapping ‘she’ for ‘he’ is a matter of false gender neutrality. It also leaves the reader wondering: was there any special reason why this example used one rather than the other? In my view, the problem of whether the argument advanced here is compatible with feminist concerns is a topic that needs to be taken very seriously. But this would call for several substantive papers, or another book, rather than just playing about with the words used in examples. Jeremy Shearmur, Bungendore NSW x 1 INTRODUCTION OVERVIEW I will start by explaining the overall argument that is offered in this book and also the contribution that is made to it by each chapter. Hayek is well known for having argued for the desirability of a market- based social order, both in broadly consequentialist terms and because of its relation to a particular conception of human freedom. He further argued that if we wish to live in societies in which our economic activities are coordinated with those of numerous other people with whom we cannot have face-to-face relations, we have no option but to make use of market mechanisms. These allow for the transmission of information in ways that cannot be simulated by central planning. In chapter two, I introduce these ideas in the course of a fairly detailed account of some aspects of Hayek’s intellectual development. The reason for proceeding in this way, I will explain shortly. First, I will sketch what they look like, in more general terms. On Hayek’s account, a desirable social order turns out to be a complex whole which contains as intrinsic and ineliminable parts things which, in themselves, are not desirable. This idea is of interest not only in itself, but also because it turns out that, on his account, such a social order must be sustained on the basis of behaviour that in key respects is what I will call disaggregated. Hayek, like Hume and Smith before him, stressed the way in which actions in a society of any complexity are not—and can hardly be— taken with the intention of bringing about large-scale social consequences which we find desirable. Instead, they are taken on a basis that is intelligible to us in the concrete situations in which we act; situations in which our knowledge is inevitably very limited. These ideas are of the greatest importance for social theory. Hayek’s writings about the problems of economic calculation under socialism discuss the way in which, under certain conditions, we may be able to sustain some desirable social outcomes on the basis of such actions. But as Hayek himself suggested in what he wrote about social justice, we may not be able to realize other attractive social ideals at the same time. More generally, some features 1 INTRODUCTION of life in large-scale societies of the kind within which most of us live, and to which Hayek has drawn attention, impose important constraints over what we can aspire to, by way of the realization of normative ideals. It is these ideas about the constraints upon the realization of normative ideals which seem to me of real significance for social theory. It is one thing to decide that it would be desirable if the society in which we live possessed certain characteristics. But it may be quite another thing for it to be possible for such effects to be brought about, as consequences of the actions of citizens within it. Not only may our adoption of any one way of solving certain problems preclude our also being able to solve others, but, as Hayek’s work suggests, if individuals have freedom as to the actions that they will perform in the specific situations in which they find themselves, and they are, for the most part, not in a position to know what the relationship will be between their particular actions and the more systematic consequences of those actions, it may not be possible even to bring about consequences the realization of which they would consider desirable, and which they would like to realize if they could do so.1 In my view, such ideas pose some interesting challenges to the way in which many issues in normative political theory are customarily considered.