Friedrich A. Hayek (1899–1992) is probably one of the most important twentieth-century economic philosophers and, equally, least understood. A firm free-trader but aggressive opponent of the quantitative formalisation of the subject. In the case of the latter he shared an uncomfortable relationship with Milton Friedman and the Chicago School. Naomi Beck has done a brilliant task of explicating Hayek’s use of a cultural argument emphasising group selection as the impulse to understanding the decentralised market order. In short, natural selection at the collective level was, for Hayek, the key to interpreting modern civilisation and morality (meaning the West). Hayek emphasised cultural evolution within an organic Burkean perspective, in which self-interest and human logic, were subsumed to group selection. In this sense new human self-interests only gained ascendancy if the whole party chose to accept them. Beck’s book offers the best systematic exploration of this aspect of Hayek’s thinking to date.

Like the moral historical economists of the nineteenth and twentieth centuries, Hayek was no fan of pure human reason. Nor, however, did he like divine design arguments and, instead, emphasised spontaneous individualism that evolved through no recognisable consciousness; it just emerged via group selection. This is very different to the individualism and gene-centric understanding of evolutionists in the latter half of the twentieth-century such as Richard Dawkins. Beck spends a great deal of time, raising contradictions and problems with Hayek’s idea of evolution, claiming this aspect of his perspective has not weathered well in comparison to his other work. It is precisely this aspect of Hayek that Beck seeks to critically examine and the result is well worth it.

Beck shows how Hayek harked back to the arguments of the early eighteenth-century Anglo-Dutch commentator, Bernard Mandeville (1670–1730) and subsequent British empiricists such as David Hume (1711–1776), as the originators of his own perspective (not Charles Darwin). Here a spontaneous social order emerged via a process independent of human action; thus autonomous of either divine or human design. Morality for Hayek, unlike nineteenth-century Anglican historians such as William Whewell (1794–1866), was not divinely planted but born of human cultural evolution. Nonetheless there was something more than sensory data that bound this development together. In this sense he was, arguably, closer to the views of the twentieth-century secular moral historians, Karl Polanyi and E. P. Thompson, although it was capitalism and not Marxism that bound morality together. For all of them, however, they shared the Kantian view on the limits of human reason.

Like Whewell, Hayek was Kantian in the sense empirical observations made no sense till they were arranged by the mind. However, unlike Whewell or Immanuel Kant (1724–1804), these evolved via human evolution. Hayek wrote: “A certain part at least we know at any moment about the external world is therefore not learnt by sensory experience, but is rather implicit in the means through which we can obtain such experience”.1 This form of cultural evolution had found its true state in the rules and accompanying morality of the free market. Knowledge was a product of tradition and was transmitted via social learning and not genes; these were “unconscious metarules” that were close to Michael Polanyi’s notion of tacit knowledge (p. 55).

At the heart of modern civilisation (meaning the West) was the free market. This was fuelled by competition and was the process underpinning discovery. Genetic evolution could not be right since it was too slow for rapid social change – hence the emphasis upon collective selection (pp. 89–93). Rules only got broken by entrepreneurs when the subsequent new practices benefited the group that they occupied (pp. 98f.).

This was the antithesis of the nineteenth-century Anglican historians and twentieth-century moral economists. It was not a commonality or Anglican faith in God that defined our morality but, rather, the human species population growth and increasing efficiency via capitalism. Not surprisingly, perhaps, Hayek does not mention Thomas Malthus (pp. 8f.). The free market was not born of utilitarian rational planning and transcended social planning. As such, too, there was no room for solidarity or altruism (characteristic of small communities) in the modern world, since they are not compatible with the rules of profit and competition that underpin the free market (anonymous large communities). Deliberate human engineering led to totalitarianism (socialism or fascism) and retarded cultural development, while liberalism grew it spontaneously. The former was the “fatal conceit” that was the title to his last work (p. 77). A free liberal market allowed humans to share tacit knowledge, but no human could ever know it in its entirety.

It was not human logic but the free market that guided the action of individuals. In this sense, as Beck skilfully shows, Hayek spent his life attacking a rationalist tradition that interpreted and planned the world entirely via human reason. The result was, he argued, a false engineering mentality that forced the social world to be interpreted by the scientific methodology of the natural sciences. This could be traced back to the French Physiocrats and the Encyclopaedists that emphasised a single human reason, which went on to underpin the French revolution. This path, for Hayek, would inevitably lead to serfdom and socialism. It was not an accident the Industrial Revolution first occurred in the West and, especially, England: “It was not under the more powerful governments, but in the towns of the Italian Renaissance, of South Germany and 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.”2

Beck’s overview of Hayek’s notion of cultural evolution still, and I would say more than she gives credit, enjoys a huge relevancy in such areas as, for example, histories on the origins of the Industrial Revolution. Beck’s excellent book is an important addition to our understanding of Hayek’s work, and his impact upon economics and economic history.

Notes:
1 Friedrich A. Hayek, The Sensory Order: An Inquiry into the Foundations of Theoretical Psychology, Chicago 1952, p. 167 and quoted in Beck, Hayek, p. 55.
2 Friedrich A. Hayek, The Fatal Conceit: The Errors of Socialism, Chicago 1988, p. 33 and quoted in Beck, Hayek, p. 108.