The Errors of Socialism (The Collected Works of F. A. Hayek)

I was hesitant to purchase this book because the title led me to believe that this was just a rehash of The Road To Serfdom. Instead, it turns out to be a philosophical work that in my opinion would be more accurately titled The Extended Order as opposed to The Fatal Conceit.

The book mostly deals with the concept of the extended order, which is basically the idea that in addition to our genes, our morals and politics come from an evolutionary process which is much too complicated to be intentially created by the human mind. This is an epistemological view that argues against the idea of system building in both morals and politics (specifically socialism which seems to be broadly defined as any top-down political and moral construction).

I would have liked to see the concept of the extended order flushed out into a more concrete moral and political philosophy, but this has been done (at least the political) in his earlier writings (Constitution of Liberty among others). Because of this, I'm not sure this book has as broad an appeal as some of his earlier classics, but as a Hayek fan who likes philosophy, I thoroughly enjoyed the book.

Reading this book frequently gave me a feeling of satisfaction similar to learning a new concept in physics or engineering. That, "oh, so-that's-how-that-works feeling," that I so enjoyed in my engineering classes. I suppose that means that this book contains fundamental insights that explain how the world works.

It does this in a very peculiar way however: it shows what we can not know, explain or control.

This book has greatly broadened by understanding of history, philosophy, evolution and economics. This is a great book to read as your first Hayek book. I'm now looking forward to reading Law, Legislation and Liberty which is supposedly also very insightful.

On a personal level, this book has made me more humble and more willing to accept facts, phenomenon and experimental results that are beyond my comprehension. There are things in life that I will not be able to understand, explain or control, and being an engineer I often feel that I should understand in order to move forward. Hayek's insights however allow me to proceed forward with the idea that I'm not trying to explain why or how something works, but rather moving forward because it does work.

This line of thinking is not new to the world, I think it's called respect for tradition, evolution, empiricism or just what works.

Capitalism is what works. It is what has evolved, not by design or planning, but through evolution. With some things humans can not design better than evolution can create. For example, no one can design a human being or the culture of humans beings.

I hope you enjoy.

I first read The Fatal Conceit back in 1991, after reading Hayek's The Road to Serfdom. I reread the book in 2007 while commuting back and forth to California's state capital in my capacity as a state assemblyman. Needless to say, the book's profound critique of socialism means much more to me now as a 45-year-old lawmaker and front row eyewitness to daily attempts to incrementally enact socialism in the Golden State.

The Fatal Conceit's title captures the essence of the socialist/progressive/liberal impulse, born of a feeling of moral and intellectual superiority, to bring order to the free market, and in so ordering, destroy the very thing (capitalism), that allows modern civilization. Hayek writes of socialism in the introduction entitled "Was Socialism a Mistake?":

"...The dispute between the market order and socialism is no less than a matter of survival. To follow socialist morality would destroy much of present humankind and impoverish much of the rest.

"All of this raises an important point about which I wish to be explicit from the outset. 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 recognizes 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..."

What a simple observation of the truth, "...order generated without design can far outstrip plans men consciously contrive..." Capitalism, spontaneously generated through centuries of human interaction, has proven the best way to conduct the economics of mankind. But socialists to try to "improve" upon something that no person invented, and, in so doing, ruin a healthy economy. Hayek admits that capitalism can look bleak to individuals who, through hard luck or laziness, can't make it - but he convincingly argues that helping the poor by enacting socialism out of a moral impulse "...would destroy much of present humankind and impoverish much of the rest."

This brings me to present day California with its burgeoning budget deficit brought on by chronic overspending on social programs twined with a tax regime regarded by The Tax Foundation as the 47th worst business tax climate in America. Very soon this system will collapse. The socialists/progressives/liberals who run the legislature are already proposing more taxes and more social welfare spending. Should California become America's tax dungeon by edging out Rhode Island to claim the worst business climate in the nation, the negative impact on the working class will dwarf all the combined intended good of every social welfare program enacted and yet conceived by the left as the paying jobs of the capitalists flee the state. Gazing at California, Hayek would surely shake his head sadly.

The Fatal Conceit should be required reading for every elected official in America, beginning with California.

Reviewer: Chuck DeVore is a Vice President at the Texas Public Policy Foundation. He served in the California State Assemblyman from 2004 to 2010. Before his election, he was an executive in the aerospace industry. He was a Special Assistant for Foreign Affairs in the Department of Defense from 1986 to 1988. He is a lieutenant colonel in the U.S. Army (retired) Reserve. DeVore is the author of "The Texas Model: Prosperity in the Lone Star State and Lessons for America" and the co-author of "China Attacks."

Hayek is an amazing thinker, a dense writer and a rewarding read. Though the book is less than 150 pages, Hayek manages to make a fully thought out argument, reasoning that the complexity of the society that we live in is not fully comprehended, predictable or explainable. Hayek believes that our culture has evolved in such a way that the root causes of our interactions benefit us, but the underlying reasons have been lost throughout the generations.

Economics and sociology are virtually the same science as both are built around the interactions of people within a larger system (both stem from a system of thought called praxiology). The difference is that economics is focused on the interchange between people that effects monetary systems. Economics can not be separated from sociology, nor the other way around.

Because of this lack of understanding of our society as a whole, he argues that it is impossible for bureaucrats in their marbelized hallways to plan an economy for an entire nation. After all, he argues, who are these great minds that possibly plan out in detail the needs for a changing society?

Hayek uses the term "Rational Constructivism" to define the attempt to use reason to construct a society. He argues that this is impossible in what he calls "the extended order" - a large market economy where people interact in a non-direct way. For example, we interact with the makers of electronics, but we never meet them or speak to them directly. Our only interaction is by purchasing the products that they produce. The interaction within an extended order is unpredictable or unknowable to us, thereby discrediting the notion a person or group of people who can plan an economy exist.

Hayek argues brilliantly that primitive man was never free in the classical liberal sense of the term (and not even in the anarchist sense), but always collectivist (tribal). He could not have survived otherwise. He goes on to argue that man had developed instincts that facilitated the successful coordination of small groups. We see it today in extended families, characteristics that we know as altruism and group solidarity. However, modern civilization is not a tribal organization that can survive on these instinctual drives. Hayek used the term "the extended order of human cooperation" to distinguish man's modern civilization from his primitive existence in the tribal setting.

Hayek emphasizes that what truly differentiates man from animals is not our biology, but our traditions. We became man late in the game, not primarily through biological evolution, but through cultural evolution. The selection of traditions enabled the advancement of some groups over others allowing for their expansion. On this evolutionary process Hayek wrote: "We did not select these traditions; rather, they selected us."

Socialists are generally hostile to traditions in favor of embracing their instinctual drives toward altruism and group solidarity. But these qualities cannot sustain the extended order of human cooperation that developed, and is maintained, through the market process, itself protected by our adherence to the traditions of private property, trade, honesty, contract, saving, and rule of law.

This was a brilliant book. The language was much shorter and more precise than in Road to Serfdom.

I know that it was one of Hayek's traits to not use mathematics, but it would have been nice if he demonstrated some of his ideas with at least a little math. Or gave us the references if we wanted to look them up right at the bottom of the page.

Particularly neat was his off-setting things that were not critical to the argument in small type.

As it stands, the book is almost 100% empirical evidence of why socialism doesn't work. And kudos to the author for calling Socialism and Communism what they are, which is religion.

This book signals a broadening of the classical liberal agenda into a range of cultural, historical and anthropological interests, beyond its traditional strongholds in philosophy and economics.
The book was the first volume of a major publishing program at the University of Chicago Press. The ten-year plan was to bring out a uniform set of twenty or more volumes of Hayek's collected works. The senior editor for the venture was William W Bartley who died shortly after this book appeared.
The main concern of the book is the continuing appeal of socialism among Western intellectuals despite its theoretical shortcomings and its failure in practice. Hayek defines the basic problem of the book as 'how does our morality emerge, and what implications may its mode of coming into being have for our economic and political life'.
Central to his case is the notion of an extended order of civilisation that is held together by the largely unconscious influence of traditional moral codes and practices. He has deployed the 'extended moral order' concept in his critique of socialists and central planners and their 'constructivist rationalism'. He proceeds by way of a reconstruction of Western history to explain the function of a number of moral rules, especially those that regulate dealings in private property, which he calls "several property". Other important rules concern honesty, contracts, exchange, trade and privacy. He undertakes some "conjectural history" to chart the origins of liberty, property and justice and the linked evolution of markets and civilisation.
With his conjectural history in place, Hayek then describes the revolt of the modern socialists against the discipline (and the opportunities) of the extended order. This revolt has two bases; one is instinctive or 'atavistic', the other is a perversion of reason that Hayek calls 'constructivist rationalism'. He claims that the instinctive resistance to the extended order of capitalism arises from the conflict between the "old" and "new" moral codes. However, against this essentially psychological thesis it is more likely that the attraction of socialism comes from the conjunction of several strands of thought. One of these is the tradition of utopian social thought which can be traced from Plato. Second is the tradition of helping the weak, which in the West is essentially the moral legacy of Christianity. Third, a cluster of ideas in political economy including the utopianism and centralism noted above, combined with the egalitarian aim of shifting wealth from the haves to the have-nots (inspired partly by the Christian ethos of helping the poor).
While the ideas of the first and third kind are well worthy of criticism the tradition of helping the weak is important and valuable, and needs to be sustained. Unfortunately there has been a growing movement in modern times to recruit the state to perform this function, in place of private charity. Therefore it is plausible to argue, against Hayek, that the moral force of socialism derives not from primitive emotional sources but from the fact that it recruits the power of Christian charity with its drive to help the poor and the weak. The tragedy of socialism is that the means do not achieve the objective.
Hayek's critique of reason is distinctly ambiguous and it is no more satisfactory than his psychological critique of socialism. His target is "constructivist rationalism", expressed in the view that blueprints for social engineering can be derived from concepts of society and its destination which form by a rational process in the minds of individuals or members of elite groups. An earlier critique of this stance occurs in "The errors of constructivism", a 1970 paper reprinted in his "New Studies in Philosophy, Politics, Economics and the History of Ideas". At this stage in his thinking the individual still retained a high degree of autonomy and the critical function assigned to human reason was compatible with an evolutionary approach that recognized the significance of tradition.
This view of the critical role of reason is restated very briefly in "The Fatal Conceit", but so briefly and adjacent to so much argument in favour of the benefits of submitting to tradition that the impression is one of confusion. This is unfortunate because a very important (and reasonable) conception of the function of moral and political philosophy emerges from Hayek's work, and from that of Popper in "The Open Society and its Enemies". This is the view that the task of moral and political philosophers is to discover, formulate and critically probe the implications of those principles which function as the "rules of the game" in social life.
This approach would supplement the methods of conceptual analysis and crude 'positivist' empirical description of social and political systems. It would have the theoretical advantage of linking disciplines and the practical merit of being continually in touch with problems and their possible solutions. This is consistent with the thrust of Hayek's previous work. In view of the dubious critique of the 'atavistic' roots of socialism and the ambiguous critique of reason, "The Fatal Conceit" is a brilliant but flawed jewel.

If conceit is fatal, Washinton DC is doomed. This is perhaps Hayek's best work. I first heard about Hayek on "Free Markets With Dr. Mike Beitler," a libertarian internet-radio show. Hayek's work is timely and timeless. Socialist central planning is a hopeless effort. Washington DC give it up! Thanks Dr. Beitler for the recommendation.

I recommend this in addition to Beitler's Rational Individualism: A Moral Argument for Limited Government & Capitalism.

The Fatal Conceit is not, as it masquerades to be, a book about government, but rather a book about the human mind. It pleads with the reader to understand that there are structures more complex than the human mind, of which the human mind is a less complex sub-structure, and which more-complex super-structure may therefore be impossible for the less-complex sub-structure to understand or even witness. Structures which are products of the human mind are, of course, less complex than the minds that created them, and therefore are far less complex still, than the wonderful super-structures composed of many human minds interacting unconsciously. Hayek simply implores those of you who can't see the garden for the flowers to at least try to avoid stepping all over it -- even though your mind is incapable of appreciating its beauty, and you are doomed to write bitter, scathing reviews, proving for the rest of us how you will continue to miss the point completely. The best thing you unbelievers can do to appreciate Hayek is go read "Horton Hears A Who" by Dr. Seuss, and understand that for 50 years, Hayek was Horton.
Love Ya!!
SM

Hayek is without a question one of this century's greatest thikers. The book is a valuable tutor in the shortcomings of socialist theory.
To the reviewer from New York attacking the writing style of the Italian reviewer: why don't you try writing your review in Italian for all of us to see your multilingual brilliance. Also, I must admit that your "lucid" writing style was not particularily engaging.

To those who have some basic understanding of economics and history Hayek provides one of the greatest apologetic summaries of why market economics work and why socialism does not. To those who profess to love the common man and who suffer with the plight of Africa and other parts of the underdeveloped world there is a lesson to those who will hear it. Proceed with socialism and waste time, money, and lives. Proceed with market economics and with all its cruelties it is kinder by far than socialism. Just look at China, and India verses Russia and Africa.

This book is an eye opener for those interested in either sociology or economics. Hayek explains the evolution of society from an economist's standpoint, and best of all it is written in plain English. Hayek doesn't use a prose cluttered with economist/sociologist jargon. This way it can be read and understood by anyone with a slight interest in the subject, yet still be highly appreciated by scholars.

Alright, I notice that the "reviews" below are by and large little more than ideological chest-thumping. This is true of both those on the right and the left (do any centrists ever read this book? I wonder.). So, I am going to do my best to make some comments on the virtues and vices of free-market capitalism (to the extent to which such an institution has ever existed). Caveat emptor--I am a socialist.
1. The idea that socialism neccessarily entails centralized governmental control over the socioeconomic structure of a given body politic is plainly false, although it is certainly an excusable error considering that the erstwhile "socialist" bloc was organized accordingly. If you know anything about the 200+ year history of socialism, you are no doubt aware that there has been in fact a long-running, acrimonious debate between advocators of statist and bottom-up models. Of course, you can get around this annoying historical fact by simply defining "socialism" as "economic centralism," but this is a little like defining "democracy" as "mob rule." Mob rule is a form of democracy, not identical with the class of all possible democratical systems of rule.
2. Be very careful when comparing the "successes" of capitalist economies with the "failures" of "socialist" ones. Comparing the United States, a country with a long history of industrialization and with almost incomparable natural advantages, with the Soviet Union, a nation that began its existence as a devastated and famine-ridden Third World country with no industrial infrastructure to speak of, is a little bit ingenuous. Remember that the Soviet Union was at least able to care for all of its population, as opposed to such capitalist states as Chile, Mexico, Honduras, Brazil, Haiti . . . the list could be extended quite a bit. Remember also that Cuba possesses the highest standard of living in Latin America (you don't have to take my word for this--I'm drawing on UN statistics). Yes, non-capitalist Cuba is poor and people are attempting to emigrate, but ALL of Latin America is poor, and Cuba at least does not have starvation, malnutrition, an economy based on cocaine exportation, or death squads roaming the landscape.
3. The idea of laissez-faire has NEVER been taken seriously by anybody outside of the academy (except for a brief period in the 1800's in Britain, which made a rapid about-face when its economy studied to collapse). If you look at the historical record, you will be very hard-pressed indeed to find an instance of an economy developing using a free-market model. The U.S., for instance, was only able to get its steel industry off the ground because it engaged in very stringent protectionist policies to keep out much cheaper imports from Britain. Indeed, historically, free-market eonomies have been imposed on countries by foreign powers in order to ruin their economies and make them dependent, as was the case in India in the 1800's, most of Latin America in the 1900's, and, the more cynical among us might suspect, Eastern Europe in the 1990's.
Oh yes, I should I suppose make a few comments about Hayek's book--I find him an engaging writer, of keen intellect but very limited in scope and grievously hampered by his own ideological presuppositions. Certainly worth reading, but I wouldn't want to run a country based on it.

Hayek came late to a strange brand of social-Darwinism with this late text, in which he develops his concept of a ‘spontaneous order’. Read as he endlessly drives home the exact same point in four or five different registers: markets cannot be planned, but are the emergence of unconscious actions by diverging actors. Through a bizarre amalgam of Spencerian and social-Darwinian cultural evolutionary theory, Hayek positions the market as the outcome of a rule-bound context of evolving complexity and completeness. Through the simple conflation of ontogeny and phylogeny, he is able to have the market become an organic process and the general context of all “extended orders.” It is difficult to trace exactly what his evidence for any of this is (he will frequently drop related disciplines such as cybernetics, autopoiesis without explanation), but what should be taken away is the political implication: give up on your delusional aspirations to democratically organize society. Only the market can organize the relevant information for such organization. A deeply worrying text which thinly veils its simplicity in a tissue of undeveloped references and appeals to intellectual authority (usually to Popper and Smith). Don’t miss out on this disaster of economic “theory.”

but Milton Friedman already had the job." I rarely venture forth into reviewing this kind of ideological rubbish because of the type of reader this work finds. Reality seems far removed, or at least they only see their tiny island of the world and are happy to have reasons for their supposed superiority.
In response, someone should write a book called Apologists for Capital: The Fatal Conceit or How to Turn Humanity into Commodities. The whole notion that socialism failed, while capitl succeeded strikes me as odd.
First, none of the people who read books like this have ever spent a moment to review the vast literature within Marxism that has long argued that none of the so-called "communist" or "socialist" countries are capitalist, state capitalist <this is a bad sentence, which I am editing here. It should read "countries never were communist, but have long been critiqued as capitalist by many Marxists.> That is not a tradition going back a few years, but all the way to Lenin himself in discussing the problems confronting the Russian Revolution, and more consistently by Amadeo Bordiga, the council communists, CLR James, Raya Dunayevskaya and the recent excellent work by Paresh Chattopadhyay.
Second, none of these people ever seems to have actually read Marx. Nor Hegel. Rarely if ever both in the context of a progression and part of a single thread of intellectual discussion in Germany starting with Kant. Sadly, i have had to read Hayek and it is not very profound. Everything he has said, someone else said before. He just says it with a particularly nasty and arrogant tone. And Hayek is singularly incapable of understanding or fairly representing a single thing ever said by Marx. That would require a textual analysis beyond one thousand words however.
Third, I can't neatly separate the vast sea of poverty, misery, alienation, oppression, war and exploitation from capital. Capital and its supporters have been responsible for NEARLY EVERY war in the 20th century, including the undeclared ones. Over one hundred million dead is not a great advertisement. Fascism is nothing if not capital's solution to depression and revolution in the age of imperialism. Hitler protected capital and smashed workers' organizations, whether the communist party, the social democrats, or the unions or any other organization. The United States has undemocratically and illegally overthrown dozens of governments, supported the filthiest dictators (see Alan Friedman and the rise to power of Pinochet in Chile as one, tiny example), and engaged in viscious internal repression of African Americans, Native Americans and working people in general. Other, poorer countries where capitalk dominates are simply unable to afford any layer of democratic rights or pretences of civility. They are not necessarily more barbaric, however. No one else has killed as many people since the end of WWII as the United States, either directly in war or indirectly by funding dictatorships.
Fourth, Hayek and many others would like to separate the political and the economic, as if the state could somehow be separated from the social relations of production. That idea flows from capital's separation of the economic and the politcal which is both real (in so far as appearances are not illusions separate from an underlying reality) and unreal (in so far as the state is really a form of the capital relation) at the same time. Hayek's fetishized understanding of the relation of state and capital allows him to excuse the worst atrocities as the fault of states and governments, but not capital. No wonder Hayek and Friedman and their ilk get referred to as apologists for the worst sort of misery and reaction.
In conclusion, if you want the most succinct reactionary critique of socialism without having to read an outright fascist, read Hayek. If you want to find moral authority and cover for exploitation, racism, sexism, national chauvinism (like the bigot attacking the Italian reviewer), etc..., read Hayek. If you want even the faintest understanding of this world, its contradictions, or capital, read someone else, preferrable Marx, Fanon, Dunayevskaya, Hegel, Bonefeld, Holloway, Lenin, Luxemburg, Adorno, Cleaver, etc. Oh wait, that''s work. Why work when you can read Hayek and have "reactionary in a can?"

This book was not written by Hayek. It was written by editor and confidant W.W. Bartley when Hayek was sick and incapacitated. The only parts written by Hayek were just random notes that only show up in the appendices.

This is like listening to your grandpa tell a story about something, then start rambling about a bunch of unrelated nonsense for 4 hours, then at the end you realize he has said absolutely nothing about the story he was trying to tell. The author is a pompous tool who obviously is completely detached from the real world (as many economists are) and loses all credibility when he says things like: Einstein was an idiot, overpopulation poses no threat to the world at all, because it means more money, and intellectuals are stupid because they think about things and try to use reason to come up with the best answers. This book is good for only one thing: toilet paper.

The cure for socialism.
Unfortunately socialists are impervious to fact and reason.
Unfortunately socialists are not producers, they never have anything the state wants to steal, so they never experience the reality of socialism.

Socialism leads to big, powerful centralized government. That leads to less freedom. It almost always leads to mass murder of millions. Stalin's purge of millions of his people is just one example. Our Founders: "The powers of the Federal government are few and defined." The Second Amendment gives the American people the tools to fight back. There have been many novels based on a future America under Socialism. One of the best is John Grit's "Feathers on the Wings of Love and Hate." The main character is a fighting machine. He is motivated by his hatred of the tyrannical government and his love for his people.