Political Theory Capitalism and Civil Society

Tonights lecture Introducing Hayek Spontaneous social order The market order (catallaxy) Hayeks critique of socialism Social justice Liberty and the rule of law Cultural evolution Assessment and criticism

The idea of spontaneous order The problem of constructivism and Cartesian rationalism (the synoptic delusion) Liberalism and order (the evolutionary approach): order in society is due to a process of growth or evolution Distinction between Anglo-Saxon liberalism and Continental liberalism The concept of order: cosmos and taxis (grown and made order)

The market order (catallaxy) Spontaneous order in economic life: the distinction between economy and catallaxy The problem of the division of knowledge as the central problem of economics as a social science Economic knowledge is, by its very nature, dispersed throughout society and incapable of being centrally co-ordinated

Hayeks critique of socialism The superiority of the market order rests, in the first instance, on its capacity to utilise dispersed knowledge or information The market economy achieves a more efficient allocation of resources and a more effective satisfaction of a greater range of needs than a planned economy Hayeks role in the socialist calculation debate (economic calculation under socialism is impossible)

Liberty and the rule of law Individual liberty is necessary for the spontaneous order of the market to work – the spontaneous order of the market is made possible by certain regularities in behaviour, which, in turn, can be attributed to certain abstract rules of conduct The general rules of conduct which delimit the individuals private sphere and allow the market order to work are the rules of property and contract, and these rules are manifested in the rule of law

The liberal subject Like any other theory of liberal individualism, Hayeks presupposes a model of the rational or normal individual Competition as a means through which rational and entrepreneurial conduct is produced; a method for breeding certain types of mind Liberty is inseparable from individual responsibility in the sense that the argument for liberty can apply only to those who can be held responsible Full inclusion into the open society thus depends on a certain standard of rationality/normality and that full liberty is only given to those who are, or can be held, responsible

Cultural evolution The process of cultural evolution is analogous to that of biological evolution in the sense that both rely on the same principle of selection: survival or reproductive advantage The contention that the order of the open society is in fact natural – that is, independent of deliberate human agency and prior to political power and authority – is central to Hayeks defence of liberalism Civilisation, as it has developed during the last ten or twenty thousand years, is a product of our capacity to learn

Cultural evolution Bio-ontological account of the human condition which features a fundamental conflict between two biological properties and their respective cultural expressions The open society has prevailed because of its superior capacity to ensure survival and increase of population Through his evolutionary ontology he asserts that the open society is vital for the vast majority of the global population and indeed for the possibility of further evolution

Assessment and criticism John Gray: negative epistemology and neutral concept of spontaneous order unable to provide an affirmative ontological foundation for a moral- political argument for liberalism (evolutionary argument problematic) Andrew Gamble: meta-narrative about evolution, progress, and civilization is problematic; Hayeks social and political thought is structured by a series of dualities or ideological closures which prevent him from realising the potential value of his account of modernity

Further reading Andrew Gamble, Hayek: The Iron Cage of Liberty (Cambridge: Polity Press, 1996). John Gray, Hayek on Liberty (London and New York: Routledge, 1984). Mohammad R. Nafissi (2000), The paradox of principles: the dialectics of Hayeks liberalism, Economy and Society, 29:2, pp Jörg Spieker (2012), Defending the open society: Foucault, Hayek, and the problem of biopolitical order, Economy and Society, DOI: /

Concluding remarks