The Fatal Conceit: The Errors of Socialism (The Collected Works of F. A. Hayek Book 1)

by Friedrich A. Hayek

This book argues that our civilisation depends, not only for its origin but also for its preservation, on what can be precisely described only as the extended order of human cooperation, an order more commonly, if somewhat misleadingly, known as capitalism.

the extended order resulted not from human design or intention but spontaneously: it arose from unintentionally conforming to certain traditional and largely moral practices, many of which men tend to dislike, whose significance they usually fail to understand, whose validity they cannot prove, and which have nonetheless fairly rapidly spread by means of an evolutionary selection – the comparative increase of population and wealth – of those groups that happened to follow them.

Role of cultural group selection recognized by F. Hayek

there is no known way, other than by the distribution of products in a competitive market, to inform individuals in what direction their several efforts must aim so as to contribute as much as possible to the total product.

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 recognises 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.

Spontaneous order and reason. Their roles have to be understood

Nor do I dispute that reason may, although with caution and in humility, and in a piecemeal way, be directed to the examination, criticism and rejection of traditional institutions and moral principles.

Humble criticism of tradion is however important

Thus I wish neither to deny reason the power to improve norms and institutions nor even to insist that it is incapable of recasting the whole of our moral system in the direction now commonly conceived as ‘social justice’. We can do so, however, only by probing every part of a system of morals.

how we came to acquire such an irreplaceable economic order – especially in view of my claim that powerful instinctual and rationalistic impulses rebel against the morals and institutions that capitalism requires.

an evolutionary theory of morality is indeed emerging, and its essential insight is that our morals are neither instinctual nor a creation of reason, but constitute a separate tradition – ‘between instinct and reason’, as the title of the first chapter indicates – a tradition of staggering importance in enabling us to adapt to problems and circumstances far exceeding our rational capacities.

Evolution of morality

The members of these small groups could thus exist only as such: an isolated man would soon have been a dead man. The primitive individualism described by Thomas Hobbes is hence a myth. The savage is not solitary, and his instinct is collectivist. There was never a ‘war of all against all’.

Mankind achieved civilisation by developing and learning to follow rules (first in territorial tribes and then over broader reaches) that often forbade him to do what his instincts demanded, and no longer depended on a common perception of events.

These rules, in effect constituting a new and different morality, and to which I would indeed prefer to confine the term ‘morality’, suppress or restrain the ‘natural morality’, i.e., those instincts that welded together the small group and secured cooperation within it at the cost of hindering or blocking its expansion.

continued obedience to the command to treat all men as neighbours would have prevented the growth of an extended order. For those now living within the extended order gain from not treating one another as neighbours, and by applying, in their interactions, rules of the extended order – such as those of several property and contract – instead of the rules of solidarity and altruism.

Such new rules would spread not because men understood that they were more effective, or could calculate that they would lead to expansion, but simply because they enabled those groups practising them to procreate more successfully and to include outsiders.

the group selection that led to the external order

This evolution came about, then, through the spreading of new practices by a process of transmission of acquired habits analogous to, but also in important respects different from, biological evolution.

This gradual replacement of innate responses by learnt rules increasingly distinguished man from other animals, although the propensity to instinctive mass action remains one of several beastly characteristics that man has retained

the structures of the extended order are made up not only of individuals but also of many, often overlapping, sub-orders within which old instinctual responses, such as solidarity and altruism, continue to retain some importance by assisting voluntary collaboration, even though they are incapable, by themselves, of creating a basis for the more extended order.

Part of our present difficulty is that we must constantly adjust our lives, our thoughts and our emotions, in order to live simultaneously within different kinds of orders according to different rules.

It is not so much, as is often suggested, emotion and reason that conflict, but innate instincts and learnt rules.

Rules alone can unite an extended order. (Common ends can do so only during a temporary emergency that creates a common danger for all. The ‘moral equivalent of war’ offered to evoke solidarity is but a relapse into cruder principles of coordination.)

As we see today due to the Russian invasion of Europe these "temporary emergencies" are maybe more common and less temporary than Hayek anticipated.

rules become increasingly better adjusted to generate order happened not because men better understood their function, but because those groups prospered who happened to change them in a way that rendered them increasingly adaptive.

This evolution was not linear, but resulted from continued trial and error, constant ‘experimentation’ in arenas wherein different orders contended. Of course there was no intention to experiment – yet the changes in rules thrown forth by historical accident, analogous to genetic mutations, had something of the same effect.

perhaps the most important capacity with which the human individual is genetically endowed, beyond innate responses, is his ability to acquire skills by largely imitative learning.

In view of this, it is important to avoid, right from the start, a notion that stems from what I call the ‘fatal conceit’: the idea that the ability to acquire skills stems from reason.

the idea that at some point conscious design stepped in and displaced evolution substitutes a virtually supernatural postulate for scientific explanation.

cultural evolution operates largely through group selection; whether group selection also operates in biological evolution remains an open question –

Governments strong enough to protect individuals against the violence of their fellows make possible the evolution of an increasingly complex order of spontaneous and voluntary cooperation. Sooner or later, however, they tend to abuse that power and to suppress the freedom they had earlier secured in order to enforce their own presumedly greater wisdom and not to allow ‘social institutions to develop in a haphazard manner’

Cycle of Hayek?

the revival of European civilisation during the later Middle Ages it could be said that the expansion of capitalism – and European civilisation – owes its origins and raison d’être to political anarchy

It was not under the more powerful governments, but in the towns of the Italian Renaissance, of South Germany and of 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.

the basic point of my argument – that morals, including, especially, our institutions of property, freedom and justice, are not a creation of man’s reason but a distinct second endowment conferred on him by cultural evolution – runs counter to the main intellectual outlook of the twentieth century.

Although my argument is directed against socialism, I am as little a Tory-Conservative as was Edmund Burke. My conservatism, such as it is, is entirely confined to morals within certain limits. I am entirely in favour of experimentation – indeed for very much more freedom than conservative governments tend to allow.

Hayek's traditionalism

One’s initial surprise at finding that intelligent people tend to be socialists diminishes when one realises that, of course, intelligent people will tend to overvalue intelligence, and to suppose that we must owe all the advantages and opportunities that our civilisation offers to deliberate design rather than to following traditional rules, and likewise to suppose that we can, by exercising our reason, eliminate any remaining undesired features by still more intelligent reflection, and still more appropriate design and ‘rational coordination’ of our undertakings.

intellectuals will demand explanations for everything they are expected to do, and will be reluctant to accept practices just because they happen to govern the communities into which they happen to have been born; and this will lead them into conflict with, or at least to a low opinion of, those who quietly accept prevailing rules of conduct.

and Hayek disagrees with those intellectuals

Freedom requires that the individual be allowed to pursue his own ends: one who is free is in peacetime no longer bound by the common concrete ends of his community. Such freedom of individual decision is made possible by delimiting distinct individual rights (the rights of property, for example) and designating domains within which each can dispose over means known to him for his own ends.

What is freedom?

to have something of one’s own, however little, is also the foundation on which a distinctive personality can be formed and a distinctive environment created within which particular individual aims can be pursued.

General freedom in this sense is nevertheless impossible, for the freedom of each would founder on the unlimited freedom, i.e., the lack of restraint, of all others. The question then is how to secure the greatest possible freedom for all.

The focus on happiness was introduced by rationalist philosophers who supposed that a conscious reason had to be discovered for the choice of men’s morals, and that that reason might prove to be the deliberate pursuit of happiness.

and Hayek disagrees

intellectuals from Rousseau to such recent figures in French and German thought as Foucault and Habermas regard alienation as rampant in any system in which an order is ‘imposed’ on individuals without their conscious consent;

and Hayek disagrees

Earlier I claimed that, within an extended order, solidarity and altruism are possible only in a limited way within some sub-groups, and that to restrict the behaviour of the group at large to such action would work against coordinating the efforts of its members.

Once most of the productive activities of members of a cooperating group transcend the range of the individual’s perception, the old impulse to follow inborn altruistic instincts actually hinders the formation of more extensive orders.

this is true but in the context of a boarder country like Finland or Ukraine big part of activity is protection against Russia. That activity beeing public goods production

Only a confessed immoralist could indeed defend measures of policy on the grounds that ‘in the long run we are all dead’. For the only groups to have spread and developed are those among whom it became customary to try to provide for children and later descendants whom one might never see.

Custom and tradition, both non-rational adaptations to the environment, are more likely to guide group selection when supported by totem and taboo, or magical or religious beliefs – beliefs that themselves grew from the tendency to interpret any order men encountered in an animistic manner.

first the main function of such restraints on individual action may have been to serve as signs of recognition among members of the group.

we owe the persistence of certain practices, and the civilisation that resulted from them, in part to support from beliefs which are not true – or verifiable or testable – in the same sense as are scientific statements, and which are certainly not the result of rational argumentation.

it might be appropriate to call at least some of them, at least as a gesture of appreciation, ‘symbolic truths’, since they did help their adherents to ‘be fruitful and multiply and replenish the earth and subdue it’

the religious view that morals were determined by processes incomprehensible to us may at any rate be truer (even if not exactly in the way intended) than the rationalist delusion that man, by exercising his intelligence, invented morals that gave him the power to achieve more than he could ever foresee.