Hayek’s Method

by Don Boudreaux on March 23, 2006

in The Economy

Hayek passed away fourteen years ago today.  I help to celebrate his long life well-lived with this essay at Tech Central Station.

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{ 13 comments }

drtaxsacto March 23, 2006 at 9:33 am

Don-

Thanks for this.

drtaxsacto

bartman March 23, 2006 at 2:29 pm

Indeed, thanks, Don. I didn't realize that my way of thinking about society and life had one of those double-barreled 50-cent post-modernist-sounding names, but I guess I'm a methodological individualist without even knowing it.

Hit The Bid March 23, 2006 at 3:54 pm

I'm underwhelmed. What a sad view of the world. If individual actors account for all actions, and the sum of those actors cannot be greater than its parts, then how does a society or a business or a church get formed where rights and actions must be subservient to a greater collective?

Nice try as well Don on the idea that a government (necessarily no greater than the sum of its individuals) can never spend their money better than any individual…what if some of the individuals are idiots?

Don Boudreaux March 23, 2006 at 4:26 pm

Hit the Bid,

Absolutely nothing in my post, nor in Hayek's work, says that "If individual actors account for all actions, [then] the sum of those actors cannot be greater than its parts." The sum of the actions is enormously greater than the parts.

Leonard Read's essay I, Pencil is a superb introduction to this vital notion:

http://www.econlib.org/library/Essays/rdPncl1.html

Hit The Bid March 23, 2006 at 4:46 pm

After re-reading it, yo did not say that neither did Hayak, so I retract!

thanks for the pencil article, a very interesting allegory ( i knnow its not a total allegory).

I just tend to think that institutional knowledge does get built up(greater than the sum of its individual workers -thank you) enough to make us adequately capable of delivering what we have deemed to be a public good…the post. The author of that would be glad to know of things like FedEx, UPS and others though as well as the internet and email.

Maybe its my grounding in political philosophy and the teachings of Rousseau and others about us leaving the state of anture to enter into the social contract that makes me look askance at libertarianism of this level.

The collective morality of our culture prevents free market capitalism–and by definition its requisite inequalities–to be unacceptible. We have a collective sense of fairness in the US and we give up freedoms/opportunities daily to adhere to these collective notions dont we??

Hit The Bid March 23, 2006 at 4:56 pm

My apologies, I mis-typed:

"The collective morality of our culture prevents free market capitalism–and by definition its requisite inequalities–to be unacceptible. We have a collective sense of fairness in the US and we give up freedoms/opportunities daily to adhere to these collective notions dont we??"

that makes no sense….I meant to say "our culture prevents pure free market capitalism—it unacceptable"..

point being…markets are too efficient and therefore don't address issues of equality sufficiently.

Joel March 23, 2006 at 5:03 pm

You say "equality" like it's a good thing.

Hit The Bid March 23, 2006 at 5:06 pm

I never said "perfect" equality. I mean some measure of equality.

Are you saying you don't beleive in any measure of equality at all in our society/economy? That in fact you believe in perfect inequality!?!?!

liberty March 23, 2006 at 7:28 pm

>Are you saying you don't beleive in any measure of equality at all in our society/economy? That in fact you believe in perfect inequality!?!?!

Believe in like its a good or moral thing, or that it exists?

I do not think there is any moral value in equality, whether complete equality or just more-equality.

Neither relative standing nor equality of outcomes is an important goal. Absolute income levels are an important goal – and opportunity. Redistribution gains one more equality but lower absolute outcomes, and it hurts opportunity, hence I don't like redistribution as my goals do not include equality of outcomes and do include absolute measures of well-being.

Hit The Bid March 23, 2006 at 9:05 pm

"Fair" enough Liberty. Can't say I totally agree, but I catch your drift.

Joel March 23, 2006 at 10:17 pm

Economic inequality is the driving force behind all economic progress.

The inequality in salary between a highschool graduate and a college graduate is what causes people to invest significant amounts of time and money into continuing their educations.

The inequality in salary between a college graduate and a corporate CEO is what causes people to assume the tremendous risk of starting a new business.

Any effort to reduce economic inequality removes the reward incentive that causes people to strive for a better life, and so retards progress. And in the end, economic progress is the only thing that is capable of eliminating poverty, which is the real problem.

Russell Nelson March 24, 2006 at 2:43 am

Hit the Bid: How much inequality are you prepared to destroy? Will it be worth the cost? How do you know this to be true or false?

Swimmy March 24, 2006 at 9:16 am

"We have a collective sense of fairness in the US and we give up freedoms/opportunities daily to adhere to these collective notions dont we??"

The answer, from a methodological individualistic perspective, is no. The words "we" and "collective" are essentially nonsense. You must specify what those words literally mean to understand who is making decisions. What you probably mean to say is that a *majority* of Americans believe in fairness and that *everyone* gives up (willingly or by threat of force) freedoms and opportunities to satisfy the whims of a majority, whatever their beliefs on inequality.

No comment on whether this is a good or bad thing. Democracy's democracy, after all. But humans are humans, not wes or collectives.

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