Quotation of the Day…

by Don Boudreaux on October 12, 2011

in Civil Society, Complexity & Emergence

… is from page 232 of Hayek’s 1967 collection Studies in Philosophy, Politics, and Economics; it’s in his 1962 essay “The Moral Element in Free Enterprise”:

Free societies have always been societies in which the belief in individual responsibility has been strong.  They have allowed individuals to act on their knowledge and beliefs and have treated the results achieved as due to them.  The aim was to make it worth while for people to act rationally and reasonably and to persuade them that what they would achieve depended chiefly on them.  This last belief is undoubtedly not entirely correct, but it certainly had a wonderful effect in developing both initiative and circumspection.

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vidyohs October 12, 2011 at 10:14 am

“to persuade them that what they would achieve depended chiefly on them. This last belief is undoubtedly not entirely correct, “

I am well aware of the current fad of thought/claim that no individual achieves alone, that no matter what he does he can’t claim the result to be entirely his alone. After all government did oversee the building of the roads, etc. et.al.

I dispute both the quote from Hayek and the current fad of thought.
————-
My workshop and all the tools in it are made from materials manufactured by some one other than me. But, it was me that created the wealth that allowed me to gather those materials together so that I can go into my shop and create things. Without me, the individual, those materials would likely or possibly be still sitting on a shelf somewhere waiting for some other individual to come buy them.

If I have the skill to make a wood product that sells in the local market at such a rate that I can make good income from that, that product and the resulting sales will not happen unless I, the individual, get out of bed on a self established schedule and use the tools and materials to produce the product.

Note that at no time in my little story that begins below the dotted line does government or society appear, except society as the buyer (and I am confident that society in this context is not what Hayek meant when he said I couldn’t do it alone).

No collective made me or helped me create the wealth to buy the materials to make and stock my shop, that was entirely my initiative. No collective made me seek and gain the skill and experience to produce a product that would sell. No collective makes me get up on a timely and consistent basis so that the products actually are produced. No collective helps me or makes collect the items produced and transport them to market. The collective only appears after I have made my profit and it comes in the form of a hand grasping at my wallet wanting to take a substantial part of what I (me the individual) has created.

If I stay in bed, if I do not have the initiative and ambition, nothing happens.

It is the same all across the nation, all across the world. If individuals do not do, then nothing gets done. Even slavery isn’t the answer. A slave that has reached his limit, and refuses to move for the master, will do nothing and nothing gets done, even beating a dead horse doesn’t make him pull the wagon.

Bastiat Smith October 12, 2011 at 11:04 am

The collective is present, but I do not mean one of single agency. (Which may be the your defining characteristic.)
The society is the market. Cooperating to achieve EACH of our wants and to make each of us happy. Individuals reward you if you do things for them. And the more reward you have, the more utility/happiness you can afford.

It is a system of cooperation. But “they” don’t need repaying. They were adequately compensated in the initial transactions. Otherwise they’d not have transacted. Nobody owes anybody anything post-transaction.

For the individual’s credit; nobody is happier if each of us stops pursuing private wealth. NOBODY.

vidyohs October 12, 2011 at 3:10 pm

I acknowledged the role “society” (others) played in making the materials there for me to choose and use.

But, at the same time I know that if an individual did not come and pick those things up and manipulate them as the individual chooses, then they would still be lying on a shelf and nothing would be done with them.

Only the individual can motivate, use, and direct his life force so that the individual does anything, makes anything.

The fact that they are there means nothing until the individual picks them up and manipulates them. So society’s role in the success of an individual is the same as its role in the individual’s failure if there is no individual decision to act.

Seth October 12, 2011 at 1:08 pm

I agree. “Income inequality” itself is evidence of this. But most people believe that inequality was caused by stealing rather than giving.

They fail to see the value on both sides of the trade, but they’ll be the first to whine when their favorite product is discontinued or their power goes out.

Will October 12, 2011 at 11:04 am

This is an excellent point. Of course there is no one who did not rely on someone else. Someone had to educate or train you and markets only works with people involved in exchanges. However, unless a person believes that they can accomplish what ever he puts his mind to, there is nothing to motivate them. Free society with minimal government intrusion provides that dream (American Dream being the first and foremost example). One of the things that keeps Marx’s future from coming true, is that an individual is not set for life in the bottom in free societies. A prolitareate may be a low wage worker his whole life, but in a free society he can save and invest his income properly and be quite wealthy later in life.

Anotherphil October 12, 2011 at 12:55 pm

Great lies begin with a kernal of truth. So it is with the self-appointed arbitar of equity, Elizabeth Warren-when it (I’m using the leftist tactic of depersonalizing and dehumanizing the opposition). She tells us that nobody succeeds on their own (except of course for leftist cult heroes, who not only succeed on their own, but in spite of opposition).

But what she is speaking of us success acheived through commercial means. To her, there ares no arms-length transactions, just usury that occasionally accrues disproportionatelty to some individuals and therefore must be repatriated to society as a whole.

She is a weird amalgam of Marxism and Wesleyism.

Scott G October 12, 2011 at 11:41 am

Great quote Don. Thank you.

Over the years I’ve altered my language at work from, “I made this widget,” to “I helped make this widget,” as I grew to understand that I was part of a team who was making the widget. This type of thinking can of course be expanded to the level of Hayek’s quote above. There is a subtle idea here that one is still free even in a culture in which individuals are all dependent on each other and sometimes cooperating with each other (mixing of Julian Simon’s ideas with F.A. Hayek’s quote).

By the way, here is what I consider to be your three most valuable posts at Cafe Hayek. I’d like to know what your other readers consider to be your most valuable posts at the Cafe.

http://www.studiohayek.com/2011/10/three-most-valuable-posts-by-don.html

Also here’s a question about Hayek. Why do you think Hayek didn’t embrace the idea of libertarian anarchism? Do you know if he read Machinery of Freedom?

vidyohs October 12, 2011 at 11:51 am

I thank you Scott for posting this comment. I must have missed the three posts you list, but I appreciate having them to hand now. Thanks again.

Invisible Backhand October 12, 2011 at 11:53 am

Thanks for pointing me to that essay. I particularly enjoyed this bit:

All that we can say is that the values we hold are the product of freedom, that in particular the Christian values had to assert themselves through men who successfully resisted coercion by government, and that it is to the desire to be able to follow one’s own moral convictions that we owe the modern safe­guards of individual freedom. Per­haps we can add to this that only societies which hold moral values essentially similar to our own have survived as free societies, while in others freedom has perished.

So don’t forget, all you individuals are at liberty to believe what you want, but Christian is better.

Anotherphil October 12, 2011 at 1:00 pm

Invincible Ignorance prefers a different creed.

Render unto Caeser what is Caeser and its all Caesers’s.

State forbid that we have any loyalties greater than the state.

Invisible Backhand October 12, 2011 at 5:20 pm

Started drinking early today?

vidyohs October 12, 2011 at 12:17 pm

Yeah, Cristian is better, with number 8 on the list of 10 commandments that stops coerced government dead in its tracks.

#8 Thou shalt not steal.

vidyohs October 12, 2011 at 12:17 pm

Christian.

Randy October 12, 2011 at 12:19 pm

Brings to mind the fact that the “men who successfully resisted coercion by government…” also resisted coercion by established religions. The desire to be free has always existed. Expanding wealth has made it possible. And the efforts of the modern political class to limit the holding of wealth are a threat to the expansion of freedom.

vidyohs October 12, 2011 at 12:24 pm

“Per­haps we can add to this that only societies which hold moral values essentially similar to our own have survived as free societies, while in others freedom has perished.”

Which explains precisely why all socialist/collectivist societies have failed consistently and without exception; and, it also explains why our own society is failing as it has that moral character of its founding steadily eroded by the “gimme, I deserve it” of socialism.

kyle8 October 12, 2011 at 5:54 pm

Well it is real simple really, if there is a multiplier then the evidence here and in Japan recently is that it is simply not large enough to counter act the increase in regime uncertainty and/or the crowding out of private investment by government debt.

If it were otherwise then the huge fiscal spending here and in Japan would have had some noticeable effect on growth, rather than negative growth.

I don’t see any other way to spin out of this circumstance. It just doesn’t do to say that the stimulus was too small since that is a value judgment with no objective criteria for what is too big or too small. Furthermore even if it were too small there should have been some positive signs and yet all we got were negative results.

It is time to shoot this discredited old theory and throw it in the dustbin of history.

kyle8 October 12, 2011 at 5:55 pm

Sorry I think I am on the wrong thread.

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