… 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.