… is from page 117 of Hayek’s 1991 collection, The Trend of Economic Thinking, which is Vol. 3 in The Collected Works of F.A. Hayek; specifically, it’s from Hayek’s 1963 University of Freiburg public lecture “The Legal and Political Philosophy of David Hume” (emphasis original to Hayek; link added):
He [David Hume] knew that in politics “every man must be supposed a knave.”
The exceptions to this rule are too few and too conditional to dilute its wisdom.