Defending Capitalism: Ayn Rand vs. Hayek
Hayek argues that the reason we need freedom is because of our ignorance or really the limits of the power of reason. Without this limitation, there would be no justification for freedom.
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family & friends! -- j
I view both Hayek and Rand with respect. Neither is completely correct about everything but both are correct to a great degree.
From your comments it appears that the argument is about each author's expectations of performance of individuals. Rand appears to hold individual performance as the highest measure of humankind. To me, this is a very admirable and optimistic view and challenges every individual to aspire to his best. Your quote is not a complete description of Hayek's views, but (imo) it is more a look at Hayek's observations of real human activity and its imperfections. Hayek may be the opposite of the attitude of hubris that oozes from every pore of the politicians and bureaucrats of our day. (If I had been Hayek's publisher I would have demanded that he re-write that line because it so misrepresents the message of the book. )
Hayek goes on to say, in the same paragraph as your quote:
"Liberty is essential in order to leave room for the unforeseeable and unpredictable."
Hayek is recognizing that liberty allows freedom of thought and free will, and that with free will of individuals that no one can be omniscient. Omniscience and free will are mutually exclusive.
I don't have to agree with every word that Rand (or Hayek) wrote to accept much of her (his) message.
Link to the complete book:
http://www.libertarianismo.org/livros/tc...
Ayn Rand showed why life must be the standard for what an individual should do in his choices as his own highest purpose, not the survival or improvement of a species by choice or otherwise, and developed what life as a standard means in terms of our rational, conceptual consciousness and how to apply it. That was based on the nature of man as he is, independently of how we happened to become this way. That could have been done without a theory of evolution at all, and apparently was done without knowing much about it at all.
I can't fully develop it here,but the study of human evolution and economics would be the same thing if humans were not rational animals. And invention are the genetic adaptations of humans or economics.
Salma Hayek is perfect! -- j
http://media.photobucket.com/user/al7n6a...
which AR developed into human nature continues
to make me love her more every day!!! -- j
I too believe that Rand had a better argument and foundation for the superiority of Capitalism. Admittedly, I have read only two of Hayek's books (The Road to Serfdom & The Constitution of Liberty) but I never got that he was anti-reason or that our freedom depended upon our limitations. My understanding of his argument based on ignorance was quite narrow. I understood him to mean that since no one was omniscient, our economy was not static and it had too many changing variables for any one man to comprehend, constantly collate and account for, then the invisible hand and free markets evolving naturally, were the only reasonable solution. If all economic metrics were static perhaps the economy could be understood fully and some sort of central control would be feasible, but that is not reality.
From an argument of morality no one has done a better job than Rand. The argument from Hayek was one of human fallibility and limit. He argued for the same policies, but from a different tack. When Hayek said that there were limits to the power of reason could it simply have been a poor choice of words? when what he was trying to say was that there are limits to any one man's or any groups capacity... of knowledge... of ability to comprehend such a complicated and changing dynamic system? To me this was simply an argument based on the premise that central control was not feasible because of the multitude of factors and shortcomings of men, not of logic or "reason." It is true that some of his arguments/comments are quite questionable, but the total context points to satisfactory policies and outcome.
From the article: “In a way, this is an argument from ignorance: the planners can’t know enough to issue the right decrees. In its simpler form, it’s the argument that you can’t force a person to do what’s best for him because only he can know what’s best for him, which is an argument one often hears from conservatives.” I believe the interpretation--- “In its simpler form…” is reading more into it than intended. Also, it is not an argument from ignorance. It is an argument of recognition of human limitation. Nothing more... It is a pragmatic argument, related to recognition of the laws of nature, but it is also true.
It would be quite something to hear Hayek’s rebuttal to these criticisms were he alive today. Perhaps he may even agree and change his mind... or choice of words. Sometimes meanings or emphasis not intended can be ascribed.
Either way, for me, specifically on matters of economics, when one is a proponent of the same policies regardless of their basis for support, I count them among allies, not enemies. Now, as for arguments regarding reason, foundation, or morality, Rand and I may disagree with Hayek, but I will not condemn an entire body of work that still fights the collectivist, etatist common enemy. I would encourage people to read and understand that every word is not "gospel", that there may be better arguments, even disagreements, but then, who is perfect? I would also recommend the writings of many others on economic matters (Smith, Friedman, Hazlitt, Bastiat, Sowell, Williams, etc.), but I would urge too that the crown belongs to Rand when it comes to capitalism. In my opinion no economic education would be complete without her contributions... No argument more moral. If Hayek was ones only input I would be concerned. Rand would certainly disagree based on ethics alone. She was determined for all to appreciate a superior moral foundation. Hayek came up with fine economic policies, but as a philosopher... maybe not so much.
I am presently half way through Mises’ Socialism… and I see a few fallacies within that I believe Rand would also have disagreement with, even though she recommended his work…
Sure, there are areas of disagreement, but in the wide view, the areas of agreement are more important and by reinforcing them with more voices, they become even more powerful.
Still it is a very interesting exchange and perspective worth consideration. From the comments presented, I see I will have to read more.
Well, for what it is worth that is my two cents.
Regards,
O.A.
I see no disagreement. I am particularly fond of Bastiat also. That said: I have found nuggets of wisdom among the others too.
I do not see, or did not mean to convey any arguments against Rand? Quite the contrary.
Respectfully,
O.A.
I used to count them as allies to, but several things kept nagging at me. First of all let me be clear I am more committed to defending reason and think it is more important than just being pro-free market. One of things that bugged me was this idea that wealth was created by mindlessly giving people what they wanted. The result of this inquiry is my next non-fiction book. Real per-capita increases in wealth are created by increasing our level of technology, which requires the highest use of man’s mind not blindly giving people what they want. Two was the clear adherence to religion and mysticism by so many in the Austrian Economics movement. My inquiry in this area has shown it is because the Austrian School is not built on reason, not built on A is A, and not built on an objective ethics. A perfect ground for mystics. Third was the irrational attack on patents. Why would a group that pretends to care about free markets, the constitution, and admires the economic history of the US turn its back on patents? What I found is Austrian’s have no real interest in the Constitution, Natural Rights, John Locke or American history. This is why people like Robbie are attracted to Austrian Economics.
The modern Austrian movement is wrong on a number of points: 1) they do not understand property rights, without which you cannot understand capitalism. Their position plays right into the hands of the socialists. 2) They do not understand fractional reserve banking and constantly conflate it with a central bank. The logical conclusion of their position is to eliminate banks, stocks, bonds and all financial instruments. This is not only anti-freedom it is a disaster economically. 3) They are just dead wrong on patents. Their hostility does not end with the property right, but they attack the achievement of inventors with arguments that boil down to the idea that no one ever invents anything.
THE AUSTRIAN MOVEMENT IS NOT A FRIEND OF CAPITALISM, FREEDOM, OR REASON.
As a process improvement professional, I've found that the human element is 50% or more of all change efforts. I just finished a gig that was not fully successful. The management refused to provide the leadership needed to ensure the changes identified continued. Thus the operators were allowed to go back to their prior behavior, even after they and management had agreed that the revised methods were better. Alas, you cannot change another human being, they must decide to change themselves.
Thank you for your analysis. It would seem that Hayek was not consistent in all of his writings. I quite agree with your opinion regarding patents and property rights. If the Austrians are not fully behind these I must reexamine my hierarchy. I believe it is apparent from my previous discourse that I find the most pernicious, contemporary enemy the Keynesians. Thus, I have been of the opinion that Keynes was my enemy, Hayek an ally and Rand my mentor. In this regard I feel as if the enemy of my enemy is my friend... at least as a temporary tactic and strategy towards free markets. I will now take your analysis under consideration and do a little more research. My Hayek exposure, as I stated, was limited. Now I am interested in the differences between Hayek and Mises since Rand did show some appreciation for Mises. The Austrian School having many adherents gives me pause to consider if they all have similar positions regarding patents and property.
I have investigated many economists and gleaned from each those thoughts which were appealing and sound. Ultimately finding less to quibble over with Rand than any other. That is a large part of why I am here.
Thank you again for your input... Food for thought.
Regards,
O.A.
I go to work and engage in the economy because life requires that I do so.
If that's not the correct understanding, then I think we're back to more shoveling. ;-)
Rand has a full discussion of Intrinsic value (classical economists), subjective value (Von Mises and most modern economist), and objective value in Capitalism the Unknown Ideal, starting on page 13. The subjective theory of value holds that the value (price) has no relation to reality and this is the Von Mises position. The objective theory holds that the value is based on a persons evaluation of the facts of reality.
Don't fret there are still Constitutional Centrists out here who see both parts of the Government Party for what IT is.
There is a difference between efficiency and freedom. Sweet it is when they coincide as often they do. But there are times when a choice is needed.
According to Robbie, Hayek says central control will never work, but it does work in some circumstances, and works well, then should individual choice be over-ridden?
Rand clearly says, no. Individual freedom is paramount,
Hayek says he cannot imagine how it could be (my words), so, maybe.
Aspects for more consideration- times of war, IP enforcement, net neutrality.
Hayek, by contrast, is a critic of what he calls ―"constructive rationalism.” This puts Hayek up there with Kant and Hume.
“―no universally valid system of ethics can ever be known to us.” Hayek
This shows that Hayek is a moral relativist.
“―[M]orals, 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.” Hayek
This is an attack on both reason and ethics.
“If there were omniscient men, if we could know not only all that affects the attainment of our present wishes but also our future wants and desires, there would be little case for liberty” Hayek
This shows that Hayek does not think Freedom is valuable, it's tolerated because it results in economic efficiency.
Hayek, by contrast, is a critic of what he calls ―"constructive rationalism.” This puts Hayek up there with Kant and Hume.
“―no universally valid system of ethics can ever be known to us.” Hayek
This shows that Hayek is a moral relativist.
“―[M]orals, 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.” Hayek
This is an attack on both reason and ethics.
“If there were omniscient men, if we could know not only all that affects the attainment of our present wishes but also our future wants and desires, there would be little case for liberty” Hayek
This shows that Hayek does not think Freedom is valuable, it's tolerated because it results in economic efficiency.
Hayek, by contrast, is a critic of what he calls ―"constructive rationalism.” This puts Hayek up there with Kant and Hume.
“―no universally valid system of ethics can ever be known to us.” Hayek
This shows that Hayek is a moral relativist.
“―[M]orals, 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.” Hayek
This is an attack on both reason and ethics.
“If there were omniscient men, if we could know not only all that affects the attainment of our present wishes but also our future wants and desires, there would be little case for liberty” Hayek
This shows that Hayek does not think Freedom is valuable, it's tolerated because it results in economic efficiency.
I thought that the article was extremely pro-Rand..." The lady doth protest too much, methinks " !
Patents are a legal document, not a journal article. I find most journal articles to be long on data and short on how the invention (setup) was created. I do not read a lot of chemical patents however. A legal document has different criteria, but in patents the number one issue of the specification is that you can practice the invention, not exhaustive proof of the underlying science. In fact, it is irrelevant whether the inventor understands the science, what matters is whether one skilled in the art can practice the invention. That said if you cannot explain the underlying science, then the patent is likely to be much narrower.
that makes sense to you? IP is only one area of disagreement. Would this argument be relevant if we agreed we all had a vested interest in capitalism? If we agree we do and wanted to keep it or get closer to "true" capitalism, wouldn't it be worth it to make the best possible moral case for it in the first place? and, in making the best moral case for it, could we agree that collectivist arguments would not be the best evidence in supporting capitalism? or? If you want to make a collectivist defense of capitalism make it, admit it and point to it openly.
Hayek did write on epistemology and ethics and he was clear that he was not just saying that knowledge is localized, he fundamentally does not think reason can be used to justify natural rights or freedom. I have provided references to his papers on point.
Freedom and Capitalism can only survive under an epistemology system of reason and A is A, there is no short cut and Hayek's arguments do more damage in the long run.
10-15 years ago I might have taken your position. Then I noticed that the Austrians were wrong on patents, which I discovered was because they were wrong on Property Rights and rejected Locke. They are not honest enough to say they reject Locke, they just reject his formulation of how and why property rights exist, which Locke said was the most important right. They say they are for the Constitution, but then they ignore that the only right mentioned in the original constitution is patents and copyrights.
I noticed that many Austrians seemed to be religious and I wondered why this was, so I started investigating. Von Mises was an atheist but more in the way Marx is an atheist than Rand. I found David Kelley's paper on Rand v. Hayek and it is clear that Hayek is talking about the fundamental limits of reason. He is clear that he thinks Locke's natural rights is not based in reason and cannot be based in reason, it is based on some sort of cultural evolution, which by the way makes him a moral relativist. I then investigated Von Mises and his idea that prices were subjective.. I use to make this argument myself, but it always bothered me because even the best interpretation turns economics into a game with little or no connection to reality. But Mises was not and is not saying prices and values are determined by each individual, he is saying they are not connected to reality.
The reason Austrians attract religious people like Robbie is because the philosophical foundations are consistent with religion not with science - which makes them more like the socialists (post modernist movement) than objectivists or Locke or the enlightenment. Rand used to warn that capitalisms defenders were worse than its enemies and I put the Austrian squarely in that camp.
Hayek, by contrast, is a critic of what he calls ―"constructive rationalism.” This puts Hayek up there with Kant and Hume.
“―no universally valid system of ethics can ever be known to us.” Hayek
This shows that Hayek is a moral relativist.
“―[M]orals, 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.” Hayek
This is an attack on both reason and ethics.
“If there were omniscient men, if we could know not only all that affects the attainment of our present wishes but also our future wants and desires, there would be little case for liberty” Hayek
This shows that Hayek does not think Freedom is valuable, it's tolerated because it results in economic efficiency.
Friedrich A. Hayek, Rules and Order, Volume 1 of Law, Legislation and Liberty: A
New Statement of the Liberal Principles of Justice and Political Economy (New York:
Routledge, 1973), pp. 9-10; Friedrich A. Hayek, The Fatal Conceit: The Errors of
Socialism (Chicago, IL: University of Chicago Press, 1988), pp. 61-62.
3 Hayek, Fatal Conceit, p. 20
As posted yesterday I have a digital copy of Hayek's Constitution of Liberty that contained the text critiqued in the article. I am already reading that one. There were ~17 years of observation for Hayek between "Road" and "Constitution."
It would have been better if she would have clearly set out her disagreements. But she was only one woman.
Omniscient people do not exist - so the world / reality with little case for liberty is a non-existent one also (NOT ours).
Therefore is seems to be MORE of an argument FOR liberty than against it - but really a pretty useless description of what a non-existent utopia may be like (everything thing/action throughout eternity already understood ahead of time BY EVERYONE....pretty sure that is not us )
As usual you comment from ignorance and then when it is pointed out you persist instead of learning something.
“In a way, this (Hayek’s) is an argument from ignorance: the planners can’t know enough to issue the right decrees. In its simpler form, it’s the argument that you can’t force a person to do what’s best for him because only he can know what’s best for him, which is an argument one often hears from conservatives.”
That is our starting point. To suggest that it should be proved from other statements is putting the cart before the horse. I believe AR was wrong in that respect.
I also believe that Hayek agreed with me on this, and that dbhalling has misinterpreted Hayek.
Political philosophy depends on ethics so that both are dependent on identifying the nature of man and its role in his choices. The a-philosophical libertarians insist on starting with an arbitrary premise based on feeling.
I have not misinterpreted Hayek, you have not looked into what he said about epistemology and ethics.