F. A. Hayek - The Fatal Conceit: The Errors of Socialism

THE FATAL CONCEIT

The Errors of Socialism

A paperback of Volume I of The Collected Works of F.A. Hayek F. A. Hayek studied at the University of Vienna, where he became both a Doctor of Law and a Doctor of Political Science. After several years in the BIBLIOTEKA AUSTRIACKA

Austrian civil service, he was made the first director of the Austrian Institute OSTERREICH - BIBLIOTHEK

for Business Cycle Research. In 1931 he was appointed Tooke Professor of UNIWERSYTETU WROCLAWSKIEGO

Economics and Statistics at the London School of Economics, and in 1950 he went to the University of Chicago as Professor of Social and Moral Sciences.

He returned to Europe in 1962, to the chair of Economics at the University of 4234

Freiburg, where he became Professor Emeritus in 1967.

The holder of numerous honorary doctorates, and a member of the British Academy, Hayek was awarded the Nobel Memorial Prize in Economics in 1974. He was created Companion of Honour in 1984. He is the author of some fifteen books, including Prices and Production, The Pure Theory of CapitalThe Road to Serfdom, The Counter-Revolution of Science, The Sensory Order, TheConstitution of Liberty, and Law, Legislation and Liberty. He died in 1992.

The editor, Professor W. W. Bartley, III, was at the Hoover Institution, Stanford University until his death in 1990.

PLAN OF THE COLLECTED WORKS

Founding Editor: W. W. Bartley, III

Editor: Stephen Kresge

THE COLLECTED WORKS OF

Volume I

* The Fatal Conceit: The Errors of Socialism

Volume II

Friedrich August Hayek

The Uses and Abuses of Reason: The Counter

Revolution of Science, and Other Essays

Volume III

The Trend of Economic Thinking: Essays on Political VOLUME I

Economists and Economic History

Volume IV

The Fortunes of Liberalism: Essays on Austrian

Economics and the Ideal of Freedom

Volume V

Nations and Gold

THE FATAL CONCEIT

Volume VI

Money and Nations

Volume VII

Investigations in Economics

The Errors of Socialism

Volume VIII

Monetary Theory and Industrial Fluctuations

Volume IX

Contra Keynes and Cambridge: Essays,

Correspondence, and Documents

Volume X

Socialism and War: Essays, Correspondence, and

Documents

Volume XI

Essays on Liberty

Volume XII

Essays, Debates, and Reviews

Volume XIII

The Pure Theory of Capital

EDITED BY

Volume XIV

The Road to Serfdom

Volume XV

The Constitution of Liberty

W. W. BARTLEY, III

Volume XVI

Philosophy, Politics, and Economics

Volume XVII

Law, Legislation, and Liberty

Volume XVIII The Sensory Order and other Essays in Psychology Volume XIX

John Stuart Mill and Harriet Taylor: Their

Friendship and Subsequent Marriage

The plan is provisional. Minor alterations may occur in titles of individual books, and several additional volumes may be added.

* available in paperback

THE COLLECTED WORKS OF F. A. HAYEK

Founding Editor: W. W. Bartley III

First published in 1988 by Routledge

General Editor: Stephen Kresge

11 New Fetter Lane, London EC4P 4EE

Reprinted 1989

Assistant Editor: Gene Opton

New in paperback 1990

Reprinted 1990, 1992

Set in Baskerville

by Columns of Reading

Published with the support of

and printed in Great Britain

by T.J. Press (Padstow) Ltd.

The Hoover Institution on War, Revolution and Peace, Padstow, Cornwall

Stanford University

F. A. Hayek 1988

Anglo American and De Beers Chairman's Fund, Johannesburg Cato Institute, Washington, D.C.

All rights reserved. No part of this book may be

The Centre for Independent Studies, Sydney

reproduced or utilized in any form or

Chung-Hua Institution for Economic Research, Taipei by any electronic, mechanical, or other means, now Earhart Foundation, Ann Arbor

known or hereafter invented, including photocopying Engenharia Comercio e Industria S/A, Rio de Janeiro and recording, or in any information storage or

Escuela Superior de Economia y Administracion de Empresas retrieval system, without permission in writing from (ESEADE), Buenos Aires

the publishers.

The Institute for Humane Studies, George Mason University Instituto Liberal, Rio de Janeiro

British Library Cataloguing in Publication Data Charles G. Koch Charitable Foundation, Wichita

Hayek, F.A. (Friedrich August), 1899

The Vera and Walter Morris Foundation, Little Rock The fatal conceit : the errors of socialism.

Verband der Osterreichischen Banken and Bankiers, Vienna (The collected works of Freidrich August Hayek).

The Wincott Foundation, London

1. Socialism. Philosophical perspectives

I. Title

II. Bartley, William Warren

III. Series

335'.001

ISBN 0-415-00820-4

ISBN 0-415-04187-2 (Pbk)

4234

CONTENTS

Editorial Foreword

X

Preface

Introduction

Was Socialism a Mistake?

One

Between Instinct and Reason

I I

Biological and Cultural Evolution

I I

Two Moralities in Cooperation and Conflict

1 7

Natural Man Unsuited to the Extended Order

1 9

Mind Is Not a Guide but a Product of Cultural

Evolution, and Is Based More on Imitation than onInsight or Reason

21

The Mechanism of Cultural Evolution Is Not Darwinian 23

Two

The Origins of Liberty, Property and justice

Freedom and the Extended Order

The Classical Heritage of European Civilisation 31

` Where There Is No Property There Is No justice'

The Various Forms and Objects of Property, andthe Improvement Thereof

Organisations as Elements of Spontaneous Orders37

Three

The Evolution of the Market: Trade and Civilisation 38

The Expansion of Order into the Unknown

The Density of Occupation of the World Made

Possible by Trade

41

Trade Older than the State

The Philosopher's Blindness

45

Four

The Revolt of Instinct and Reason

The Challenge to Property

48

Our Intellectuals and Their Tradition of ReasonableSocialism

Morals and Reason: Some Examples

A Litany of Errors

60

vii

CONTENTS

CONTENTS

Positive and Negative Liberty

62

Appendices

`Liberation' and Order

64

A. `Natural' vs. rtificial'

1 43

B. The Complexity of Problems of Human Interaction 1 48

Five

The Fatal Conceit

66

C. Time and the Emergence and Replication of Structures 1 51

Traditional Morals Fail to Meet Rational

D. Alienation, Dropouts, and the Claims of Parasites 152

Requirements

66

E. Play, the School of Rules

154

Justification and Revision of Traditional Morals67

F. Remarks on the Economics and Anthropology of Population 1 55

The Limits of Guidance by Factual Knowledge;

G. Superstition and the Preservation of Tradition