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Hayek grounded free-market economics in a theory of human ignorance

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tagsja-picks, define, xref, seed, deepthinking, definitional_content, trade, singleton, category/definitional-content
aliases@burgin_great_2012, loc. 278

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Hayek grounded free-market economics in a theory of human ignorance

Evidence

In the late 1940s Hayek was in the midst of his own attempt to describe the philosophical foundations of the market society, a project that would consume much of his remaining career. A de cade earlier he had begun publishing work that provided an epistemological justifi cation of his economic views. He increasingly represented himself as a theorist of ignorance, arguing that each individual had only a tiny fraction of the available information about the world within which he or she operated. Given these severe constraints on the individual’s capacity for comprehension, the challenge of the modern social order was to maximize the cumulative knowledge of its many constituents. Hayek was deeply suspicious of any response to these problems that relied on what he described as rationalism, “the product of an exaggerated belief in the powers of individual reason and of a consequent contempt for anything which has not been consciously designed by it or is not fully intelligible to it.” Instead, he advocated for a humbler sensibility that emphasized the irrationality and fallibility of humankind, an approach that he specifi cally associated with “En glish individualism.” Adherents of this antirationalist philosophy would respect the market as a mode of ordering social interactions that was capable of assimilating the unique knowledge of its constituents without subjecting them to any unitary plan. Although they would not hesitate to limit the exercise of coercive power, they would be suspicious of attempts to rationalize an economy or society, because such enterprises tended to overemphasize the knowledge of a few individuals and thereby to constrain the contributions of the many. — Angus Burgin, The Great Persuasion, 278

Categorization

  • DEFINE: Captures Hayek’s core definition of ‘rationalism’ — an exaggerated belief in individual reason — as the mirror against which his antirationalist, market-respecting epistemology defined itself.
  • XREF: Connects to the MPS/neoliberal intellectual project generally; Hayek’s ‘theorist of ignorance’ framing links to later chapters on knowledge problems in planning and to debates over centralized planning raised in earlier chapters of this book. — connects to: Hayek grounded freedom in the inevitability of ignorance — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 221; Hayek justified markets by dispersed knowledge, not happiness maximization — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin: The Making…, 2195; Hayek’s market argument rests on an epistemology of dispersed tacit knowledge — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 72 (+16 more)
  • SEED: Possible essay angle: how ‘theorist of ignorance’ became the founding epistemological premise of modern market apologetics — tracing the rhetorical inversion from rational planning to a humility that legitimates markets.
  • DEEPTHINKING: The central epistemological move of the neoliberal project — reframing the market as a knowledge-assimilation device rather than a distribution mechanism — is dense and paradigm-defining for the whole book.

Broader Connections

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