Fukuyama on Hayek

Francis Fukuyama has a review of Hayek’s The Constitution of Liberty in the New York Times. He concludes with this insightful observation:

In the end, there is a deep contradiction in Hayek’s thought. His great insight is that individual human beings muddle along, making progress by planning, experimenting, trying, failing and trying again. They never have as much clarity about the future as they think they do. But Hayek somehow knows with great certainty that when governments, as opposed to individuals, engage in a similar process of innovation and discovery, they will fail. He insists that the dividing line between state and society must be drawn according to a strict abstract principle rather than through empirical adaptation. In so doing, he proves himself to be far more of a hubristic Cartesian than a true Hayekian.

UPDATE (2011-05-09): Although the commenter to this post did not respond to my request to show me who has contradicted Fukuyama online, I did find a whole lot of comments via Easterly’s blog. This one, from beyond the grave, is most entertaining. Do read the comments on Easterly’s blog, too. At the end of the day, Fukuyama’s review, at least the part I quote above, is certainly true about people like Beck and may not be true for Hayek. I stand by my observation in the comment below that Hayek should have looked for the mathematical tools needed to formalize his seminal ideas. (I have almost the same complaint about Keynes’s General Theory, although Keynes was reasonably capable in mathematical modeling. Why did he not try it?)

3 thoughts on “Fukuyama on Hayek

  1. Who are the many who are pointing out errors? What are the errors?

    My view of Hayek in a capsule is that he came up with a great observation about localized information but did not develop it into what is now mechanism design theory because of his lack of interest in mathematical tools. Fortunately, many other smart people stepped in and created the theory anyway and are still making advances.


  2. The comment of Anton Howes (at the Adam Smith Institute blog, http://www.adamsmith.org/blog/philosophy/fukuyama… may most directly address the problem in the quote above, pointing out that Hayek's point was the different ways in which governments and private entities use localized knowledge to experiment, get feedback, and respond lead the process to work reasonably well for private entities and not so well for governments. (Note that I'm summarizing Howes's characterization of Hayek, so a little far from the original source. Let the reader beware.)

    I'd say you are right in your capsule view, more or less. Hayek had a great observation and went on to apply it to develop his social and political philosophy. Other people took it in other directions, including the development of mechanism design.


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