The Fatal Conceit-The Errors of Socialism

The Fatal Conceit The Errors of Socialism

Author: F.A. Hayek

Publisher: The University of Chicago Press, Chicago 60637

Originally published 1988

This book is written by a foremost author that would be considered to be on the conservative side of the spectrum. F.A. Hayek is a highly respected and highly intelligent advocate of the free market economy. His assessment of humanity and of economics, both in theory and reality, are extremely profound and insightful. I personally think time and events have shown some of his observations and beliefs to be slightly out of sync with reality. This is to be expected as often an event or a series of events that no one could foresee will render our whole perception of possibilities and predictions totally in error. One such event fresh in everyone’s mind would be the attack on the World Trade Center of 9/11. His thoughts on population growth are one such area in which I find myself in disagreement with him. This does not detract from the overall validity of the vast majority of his thinking. It must be remembered that one time and on the two sides of the Atlantic the word conservative and the word liberal had different meanings, almost opposite of what we in America have come to accept as their meanings in the present.

He is a capitalist through and through but many of his beliefs and positions would be embraced by the present day American liberals. I am not either a socialist or a capitalist but find that a mixed economy has more merits, especially for the conditions of present day.

Usually when I do a book report or book review I often use excerpts from the book rather than try to explain it in my words. Compared to people like F.A. Hayek my attempt to express the ideas they have so eloquently expressed probably would only have the opposite effect and do a disservice to both author and reader by failing to convey the profound insights and thoughts of these authors and the wisdom they could impart. The first paragraph is from the first part of the introduction and should be an example of the brilliance of F.A. Hayek in expressing clearly thoughts. It is my hopes that many who are concerned with the future of humanity will read the book in its entirety and gain some thoughts and perspectives in helping them to determine the best course of action.

“To understand our civilization, one must appreciate that the extended order resulted not from human design or intention but spontaneously: it arose from unintentionally conforming to certain traditional and largely moral practices, many of which men tend to dislike, whose significance they usually fail to understand, whose validity they cannot prove, and which have nonetheless fairly rapidly spread by means of an evolutionary selection – the comparative increase in population and wealth – of those groups that happen to follow them. The unwitting, reluctant, and even painful adoption of these practices kept these groups together, increase their access to valuable information of all sorts, enabled them to be ‘fruitful, and multiply, and replenish the earth, and subdue it’ (Genesis 1:28). This process is perhaps the least appreciated asset of human evolution.”

“Even Aristotle, who comes fairly late, still believed that order among men could extend only so far as the voice of a Herald could reach (Ethics, IX,x), and that a state numbering a hundred thousand people was thus impossible.”

“Such beliefs are understandable, poor man’s instincts, which were fully developed long before Aristotle’s time, were not made for the kinds of surroundings, and for the numbers, in which he now lives. They were adapted to life in the small roving bands or troops in which the human race and its immediate ancestors evolved during the few million years while the biological constitution of Homo sapiens was being formed. These genetically inherited instincts serve to steer the cooperation of the members of the troop, a cooperation that was, necessarily, a narrowly circumscribed interaction of fellows known to and trusted by one another.”

“….. The members of the small groups could thus exist only as such: an isolated man would soon have been a dead man. The primitive individualism described by Thomas Hobbes is hence a myth. The savage is not solitary, his instinct is collectivist.”

“Constraints on the practices of the small group, it must be emphasized and repeated, are hated. For, as we shall see, the individual following them, even though you depend on them for life, does not and usually cannot understand how they function or how they benefit him. He knows so many objects that seem desirable but for which he is not permitted to grasp, and he cannot see how other beneficial features of his environment depend on the discipline to which he is forced to submit – a discipline forbidding him to reach out for the same appealing objects.”

“We are led – for example by the pricing system in market exchange – to do things by circumstances of which we are largely unaware in which produce results that we do not intend. In our economic activities we do not know the needs which we satisfy nor the sources of the things which we get. Almost all serve people who we do not know, and even though whose existence we are ignorant; and we in turn constantly live on the services of other people of whom we know nothing.”

“This gradual replacement of innate responses by learned rules increasingly distinguished man from other animals, although the propensity to instinctive mass action remains one of the several beastly characteristics that man has retained (Trotter, 1916).”

“One can hardly expect people either to like an extended order that runs counter to some of their strongest instincts, or readily to understand that it brings them the material comforts they also want.”

“To operate beneficially, competition requires that those involved observe rules rather than resort to physical force. Rules alone can unite an extended order. (Common ends can only do so during a temporary emergency that creates a common danger for all.”

“What we call mind is not something that the individual is born with, as he is born with his brain,………”

“While facts alone can never determine what is right, ill considered notions of what is reasonable, right and good may change the facts and the circumstances in which we live; they may destroy, perhaps forever, not only developed individuals in buildings and art in cities (which we have long known to be vulnerable to the destructive powers of moralities and ideologies of various sorts),…………”

“It would seem that no advanced civilization, has yet developed without a government which sought its chief aim in the protection of private property, but that again and again the further evolution and growth to which this gave rise was halted by a ‘strong’ government. Governments strong enough to protect individuals against the violence of their fellows make possible voluntary cooperation,……..”

in the most remarkable of these, Imperial China, great advances toward civilization and towards sophisticated industrial technology took place during recurrent ‘times of trouble’ when government control was temporarily weakened.”

“The times, circumstances, and processes which we write are cloaked in the mists of time, and details cannot be discerned with any confidence of accuracy.”

“………. It would seem as if, over and over again, powerful governments so badly damaged spontaneous improvement that the process of cultural evolution was brought to an early demise. The Byzantine government of the East Roman Empire may be one instance of this (Rostov, 1930, and Einaudi,1948). And the history of China provides many instances of government attempts to enforce so perfect an order that innovation became impossible (Needham, 1954)………..”

“……….. in general, the more intelligent and educated a person is, the more likely he or she now is not only to be a rationalist, and also to hold socialist views……………….. The higher we climb up the ladder of intelligence, the more we talk with intellectuals, the more likely we are to encounter socialist convictions. Rationalists tend to be intelligent and intellectual; intelligent intellectuals tend to be socialists.”

“Once initial surprise at finding that intelligent people tend to be socialists diminishes when one realizes that, of course, it is intelligent people who tend to overvalue intelligence, and to suppose that we must owe all the advantages and opportunities that our civilization offers to deliberate design rather than the following of traditional rules, and likewise to suppose that we can, by exercising our reason, eliminate any remaining undesired features by still more intelligent reflection, ……”

On John Maynard Keynes he said: “characteristically justified some of his [Keynes] economic views, and his general belief in the management of the market order, on the grounds that ‘in the long run we are all dead’ (i.e., it does not matter what long-range damage we do; it is the present moment alone, the short run – consisting of public opinion, demands, votes, and all the stuff in bribes of demagoguery – which counts). The slogan that ‘in the long run we are all dead’ is also a characteristic manifestation of an unwillingness to recognize that morals are concerned with effects in the long run – effects be on our possible perception –……………”

“(Though the free man will insist on his right to examine and, when appropriate, to reject any tradition, he could not live among other people if he refused to accept countless traditions without even thinking about them, and of whose effects he remains ignorant.)”

“Freedom requires that the individual be allowed to pursue his own ends………… But confusion has been created by the common supposition that it is possible to have this kind of freedom without restraints. …………… General freedom in this sense is nevertheless impossible, for the freedom of each would founder on the unlimited freedom, i.e., the lack of restraint, of all others.”

“On a less sophisticated level………… are the demands for ’liberation’ from the burdens of civilization – including the burdens of disciplined work, responsibility, risk taking, saving, honesty, the honoring of promises, as well as the difficulties of curbing by general rules one’s natural reactions of hostility to strangers in solidarity with those who are like oneself – and ever more severe threat to political liberty. ……….. Those that champion such liberation would destroy the basis of freedom, and permit men to do what would break down those conditions that make civilization possible.”

“If we stopped doing everything for which we do not know the reason, or for which we cannot provide a justification in the sense demanded, we would probably very soon be dead.”

“There is no reason to suppose that the selection by evolution of such habitual practices as enabled men to nourish larger numbers had much of anything to do with the production of happiness, let alone that it was guided by the striving after it. On the contrary, there is much to indicate that those who aimed simply at happiness would have been overwhelmed by those who just wanted to preserve their lives.”

“The extended order depends on this morality in the sense that it came into being through the fact that those groups following its underlying rules increased in numbers and wealth relative to other groups.”

“In this order the advance of some is paid for by the failure of equally sincere and even meritorious endeavors of others.”

“Civilization is not only a product of evolution – it is a process; by establishing a framework of general rules and individual freedom it allows itself to continue to evolve. This evolution cannot be guided by and often will not produce what men demand. Men may find some previously unfulfilled wishes satisfied but only at the price of disappointing many others.”

“Good intentions will not suffice – we all know what road they paved.”

“For intellectuals generally, the feeling of being mere tools of, even if impersonal, market forces appear almost as a personal humiliation.”

“For the only groups who have spread and developed are those among whom it became customary to try to provide for children and later descendants whom one might never see.”

“Centrally planned economy ………….. this notion appears eminently sensible at first glance. But it proves to overlook the facts just reviewed: that the totality of resources that one could employ in such a plan is simply not noble to anybody, and therefore can hardly be centrally controlled.”

“Indeed the whole idea of a ‘central control’ is confused. There is not, and never could be, a single directing mind at work; there’ll always be some counselor committee charged with designing a plan of action for some enterprise.” …………” Each bit of knowledge contributed by one person who tend to leave some other to recall yet other fact of whose relevancy has become aware of only by his being told of yet other circumstances of which he did not know.”

“Perhaps the best illustration of the impossibility of deliberate ‘rational’ allocation of resources……….. The problem is essentially how much of the currently accruing productive resources can be spared to provide for the more distant future as against present needs.”

“…….. What happens when the share of current resources used to provide for needs in the more distant future is greater than what people are prepared to spare from current consumption in order to increase provision for that future?”

“….so it was that traders were held in contempt even by Plato and Aristotle, citizens of the city which in their day leading to position of trade. ………. Trade could develop only under the protection of a class whose profession was arms, whose members depended on their physical prowess,………..”

“…. While wisdom is often hidden in the meaning of words, so is error.”

“Mankind is split into two hostile groups by promises that have no realizable content. The sources of this conflict cannot be dissipated by compromise, for every concession to factual error merely creates more unrealizable expectations.”

“I have also maintained that the extended order would collapse, and that much of our population would suffer and die, if such movements ever did truly succeeded in displacing the market. Like it or not, the current world population already exists. Destroying its material foundation in order to attain the ‘ethical’ or instinctually gratifying improvements advocated by socialists would be tantamount to condoning the death of billions and the impoverishment of the rest.”

“…. John Locke’s similar claim in the second treatise (1690/1887) the American historian James Sullivan remarked, as early as 1795, how the Native Americans had been displaced by European colonists, and that now 500 thinking beings could prosper in the same area were previously only a single savage could ‘drag out a hungry existence’ as a hunter (1795: 139). (The Native American tribes that continue to engage primarily in hunting were displaced also from another direction: by tribes that had learned to practice agriculture.)

“Quite the contrary, as they contemplate our present population density and, more especially, the acceleration in the rate of population increase during the past 300 years, they have become highly alarmed, and construe the prospect of increasing growth of population as a disaster of nightmare quality. Even a sensible philosopher like A.G.N. Flew praised Julian Huxley for recognizing early, ‘before this was even as widely admitted as it is now, that human fertility represents the number one threat to the present and future welfare of the human race’.”

“The proletariat are an additional population that, without new opportunities of employment, would never have grown up. The following average income occurs simply because great population growth generally involves a greater increase of the poor, rather than the richer, strata of a population.”

“That is, if the base of the income rose more than its height, the average income of the increased total will be smaller.”

“Some notions that attend such recommended policies for restricting population – were for example, that advanced peoples should turn parts of the territories inhabited by still undeveloped people into a sort of nature Park – are indeed outrageous. The idyllic image of happy primitives who enjoy their rural poverty and will gladly forgo the development that alone can give many of them access to whatever they have come to regard as the benefits of civilization is based on fantasy.”

While I present the following few paragraphs on population my conclusion is he is in error here. It seems he has an optimistic view that time and events have not borne out. The experts have determined the population will increase more in the 21st century than was originally expected.

“:….. I do not think that the much dreaded population explosion – leading to ‘standing room only’– is going to occur. The whole story of population growth may now be approaching its end, or at least poaching a very new level.”

“…… there is strong reason to doubt the accuracy of extrapolating the trend of the last several centuries – of an indefinitely increasing acceleration of population growth – into the indefinite future.”

“I suspect that the problem is already diminishing: that the population growth rate is now approaching, or has already reached, its maximum, and will not increase much further but will decline. One cannot of course say for certain, but it appears that – even though this has not already occurred – sometime in the last decade of this century population growth will reach a maximum and that, afterwards, it will decline unless there is deliberate intervention to stimulate.”


“most individuals who now make up the proletariat could not have existed before others provided them with means to subsist. Although these folks may feel exploited, and politicians may arouse and play on these feelings to gain power, most of the Western proletariat, and most of the millions of the developing world, owe their existence to opportunities that advanced countries have created for them.

“…. These practices do not preserve particular lives but rather increase the chances (or prospects or probabilities) of more rapid propagation of the group. Such results were no more desired than foreseen. Some of these practices may indeed have involved a decrease in esteem for some individual lives, a preparedness to sacrifice by infanticide, to abandon the old and sick, or to kill the dangerous, in order to improve the prospects of maintaining and multiplying the rest.”

“Even if we do not like to face the fact, we constantly have to make such decisions. Unknown individual lives, in public or private decisions, are not absolute values, and the builder of motor roads or of hospitals or electric equipment will never carry precautions against lethal accidents to the maximum, because by avoiding this cost, elsewhereoverall risks to human lives can be much reduced. Much like when the Army surgeon after a battle engages in ‘triage’ – when he lets one die who might be saved, because in the time he would have to devote to saving him he could save three other lives.”

“The requirement of preserving the maximum number of lives is that not all individual lives be regarded as equally important. It may be more important to save the life of the doctor in our example above, then the save the lives of any particular one of his patients: otherwise none might survive. Some lives are evidently more important in that they create or preserve other lives. The good hunter or defender of the community, the fertile mother and perhaps even the wise old man may be more important than most babies and most of the aged. On the preservation of the life of a good chief large numbers of other lives may depend. And the highly productive may be more valuable to the community than other adult individuals. It is not the present number of lives that evolution will tend to maximize but the prospective stream of future lives. If in a group all men of fertile age, or all such women, and the required numbers to defend and feed them, were preserved, the prospects of future growth would hardly be affected, whereas the death of all females under 45 would destroy all possibilities of preserving the strain.”

“…….. Like it or not, we owe the persistence of certain practices, and the civilization that resulted from them, in part to support of beliefs which are not true – or verifiable or testable – in the same sense as our scientific statements, and which are certainly not the result of rational argumentation. I sometimes think that it might be appropriate to call at least some of them, at least as a gesture of appreciation, ‘symbolic truths’, since they did help their adherents to ‘be fruitful and multiply and replenish the earth and subdue it’ (Genesis 1:28). Even those among us, like myself, who are not prepared to accept the anthropomorphic conception of a personal divinity to admit that the premature loss of what we regard as nonfactual beliefs would have deprived mankind of a powerful support in the long development of the extended order that we now enjoy, and that even now the loss of these beliefs, whether true or false, creates great difficulties.”

“………. Even an agnostic ought to concede that there are morals, and positions that have provided not only our civilization but our very lives, …….”

“As strategies for survival, counterparts of both rigidity and flexibility have played important roles in biological evolution; and morals that took the form of rigid rules may sometimes have been more effective than more flexible rules whose adherents attempted to steer their practice, and alter their course, according to particular facts and foreseeable consequences – and thus by something that it would be easier to call knowledge.”