The Fatal Conceit: The Errors of Socialism

The Fatal Conceit: The Errors of Socialism

by Friedrich A. Hayek

Hayek gives the main arguments for the free-market case and presents his manifesto on the "errors of socialism." Hayek argues that socialism has, from its origins, been mistaken on factual, and even on logical, grounds and that its repeated failures in the many different practical applications of socialist ideas that this century has witnessed were the direct outcome of these errors.

. The energy and precision with which Mr. Hayek sweeps away his opposition is impressive."Edward H.

A. Hayek is considered a pioneer in monetary theory, the preeminent proponent of the libertarian philosophy, and the ideological mentor of the Reagan and Thatcher "revolutions."

  • Language: English
  • Category: Economics
  • Rating: 4.25
  • Pages: 194
  • Publish Date: August 28th 1991 by University of Chicago Press
  • Isbn10: 0226320669
  • Isbn13: 9780226320663

Read the Book "The Fatal Conceit: The Errors of Socialism" Online

Hayek argues that the "moral" institutions of free market capitalism, such as private property and contract, represent the result of an evolutionary process between competing traditions. The "fatal conceit" is the belief among intellectuals that we can use reason to create a better system of tradition than what that process created. Despite the title, this conceit is present in any form of social engineering as well as socialism.

Hayek's Fatal Conceit is certainly more synthetic and more high-flying than Ludwig von Mises's mordant catalog of the "errors" of socialism in his 1922 Die Gemeinwirtschaft, only published in English a decade later as Socialism. If you are interested in this book and it deserves a good look one must first also consult Hayek biographer Alan Ebenstein's systematic examination published in Liberty as "The Final Deceit," linked below: It is certainly worth reading "Hayek," but one also must read Ebenstein now as well.

He talks about how order rises from chaos naturally through competition (survival of the fittest). He is in favor of societal morals (not government) that have survived the tests of time and does not represent an infringement on the rights of others.

Ive read Hayeks The Road to Serfdom and other books but hadnt read The Fatal Conceit.

Clear, well-argued, and sound, Hayek not only manages to slam the last nail into the coffin of central-planning but also synthesizes all free market theory into one concise concept of "spontaneous order." I would recommend this book to anybody, socialist or libertarian, liberal or conservative, apathetic or activist. Almost all of us serve people whom we do not know, and even of whose existence we are ignorant; and we in turn constantly live on the services of other people of whom we know nothing." 14 "One revealing mark of how poorly the ordering principle of the market is understood is the common notion that 'cooperation is better than competition.' Cooperation, like solidarity, presupposes a large measure of agreement on ends as well as on methods employed in their pursuit. Competition is a procedure of discovery, a procedure involved in all evolution, that led man unwittingly to respond to novel situations; and through further competition, not through agreement, we gradually increase our efficiency." 19 "Learnt moral rules, customs, progressively displaced innate responses, not because men recognized by reason that they were better but because they made possible the growth of an extended order exceeding anyone's vision, in which more effective collaboration enabled its members, however blindly, to maintain more people and to displace other groups." 23 "The crucial point is that the prior development of several property is indispensable for the development of trading, and thereby for the formation of larger coherent and cooperating structures, and for the appearance of those signals we call prices." 31 "But during the last years of the Republic and the first centuries of the Empire, governed by a senate whose members were deeply involved in commercial interests, Rome gave the world the prototype of private law based on the most absolute conception of several property. In this respect students of early history were overly impressed and greatly misled by monuments and documents left by the holders of political power, whereas the true builders of the extended order, who as often as not created the wealth that made the monuments possible, left less tangible and ostentatious testimonies to their achievement." 33 "What led the greatly advanced civilization of China to fall behind Europe was its governments' clamping down so tightly as to leave no room for new developments, while...Europe probably owes its extraordinary expansion in the Middle Ages to its political anarchy." 45 46--critique of Aristotelian ethical theory 50-51--critique of sociology "Rationalists tend to be intelligent and intellectual; and intelligent intellectuals tend to be socialists." 53 "second-hand dealers'--55 "Everywhere, in the name of liberation, people disavow practices that enabled mankind to reach its present size and degree of cooperation because they do not rationally see, according to their lights, how certain limitations on individual freedom through legal and moral rules make possible a greater--and freer!--order than can be attained through centralized control." 65 "In the marketplace (as in other institutions of our extended order), unintended consequences are paramount: a distribution of resources is effected by an impersonal process in which individuals, acting for their own ends (themselves also often rather vague), literally do not and cannot know what will be the net result of their interactions." 71 "If we had deliberately built, or were consciously shaping, the structure of human action, we would merely have to ask individuals why they had interacted with any particular structure. The extended order circumvents individual ignorance (and thus also adapts us to the unknown, as discussed above) in a way that good intentions alone cannot do--and thereby does make our efforts altruistic in their effects." 81 "Some persons are so troubled by some effects of the market order that they overlook how unlikely and even wonderful it is to find such an order prevailing in the greater part of the modern world, a world in which we find thousands of millions of people working in a constantly changing environment, providing means of subsistence for others who are mostly unknown to them, and at the same time finding satisfied their own expectations that they themselves will receive goods and services produced by equally unknown people." 84 Intellectuals and socialist realities--85-86 "Value is not an attribute or physical property possessed by things themselves, irrespective of their relations to men, but solely an aspect of these relations that enables men to take account, in their decisions about the use of such things, of the better opportunities others might have for their use. Increase in value appears only with, and is relevant only with regard to, human purposes." 95 "But because of the delusion that macroeconomics is both viable and useful (a delusion encouraged by its extensive use of mathematics, which must always impress politicians lacking any mathematical education, and which is really the nearest things to the practice of magic that occurs among professional economists) many opinions ruling contemporary government and politics are still based on naive explanations of such economic phenomena as value and prices, explanations that vainly endeavour to account for them as 'objective' occurrences independent of human knowledge and aims." 99 "Though an indispensable requirement for the functioning of an extensive order of cooperation of free people, money has almost from its first appearance been so shamelessly abused by governments that it has become the prime source of disturbance of all self-ordering processes in the extended order of human cooperation.

I suppose one of the main reasons I like this book is because it supports one of my main theories about life: we evolved the capacity for self-awareness and abstract thought by accident of history, and there is therefore no reason to expect happiness, satisfaction, justice, or any other moral, emotional, or complex good to be achievable or maintainable in our lives, let alone in society as a whole. So one of Hayek's main contentions is that: achieving many things that are widely desirable - peace, safety, availability of food, health care, shelter, etc for large numbers of people, in short, a stable society - cannot really be brought about without circumventing many of our strong natural urges and instincts. Them's just the breaks, and thus there is some inherent conflict between our everyday, moment-to-moment, personal desires and actions, and that which apply to society at large, or as Hayek calls it, the extended order. We can perceive how things work, make predictions, figure out and engineer some pretty complex stuff. But in systems as enormously complex and chaotic as an entire civilization, with billions of agents contributing to its behavior, let alone non-agenty factors, it's just not practical to think that we can sit down and work it all out. But it works - you can't expect any one person, group, organization, or institution, to be able to design and coordinate a system as complex as a civilization or economy. And he definitely gained my respect and willingness to hear him out by his focus on actual effects and knowledge, and his eschewing of the temptation to rationalize choices and actions, as exemplified by this quote: "Virtually all the benefits of our civilization, and indeed our very existence, rest, I believe, on our continuing willingness to shoulder the burden of tradition.

At a time when many young Americans increasingly identify with socialism, Hayek's "Fatal Conceit" is a valuable counter-argument in favor of evolved systems of cooperation and exchange known as the extended order. The Fatal Conceit is a long form argument about the evolution and moral basis of the extended order of a market system citing numerous other sources and arguments for support.

I picked it up because I wanted to give Hayek a proper chance by reading an entire book by him. I picked it because it was the only Hayek book available on I don't think he (or Bartley?) does in this book.

Friedrich August von Hayek CH was an Austrian and British economist and philosopher known for his defense of classical liberalism and free-market capitalism against socialist and collectivist thought.