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A shorter version of this paper was originally presented at the 7 th ESHET Conference (Université de Paris 1 Panthéon-Sorbonne, 30 January-1 February 2003). CULTURAL EVOLUTION TRUE AND FALSE: A DEBUNKING OF HAYEK’S CRITICS Robert Nadeau Department of Philosophy Université du Québec à Montréal 1.- Introduction: articulating Hayek’s evolutionary argument with his socialist calculation dispute I completely agree with Bruce Caldwell (Caldwell 1988b: 74-75; Caldwell 1988a) that it is precisely within the conceptual and theoretical framework of the debate on the possibility of socialist calculation that Hayek definitively breaks with the standard static equilibrium approach to the market economy and finds out that the central problem of economics is related to the complex question of social coordination. From the Hayekian standpoint, this problem cannot be solved without articulating a genuine theory about the role and the use of knowledge in society. 1 This forms the hard core of what I will call the Hayekian theoretical argument. But one can find a much different kind of argument in Hayek, i.e. an evolutionary argument. I will characterize this argument as the Hayekian empirical argument. Hayek first exposed the essential elements of this genuine argument systematically in Law, Legislation and Liberty (see especially Hayek 1973). But in Hayek’s last book (Hayek 1988), socialism is still analyzed from this evolutionary standpoint , and as such socialism is considered by Hayek to be the major problem not only of economic theory but also, more globally, of Western civilization itself. In that book, published the year before the Soviet Union collapsed, Hayek showed himself to be absolutely confident that economic analysis could prove that socialism was not only a social blunder and a political failure, but above all a formidable scientific error. My reading of Hayek’s work is that this evolutionary argument has to be linked to the first one, which is of a more theoretical nature as far as economics is concerned. Indeed, while the evolutionary argument puts forward a completely different conceptual framework tightening the theoretical argument, it first of all displaces the gist of Hayek’s claim against socialism. By calling attention to facts concerning the global process of cultural evolution, typically analyzed by Hayek as a struggle or competition between moral traditions where the more efficient social and economic orders will dominate all the 1 According to Hayek, “(…) economics has come nearer than any other social science to an answer to that central question of all social sciences: How can the combination of fragments of knowledge existing in different minds bring about results which, if they were to be brought about deliberately, would require a knowledge on the part of the directing mind which no single person can possess?” (Hayek 1937 [1948]: 54). See also Hayek, 1945 [1978]. 1 others and win the competition, Hayek now grounds on empirical evidence his argument stating the superiority of competitive economy over planned economy. This is to say that, when interpreted systematically, Hayek comes through as trying to prove on theoretical and empirical grounds that market economy is evolutionarily superior to any kind of socialist economy (centrally planned economy, market socialism, partially planned market economy). Methodologically speaking, Hayek is very explicit about the scientific nature of this question. This is not to say that Hayek does not equally approach this problem from a philosophical standpoint, for it is indisputable that by way of careful analysis he also tries to show socialism to be a moral, political and social disaster. But I would like to argue in the coming sections that the theoretical argument and the empirical argument are plainly consistent and logically compatible with one another, even if one could contest that they are sound (logically valid and true), i.e. theoretically demonstrated and sufficiently supported by evidence. It is significant that those historians of economic thought who are discussing and trying to shed more light on Hayek’s arguments against socialism seem to me to become hesitating and uncomfortable, if not embarrassed, when they come to grips with Hayek’s professed evolutionary standpoint. Erich Streissler, for instance (Streissler 1994), reconstructs the core of Hayek’s arguments against socialism as three “impossibility theorems ” (Streissler 1994: 65 and sq.): 1. In the real world goods are not easily specified; commodities are not homogeneous and fully standardized; quality is not constant but declining over time, and full quality control is impossible; 2. Costs are not objectively given, but are mere subjective estimates; they are objectively determinable only ex post, not ex ante ; 3. “Knowledge is uncentralizable because we do not even know what knowledge we use, and therefore cannot communicate it fully to others” (ibid .: 66); economic knowledge is dispersed, not complete and made of contradictory bits; it is local. Being fully aware that Hayek’s argument on the ‘impractability (sic) of socialism’ (68) 2 is that “such a system will only achieve a much lower degree of efficiency at much higher cost than a free enterprise system” (Streissler 1994: 68), he adds towards the end of his analysis that “(I)n his later years Hayek developed this concept into an evolutionary idea about social systems and society” ( ibid.: 69). In a very brief paragraph he goes on to say that for Hayek “(a) free enterprise system is uniquely 2 Referring to the phrase “the impossibility of socialism”, Hayek clearly rejects this wording of the problem: ”(…) Mises had occasionally used the somewhat loose statement that socialism was impossible, while what he meant was that socialism made rational calculation impossible” (Hayek 1935a: 76). Hayek’s word is “impracticability” of socialism (ibid.: 69 and passim). 2 qualified to cope with economic change and thus has a decided evolutionary advantage over social systems” (ibid.), before concluding after only five lines that “Hayek’s last book, The Fatal Conceit, suggests that it is therefore also immoral to ‘commit’ socialism” ( ibid.). I am deeply sorry to say that Professor Streissler almost completely missed the point. Worse, he has Hayek committing what Hayek himself has overtly deprecated as “the genetic or naturalist fallacy”, a logical blunder that he is surely not guilty of. I will have more to say on this later on. When Viktor Vanberg published his 1986 seminal paper, two years before the publication of The Fatal Conceit , he had had access to Hayek’s manuscript and referred to it explicitly. “In his latest writings”, writes Vanberg, “notably in his forthcoming book The Fatal Conceit, Hayek seems more and more to suggest an interpretation of the notion of group selection which is not based on the claim that individuals practice certain rules because they are beneficial to the group (…) Rather the argument is that those groups in which, for whatever reason, individuals are made to follow socially beneficial rules will be superior to groups with less beneficial rules, and that—via the superiority of the group—cultural evolution will select for appropriate rules” (Vanberg 1986: 89, n. 14). Vanberg’s critique of this view is that ”certain rules cannot be expected to emerge and to be enforced spontaneously, but require some ‘organized apparatus’ for their enforcement” (ibid.). Vanberg also states that “(T)he idea of such a politically mediated process of cultural selection is left extremely vague in Hayek’s writings” (ibid.). Following Steele (1984), Vanberg adds that “it is unclear for what period of human history Hayek considers this interpretation to be appropriate,” that it can “perhaps be appropriate for a view measuring cultural development in terms of millennia” but surely not for us mortals who live on a much shorter timescale and who have to develop “an appropriate attitude towards the systems of rules” (ibid.) in which we find ourselves. I contest Vanberg’s understanding of Hayek’s analysis. According to Hayek, the reasons why individuals in a given community will, generally speaking, follow tacit rules as far as their social and economic behavior is concerned is, of course, that they will tend to imitate successful social and economic behaviors. Furthermore, they will be in a position to do so because the group in which they earn their living will be economically successful. So Hayek’s point goes thus: individuals follow rules of just conduct and of perception; individuals interact in a community, which tends to be more extended (this is the idea of ‘catallaxy’) the more efficient it is, and more productive the greater its population (the causality must be circular). Individuals get imitated for the rules they apparently follow (as in the language acquisition process); groups of individuals get selected for the successful rules the individuals composing them follow. If I am right, then Vanberg’s critical remarks refer to an evolutionary group selection model that is at odds with the one Hayek is effectively advocating. To pinpoint Vanberg’s first critical point 3 and diminish its impact, if not turn it down, it seems to me that the need for ‘organizational enforcement’ of spontaneously generated institutions or systems of rules (e.g. markets) is clearly put forth in Hayek, but indeed has never been systematically investigated by him. It is true that later in his work Vanberg takes a much more positive approach to Hayek’s “evolutionary paradigm”, conceding that this “is, in fact, a much more fundamental element of Hayek’s thought than is commonly recognized” (Vanberg 1993 [1994]: 95). But this leaves open the question of whether his 1986 critical remarks were justified in the first place, and I think not. I will develop this below. Last but not least, Bruce Caldwell openly considers the “critique of rationalist constructivism” in the framework of the theory of spontaneous orders as “Hayek’s final set of arguments against socialist planning” (Caldwell 1997: 1871). But he does not establish in detail the connection between this last argument and the previous ones given by Hayek in the socialist calculation debate. Obviously uncomfortable vis-à-vis Hayek’s cultural evolutionism, Caldwell insists that “Hayek’s evolutionary arguments have been criticized (particularly his reliance in later work on the idea of ‘group selection’) perhaps most effectively by those like Viktor Vanberg (1994, Chs 5-7 & 12) who believe that design of constitutions is an essential element in the improvement of liberal orders” (ibid.: 1873). But he also writes in passing that the spontaneous emergence of liberal market orders “is a question that his critics have thus far left unanswered” (ibid .: 1873). He then quickly moves on to something else related to The Sensory Order and which has nothing to do with Hayek’s evolutionary argument. Hayek’s critics have almost unanimously missed something I myself regard as crucial and this is why I will plead here for a renewed reading of Hayek’s works on socialism. I call for a retrospective reading. The usual reading by historians of ideas is linear; a step-by-step reconstruction, as if the only thing a sequence of texts can eventually do is add new arguments in answer to previously defined problems. A ‘retrospective reading’ can do something else: it can shed new light on a previous argument and show us a way to read it from a new angle. I claim that this is precisely what Hayek’s evolutionary views can do for us if we use them as a starting point to look back into the socialist calculation debate of the 1930s and 1940s. The evolutionary standpoint that Hayek adopts systematically with his 1973-79 trilogy Law, Legislation and Liberty , up to his last book in 1988, The Fatal Conceit, does more than simply add a new tenet to an already well-defined doctrine. Streissler thinks otherwise, and seemingly so does Bruce Caldwell. To my mind, Hayek’s evolutionary view does not simply add a new element to a previously structured argument, because it forces us in retrospect to assess the socialist calculation debate from a quite different perspective. Consequently, it leads us to set off and insist on a dimension of this debate that was not clear enough from the start and, for that matter, was insufficiently emphasized by commentators and historians of thought. This debate 4 has indeed almost always been interpreted negatively : following the traditional reading, Hayek, and Mises before him, criticized socialism (and especially market socialism in Hayek’s case) in order to demonstrate what Hayek has called the “impracticability” of socialism conceived as a ”centrally planned economy”. But contrary to what many critics and commentators of Hayek state, I would like to maintain that the ultimate aim if not the core of Hayek’s argument is positive. Following my line of interpretation, Hayek is striving to define a method suited to prove the superior efficiency not only of market-based economy (or ‘free market economy’, or again ‘competitive economy’) but also and more globally of what he calls the “extended society” (or, using Mises’s term, the ‘catallaxy’, or again the ‘Great Society’, which perhaps corresponds to what Popper has called for his part the “Open Society”). Without a doubt, the whole argument is from this standpoint better seen as a comparative argument: but here comparison is not done for its own sake; it is used to prove something. Hayek’s aim is not only to substantiate the theoretical point that socialism is impracticable (a negative claim) but furthermore to provide evidence that capitalism offers the best solution, or at least a better one, to the allocation problem (a positive claim). As long as the economic problem concerns allocating scarce resources to different social ends that compete against each another, the most rational way to settle the question is to compare different possibilities in order to reach a conclusive and convincing answer. For Hayek, if the question has to be formulated in comparative terms, it is clearly because what is at stake in the market socialism debate is the relative efficiency of two economic models, the first propounding state intervention in and overall planning of the economy, the other propounding coordinated growth of the economy by spontaneous social forces working under the Rule of Law. “(T)he main point is very simple”, writes Hayek. “It is that comprehensive economic planning, which is regarded as necessary to organize economic activity on more rational and efficient lines (emphasis mine), presupposes a much more complete agreement (emphasis mine once again) on the relative importance of the different social ends than actually exists, and that in consequence, in order to be able to plan, the planning authority must impose upon the people the detailed code of values that is lacking” (Hayek 1938-39 [1997]: 193) The same point is made again in The Road to Serfdom (1944 [1976]: 57). There can be no doubt that from the start, and more preeminently in Hayek’s case than in Mises’s, the question is put in a form that is thoroughly comparative, and besides the same can be said of the advocates of market socialism. The proper method to discuss the question in all its implications is to compare both models conceived as ideal-types (private versus public ownership of the means of production, dispersed and fragmented knowledge versus centralized information, pricing system versus having prices determined by a Central Planning Board; incentives in terms of 5 profits for entrepreneurs versus incentives in terms of political rewards for the state-owned enterprises, etc.). I wish now to discuss the main objections that have been raised against Hayek’s views. I have identified four major criticisms against Hayek. The first is about Hayek’s ‘optimalism’—if it really is an ‘optimality’ argument. Supposing it is a logically valid statement, the question is what Hayek is really saying, and what it means. The second rebukes Hayek for having grounded a claim to moral superiority and desirability on an evolutionary argument. The third criticism contends that Hayek’s evolutionary standpoint, which as such is based in particular on a ‘group selection’ theory, is sound and consequently questions whether it is consistent with his methodological individualism. The fourth and last criticism contests whether Hayek’s conceptual distinction between ‘constructed order’ and ‘spontaneous order’ can serve as grounds for a ‘preeminence argument’ claiming that social and economic orders that are market based are more efficient and evolutionarily advantageous than socioeconomic orders that are based on planning. I will now discuss these four criticisms in order. 2. The case for optimality in Hayek’s writings What seems to be quite characteristic of Hayek’s analysis of spontaneous social and economic order is that, as theoretical as it is from the start, when closely related to the socialist calculation debate, it cannot be completely articulated if we do not state the optimality argument that is essentially tied to it. One can surely try to maintain, as John Gray does, that no moral value judgment is really at stake here (Gray 1984: 33-4; 118-125) but it is difficult not to see that Hayek’s theoretical analysis serves to support a preeminence claim regarding the market economy.3 Let me try to be razor sharp about this. Hayek undeniably sees “the price system as the best one” (Hayek 1938-39: 215). Time and time again he insists on the superior efficiency of capitalism over socialism. For instance, starting from the bare fact that “(T)he only known mechanism by which the knowledge of all can be utilized (is) the price 3 For instance, Jean-Pierre Dupuy is very critical of Hayek’s evolutionary argument precisely because of its strong ‘optimalist’ view concerning the market economy. He writes: « La critique a été sensible à ce qui semble être la contradiction majeure de la philosophie sociale hayékienne. Il s'agit du statut de la démonstration qui établit la supériorité absolue du marché. Seuls les ordres abstraits qui passent au travers du filtre de l’évolution culturelle peuvent prétendre au rang suprême. Jamais en particulier l’esprit humain ou la raison ne pourront concevoir des ordres aussi complexes que ceux qui sont sélectionnés par l’évolution. Le problème est évidemment que Hayek peut difficilement prétendre que le marché a passé le test avec succès puisque son œuvre se présente comme une critique radicale et « rationnelle », a-t-on envie d’écrire, de la civilisation moderne, coupable de s’être laissée séduire par les sirènes du constructivisme. De deux choses l’une, donc, conclut la critique. Ou bien Hayek doit renoncer à sa théorie de l’évolution culturelle et fonder la supériorité du marché sur des arguments rationalistes ou, s’il la maintient, il faut qu’il admette que l’ordre étendu du marché n’est pas le meilleur » (Dupuy 2002: 198). 6 mechanism” (Hayek 1938-39: 196), and being perfectly aware of the fact that sometimes the price system is inapplicable and is supplemented, he writes: “(T)he problem we are discussing is not, however, whether the price system must be supplemented, whether a substitute must be found where in the nature of the case it is inapplicable, but whether it ought to be supplanted where the conditions for its working exist or can be created. The question is whether we can do better than by the spontaneous collaboration secured by the market, and not whether needed services, which cannot be priced and therefore will not be obtainable on the market, have to be provided in some other way” (Hayek 1938-39: 197). This is why I think that Angelo Petroni is plainly mistaken when he writes that “(I)f anyone assumes an evolutionary point of view, where the individuals have a severely limited knowledge about the environment and their own rules of conduct, there is simply no room for saying that anything similar to optimality exists in Hayek's world” (Petroni 1995: 119). One has to ask nevertheless whether this Hayekian optimality argument is fully consistent with the evolutionary standpoint Hayek is adopting. As I will try to show, I think it is. This kind of argument can easily be characterized as forming a subcategory of “invisible hand explanations”, akin to the kind of extremal explanations one can find in evolutionary biology4 The idea of an ‘optimum’ is surely not unfamiliar to economists: standard neoclassical economics in particular usually works with an ‘optimality assumption’ when it assumes that “rational agents (…) optimize over all the relevant margins” (Caldwell 1997: 1884). Furthermore, when theoretically extended, this paradigm includes information acquisition and transaction costs. But Viktor Vanberg’s point against Hayek is that “Hayek does not provide an independent definition of what ‘appropriate’ rules are, beyond the notion that they contribute to a beneficial social order (Vanberg 1986: 79). He further points out that “in talking of the ‘appropriateness’ of rules it may be necessary to specify the relevant group for which the resulting order is to be judged beneficial” (ibid., n. 4). This complaint is unfounded. The criterion of the appropriateness of just conduct and perception rules is formulated by Hayek in terms of population growth (see Hayek 1988, Ch. 8: 120-134), this being directly related by Hayek to the socioeconomic conditions (themselves being based on a cultural tradition) which can most favorably play a causal role in the matter. It should be noted here (more on this in Nadeau 4 Gould and Lewontin (1979) distinguish three forms of ‘adaptation’: 1) « what physiologists call ‘adaptation’: the phenotypic plasticity that permits organisms to mold their form to prevailing circumstances during ontogeny (…) Physiological adaptations are not heritable, though the capacity to develop them presumably is » (p. 264). 2) « Secondly, we have a ‘heritable’ form of non-Darwinian adaptation in humans (and, in rudimentary ways, in a few other advanced social species): cultural adaptation (with heritability imposed by learning). Much confused thinking in human sociobiology arises from a failure to distinguish this mode from Darwinian adaptation based on genetic variation » (p. 264). 3) « Finally, we have adaptation arising from the conventional Darwinian mechanism of selection upon genetic variation » (p. 264). The second kind is obviously what Hayek is talking about. 7 1998b) that Hayek builds up a strong critical argument against Malthus and the Malthusian fear of overpopulation. Claiming that, as a matter of fact, in a market economy everyone gets a return exactly proportioned to what he/she contributes, Hayek also claims that the comparative advantages of economic systems can be devised in populational terms, with the most efficient system nourishing more people. This presupposes that its population will tend to grow much faster (by immigration if not by natality), a situation that in turn will tend to increase economic efficiency because this is a function of the size of markets. Market process is conceived by Hayek as the best ‘discovery procedures’ of information needed by individuals to act rationally, and as the best mechanism to work out spontaneously the ‘coordination of all individual plans’. But of course this is not at all equivalent to saying that the best individual plans will necessarily be chosen and that the best aggregate social and economic results will inevitably be produced. What is certain is that Hayek never thought or wrote that socialism would inevitably cause serfdom (he disputed this point to Samuelson who saw an “inevitability thesis” in Hayek’s argument: on this see Caldwell 1997: 1868, n. 7), just as he never claimed that competitive economies would in fact certainly give optimal results. Bruno Jossa writes nevertheless that “(A)ccording to a widely shared interpretation (Hayek is confident) that social evolution will guarantee the survival of efficient institutions” (Jossa 1994: 80), but he adds that “other well known advocates of economic liberalism, among them Viner and Buchanan, have severely criticized Hayek’s opposition to institutional reforms by emphasizing that the institutions that are found to survive, and even to thrive, are not necessarily apt to maximize human capabilities. (…) In other words, according to Viner and Buchanan, cultural evolution does not guarantee the survival of the best institutions” (80).5 I completely disagree with Vanberg and those commentators who reject Hayek’s evolutionary argument as misguided or inconsistent. Let me first stress that just because, at a purely theoretical level, one can prove, or at least try to prove, that the market economy is the best ever solution (at least up until now) to the resource allocation problem, it does not mean that one is committed to the thesis that in fact and automatically, regardless of particular institutional context and constitutional regime, capitalism will prove to be the best social and economic order. Hayek should not be criticized for having propounded an ‘inevitability thesis’ as though his argument amounted to saying that, from an evolutionary standpoint, it is necessarily the case that socialism will lead to totalitarianism, that socialism will inevitably collapse, and that capitalism will inescapably triumph everywhere on Earth. 5 Jossa’s references are the following: Viner, 1961, pp. 166-7; Buchanan, 1975, pp. 130-1; Buchanan, 1976, pp. 13-24. It should be noted that all of these texts were written long before Hayek’s evolutionary ideas had been cleared up. 8 It is doubtless the case that a social and economic order can be both optimal, abstractly speaking (meaning that it is the best thinkable system), and contingent, evolutionary speaking (it could have not emerged or could even fade away after having been historically implemented). But the converse argument is also logically valid: saying that we have evolutionary evidence to believe that market–based, spontaneous social orders outdistance in economic efficiency any form of centrally planned and directed society does not commit us to the view that, as an abstract and strongly idealized model of the economy, market process within the spontaneous social order working under the Rule of Law can, given the proper conditions, produce the best social, political and economic order possible. This is to say that, in line with the classic Duhemian argument, while one social and economic order may in fact be superior to another with which it is compared, it does not follow simply of the fact that one of the two orders is seen as “inferior” that the second one, even if automatically seen as “superior” to the first one, is necessarily the best possible—if only because we do not know what all of the other possibilities are. We would have to be at the end of human history in order to form a reasoned judgment and put forward a conclusive argument about that issue. If we want to make sense of Hayek’s evolutionary argument, we must distinguish between a theoretical statement (1) and an empirical one (2). But more than that, we absolutely must distinguish between a sound theoretical argument (1) and a flawed one (1’), as we must also distinguish between a legitimate empirical claim (2) and a faulty one (2’). Here are the four statements in question: (1) theoretically speaking, free market and decentralized economy is more efficient than its centralized and planned counterpart; (1’) competitive economy is the optimal solution if we compare it on an absolute scale with all other possible solutions; (2) empirically speaking, spontaneous social and economic orders have an evolutionary comparative advantage over rationally constructed social and economic orders; (2’) cultural evolution will inexorably select capitalism as the best social and economic tradition. My reading is that Hayek emphasizes thesis (1) but not thesis (1’), and that he upholds thesis (2) but never thesis (2’). His optimality argument is a comparative one, and not a superlative one. Indeed what is crucial to me is that both propositions (1) and (2) express a ‘comparatist’ thesis: Hayek argues by taking a deliberately comparative viewpoint contrasting two typical models of socioeconomic systems. What is more, I would like to emphasize that neither thesis (1) nor thesis (2) are logically 9 inconsistent: no logical criteria can force us to reject them. Moreover, they are not incompatible but rather complementary: they can form a two-sided scientific argument. Thesis (1) will be said to be ‘theoretical’ because Hayek writes that it is on an “a priori reasoning” (Hayek 1935b: 90) that it can be justified as a scientific argument. Thesis (2) will be said to be ‘empirical’ because, despite the fact that it explicitly takes on the evolutionary paradigm, it cannot be demonstrated by ‘a priori reasoning’. It can only be demonstrated by reference to observational facts pertaining to the cultural evolution process. I will also maintain in section 4 that it should not be discussed as though it were part of neoDarwinian theory, for, as I will insist, Hayekian group selection is not a Darwinian biological process after all. To be sure, if we can prove, as Hayek thinks we can, that competitive economy works better than any kind of planned economy, it gives us no grounds to conclude that, if there is a competition opposing the cultural traditions underlying the two economic orders, cultural evolution will necessarily select competitive and reject planned economy. My reading is that Hayek obviously never fell into the tricky traps of historical determinism. As Caldwell writes: “there is no guarantee of coordination” (Caldwell 1997: 1883; emphasis mine). But this is of course no basis to infer that it is impossible to demarcate socialism and capitalism conceived as two opposite ideal-types. This is why Caldwell immediately adds the following comment, sticking to the unmistakably comparativist orientation of the whole Misesian and Hayekian argument, that “(the Austrian analysis) does insist that a system in which prices determined in competitive markets are free to adjust to reflect relative scarcities is one in which the coordination of agents’ plans is least likely to be hindered” (Caldwell 1997: 1883). In the following sections I will target three more criticisms that were raised against this Hayekian view. It is obvious that Hayek’s critics have a different reading from mine of what goes on and what is at stake in Hayek’s writings. This being said, even if we cannot reach consensus on what to think about Hayek’s case for optimality, we should at least be able to converge on what Hayek’s case for optimality is not about. 3.- Hayek and the naturalist fallacy Let us first ask ourselves whether Hayek‘s claim has anything to do with a moral claim, and whether it amounts to upholding that the rules that get selected through the cultural evolution process are for that reason those that we should praise as morally good. It is obvious that this is precisely what 10 Viktor Vanberg has in mind when criticizing Hayek. But Hayek overtly denies committing the genetic or naturalistic fallacy. He writes: “I do not claim that the results of group selection of traditions are necessarily ‘good’ — any more than I claim that other things that have long survived in the course of evolution, such as cockroaches, have moral value” (Hayek 1988: 27). But this in no way means that Hayek denies eo ipso the evolutionary superiority of competitive economy over planned economy. As a matter of fact, Hayek also denies that the extended society was bound to take place in History: he explicitly considers that this economic system “has not been deliberately invented, but that it has spontaneously grown up long before we had learnt to understand its operation” and he regards it as “the result of a more or less accidental historical growth…” (Hayek 1941: 215). Vanberg wants a neat and razor-sharp distinction to be made between what makes systems of rules desirable and what accounts for their survival through the evolutionary process, i.e. their effective selection. He rightly claims that “what is desirable need not be at all what survives, and vice versa” (Vanberg 1993 [1994]: 102). He goes further in claiming that spontaneous rules (e.g. property rules) need to be ‘enforced’ by a proper mechanism—a mechanism “that serves to exclude coercion and fraud as strategies of enrichment, ideally leaving voluntary exchange as the only avenue for the pursuit of one’s interests” (ibid.). Referring to this ‘enforcement mechanism’, Vanberg adds that “(I)t is because of these particular characteristics of the market process, because competitive behavior is ‘restrained by appropriate rules of law’ (Hayek 1978: 125), and not simply because of its evolutionary nature per se, that for classical liberals like Hayek markets are the favorite form of social organization” (ibid.). Even if this last remark is right, Vanberg does not seem to grasp fully Hayek’s argument here: when comparing ‘constructed order’ to ‘spontaneous order’, we must keep in mind that the evolutionary advantage of the second system over the first is precisely due to the fact, explicitly stated by Hayek, that it works under the Rule of Law. This institutional framework is what guarantees that capitalism will develop on a competitive basis with no fixed global aims, as compared to a system that would develop by being directed and based on intended, all-encompassing ends. If this is right, then there is no distinction to be made in Hayek’s cultural evolution between rules that are socially and economically advantageous and rules that have evolutionary superiority: the more efficient rules will prevail in the long run—this is what the evolutionary conjecture is about in economics and, mutatis mutandis, in biology as well. But this theoretical conjecture has nothing to do with the moral question of which set of rules is or should count as the most desirable. Vanberg believes that the analogy between ‘market process understood as evolution within rules’ and ‘competitive selection of alternative problemsolving devices in ordinary markets’ is “legitimate in so far as the rules and institutions that exist at 11 any point in time, in any particular society, are obviously those that, de facto, did ‘win out’ in some kind of competition”. As this cannot be the case in economics following Vanberg, for we would have to say that if this were true then any socialist or communist revolution would have to be counted as de facto ‘selected’ and as evolutionary dominant6, than we should consider that “(T)he suggested analogy between market competition and cultural evolution becomes misleading…when it comes to the question of what their factual survival can tell us about the desirability of rules and institutions” (Vanberg 1993 [1994]: 102). Vanberg is of course fully justified in thinking that we must meaningfully distinguish between ‘what is good or desirable’ and ‘what survives’. But this distinction cannot be considered as a counterargument to Hayek’s cultural evolution approach. Maurice Lagueux’s very careful reading of Hayek is a bit different from Vanberg’s. Lagueux insists that one will not find any form of teleological view in Hayek’s evolutionary approach to economics: “Hayek could not have and indeed did not use the adaptation and survival criterion to establish that a structure like the market will in fact favor efficiently the correct functioning of society” (Lagueux 1988: 96).7 And as far as moral or political justification is concerned, Lagueux adds that “the only property of being spontaneous does not give by itself anything that could help us base a value judgment on ‘social order’ or ‘justice’” (Lagueux 1988: 102)8. This is absolutely faultless reasoning, but unfortunately it misses the gist of Hayek’s evolutionary standpoint: Hayek clearly does not see evolution as a process giving optimal or superior moral results, but he advocates overtly that in the struggle for survival, those spontaneous social and economic orders, being based on the Rule of Law, have a clear evolutionary advantage–a relative superiority–over their constructivist counterparts. So competitive economy cannot be proven to be more morally desirable on an evolutionary basis, but it can be proven to be more efficient than any 6 This last part of the argument is not to be found in Vanberg, but a very similar one can be found in Lagueux (1988). More on this in section 5. 7 “…(Hayek) ne pouvait pas recourir et il n’a pas vraiment recouru aux critères de l’adaptation et de la survie pour établir qu’une structure comme le marché est effectivement apte à favoriser efficacement le bon fonctionnement de la société. Si une telle structure pouvait, à ses yeux, résulter de l’évolution spontanée des sociétés, on ne pouvait en conclure que toute évolution devait forcément déboucher sur une structure de ce type. Il serait donc tout aussi injuste de voir en Hayek une sorte d’apologète inconditionnel du statu quo qui justifierait le présent du seul fait qu’il serait le fruit d’une longue évolution ou même d’une longue tradition. Le marché, selon Hayek, ressemble bien plutôt à une structure fragile qui ne s’est réalisée qu’imparfaitement dans l’histoire concrète et que les essais et erreurs de l’humanité ont risqué de détruire tout autant qu’ils sont parvenus à la mettre en place” (Lagueux 1988: 96). 8 “(…) la dimension anti-téléologique de la sélection ne peut intervenir de façon décisive au moment où entre en jeu le choix des institutions (…). La seule qualité de spontanéité ne véhicule aucunement en tant que telle quoi que ce soit qui puisse fonder un jugement de valeur portant sur l’«ordre social» ou sur la «justice»” (ibid.,: 102). This analysis is rightly praised by Bruno Jossa (Jossa 1994: 83). 12 kind of planned economic regime, since it can be conjectured that more people can earn their living in that kind of social and economic system. For Hayek, we have good reasons, scientific reasons for that matter, to think that people will be better off in a competitive and free economy than in a planned and centrally directed economy. My point here is not that Hayek’s argument is true: it is that Hayek’s argument is about the comparative economic robustness of two models and systems, something which has no bearing on the moral desirability and justifiability of the systems of rules involved. Accordingly, Hayek should not to be criticized for having based a normative claim (‘we ought to be liberal’) on an empirical conjecture (‘rules of just conduct sustaining competitive economy have the best chances to be selected in the cultural evolution process’). But more needs to be said. Moral systems are for Hayek behavioral codes. Consequently Hayek adopts a thoroughly sociological point of view on morals, not a philosophical or foundationalist one. Hayek’s problem is not relative to the rational justification of what should be judged ‘morally good’. I do not mean of course that Vanberg’s concern about ‘who’ or what group of people is really supposed by Hayek to be better off in the cultural process of rule selection is unfounded. Nevertheless, what we should keep in mind is that Hayek’s stance as to 1) what should make us suppose that, on an economic basis, certain behaviors are more efficient than others and 2) what should make us assume that the rules on which those more efficient behaviors are grounded are evolutionarily superior to other systems of rules, is no more than a scientific conjecture. If my viewpoint is correct, then counterarguments to what I have called in section 2 ‘Hayek’s case for optimality’ can only for their part be theoretical or empirical, i.e. scientific, and not philosophical. 4.- Group selection and methodological individualism I now turn to the third criticism. Viktor Vanberg writes in his seminal 1986 paper9 “that we have no reason to assume that there is some general spontaneous process at work on which we could blindly rely for the generation of appropriate rules” and furthermore “(T)hat the notion of cultural group selection is theoretically vague, inconsistent with the basic thrust of Hayek’s individualistic approach and faulty judged on its own grounds” (Vanberg 1986 [1994]: 93-4). Stephen Boehm writes that Hayek is not the methodological individualist that he pretends to be (Boehm 1989: 221). Geoffrey Hodgson writes that “(I)n an evolutionary context, methodological individualism has to be either redefined or abandoned” (Hodgson 1991: 78). Hodgson himself rejects methodological individualism 9 This paper was extensively revised by Vanberg, with many additions, for his 1994 book Rules & choice in economics (see Vanberg 1994, Ch. 5: 77-94.). 13 because it “takes the individual for granted” (Hodgson 1994: 419), whereas he thinks we need an analysis that goes deeper than the individual level in order to provide a causal explanation for the social and cultural factors of preference formation. To be sure, the ‘unsoundness’ and ‘inconsistency’ criticisms were raised by most, if not all commentators of Hayek’s work, such as Alain Leroux (1997) and many others. 10 Vanberg’s criticism, which is more comprehensive and drastic, first casts doubt on the very existence of a social and economic process. How are we indeed to know that there is one at work? For that matter, the question is about the same as far as Darwinian natural selection is concerned. Consequently, the answer to that question, methodologically speaking, should be the same and should be given the following way: it all depends, on the one hand, on what the theory of spontaneous social and economic orders is supposed to explain and, on the other hand, on the observational evidence that we can say supports this theory. We certainly don’t know that the theory of cultural evolution is scientifically true: nevertheless, as a second order of knowledge, we can stress that this theory is a refutable conjecture . This is surely something we should ask of a scientific argument that aims to explain observable phenomena and give us a deeper understanding of what is going on in the social and economic world. Be that as it may, Hayek never says that we can count on it that ‘appropriate rules’ will spontaneously appear and do their work if we ‘stay blind’ to the very process that brings them into being, and stay neutral about the institutional framework that can guarantee that those rules will endure over time and work efficiently and as intended. On the contrary, Hayek is clear enough about the kind of constitutional framework and legislative arrangements (or ‘state interventions’) we need to enforce if spontaneous forces are to do their coordinating job and protect liberty as much as possible. Hayek writes explicitly that ‘laissez-faire’ does not at all correspond to what he has in mind when he upholds liberalism (or competitive economy), and he prefers by far to talk about the ‘Rule of Law’ if we are to characterize with more precise terms what is at stake here. 11 ‘Group selection’ is said to be ‘vague’ by Vanberg and I concur with that criticism—so vague, in fact, that almost no one correctly understands what this model is needed for within Hayek’s 10 Pierre Garrouste (1999) is perhaps the only one to maintain loud and clear that “the Hayekian conception of evolution is consistent” (99) and “coherent” (100). In addition to chapters and books already mentioned, many other insightful comments are to be found in Bianchi (1994), Chaloupek (1990), De Vlieghere (1994), Dupuy (1992), Gray (1984), Prisching (1989), Steele (1994), Voight (1993), Witt (1994) and Zappia (1999). 11 As it is usually understood, “laissez faire” is for Hayek a “misleading and vague term” (Hayek 1941: 219) and he prefers to differentiate the liberal or market-based economy from planned economy by reference to the “Rule of Law”. 14 cultural evolution theory. But what really matters is that ‘group selection’ is said to be ‘inconsistent’ with methodological individualism, and I take this point to be generally considered as a decisive one. But to my mind this contention is plainly misguided. Methodological individualism is identified and characterized, for instance by Vanberg, as “the guiding principle that aggregate social phenomena can be and should be explained in terms of individual actions, their interrelations, and their—largely unintended—combined effects” (Vanberg 1986: 80; more on that in Vanberg 1975: 5-29). In line with Adam Smith, it is presented as “an invisible-hand explanation” (ibid.: 81). Vanberg claims that, in order to be legitimate, this kind of explanation has “to show how the behavioral regularities, which a theory of spontaneous order assumes as given, can be explained as an unintended, but systematic outcome of a process of interaction among individuals who are separately pursuing their own ends” (ibid: 81). He also stresses that “(M)ore specifically, such a theory of cultural evolution would have to specify that the process by which rules spontaneously emerge and change is an evolutionary process, i.e. characterized by certain features that can be considered peculiar to an ‘evolutionary’ process” (ibid.). Somewhat strangely, Vanberg writes that “(I)t should be noted that Hayek, in some places, seems to characterize the process of group selection in a way that would allow for a consistent, individualistic interpretation. He argues, for instance, that groups practicing more ‘appropriate’ or ‘successful’ orders will expand ‘by attraction of outsiders’ (Hayek 1979: 159), or that more successful orders will tend to prevail by being imitated by ‘outsiders’. For such processes of between-group migration and between-group imitation to be taken into account, it is not necessary, however, to appeal to a special theory of group selection that would have to be added to the individualistic conception of cultural evolution…” (Vanberg 1986: 85, n. 12, [1994: 256, n. 26]). One could even say that Vanberg himself almost found the solution to the problem he helped create in the first place: Hayek does not in fact need any biological group selection theory. Consequently, the fact that he has adopted the Wynne-Edwards model of group selection, 12 a flawed model rejected by Wynne-Edwards himself, has absolutely no bearing on the point Hayek wants to make. As stated by Hayek in 1988, evolutionary biology is still striving to work out an adequate model of group selection but even if there were no solution to the problem as stated, it would not have any consequence for the theory of cultural evolution. How is that to be understood? The answer is straightforward in Hayek: cultural evolution is not a biological process after all, and does not need to be articulated in an overall 12 V.C. Wynne-Edwards, Animal Dispersion in Relation to Social Behavior, Edinburgh, Oliver & Boyd, 1962. 15 Darwinian or neo-Darwinian explanation. This point has been made very clearly in Lagueux (1988) and also, in more general terms, in Rosenberg (1992 and 1994). As far as modeling the biological evolution process is concerned, Hodgson (1991) did a tremendous job replying to one part of Vanberg’s criticism. Hodgson showed in a carefully documented analysis that there were legitimate alternatives within evolutionary biology to the Wynne-Edwards model, which was inaptly based on the idea of altruism and self-sacrifice of individual organisms for the benefit of the species. It cannot be denied that Hayek’s theory of cultural evolution has been articulated as an analogy of biological evolution. As for orthodox evolutionary biologists, natural selection was conceived by Hayek as the statistical outcome of the working of time on biological organisms. Hayek is fully aware of the fact that the species that individual organisms come to form are exposed to blind variations, some of these variations being favorable to their rate of reproduction as a group and increasing their adaptation to their environment, but all others being disadvantageous and diminishing their capacity to adapt. It is with that model in mind that Hayek approached cultural evolution. It is worth noting that Geoffrey Hodgson criticized Hayek for not having seen that Carl Menger (and before him Adam Smith, David Hume and Bernard Mandeville) also espoused an ‘evolutionist’ viewpoint, but were aware that cultural evolution “is not equivalent to Darwinian evolution or natural selection in a fully specified sense” (Hodgson 1994: 408). I need to be clear here: I wish neither to praise nor rearticulate more legitimately Hayek’s group selection theory. Once again my point is purely methodological. I do not think that what Hayek more or less correctly called ‘group selection’ has anything to do with neo-Darwinism—and I think that Hayek himself was fully aware of that. 13 This is why, in order to make sense of what Hayek meant by ‘group selection’, we do not need to find new and adequate biological models of cultural evolution, contrary to what Hodgson seems to believe. First of all, since cultural evolution is not a biological process, it need not be modelized as if it were one. The correct question here is not whether we can find a proper model of group selection, for I suppose we can, but whether we can stay connected with what Hayek wanted to explain and still stay within the group selection framework. In a sense, the question of group selection is for Hayek as the question of verisimilitude is for Popper: on both sides, the initially proposed model was proven to be flawed. In both cases, it is not sure whether we need to keep searching for a sound model, a logical model in the case of verisimilitude and a biological model in the case of group selection. Moreover and contrary to widespread criticism, Hayek’s views on cultural 13 In fact, Hayek follows Popper and writes that “cultural evolution simulates Lamarckism” (Hayek 1988: 25). 16 evolution show no logical inconsistency with his methodological individualism. This point requires a specific and detailed argument. I say “his” methodological individualism, intending to mean that there is more than one philosophical stance that can be taken here. Usually, methodological individualism is reductionist: as a method to explain the working of society, methodological individualism assumes that every supraindividual entity must be ‘explained away’ by reducing it to its elements. ‘Society’ as a whole needs, in that sense, to be reduced to the actions of interacting individuals. Methodological individualism is defined most of the time, like in Vanberg, as “the methodological presumption that, whatever phenomena at the social aggregate level we seek to explain, we ought to show how they result from the actions and interactions of individual human beings who, separately and jointly, pursue their interests as they see them, based on their own understanding of the world around them” (Vanberg 1994: 1). I am sorry to say that this is not what Hayek has in mind when adopting methodological individualism. When Hayek takes a stance as to the ‘individualistic’ character of the method of social science, he means something other than reducibility: he advocates what he called a ‘compositive’ method and considers that we have to start from individual actions in order to explain the aggregate level of society (the analysis is conducted from the bottom up) and there is no indication that we must follow the other path (we cannot have an analysis that goes from the top down). Something is missing in the reductionist conception of methodological individualism as far as Hayek is concerned: the important thing is not that social institutions and structures result from human actions but that they do not result from the intentions of individual agents. But even if we were to invoke ‘unintended consequences of action’ to come closer to Hayek’s view, something crucially important would still be missing here. Indeed it is quite true that for Hayek, as for all other individual methodologists, the building blocks of social and economic orders are individual actions and interactions, but what this means is that we must understand that the supra-individual level ‘emerges’ out of individual action. This is what Hayek’s ‘compositive method’ is all about. Hayek’s methodological individualism doctrine is a form of “emergentism”, and this methodological view is radically anti-reductionist. Let me use an example to clarify: the ‘methodological individualism theory of the omelette’ is that it is made with three individual eggs (and milk and whatever other ingredients, and all these plus heat give a new ‘composition’, i.e. the omelette). But the ‘methodological individualism theory of the omelette’ is not that when you encounter an omelette on your plate and want to understand and explain how it came to be, you should try to get the three eggs back! This is radically unfeasible! So what exactly is Hayek’s individualist methodological claim? 17 It is that the ‘compositive’ method is what we need in social science, and not a ‘resolutive’ method.14 For Hayek, the natural sciences are analytically oriented because they try to reduce complex entities like physical bodies to their simpler elements (atomic and subatomic particles). By comparison, social sciences need to follow a synthetic orientation because they have to explain how more complex phenomena like social institutions are constituted out of individual actions, these being the only constituents that we can observe and have access to in the social sciences. The best way to understand the relationship between individual actions and society is what has been called in philosophy of mind “supervenience”. Just as ‘mind’ can be said to supervene on ‘brain’, society can be said to supervene on ‘individuals’: and in the very same line of thinking, ‘cultural groups’ can be said to supervene on ‘individual agents’. 15 The Hayekian brand of methodological individualism qualifies as “emergentist” as opposed to “reductionist”. Cultural group selection supervenes on individual moral behaviors: rules of perception and just conduct followed by individual economic agents may confer superiority to some communities over other populations. Group selection in the Hayekian sense is the effect, never the cause , of individual behavior. Technically speaking, “supervenience” is here a key concept, even if not explicit in Hayek’s views, for understanding adequately what cultural group selection is about and how it can be properly analyzed. Correctly stated, Hayek’s conjecture goes thus: groups of people are selected for their rules because economically successful individuals behave as they do—and not the other way around. Precisely recapitulated, Hayek’s point is that moral rules (“moral” in the sociological sense) get selected and a moral tradition gets progressively implemented and eventually reinforces itself because it confers a comparative advantage to groups of individuals that coordinate themselves in order to be better off in economic competition. In conclusion for this section, we must consider that even if Hayek effectively talks of ‘group selection’, it seems obvious that the explanatory device involved in the cultural evolution theory is thoroughly and solely based on individual actions and on the unintended consequences of those individual actions. Consequently, Hayek’s evolutionary argument is by no means inconsistent with his methodological individualism. 14 Hayek indicates in Scientism and Social sciences that he borrowed the term ‘compositive’ (a translation of the German word synthetisch) from a handwritten note by Carl Menger on his own copy of the review of Menger’s book Methoden der Sozialwissenschaften that Schmoller had published in Jahrbuch für Gesetzgebung (N.F., VII, 1883: 42). Schmoller had himself used the term “deduktiv” and Menger had written “synthetisch” just over it. 15 Supervenience relates in a non-reductionist fashion two levels of reality in such a way that the two levels co-vary without being isomorphic. This means that for every modification of a ‘social state’, you necessarily have a corresponding variation in ‘individual actions and events’. But it does not mean that by a proper manipulation at the individual level, you will necessarily be able to get at will a particular pattern at the societal level. Supervenience is used in Nadeau (2001b) to explain Hayek’s theory of mind as articulated in The Sensory Order. 18 5.- Constructed versus spontaneous social and economic orders A fourth and last criticism needs now to be addressed. It concerns a very central conceptual distinction made by Hayek between ‘constructivism’ and ‘spontaneous order’.16 Carlo Zappia is surely right in maintaining that “mainly as a result of the approach developed by Hayek, the socialist calculation debate focused on the respective efficiency of the competitive market economy and the socialist market economy in using the information dispersed throughout the system, an issue which is now dominant in economic theory” (Zappia 1999: 106). Zappia unerringly sees that in the whole socialist calculation debate “Hayek‘s claim (is) about the superiority of the competitive mechanism over centralized mechanisms of allocation” (Zappia 1999: 109), and that Hayek’s proof relates to the peculiar fact “that the market is relatively more efficient than other mechanisms in communicating and discovering information” (Zappia 1999: 108). But I think that Zappia has real difficulty coping with the Hayekian evolutionary argument. Of course he writes that ”(I)n his later essays, Hayek clarified that market equilibrium is to be interpreted as a spontaneous order of the economic system, or a ‘catallaxy’. Referring to Law, Legislation and Liberty, vols. 1 and 2, he correctly stresses that “(I)n a spontaneous order, the coordination of individual plans does not merely depend on the price system, but also on a number of abstract rules, such as custom and laws, which are the result of the evolution of the economic system. Furthermore, the role of alternative mechanisms of co-ordination such as contractual and organizational agreement is explicitly recognized (see Hayek 1973, Ch. 2 and 1976, Ch. 10)” (Zappia 1999: 116). But the difficulties appear clearly in the following quotation: “It is worth pointing out”, writes Zappia, ”that it does not matter here if ‘state coordination’ or ‘process coordination’ is involved, in contrast to the emphasis put on this issue by neo-Austrians…The institutions which favor the coordination of economic activity may well be thought of as spontaneously evolved (Hayek 1967, Ch. 6), but the need for a direct analysis of contractual relationships is independent of the analysis of their genesis” (Zappia 1999: 121, n. 18). For Zappia, Hayek’s evolutionary argument concerns exclusively the origin or genesis but not the theoretical justifiability of what makes competitive economy more efficient. This is why he insists, contrary to Grossman (1989) for whom “prices in competitive markets perform the function of efficiently aggregating all the information dispersed throughout the system, thus giving birth to a new optimal standard,” that “Hayek is explicit in denying any optimal properties of the price 16 See Hayek 1973, but in particular Hayek 1988, Appendix A: 143-147. 19 mechanism” (Zappia 1999: 125). Paradoxical as it may seem, Maurice Lagueux can be seen to hold the exact opposite view. And in a sense the stronger criticism seems to me to come from Lagueux, because it goes directly to the heart of Hayek’s evolutionary argument. Indeed, Lagueux contends that the core distinction made by Hayek between constructivist and spontaneous orders can do the job he wants it to do. It is manifest that at the time he was writing his paper Maurice Lagueux thought that a competition between two (equally? — he dares not say) efficient models of economy was still going on and that the issue of superiority, pace Hayek, was indeed unpredictable. Consequently, Hayek’s evolutionary argument seemed to be fairly weak, even if Hayek insisted that we had to decide on scientific grounds that a centrally planned economy was doomed to be less efficient than a competitive one, and that socialism would predictably mean less freedom. On the other hand, it is also quite obvious (for instance in Bruce Caldwell) that many economists thought and wrote that the collapse of communism changed the deal radically and tended to give us good reasons to believe Hayek was in fact right about socialism being ‘impracticable if not ‘impossible’. This is despite the fact that it was said loud and clear years ago that the socialist calculation debate had been won by German socialists (Neurath, Bauer, Hilferding) as far as Mises’s argument was concerned, and by British socialists (Lange, Dickinson, Dobb) in the case of Hayek’s argument.17 Lagueux is right when he insists that for Hayek the spontaneous character of social and economic orders does not only and first of all concern their ‘origin’ but also their ‘working’ (Hayek 1973: 45-46). 18 Accordingly, there is no reason for Lagueux to consider that the kind of ‘Darwinian selection’ which seems, following Hayek, to be at work only in market-based societies, is not equally at work in mixed or even in socialist economies. Consequently, Hayek’s distinction between ‘constructed socioeconomic orders’ and ‘spontaneous competitive orders’ is judged by Lagueux to be flawed, and Hayek’s evolutionary argument seems unwarranted and as such unsuitable to do the job Hayek wants it to do. I will try to deal with this counterargument. If ‘rationally constructed orders’ on the one hand, and ‘unintended orders’ on the other hand can be considered by Lagueux to both be ‘spontaneous’ orders, it is due to the indisputable fact that in each case we face human actions. Seen in this light, Hayek’s argument seems to lack the necessary criterion to provide a sharp contrast 17 The official story also has it that, while at the LSE, i.e. in the 1930s and 1940s, Hayek lost his debate with Keynes. This is not a completely different story, but it will have to wait for another occasion to be dealt with. 18 He writes with emphasis: “Du seul point de vue de son origine, on l’a vu, cette société libérale ne serait guère plus spontanée qu’une société ‘planifiée’, instaurée par des révolutionnaires convaincus, pour leur part, des avantages d’un autre type d’ordre social” (Lagueux 1988: 101). 20 between two generic kinds of ‘interventions’, one that would be ‘rationalistic’ and that would target a deliberately aim, as compared to one that would be unplanned and that would reach an ‘unintended’ result. This criticism is very serious. Something to start with in trying to answer it is to look carefully at what exactly Hayek means by ‘planning’. A precise definition of ‘socialism’ and ‘capitalism’, and consequently of what precisely he is talking about, is given by Hayek. By ‘capitalism’ Hayek “means a competitive society based on free disposal over private property” (Hayek 1939: 205). On the other hand, Hayek is prompt to identify ‘socialism’ with the idea of ‘planning’, not only to say that historically speaking socialism was identified from the start with central planning, but, as he writes in 1935, because “in so far as the main economic problems are concerned, this is still the case today” (Hayek 1935a: 61). Hayek is well aware of course that “the method of collectivist ownership and control which is essential for any of these attempts to dissociate the distribution of income from the private ownership of the means of production admits of application in different degrees” (Hayek 1935a: 61-2). Hayek in fact distinguishes between two concepts of “plan”. First, following Hayek, a plan is to be defined as “a system of general rules, equally applicable to all people and intended to be permanent (even if subject to revision with the growth of knowledge), which provides an institutional framework within which the decisions as to what to do and how to earn a living are left to the individuals” (Hayek 1939: 194). And Hayek is clear about the fact that “this task of creating a rational framework of law has by no means been carried through consistently by the early liberals” (Hayek 1939: 195). But this is precisely not the kind of plan Hayek intends to be discussing in the socialist calculation debate: the notion of a ‘plan’ occurs here in a second and much narrower sense, and for that matter Hayek would have preferred to use here the French term “économie dirigée”. In that context ‘planning’ refers to the economic process by which “the central authority undertakes to decide the concrete use of the available resources” and in which “the views and the information of the central authority govern the selection of the needs that are to be satisfied and the methods of their satisfaction” (Hayek 1939: 196). What is also very clear to Hayek is that “(T)he method of planning in any case can certainly be used for purposes which have nothing to do with the ethical aims of socialism” (Hayek 1935a: 62), so that planning can just as well serve quite different if not opposite ends (tyranny and fascism, for instance). As a central claim, Hayek upholds in a very Weberian fashion that “(O)n the validity of the ultimate ends science has nothing to say” (ibid.). In any case, if such a planning method is going to be workable, there has to be a central authority, which, in the end, even if the whole process is largely 21 decentralized, has to decide what the principles for distribution of income will be. Hayek furthermore sees as a necessary condition of this planning method that this central authority work as a unique and exclusive mind 19, perhaps even be “some single individual” (Hayek 1939: 205), and keep steady and rigorous control over all resources. For Hayek, this is completely unacceptable because “(T)here can be no freedom of thought, no freedom of the press, where it is necessary that everything should be governed by a single system of thought” (Hayek 1941: 218). Be that as it may, for Hayek the only question which should concern economists as social scientists is the question of whether planning is the best method to obtain the desired social and economic results without provoking at the same time deleterious unintended consequences. To quote him again, “the fundamental question is whether it is possible under the complex conditions of a large modern society for such a central authority to carry out the implications of any such scale of values with a reasonable degree of accuracy, with a degree of success equaling or approaching the results of competitive capitalism, not whether any particular set of values of this sort is in any way superior to another” (Hayek 1935a: 623). So there is a distinction to be made after all between what goes on in a ‘constructed economy’ as compared to a ‘free economy’. Hayek recurrently insists that the planned society will not be guided by “impersonal social forces” and that it will have to be “made subject to the control of a directing mind—that is, of course, in the last analysis, the mind of an individual” (Hayek 1939: 198). This is perhaps the ultimate paradox of collectivism: one is in fact deciding for all. By comparison, the apparent paradox of Hayek’s ‘individualism’ could be said to be that society is here viewed as the unintended aggregate result and cohesive order of all individual economic agents interacting spontaneously together. Consequently it is important to single out what is precisely the kind of state intervention Hayek is opposed to as far as the economy is concerned. For, as stressed by Zappia, “Hayek (ibid., p. 195) declares himself in favor of the planning of a system of general rules (Zappia 1999: 130). Hayek sees a significant difference between state interventions by which a plan fixes, for a period of time, specific global aims for the whole economy, and individual interventions by which economic agents pursue their own plan on a personal level and under the Rule of Law but without being constrained by collective intentions and goals that have been deliberately fixed by the state. It is the coordination mechanism that is radically different in the two situations. What is at stake in the 19 “…the planner must not only translate the vague and general ‘ends’ that command popular approval into a concrete and detailed scale of values…(and) make people believe that the particular detailed code of value which he imposes is the right one. He is forced to create that singleness of purpose which—apart from national crises like war—is absent in a free society” (Hayek 1939: 206). 22 Hayekian distinction between ‘constructivist’ and ‘spontaneously emerging’ orders is the process of competition and rivalry itself—whether it will continue to operate or whether it will be replaced by another coordination mechanism. Hayek’s claim can thus best be characterized as a ‘pathdependency’ argument. The difference between the two identified processes is that in the second case the order is ex post and results from nobody’s will, while in the first case it is ex ante, implemented by law or by force and, what seems absolutely crucial, it ultimately results from a single mind and will (the ‘Central Planning Board’ is placed under the authority of someone who is politically directing the whole social and economic process). From this point of view, Hayek’s distinction between ‘constructed’ orders and ‘spontaneous orders’ seems to be warranted. As such, it pertains to both the origin and the working of two types of socioeconomic orders, two dimensions which are historically tied together and cannot be easily disconnected—which means ultimately that a spontaneous socioeconomic order can simply not be rationally constructed after all. 6.- Conclusion: a plea for a comparative method I pleaded from the start for a renewed reading of Hayek, that is for a discerning and bold reinterpretation of the Hayekian anti-socialist argument in its entirety. In order to conclude, let us come back to Hayek’s thesis in his 1988 book. Hayek does not show there (like Friedman does, for instance) that evolution theory can account for enterprises struggling for survival. He aims to show that communities or populations struggle for economic survival and that in this cultural competition the best system is the one that outdoes all others. To be sure, this is not equivalent to saying that the one that seems to be winning this competition for social and economic dominance is necessarily the best one on other grounds, ethical grounds for instance. Competitive economy is based in particular on a much more efficient social use of knowledge: this is the centermost tenet of Hayek’s economic theory. As Caldwell puts it, “it is hard to deny Hayek’s foundational contention that a liberal order allows individual knowledge to be better used than does socialism” (Caldwell 1997: 1871). Hayek’s conjecture is that market process, because it operates spontaneously in the sense explained above, is more promising than its constructivist counterpart. I have come to the conclusion that there has been a general failure to grasp and understand the Hayekian evolutionary argument properly. As a conceptual framework for a truly evolutionary perspective on socioeconomic phenomena, it should be seen, if correctly interpreted, as a legitimate conjecture—surely disputable on theoretical and empirical grounds but not at all disreputable as a matter of logical analysis. I would like to stress in my concluding remarks that if we are to discuss the 23 relative strengths and weaknesses of both planned and competitive economic models and social systems further on a scientific level , i.e. on theoretical grounds and on empirical grounds as well, and I do hope we will, then it is important to be straightforward about the optimal method for working it out. As it were, methodological reasoning has its own rendezvous with the quest for optimality. After the collapse of the Soviet Union and the fall of the Berlin Wall, it is certainly not easy to continue believing, based on scientific and philosophical arguments, that socialism is a practicable way to solve allocation problems and keep society running efficiently, if not smoothly, and without prejudice to anyone. Consequently, it would seem that the comparative approach that Hayek for one, and maybe Mises also, were advocating is no longer available. If we can no longer believe that comprehensive planning is a rational economic model of society because it underestimates the problems it has to face and solve, it would seem that there is no opponent for the market economy to compete with. But I do not think this reasoning is sound. Indeed, and Hayek clearly acknowledges this: there is a planning problem (and also a social insurance problem) within the capitalist system which has to be thoroughly discussed by economists and other social scientists and by philosophers as well. In that vein, Stiglitz (1994, Chs. 7-9) argues forcefully that socialist economies cannot compete in terms of efficiency with capitalist regimes. But new market socialists take for granted, it seems, that planned economy is doomed if not to failure at least to be less productive than competitive economy. John Roemer for instance, who is radically critical of Hayek’s stance (Roemer 1995), nevertheless doubts the public ownership of all means of production to be necessary to get a better distribution of income under socialism (Roemer 1993; Roemer 1994). Philippe Van Parijs (1995) takes for granted that market economy is the best available system to solve the production problem and that it is within this institutional, political and economic framework that we can—by appropriate social policies like proposing an unconditional basic income—aim at “real freedom for all”. So it may be the case that there is no longer any room for competition between socialism and capitalism conceived as social, economic and political systems based on different if not opposite “cultural traditions”. But we cannot fail to notice that Hayek takes the ‘present’ situation (keeping in mind that he wrote in 1935) to be “interventionist chaos” (Hayek 1935a: 67). Referring to Western Capitalist Welfare States, Myrdal (1960) talks for his part of a kind of “etatistic liberalism ”. Things seem to be so mixed up now that perhaps a diametrical comparison of two generic and opposite kinds of economic models and social systems is no longer fruitful. But I am not quite sure of this, and that is precisely the point of method I would like to make in conclusion. Whatever the case may be, even if the systematic comparison of two economic models conceived as pure or abstract ideal-types can no longer provide a reasonable expectation of gaining 24 anything worthwhile for economic theory, it does not mean that the Hayekian debate over the place of state intervention and economic planning has come to a close. For quite some time now, as Gunnar Myrdal has already shown us, we have been planning the Welfare State.20 The comparative approach is consequently still available in order to weigh abstractly (but also, as an alternative research strategy, with sociological input), ‘partially planned market-based economies’ working in an institutional framework where social and economic state interventions are forming a model of mixed economy, on one side, against ‘pure competitive economies’ working under what Hayek called the Rule of Law, on the other side. I would emphasize that here comparison gives the best methodological viewpoint obtainable in order to discuss—scientifically but also philosophically, I insist—the relative advantages of each model and ultimately reach an informed and authoritative judgment as to which is the better social and economic system. 20 For more on that topic, see my forthcoming paper “Comparing Hayek’s and Myrdal’s stance on state intervention and economic planning” first presented at the International Workshop on ‘‘Austrian and Swedish Economics: Criss-Cross Stories and Current Perspectives’’, CREUSET, University of Saint-Etienne, 22-23 March 2002 (to be published in London by Routledge in 2003, Michel Bellet and Abdallah Zouache, eds.). 25 REFERENCES Arena, Richard, ed. (1999), Subjectivism, Information and Knowledge in Hayek’s Economics, History of Economic Ideas, 7, 1-2. Bianchi, M. 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