The Fatal Conceit: The Errors of Socialism (Collected Works of F.A. Hayek) [Englisch] [Taschenbuch]

Hayek's views on four key issues help elucidate some reasons why there is such a strong movement toward economic liberalization among many industrialized and even non-industrialized nations: the role of the state, government regulation, the ! function of the free markets, the problem of social cooperation, and the meaning of liberty and equality. I will also compare Hayek's views with Robert Heilbroner's central themes in his book "21st Century Capitalism." A better understanding of these issues help us better understand the era we are living in.

The Role of the State & Government Regulation

The major role of the state in Hayek's world was to protect the rights of its citizens from infringement:

"Governments strong enough to protect individuals against the violence of their fellows make possible the evolution of an increasingly complex order of spontaneous and voluntary cooperation" ( page 32) Such a complex order of spontaneous and voluntary cooperation is the mark of trade and capitalist beginnings. Hayek believed that since history only retains records of the activities of governments we are mislead to think that it was in the arena of government and not markets that the destinies of humanity lied. So we have mistakenly fallen under the impression that a powerful state is the hallmark of a successful, and prosperous extended order of cooperation. "The powerful

state is not the culmination of cultural evolution ; it as often marked its end." (page 33) Examples from history of powerful states extinguishing the light of voluntary cooperation include ancient imperial China, the Roman empire, and the Meso-American empires. Powerful governments are not conducive to spontaneous improvement. He believes that "sooner or later governments tend to suppress the freedoms they had earlier secured in order to enforce their own presumably greater wisdom and not allow 'social institutions to develop in a haphazard manner'." ( page 32) It is only the protection of private property, not any direction of its use by government, that provides the soil for the extended order to blossom in:

". . . No advanced civilization has yet developed without a government which saw it's chief aim in the protection of ! private property." (page 32)

Without such protection, meted out by judicial, police and military force, the prerequisite morals ( honesty, for example) of the extended order would cease to exist. The evolution of such "individualist laws" aim through time to make increasingly possible the existence of voluntary associations without I compulsory powers.' Such an evolution of rules, however, must, like the chaotic extended order it seeks to support, be a spontaneous one . ( page 37) Without an acceptance of an individual's right to dispose over a recognized private domain the dense network of commercial relations among different communities' would not develop. The prerequisite for the existence of such "property, freedom, and order, is the same: law in the sense of abstract rules enabling any individual to ascertain at any time who is entitled to dispose over any particular thing." ( page 29)

Hayek's role of government is of supreme importance precisely because it is a prerequisite to any further evolution of the extended order. The extended order cannot develop without the protection granted by government over private domain. Such an important role should never be seen as limited. But thinkers of all stripes call for more government regulation and a larger government role in society. Hayek would argue that any larger role, especially if called for by socialists , would lean towards those needs which our instincts and sentimental yearnings demand. He believes that such instincts and yearnings stem from the micro-cosmos of the tribe or even the family. This realm of the micro-cosmos is run by 'unmodified, uncurbed' rules which if ever applied to the macro-cosmos (or outer civilization) would destroy the extended order. (page 18)

If you would like the rest of my review please email me. All rights reserved.

The other negative comments have been unfair. While there is substantial room to disagree with Hayek, the range of his assault on socialism and his substantially correct assessments cannot be undermined. As the century closes, Hayeks more specific criticisms gain more prescience as time goes on.

Read this book. It is the basis for an understanding of the problems inherent in socialism and the command economy.