Hayek, Co-ordination, and Evolution: His Legacy in Philosophy, Politics, Economics, and the History of Ideas.
Although Hayek's contributions to economics have still yet to be fully digested and have had only a fairly superficial effect on mainstream neoclassical thought, they have been much more influential in the other disciplines represented in the five discipline-oriented sections of this book. One recurring theme of the economics papers is that it is time to bring Hayek's broader intellectual themes, and the economics he developed along with them, back into the economics mainstream.
This point is made very well by the papers by Peter Rosner, Rudy van Zijp and Hans Visser, and Harry Garretsen who attempt to assess the relationship between Hayek's work and mainstream economics, specifically the New Classical school. The first two papers argue quite cogently that there are very essential differences between Hayek's macroeconomics and that of the New Classicals, despite the latter's claim to an Austrian heritage. Both papers point out that notions of disequilibrium and genuine discovery, which are central to Hayek's work, are ruled out by assuming rational expectations. Van Zijp and Visser explicitly argue that the New Classical preference for highly stylized mathematical models forces them to overlook many of the ideas (in particular the non-neutrality of money) that were foundational for Austrian cycle theorists. Garretsen offers some more general observations about the differences between Hayekian and general equilibrium approaches and how Hayek's work could improve the latter.
Marina Bianchi's excellent paper also explores Hayek's relationship to the mainstream, in this case game theory and the explanation of institutions and norms. She argues that modern game theory "suffices to describe the conditions under which mutual expectations are matched, but not the process" [p. 241]. To explain the learning process by which game-theoretic equilibria (such as institutions) are discovered, one needs to invoke a Hayekian learning process. One implication of Bianchi's argument is that Hayek's work on the evolution of institutions can provide the same process-orientation that Kirzner's theory of the entrepreneur does for the theory of competition. Viewing the relationship between Hayekian social theory and game theory in this light opens up a broader and more fruitful approach to the evolution of institutions. Ulrich Witt's contribution offers some further thoughts on Hayek's work on social evolution that, while critical of the details, is sympathetic toward the project as a whole.
The papers on Hayek's political theory and philosophical work bring out the influence of the Scottish moral philosophers (Adam Smith, Adam Ferguson, and especially David Hume) on Hayek's social theory. Papers by van Dun and Roos explore the linkages between Hayek's legal philosophy and so-called "natural law" theories. In particular, the relative influences of Kant and Hume on Hayek is a topic of some controversy. What Hayek took from the Scots was the broad emphasis on the role of social institutions and the limits of human rationality. These are themes that pervade the work of Smith, yet have been largely lost in the way economics has developed since. In this way, one can see "the Hayek project" as an attempt to continue the social-theoretic line of inquiry began by the Scots (but abandoned in the early 20th century rush to positivism and scientism) by infusing it with the marginalism and subjectivism of Austrian economics.
The contributions of de Vries and Milford examine these themes in their assessments of Hayek's theory of mind and his work on social science methodology. The de Vries paper would be an excellent choice to read before tackling Hayek's The Sensory Order. The Milford paper gives a good overview of Hayek's attacks on scientism and historicism, although he gives Hayek an overly Popperian interpretation which misses Hayek's roots in the Continent, especially the influence of Mises and Weber.
D. P. O'Brien's closing paper on Hayek's work in intellectual history rounds out the collection nicely by offering an overview of the major themes of Hayek's lifework. He rightly emphasizes the importance of Carl Menger's work for Hayek. One can see Menger's thought as the connection between the broad project of the Scots (as seen in Menger's Investigations) and Hayek's more narrow work in economic theory, which derives from the Austrian approach begun in Menger's Principles of Economics. As several commentators have argued, the recent resurgence in Austrian economics and Hayekian social theory reflects a recovery of several major Mengerian themes.
The overall quality of the papers in this collection is very good, with several being excellent contributions to the quickly growing Hayek literature. If there is one shortcoming that appears in several papers, it is the attempt to distance Hayek's work from that of Mises. Whatever differences the two had (and in some cases they were substantial), there is no doubt that both were engaged in the same general project. The evidence for that claim is how both root themselves in Menger's economics and social theory which originate the characteristically Austrian themes that Mises and Hayek share. There is no doubt that there is a distinct research program that can be labeled "the Hayek project," but that project would not exist if it were not for Mises' work extending Mengerian economics into a broader theory of society. The Birner and Van Zijp collection offers a scholarly and comprehensive overview of Hayek's work which has much to offer for both those new to the literature and those who are participants in it.
Steven Horwitz St. Lawrence University
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|Publication:||Southern Economic Journal|
|Article Type:||Book Review|
|Date:||Apr 1, 1996|
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