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F. A. Hayek pp 227–256Cite as

Palgrave Macmillan

Hayek, Epistemics, Institutions, and Change

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Part of the book series: Great Thinkers in Economics ((GTE))

Abstract

In order to understand Hayek’s intellectual journey, one must appreciate his formation in Vienna during the early twentieth century, one of the most vibrant intellectual centers of the time. Hayek was familiar with the debates on the role of epistemology in the natural sciences, and these arguments influenced his own understanding of the scope and method of economics. What the social scientist is always studying is the result of the interaction of the minds of a multitude of individuals. The context within which these minds interact is fundamentally important to trace the basis for the unintended consequences of human action. Hence, epistemic considerations must be at the front and center in our study of economic, political, and social phenomena.

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Notes

  1. 1.

    See Hayek’s discussion of the wrong-headed interpretation of Adam Smith in relation to the concept of “economic man.” As Hayek says, Smith’s view was quite distant from this caricature of acting man, and instead viewed man by nature as “lazy and indolent, improvident and wasteful” and that only through the impact on institutional circumstances could “be made to behave economically or carefully to adjust his means to his ends.” The intellectual fashion of deriding Smith for his “erroneous psychology” obviously irked Hayek, and thus he concluded this section by stating, “I may perhaps venture the opinion that for all practical purposes we can still learn more about the behavior of men from the Wealth of Nations than from most of the more pretentious modern treatises on ‘social psychology’” (Hayek 1948, 11).

  2. 2.

    This is of course a rather unrealistic assumption. The same factors that generate market failures also generate principal-agent problems in organizations (Miller 1992).

  3. 3.

    Consider Hayek’s claim from his Nobel lecture, “The Pretense of Knowledge” ([1974] 2016) that “If man is not to do more harm than good in his efforts to improve the social order, he will have to learn that in this, as in all other fields where essential complexity of an organized kind prevails, he cannot acquire the full knowledge which would make mastery of the events possible. He will therefore have to use what knowledge he can achieve, not to shape the results as the craftsman shapes his handiwork, but rather to cultivate a growth by providing the appropriate environment, in the manner in which the gardener does this for his plants.”

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Authors and Affiliations

  1. Department of Economics, George Mason University, Fairfax, VA, USA

    Peter J. Boettke

  2. F. A. Hayek Program for Advanced Study in Philosophy, Politics and Economics Mercatus Center, George Mason University, Fairfax, VA, USA

    Peter J. Boettke

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  1. Peter J. Boettke
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Boettke, P.J. (2018). Hayek, Epistemics, Institutions, and Change. In: F. A. Hayek. Great Thinkers in Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-41160-0_9

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  • DOI: https://doi.org/10.1057/978-1-137-41160-0_9

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