Tuesday, February 20, 2007

Hayek put the price mechanism on the same level as, for example, language

Friedrich Hayek identified two different traditions within classical liberalism: the "British tradition" and the "French tradition". Hayek saw the British philosophers David Hume, Adam Smith, Adam Ferguson, Josiah Tucker, Edmund Burke and William Paley as representative of a tradition that articulated beliefs in empiricism, the common law, and in traditions and institutions which had spontaneously evolved but were imperfectly understood. The French tradition included Rousseau, Condorcet, the Encyclopedists and the Physiocrats. This tradition believed in rationalism and the unlimited powers of reason, and sometimes showed hostility to tradition and religion. Hayek conceded that the national labels did not exactly correspond to those belonging to each tradition: Hayek saw the Frenchmen Montesquieu, Constant and Tocqueville as belonging to the "British tradition" and the British Thomas Hobbes, Godwin, Priestley, Richard Price and Thomas Paine as belonging to the "French tradition".[19] Hayek also rejected the label "laissez faire" as originating from the French tradition and alien to the beliefs of Hume, Smith and Burke.
Social and political philosophy
While known more as an economist than a philosopher, in the latter half of his career Hayek made a number of contributions to social philosophy and political philosophy, derived largely from his views on the limits of human knowledge[3], and the role played by his spontaneous order in social institutions. His arguments in favor of a society organized around a market order (in which the apparatus of state is employed solely to secure the peace necessary for a market of free individuals to function) were informed by a moral philosophy derived from epistemological concerns regarding the inherent limits of human knowledge. In his philosophy of science, Hayek was highly critical of what he termed scientism — a false understanding of the methods of science mistakenly forced upon on the social sciences but actually contrary to the practices of genuine science. Usually this involves combining the philosopher's ancient (and confused) demand for demonstrative justification with an associationist's false view that all scientific explanations are simple two variable linear relationships. Hayek points out that much of science involved the explanation of complex multi-variable and non-linear phenomena, and that the social science of economics and undesigned order compares favorably with such complex sciences as Darwinian biology (see The Counter-Revolution of Science: Studies in the Abuse of Reason, 1952 and some of Hayek's later essays in the philosophy of science such as "Degrees of Explanation" and "The Theory of Complex Phenomena"). In The Sensory Order: An Inquiry into the Foundations of Theoretical Psychology (1952), he independently developed a "Hebbian learning" model of learning and memory — an idea which Hayek first conceived in 1920, prior to his study of economics. Hayek's expansion of the "Hebbian synapse" construction into a global brain theory has received continued attention among the best minds in neuroscience, cognitive science, computer science, behavioral science, and evolutionary psychology.
Spontaneous order
Hayek viewed the free price system, not as a conscious invention (that which is intentionally designed by man), but as spontaneous order, or what is referred to as "that which is the result of human action but not of human design". Thus, Hayek put the price mechanism on the same level as, for example, language. Such thinking led him to speculate on how the human brain could accommodate this evolved behavior. In The Sensory Order (1952), he proposed, independently of Donald Hebb, the connectionist hypothesis that forms the basis of the technology of neural networks and of much of modern neurophysiology. Hayek attributed the birth of civilization to private property in his book The Fatal Conceit (1988). According to him, price signals are the only possible way to let each economic decision maker communicate tacit knowledge or dispersed knowledge to each other, in order to solve the economic calculation problem.

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