Comments on: The Hayek Fallacy http://blog.oup.com/2008/12/the-hayek-fallacy/ Academic insights for the thinking world. Thu, 09 Feb 2012 20:48:00 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: David S. Bloch http://blog.oup.com/2008/12/the-hayek-fallacy/comment-page-1/#comment-149130 David S. Bloch Sat, 31 Jan 2009 01:06:14 +0000 http://blog.oup.com/?p=2567#comment-149130 Correction: Steve Horwitz. Sorry. Correction: Steve Horwitz. Sorry.

]]> By: David S. Bloch http://blog.oup.com/2008/12/the-hayek-fallacy/comment-page-1/#comment-149129 David S. Bloch Sat, 31 Jan 2009 00:54:17 +0000 http://blog.oup.com/?p=2567#comment-149129 I agree with Steve Horowitz that this posting's last paragraph is deeply confused. In the first instance, I don't think Hayek would have viewed common-law court decisions and legislative enactments as competitive. But that aside, legislation has the effect of foreclosing other alternatives by setting a rule that courts must follow. So the issue isn't so much that legislatures are analogous to a "single planner," while common-law courts can be analogized to individual market participants [analogies that are quite strained, in my opinion] . . . it's that a legislature speaks with a single voice, and thus forecloses other options in a way that a common-law decision (confined to its particular facts) does not. And that is precisely the reason why common-law courts are supposed to be subordinate to the legislature with respect to statutory enactments. I agree with Steve Horowitz that this posting’s last paragraph is deeply confused. In the first instance, I don’t think Hayek would have viewed common-law court decisions and legislative enactments as competitive. But that aside, legislation has the effect of foreclosing other alternatives by setting a rule that courts must follow. So the issue isn’t so much that legislatures are analogous to a “single planner,” while common-law courts can be analogized to individual market participants [analogies that are quite strained, in my opinion] . . . it’s that a legislature speaks with a single voice, and thus forecloses other options in a way that a common-law decision (confined to its particular facts) does not. And that is precisely the reason why common-law courts are supposed to be subordinate to the legislature with respect to statutory enactments.

]]> By: Steve Horwitz http://blog.oup.com/2008/12/the-hayek-fallacy/comment-page-1/#comment-148518 Steve Horwitz Wed, 10 Dec 2008 13:09:20 +0000 http://blog.oup.com/?p=2567#comment-148518 Although I agree that the comparison between "one mind" and "the contributions of many minds" is a misleading way to frame the difference between market and political processes, Hayek's goal with that comparison was to make the same point that you are: the question is how well various sets of institutions make use of knowledge in society. In his later work, he makes much more clear that the point at issue is precisely whether political processes do better or worse in general at making use of knowledge than do market processes. What your argument above misses is Hayek's lifelong emphasis on the relevance of the knowledge of time and place and tacit forms of knowing, each of which cut against your claim that the knowledge of experts enables political processes to overcome the Hayekian knowledge problem. This is exactly what Hayek denied, mostly because he believed that expert, articulable, knowledge was only a small part of what mattered for social coordination. Inarticulate knowledge was at least as important, and he argued that market processes were far superior at making such knowledge available to others via the price system than are political processes. He might have been wrong about that, but your argument in the last paragraph is equally fallacious as a critique of Hayek because you overlook a key component of this thinking. And it's one that, frankly, is in the article that you purport to be criticizing. Although I agree that the comparison between “one mind” and “the contributions of many minds” is a misleading way to frame the difference between market and political processes, Hayek’s goal with that comparison was to make the same point that you are: the question is how well various sets of institutions make use of knowledge in society. In his later work, he makes much more clear that the point at issue is precisely whether political processes do better or worse in general at making use of knowledge than do market processes.

What your argument above misses is Hayek’s lifelong emphasis on the relevance of the knowledge of time and place and tacit forms of knowing, each of which cut against your claim that the knowledge of experts enables political processes to overcome the Hayekian knowledge problem. This is exactly what Hayek denied, mostly because he believed that expert, articulable, knowledge was only a small part of what mattered for social coordination. Inarticulate knowledge was at least as important, and he argued that market processes were far superior at making such knowledge available to others via the price system than are political processes.

He might have been wrong about that, but your argument in the last paragraph is equally fallacious as a critique of Hayek because you overlook a key component of this thinking. And it’s one that, frankly, is in the article that you purport to be criticizing.

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