The Philosophical Influences of F. A. Hayek

Friedrich Hayek receives the Nobel Prize in Economics, in 1974

Friedrich Hayek is perhaps best known as the father of neoliberalism, a quasi-messianic belief in markets as the prime source of a concept of value (and deliverance from totalitarianism), and the idea of spontaneous order, that things – all things – are not controlled, but ordered, spontaneously. His Nobel prize in 1974 was awarded in part for his ‘penetrating analysis of the interdependence of economic, social and institutional phenomena.’ In other words, he was no mere ‘financial’ economist, whatever that might mean. His was a big project, one that encompassed the ultimate political objective of protecting individual liberty, in a career that spanned over sixty years, and major works including The Road to Serfdom and The Constitution of Liberty.

Hayek is important because the neoliberal order (such a pejorative term these days, but it wasn’t always the case) that he envisaged has entirely shaped the liberal democratic world to the point where work, education, healthcare, technology, and even theory itself have each been reduced to an incentive- and market-driven enterprise. The ‘marketisation’ of everything, or indexicality as the French documentalist Suzanne Briet refers to it, is about counting, ranking and scoring, what Leo Strauss would doubtless have called a relativist nightmare. In particular, it has shaped technology, specifically information technology, that has such an oversized influence on our current affairs. Indeed, a good part of his speech in accepting that Nobel Prize in 1974 was given over to criticism of science and scientism, and the myth of what he refers to as ‘conscious human control’.

His fundamental philosophical position then is that markets, or more specifically the price system, offers a mechanism to understand the order that has spontaneously emerged around us. Where did this come from? Three philosophers who I’ve consciously sought connections with of late are Baruch de Spinoza, Carl Schmitt, and Friedrich Nietzsche. I should be careful to note that this is not from an investigation of Hayek’s influences, but rather from a study of these thinkers, and seeing connections there to his thought.

Spinoza was a leader of what Jonathan Israel refers to as the Radical Enlightenment. This was an enlightenment unburdened by a belief in God, although Spinoza’s philosophy didn’t necessarily preclude such a possibility. He believed in a single substance, containing everything in existence, and saw no separation between human beings and nature, or indeed human beings and other human beings. This substance had an internal order, which reflected Hayek’s later construction of ‘spontaneous order’. The influence on Hayek appears only to have been acknowledged indirectly, though Mandeville (ref: Wagener, 1994), though it was most certainly a strong presence. My own research into Spinoza’s thought is in its infancy, but as a precursor to modern secular liberalism it appears to have been far more influential and persistent than any of the French (Voltaire, Rousseau) or English (Hobbes, Locke) thinkers of the seventeenth and eighteenth centuries.

Carl Schmitt’s Political Theology was conjured just before Hayek began to substantively contribute to twentieth century thought. The connections however are strained to say the least. Still, the concept of state in Schmitt and Hayek appear both to coalesce in the futility of human supremacism: that the state itself no more exerts actual control than is evident in the state of nature. For Hayek, our order is a spontaneous order, not – as quoted above – conscious human control. For Schmitt, the modern liberal democratic state only becomes active in its denial of liberalism: in the state of emergency. So for Hayek, we delude ourselves into thinking that somehow the State is acting upon its subjects for good or ill, and ‘making’ freedom in some sense, while for Schmitt we are all free until the State becomes active in our lives.

As for Nietzsche, like Spinoza and Schmitt he saw a certain hubris in mankind, a falseness in the learned environment. True freedom, for Nietzsche, lay in first unlearning; then progressing to the state of the child. The State was no bringer of freedom; liberalism was merely a word. How could that have influences Hayek? In his Constitution of Liberty, Hayek ferociously defends the idea of individual liberty as a precursor to wealth and growth. This should be the object of our endeavours. Liberty, in Hayek’s view, could not be imposed, traded, or dictated: it was a particularly personal thing. Therefore the State should be creating the conditions for liberty.

Hayek’s primary influences were Austrian School economists Carl Menger, Ludwig von Mises, and Friedrich von Wieser, though he appears also to have been close to the philosopher Eric Voegelin. The project upon which he had embarked, however, was ultimately a political one: reforming the modern western world towards that principal aim of creating the circumstances within which people could be more free; or in the negative, the avoidance of the possibility of totalitarianism. It was certainly a project founded on a fundamentally secular enlightenment mindset.

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