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by Friedrich August Von Hayek

eBook Individualism and Economic Order (Midway reprint) download ISBN: 0226320898
Author: Friedrich August Von Hayek
Publisher: Univ of Chicago Pr (Tx) (1980)
Language: English
Pages: 271
ePub: 1506 kb
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In this collection of writings, Nobel laureate Friedrich A. Hayek discusses topics from moral philosophy and the methods of the social sciences to economic .

In this collection of writings, Nobel laureate Friedrich A. Hayek discusses topics from moral philosophy and the methods of the social sciences to economic theory as different aspects of the same central issue: free markets versus socialist planned economies. First published in the 1930s and 40s, these essays continue to illuminate the problems faced by developing and formerly socialist countries.

Friedrich August von Hayek CH FBA (/ˈhaɪək/ HY-ək, German: ; 8 May 1899 – 23 March 1992), often referred to by his initials F. A. Hayek, was an Austrian-British economist and philosopher best known for his defence of classi. Hayek, was an Austrian-British economist and philosopher best known for his defence of classical liberalism

In this collection of writings, Nobel laureate Friedrich A.

And, as we shall see, the question why the data in the subjective sense of the term should ever come to correspond to the objective data is one of the main problems we have to answer.

It is a collection of essays originally published between the 1930s and 1940s, discussing topics ranging from moral philosophy to the methods of the social sciences and economic theory to contrast free markets with planned economies. I. "Individualism: True and False". Delivered at University College, Dublin, December 17, 1945. II. "Economics and Knowledge". Delivered at the London Economic Club, November 1936.

Student of Friedrich von Wieser, protégé and colleague of Ludwig von Mises, and foremost representative of an outstanding generation of Austrian School theorists, Hayek was more successful than anyone else in spreading Austrian ideas throughout the English-speaking world

Student of Friedrich von Wieser, protégé and colleague of Ludwig von Mises, and foremost representative of an outstanding generation of Austrian School theorists, Hayek was more successful than anyone else in spreading Austrian ideas throughout the English-speaking world. Among mainstream economists, he is mainly known for.

If you are looking to acquaint yourself with . Individualism: True and False. Economics and Knowledge. Hayek's perspective on economic theory-beyond his business cycle and monetary studies of the interwar years-this is the best source. The collection appeared in 1947, before he moved on toward broader cultural and social investigations. The Facts of the Social Sciences. The Use of Knowledge in Society. The Meaning of Competition.

Hayek contends that the economic problem is really one how to make use of fragmented and widely dispersed data

Chapter two (Economics and Knowledge) examines decentralized economic planning by individuals. Hayek contends that the economic problem is really one how to make use of fragmented and widely dispersed data. As he indicated in chapter two, full knowledge of economic conditions reduces the economic problem to one of pure logic.

If it is true that prices are signals which enable us to adapt our activities to unknown events and demands, it is evidently nonsense to believe that we can control prices. May 8, 2013 ·. youtube. Hayek's perspective on economic theory-beyond his business cycle and monetary studies of the interwar years-this is the best source

If you are looking to acquaint yourself with .

In this collection of writings, Nobel laureate Friedrich A. Hayek discusses topics from moral philosophy and the methods of the social sciences to economic theory as different aspects of the same central issue: free markets versus socialist planned economies. First published in the 1930s and 40s, these essays continue to illuminate the problems faced by developing and formerly socialist countries.F. A. Hayek, recipient of the Medal of Freedom in 1991 and winner of the Nobel Memorial Prize in Economics in 1974, taught at the University of Chicago, the University of London, and the University of Freiburg. Among his other works published by the University of Chicago Press is The Road to Serfdom, now available in a special fiftieth anniversary edition.
Comments: (7)
Sadaron above the Gods
Hayek digs to find the underlying principles of arguments, his and others. He succeeds. Takes serious thought and genuine determination. Worth it!

''Democracy and socialism,” De Tocqueville wrote, “have nothing in common but one word, equality. But notice the difference: while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude.” (30)

''And Acton joined him in believing that “the deepest cause which made the French revolution so disastrous to liberty was its theory of equality” and that “the finest opportunity ever given to the world was thrown away, because the passion for equality made vain the hope for freedom.” (30)

These twelve essays vary, some historical, some psychological, some economic, some analysis of socialism.

The first ''Individualism - True and False'', reveals two uses of the word, ''individualism'', after mentioning the English use, he notes -

''This second and altogether different strand of thought, also known as individualism, is represented mainly by French and other Continental writers—a fact due, I believe, to the dominant role which Cartesian rationalism plays in its composition. The outstanding representatives of this tradition are the Encyclopedists, Rousseau, and the physiocrats; and, for reasons we shall presently consider, this rationalistic individualism always tends to develop into the opposite of individualism, namely, socialism or collectivism.''

He explains that Acton and Tocqueville refer to the first, English meaning. The other -

''It is because only the first kind of individualism is consistent that I claim for it the name of true individualism, while the second kind must probably be regarded as a source of modern socialism as important as the properly collectivist theories.'' (3)

I. INDIVIDUALISM: TRUE AND FALSE
II. ECONOMICS AND KNOWLEDGE
III. THE FACTS OF THE SOCIAL SCIENCES
IV. THE USE OF KNOWLEDGE IN SOCIETY
V. THE MEANING OF COMPETITION
VI. “FREE” ENTERPRISE AND COMPETITIVE ORDER
VII. SOCIALIST CALCULATION I: THE NATURE AND HISTORY OF THE PROBLEM
VIII. SOCIALIST CALCULATION II: THE STATE OF THE DEBATE (1935)
IX. SOCIALIST CALCULATION III: THE COMPETITIVE “SOLUTION”
X. A COMMODITY RESERVE CURRENCY
XI. THE RICARDO EFFECT
XII. THE ECONOMIC CONDITIONS OF INTERSTATE FEDERALISM
NOTES

''Adam Ferguson expressed it, “nations stumble upon establishments, which are indeed the result of human action but not the result of human design”; and that the spontaneous collaboration of free men often creates things which are greater than their individual minds can ever fully comprehend. This is the great discovery of classical political economy which has become the basis of our understanding not only of economic life but of most truly social phenomena.'' (7)

The free market system 'capitalism' was not invented, it was found already operating. What is this? How does it work? Why is this so much better? This was the work of the eighteenth century. Hayek adds his explanation here.

''It would be interesting to trace further the development of this social contract individualism or the “design” theories of social institutions, from Descartes through Rousseau and the French Revolution down to what is still the characteristic attitude of the engineers to social problems. Such a sketch would show how Cartesian rationalism has persistently proved a grave obstacle to an understanding of historical phenomena and that it is largely responsible for the belief in inevitable laws of historical development and the modern fatalism derived from this belief.'' (10)

Key theme in Hayek's writing.
Quemal
This volume includes FA Hayek's academic articles concerning the role of information in a free market and how government intervention acts to prevent the extended order from innovation, efficiency and increases in prosperity. Entrepreneurs have tacit, situational, time-sensitive, and frankly boring information that isn't boring to the entrepreneur since constant command of such information (to the extent that complex market information can be commanded) determines her profit or loss. Hayek demonstrates, as did Ludwig von Mises, that from our arm chairs we know that a government has no possibility of accessing, caring about, processing or otherwise getting and using enterprise relevant information. The entrepreneur is the location of information collection and use all day every day. This is critical knowledge if the individual is going to save civil society from the barbarism of socialism. This book along with Man, Economy and State from Murray N. Rothbard offer a profound understanding of economics. This understanding is critical if we are going to avoid the descent into a conjuries of primitive household economies and have tragically unnecessary poverty and Leviathan kill millions.
Macage
The new edition of this book from the Mises Institute reprints several classic essays. Chapter two (Economics and Knowledge) examines decentralized economic planning by individuals. Plan coordination among individuals requires each to form plans that contain relevant data from the plans of others. We each acquire this data through competition in markets. Every time someone adjusts their plans, others must also change their plans. So, initial plan coordination requires each to fully anticipate the actions of others. Since this is impossible, order will emerge as a result of successive trials by individuals in markets. The price system enables individuals to adjust their plans with each other through time. This is the foundation of Hayek's theories of spontaneous order and social evolution. Hayek was far ahead of his peers in examining expectations formation.

Chapter four (The Use of Knowledge in Society) is another classic. Hayek contends that the economic problem is really one how to make use of fragmented and widely dispersed data. As he indicated in chapter two, full knowledge of economic conditions reduces the economic problem to one of pure logic. Markets increase our ability to take advantage of division of labor and capital formation by extending the span of our utilization of resources beyond the span of any individual mind. The price system in markets does this by acting as a communications network. We can then each dispense with the need for conscious control over resources and rely on our own intimate knowledge of local economic conditions, and price information regarding general economic conditions. This proves that decentralized competitive systems will vastly outperform centrally planned systems.

Chapter five looks at the process of competition. Data regarding the least cost methods of satisfying consumer demand comes through the process of competition. The notion of competition as an end state, where we have attained perfect resource allocation, overlooks the importance of the actual processes by which market participants actually compete. Competition is a process of forming opinions and spreading information. It informs us regarding which alternatives are best and cheapest. Those who judge actual market outcomes with theoretical models that assume perfect information are putting the cart before the horse. Competition is the only means by which we can each acquire data on general economic conditions. Governmental bureaucrats do not simply know what the final outcomes of competition are supposed to be. This data is particular to the process of competition itself. We should therefore be wary of those who complain that markets do not deliver perfect competition based on perfect information. Markets are our best source on the data in question, albeit an imperfect one.

In chapter seven Hayek lays out the arguments that some make in favor of Socialism. Some claim that greater equality in incomes is worth the loss of efficiency that is inherent to Socialism. Others want to maintain some degree of free choice- consumer and occupational choice. Yet others want to restrict even these areas of personal choice. Socialists face a problem in trying to show how socialist planners could plan production in terms of satisfying consumer desires, without market prices. The labor theory of value did not explain actual behavior, but was instead an "a search after some illusory substance of value. Since we lack objective measures of the importance of the needs of different individuals, central planners face "a task which far exceeds the powers of individual men". In chapter eight Hayek points to specific informational problems that Socialist planners face. Of course, he deals with information in earlier chapters. But this chapter leads into the next. Chapter nine deals with proposals to simulate market competition under socialism. Hayek mentions that even if central planners have full knowledge of economic conditions, the calculations concerning the allocation of all resources is too difficult to perform. After dealing with the absurd notion of full information, Hayek turns to three issues. First, Socialists once aimed at overcoming the results of markets. Now they accept the results of market competition as a standard to aim at. Second, an omniscient and omnipresent dictator would also require omnipotence to plan an economy using their omniscience. Even if they had omniscience, the central planners would still have to work through an imperfect bureaucracy. So the notion of omnipotence is absurd. We must look at the actual bureaucratic problems that planners will face. Third, Perhaps, in a world of unchanging data Socialist planners could arrive at efficient prices for the means of production through trial and error. But, with changing data, the plans of the authority will never match the decisions of the 'man on the spot'. Hayek discusses incentive problems and knowledge problems at length, and also mentions the potential for abuse by concentrating power into the hands a few. This is the subject of his book "The Road to Serfdom".

The other chapters are not what I would call classics, but are generally of a high quality. Chapter eleven deals with an aspect of trade cycle theory. Chapter six (Free Enterprise and Competitive Order) deals with the limits of market and government and the influence of ideas. This is not Hayek's best effort in explaining these matters. Chapter one (Individualism, True and False) is much better. It discusses the drive to control individual action based on alleged notions of reason. True individualism requires humility towards the processes by which societal order emerges, not as a result of deliberate planning by any particular individual, but as an unintended consequence of self-serving individual interaction.

These are ideas that far too few appreciate. This book is key to understanding the way Hayek thought about social problems in general. The chapters might seem disjointed in the table of contents, but they have much in common. Anyone serious about understanding how society works should read this book, especially if they tend to disagree with the author's pro free market stance. Hayek is one of the worthiest opponents that Socialists face, and this book is one of his best. Thanks to the MI for reprinting this great book!