Friedrich Hayek’s Fatal Conceit is one of those books you can read and read and then read again and still learn from.
It carries in its title a truly shocking and powerful truth. The conceit is “that man is able to shape the world around him according to his wishes”.
That’s the conceit of socialists and utopians everywhere. They wish always to displace the market system with their “rational” and planned system of production and distribution.
It’s the conceit of the university professor, the opinion writer, the Hollywood star, the UN head honcho and the council town planner.
They can in their minds think of a better world and believe thinking of a better place, plus government power, plus well-meaning people make it possible.
For them the market system with each and everyone going about their own business is chaotic and shambolic. They fail to grasp the order that the market system engenders all around them.
The conceit is fatal because to displace the market system would inevitably mean that a great proportion of the human population now alive must suffer and die.
It’s the market system’s global co-operation and co-ordination that has enabled the human population to prosper and to expand.
A question of science
The very marvel of the market system is that the human mind only has to grasp just the tiniest bit of the vast interconnected web of the world’s production system that enables us to survive and to prosper.
And, of course, that tiny bit is precisely the bit that we are each responsible for in our day job.
Moreover, our minds simply can’t grasp the totality of the productive system. That’s why central planning must inevitably fail.
For Hayek the choice between central planning and the market order is not one of morality or competing values but instead a question of science.
It’s the proper understanding of social science, economics and anthropology that enables us to grasp the limit of our reason and of our thinking and likewise to grasp that the human population can only be sustained through the extended order that the market system enables.
The genetic instinct within us is that of the small band of hunter-gatherers. That’s the world of our genetic inheritance. In the small band we know one another. Our goals are the group’s goals.
Each can be treated as a neighbour. The life is collectivist and the rule of life is to share and share alike. That sharing extends only within the group: outsiders are feared and fought. That’s our history.
New rules prospered
But, amazingly, across tribes new rules of behaviour developed and the rules prospered. These are rules that counter human instinct. They are the “shall nots.”
They cut across intra-group altruism and solidarity. They are the rules that enabled private property to be recognised and contracts to be honoured.
Interestingly, primitive tribes in Australia and New Guinea have been observed honouring the rules necessary for the intertribal trade that they had come to depend on even amid the warring of the tribes.
The rules on which the peace and prosperity of the extended market order depends were neither conceived nor designed. They were rather stumbled on and the very success that they enabled ensured their survival and spread.
The intellectual’s desire for the plan, for the rational process, for the resource sharing and for the solidarity of the group, is a primitive desire from deep within our DNA.
It harkens back to the rules that applied when we lived in roving bands thinly dispersed across the planet always on the edge of survival and very much within the ecological limits that the present-day Greens so earnestly desire for us to return to.
To adopt those rules, to accept those limits, would be to condemn millions to die. That’s the Fatal Conceit.