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Hayek and the Evolution of Capitalism

Author(s):Beck, Naomi
Reviewer(s):Hübner, Jamin Andreas

Published by EH.Net (August 2019)

Naomi Beck, Hayek and the Evolution of Capitalism. Chicago: University of Chicago Press, 2018. 208 pp. $40 (cloth), ISBN: 978-0-226-55600-0.

Reviewed for EH.Net by Jamin Andreas Hübner, Western Dakota Tech.

 
“Neoliberalism” frequently stands in the crosshairs. Those who are critical of neoclassical economic theory put into practice, whether consistently or only in name, have sought to uncover the intellectuals behind this movement. One of them is F. A. Hayek, who influenced some of the policies of “Reaganomics” and those of Margaret Thatcher’s administration. Hayek sought to legitimize his generally laissez-faire approach in a number of ways — including an appeal to Darwin’s theory of evolution. Naomi Beck, a researcher for the Council of Higher Education in Israel, examines this particular connection in her own reading and analysis of the sources.

That’s putting it mildly. Hayek and the Evolution of Capitalism is an all-out critique of Hayek’s appeal to “group selection” (i.e., economies that survived because they were the fittest and most unplanned). With razor-sharp acumen, Beck systematically dismantles a host of inconsistencies and contradictions within this particular strain of Hayek’s thought, thereby casting a shadow on unbridled capitalism in the modern world. In Beck’s own words, we are forced “to rethink the theoretical basis for some of the core tenets of free market capitalism” (p. 160).

Beck contends that “Hayek seemed to arbitrarily opt for an interpretation of evolution that suited his purposes, while ignoring or downplaying key aspects of Darwin’s thought. Darwin … emphasized humans’ ability to obtain specific results with artificial selection as much as he insisted on natural selection’s infinitely greater, and uncontrollable, powers of modification” (p. 7). This elevation of the not-designed also contradicted Hayek’s liberalism, where such things as the rule of law somehow aren’t considered designed while socialism, simultaneously, isn’t viewed as a cultural development. Hence Hayek’s puzzling concessions toward policies like minimum income and central banking. Hayek also had trouble, Beck argues, consistently keeping social Darwinism and its societal-engineering at a safe distance.

Beck asserts the same regarding Hayek’s arguments on the conflicting roles of religion, origins of private property, and the “peaceful” (violent) history of free-markets in early human, evolutionary history. Hayek had interesting things to say, but he was consistently inconsistent, and ultimately a hopeless “conservative,” who said (in Law, Legislation, and Liberty) that “we must completely discard the conception that man was able to develop culture because he was endowed with reason” (cited on p. 116). That is, reason must be subjugated to tradition. Hence Beck’s conclusion on the last page of the book: “Hayek’s message appears both off the mark and obsolete” (p. 160).

In my reading, Beck’s central argument seems fair and valid enough: Hayek had the conclusions in mind that he wanted to legitimize (on this motivation, see p. 91), and then attempted to use human history and Darwinian evolution to support them, but ultimately failed in this attempt. How significant this is in the larger discussion of neoliberalism, however, is another point. This is true on the level of details. For example, we read that “Hayek was evidently not well versed in Darwin’s theory, and tended to confuse it with neo-Darwinism or with the modern evolutionary synthesis” (p. 89). This is no doubt true, but how much does it matter in Hayek’s larger schema? And is the validity of one’s argument really contingent on one’s ability to properly exegete and apply another person’s thought? Intellectuals take the idea of previous thinkers and run them in new innovative ways as a matter of course. Ideas mutate — whether by accident or by intention. (An ironic point to make for this particular monograph, indeed.) I couldn’t help but think in reading it that there are far better arguments against neoliberalism than poking holes in Hayek’s work on evolution and capitalism — though I suppose someone had to do it, and there is some value in this unique route.

Nevertheless, Beck is probably right that Hayek had no business appealing to the theories of a field he didn’t properly understand — especially if that appeal is used specifically to legitimize major strands of an economic theory. (I was as puzzled as her in Hayek’s failure to connect Thomas Malthus’s influence on Darwin, among other things.) She also provides some humble pie to die-hard fans who believe Hayek was always a careful and coherent thinker. Whatever the case, Hayek and the Evolution of Capitalism is a valuable read for anyone deeply interested in the thought of Hayek and in the relationship between evolution and free-market capitalism.

 
Jamin Andreas Hübner is an economics professor at Western Dakota Tech, the University of the People, and a Research Fellow for the Center for Faith and Human Flourishing at LCC International University.

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Subject(s):History of Economic Thought; Methodology
Time Period(s):20th Century: WWII and post-WWII