[Second reading] My first review was effusive, to say the least. Still a fantastic book, but I'm not sure it warrants the adoration. I might have been so enthusiastic the first time around because this was my first encounter with a clear, concise explication of spontaneous order.



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[First reading]

Fantastic. Clear, well-argued, and sound, Hayek not only manages to slam the last nail into the coffin of central-planning but also synthesizes all free market theory into one concise concep

[Second reading] My first review was effusive, to say the least. Still a fantastic book, but I'm not sure it warrants the adoration. I might have been so enthusiastic the first time around because this was my first encounter with a clear, concise explication of spontaneous order.



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[First reading]

Fantastic. Clear, well-argued, and sound, Hayek not only manages to slam the last nail into the coffin of central-planning but also synthesizes all free market theory into one concise concept of "spontaneous order." I would recommend this book to anybody, socialist or libertarian, liberal or conservative, apathetic or activist. People who profess to know should read this, because it upsets all our preconceived notions of what we, as humans, can actually achieve. I wish I had read this book earlier, because it truly is the most damning, most articulate, most animating rendition of the libertarian case for a free and voluntary society that I have read to date. It is also particularly relevant in our modern world, where nation-states are greedily devouring the private capital of their citizens in pursuit of short-term goals that ultimately will only upset what Hayek calls the "extended order", or, more commonly, "civilization." Civilization flourishes on liberty, particularly economic liberty. To abandon that, to damn several property and its effects, is to damn prosperity, peace, civilization, even humanity to a catastrophic fate.



"Adam Smith was the first to perceive that we have stumbled upon methods of ordering human economic cooperation that exceed the limits of our knowledge and perception. His 'invisible hand' had perhaps better have been described as an invisible or unsurveyable pattern. We are led--for example by the pricing system in market exchange--to do things by circumstances of which we are largely unaware and which produce results that we do not intend. In our economic activities we do not know the needs which we satisfy nor the sources of the things which we get. Almost all of us serve people whom we do not know, and even of whose existence we are ignorant; and we in turn constantly live on the services of other people of whom we know nothing." 14



"One revealing mark of how poorly the ordering principle of the market is understood is the common notion that 'cooperation is better than competition.' Cooperation, like solidarity, presupposes a large measure of agreement on ends as well as on methods employed in their pursuit. It makes sense in a small group whose members share particular habits, knowledge and beliefs about possibilities. It makes hardly any sense when the problem is to adapt to unknown circumstances; yet it is this adaptation to the unknown on which the coordination of efforts in the extended order rests. Competition is a procedure of discovery, a procedure involved in all evolution, that led man unwittingly to respond to novel situations; and through further competition, not through agreement, we gradually increase our efficiency." 19



"Learnt moral rules, customs, progressively displaced innate responses, not because men recognized by reason that they were better but because they made possible the growth of an extended order exceeding anyone's vision, in which more effective collaboration enabled its members, however blindly, to maintain more people and to displace other groups." 23



"The crucial point is that the prior development of several property is indispensable for the development of trading, and thereby for the formation of larger coherent and cooperating structures, and for the appearance of those signals we call prices." 31



"But during the last years of the Republic and the first centuries of the Empire, governed by a senate whose members were deeply involved in commercial interests, Rome gave the world the prototype of private law based on the most absolute conception of several property. The decline and final collapse of this first extended order came only after central administration in Rome increasingly displaced free endeavor. This sequence has been repeated again and again: civilization might spread, but it is not likely to advance much further, under a government that takes over the direction of daily affairs from its citizens. It would seem that no advanced civilization has yet developed without a government which saw its chief aim in the protection of private property, but that again and again the further evolution and growth to which this gave rise was halted by a 'strong' government. Governments strong enough to protect individuals against the violence of their fellows make possible the evolution of an increasingly complex order of spontaneous and voluntary cooperation. Sooner or later, however, they tend to abuse that power and to suppress the freedom they had earlier secured in order to enforce their own presumably greater wisdom and not to allow 'social institutions to develop in a haphazard manner'." 32



"Nothing is more misleading...than the conventional formulae of historians who represent the achievement of a powerful state as the culmination of cultural evolution: it as often marked its end. In this respect students of early history were overly impressed and greatly misled by monuments and documents left by the holders of political power, whereas the true builders of the extended order, who as often as not created the wealth that made the monuments possible, left less tangible and ostentatious testimonies to their achievement." 33



"What led the greatly advanced civilization of China to fall behind Europe was its governments' clamping down so tightly as to leave no room for new developments, while...Europe probably owes its extraordinary expansion in the Middle Ages to its political anarchy." 45



[46--critique of Aristotelian ethical theory]



[50-51--critique of sociology]



"Rationalists tend to be intelligent and intellectual; and intelligent intellectuals tend to be socialists." 53



["second-hand dealers'--55]



"Everywhere, in the name of liberation, people disavow practices that enabled mankind to reach its present size and degree of cooperation because they do not rationally see, according to their lights, how certain limitations on individual freedom through legal and moral rules make possible a greater--and freer!--order than can be attained through centralized control." 65



"In the marketplace (as in other institutions of our extended order), unintended consequences are paramount: a distribution of resources is effected by an impersonal process in which individuals, acting for their own ends (themselves also often rather vague), literally do not and cannot know what will be the net result of their interactions." 71



"If we had deliberately built, or were consciously shaping, the structure of human action, we would merely have to ask individuals why they had interacted with any particular structure. Whereas, in fact, specialised students, even after generations of effort, find it exceedingly difficult to explain such matters, and cannot agree on what are the causes or what will be the effects of particular events. The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design." 76



"In the sense of inculcating conduct that benefits others, all systems of morality of course commend altruistic action; but the question is how to accomplish this. Good intentions will not suffice--we all know what road they pave. Guidance strictly by perceivable favourable effects on particular other persons is insufficient for, and even irreconcilable with, the extended order. The morals of the market do lead us to benefit others, not by our intending to do so, but my making us act in a manner which, nonetheless, will have just the effect. The extended order circumvents individual ignorance (and thus also adapts us to the unknown, as discussed above) in a way that good intentions alone cannot do--and thereby does make our efforts altruistic in their effects." 81



"Some persons are so troubled by some effects of the market order that they overlook how unlikely and even wonderful it is to find such an order prevailing in the greater part of the modern world, a world in which we find thousands of millions of people working in a constantly changing environment, providing means of subsistence for others who are mostly unknown to them, and at the same time finding satisfied their own expectations that they themselves will receive goods and services produced by equally unknown people." 84



[Intellectuals and socialist realities--85-86]



"Value is not an attribute or physical property possessed by things themselves, irrespective of their relations to men, but solely an aspect of these relations that enables men to take account, in their decisions about the use of such things, of the better opportunities others might have for their use. Increase in value appears only with, and is relevant only with regard to, human purposes." 95



"But because of the delusion that macroeconomics is both viable and useful (a delusion encouraged by its extensive use of mathematics, which must always impress politicians lacking any mathematical education, and which is really the nearest things to the practice of magic that occurs among professional economists) many opinions ruling contemporary government and politics are still based on naive explanations of such economic phenomena as value and prices, explanations that vainly endeavour to account for them as 'objective' occurrences independent of human knowledge and aims." 99



"Though an indispensable requirement for the functioning of an extensive order of cooperation of free people, money has almost from its first appearance been so shamelessly abused by governments that it has become the prime source of disturbance of all self-ordering processes in the extended order of human cooperation. The history of government management of money has, except for a few short happy periods, been one of incessant fraud and deception. In this respect, governments have proved far more immoral than any private agency supplying distinct kinds of money in competition possibly could have been. " 103





