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Editor’s Note: This selection is from F.A. Hayek’s Individualism and Economic Order, now available as an ebook in the Mises Store. In this selection, Hayek contrasts two types of individualism: one that leads to freedom and spontaneous order, and the other that leads to collectivism and controlled economies.

Before I explain what I mean by true individualism, it may be useful if I give some indication of the intellectual tradition to which it belongs. The true individualism which I shall try to defend began its modern development with John Locke, and particularly with Bernard Mandeville and David Hume, and achieved full stature for the first time in the work of Josiah Tucker, Adam Ferguson, and Adam Smith and in that of their great contemporary, Edmund Burke — the man whom Smith described as the only person he ever knew who thought on economic subjects exactly as he did without any previous communication having passed between them.

In the nineteenth century I find it represented most perfectly in the work of two of its greatest historians and political philosophers: Alexis de Tocqueville and Lord Acton. These two men seem to me to have more successfully developed what was best in the political philosophy of the Scottish philosophers, Burke, and the English Whigs than any other writers I know; while the classical economists of the nineteenth century, or at least the Benthamites or philosophical radicals among them, came increasingly under the influence of another kind of individualism of different origin.

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. 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.

I can give no better illustration of the prevailing confusion about the meaning of individualism than the fact that the man who to me seems to be one of the greatest representatives of true individualism, Edmund Burke, is commonly (and rightly) represented as the main opponent of the so-called “individualism” of Rousseau, whose theories he feared would rapidly dissolve the commonwealth “into the dust and powder of individuality,” and that the term “individualism” itself was first introduced into the English language through the translation of one of the works of another of the great representatives of true individualism, de Tocqueville, who uses it in his Democracy in America to describe an attitude which he deplores and rejects. Yet there can no doubt that both Burke and de Tocqueville stand in all essentials close to Adam Smith, to whom nobody will deny the title of individualist, and that the “individualism” to which they are opposed is something altogether different from that of Smith ...

The next step in the individualistic analysis of society, however, is directed against the rationalistic pseudo-individualism which also leads to practical collectivism. It is the contention that, by tracing the combined effects of individual actions, we discover that many of the institutions on which human achievements rest have arisen and are functioning without a designing and directing mind; that, as 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 theme of Josiah Tucker and Adam Smith, of Adam Ferguson and Edmund Burke ...

The difference between this view, which accounts for most of the order which we find in human affairs as the unforeseen result of individual actions, and the view which traces all discoverable order to deliberate design is the first great contrast between the true individualism of the British thinkers of the eighteenth century and the so-called “individualism” of the Cartesian School. But it is merely one aspect of an even wider difference between a view which in general rates rather low the place which reason plays in human affairs, which contends that man has achieved what he has in spite of the fact that he is only partly guided by reason, and that his individual reason is very limited and imperfect, and a view which assumes that Reason, with a capital R, is always fully and equally available to all humans and that everything which man achieves is the direct result of, and therefore subject to, the control of individual reason.

The anti-rationalistic approach, which regards man not as a highly rational and intelligent but as a very irrational and fallible being, whose individual errors are corrected only in the course of a social process, and which aims at making the best of a very imperfect material, is probably the most characteristic feature of English individualism ...

So let me return, in conclusion, to what I said in the beginning: that the fundamental attitude of true individualism is one of humility toward the processes by which mankind has achieved things which have not been designed or understood by any individual and are indeed greater than individual minds. The great question at this moment is whether man’s mind will be allowed to continue to grow as part of this process or whether human reason is to place itself in chains of its own making. What individualism teaches us is that society is greater than the individual only in so far as it is free. In so far as it is controlled or directed, it is limited to the powers of the individual minds which control or direct it. If the presumption of the modern mind, which will not respect anything that is not consciously controlled by individual reason, does not learn in time where to stop, we may, as Edmund Burke warned us, “be well assured that everything about us will dwindle by degrees, until at length our concerns are shrunk to the dimensions of our minds.”