Sunday, September 18, 2016

BOOK REVIEW: The Fatal Conceit - The Errors of Socialism

I have been rounding up parts of the collected works of Friedrich A. Hayek and recently finished his book The Fatal Conceit - The Errors of Socialism.  The book is Hayek's final work written in 1988 while he was an octogenarian. It exudes the wisdom of a lifetime of study and experience.  The work is a powerful intellectual indictment of man's misguided efforts to control his economic environment through government planning.  Interestingly, while Hayek was himself an agnostic, he also provides a consistent and robust defense of religious tradition as a precursor of Western Civilization's success.

The book is a rich read.  I had to put the book down every few pages to digest the information he presented.  I took copious notes for future reference.  Here are some highlights by topic for your benefit.

Nature of a Free Market

"Not only does all evolution rest on competition, continuing competition is necessary even to preserve existing achievements."

Private Property

"Where there is no property, there is no justice."

"Nobody is at liberty to attack several property and to say that he values civilization.  The history of the two cannot be disentangled." - Henry Sumner Maine

The Character of Socialist Thought

"Moreover, they (socialists) also understandably will want to align themselves with science and reason, and with the extraordinary progress made by the past several centuries, and since they have been taught that constructivism and scientism are what science and reason are all about, they find it hard to believe, that there can exist any useful knowledge that did not originate in deliberate experimentation, or to accept any tradition apart from their own tradition of reason."

"Intelligent people will tend to over value intelligence."

"Pretending to be lovers of freedom they condemn several property, contract, competition, advertising, profit, and even money itself.  Imagining that their reason can tell them how to arrange human affairs to serve their innate wishes better, they themselves pose a grave threat to civilization."

"While facts alone can never determine what is right, ill considered notions of what is reasonable, right, and good may change the facts and circumstances in which we live."

"On a less sophisticated level than the argument against alienation are demands for "liberation" from the burdens of civilization, including the burdens of disciplined work, responsibility, risk taking, saving, honesty, the honoring of promises, as well as the difficulties of curbing by general rules one's natural reactions of hostility to strangers in solidarity with those who are like oneself - an ever more severe threat to political liberty. Thus, the notion  of  "liberation", although allegedly new, is actually archaic in its demand for release from traditional morals.  Those who champion such liberation would destroy the basis of freedom, and permit men to do what would irreparably break down those conditions which make civilization possible."

"So priding itself on having built its world as if it had designed it, and blaming itself on not having designed it better, human kinds is now set out to do just that."

"The aim of socialism is no less than to affect a complete redesigning of our traditional morals, law, and language, and on this basis to stamp out all the old order and the supposedly inexorable, unjustifiable, conditions that prevent the institution of reason, fulfillment, true freedom, and justice."

Man's Folly

"Man became all that he is without understanding it." - Giam Batista Rico (1854)

"There is a difference between following rules of conduct on the one hand, and knowledge about something on the other."

"Nothing is more misleading than the conventional formula of historians who represent the achievement of a powerful state as the culmination of cultural evolution; it has 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 testimonials to their achievement."

Morality and Reason

"But to ask for the conscious reason why man adopted his morals is as mistaken as to ask for what conscious reason man adopted his reason."

"It is not our intellect that created our morals, rather, human interaction governed by morals make possible the growth of reason and those capabilities associated with it.  Man became intelligent because there was tradition, that which lies between instinct and reason, for him to learn."

"While it is true that traditional morals are not rationally justifiable, this is also true of any possible moral code, including any that socialists might even be able to come up with.  Hence, no matter what rules we follow, we will not be able to justify them as demanded; so, no argument about morals -science, or law, or language - can legitimately turn on the issue of justification."


"The love of money, the bible declares, is the root of all evil.  But ambivalence about it is perhaps even more common; money appears as at once the most powerful instrument of freedom, and the most sinister tool of oppression."

"And thus we reach the progressive climax of the replacement of the perceivable and concrete by the abstract concepts shaping rules and guiding activity.  Money and its institutions seem to be beyond the boundary of laudable and understandable physical efforts of creations in a real where the comprehension of the concrete ends and incomprehensible abstractions rule."

On Man's Liberty and the Free Market

"Mankind could neither have reached nor now maintained its present numbers without an inequality that is neither determined by nor reconcilable, with any deliberate moral judgments.  Effort of course will improve individual chances, but it alone cannot secure results."

"Our ability, no less than the freedom, to be guided by one's own knowledge and decisions rather than being carried always by the spirit of the group, are developments of the intellect that our emotions have followed only imperfectly."

"It is no exaggeration to say that this notion marks the emancipation of the individual. To the development of the individual spirit are due the division of skills, knowledge, and labor on which advance civilization rests."

"Enforced obedience to common concrete ends is tantamount to slavery, obedience to common abstract rules (however burdensome they may still fell) provides hope for the most extraordinary freedom and diversity."

"Men are qualified for civil liberties, in exact proportion to their disposition to put moral chains on their appetites; in proportion as their love of justice is above their rapacity."


"At least a minimal change of conduct on their part will be a condition for their being permitted to enter the larger established group and gradually to gain an increasing share in its total product."


I hope you enjoy these enlightening quotes as much as I do.  Hayek is certainly in a class of his own when it comes to economic thought.  The book contains much more that is worth reading and students of economics, politics, and history will certainly gain insight from its pages.  Happy reading!

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