The Invisible Hand of Friedrich Hayek: Submission and Spontaneous Order

Spontaneous Order

The term “spontaneous order” was coined not by Hayek but by Michael Polanyi, but Hayek did most to popularize it. ²⁵ In a 1967 text, whose title “The Results of Human Action but Not of Human Design” is borrowed from Ferguson, Hayek provides a genealogy of spontaneous order, which he depicts as passing from Stoicism to the Spanish schoolmen, and then to Bernard Mandeville, Baron de. Montesquieu, David Hume, Josiah Tucker, Smith, and Ferguson. ²⁶ Despite the significance he accords to the Stoics, and to the Scholastics—who extended Thomas Aquinas’ account of providence as both “the type of order of things foreordained towards an end; and the execution of this order, which is called government,” ²⁷ —providence barely appears in Hayek’s genealogy. Rather, Hayek distills from this tradition an account of social order in which the blind, self-interested actions of individuals converge spontaneously without the need for human or divine coordination.

“Every step and every movement of the multitude,” Ferguson wrote, “even in what are termed enlightened ages, are made with equal blindness to the future; and nations stumble upon establishments, which are indeed the result of human action, but not the execution of any human design.” ²⁸ Citing these lines in 1945, Hayek described this as “the great discovery of classical political economy which has become the basis of our understanding not only of economic life but of most truly human affairs.” ²⁹ The central innovation of the Scottish Enlightenment, Hayek suggested later, was to have overthrown what Duncan Forbes terms “the legislator myth.” ³⁰ From the Scots, he argued, we inherited an anti-rationalist individualism, which generates “an attitude of humility towards the impersonal and anonymous social processes” by which we create things bigger than ourselves. ³¹ Referring to the famous passage from The Wealth of Nations in which Smith uses the term “invisible hand,” Hayek writes, “If, in the form in which Adam Smith put it, the phrase that man in society ‘constantly promotes ends which are no part of his intention’ has become the constant source of irritation of the scientistically minded, it describes nevertheless the central problem of the social sciences.” ³²

Pushing God aside, Hayek depicts the Scots as the first thinkers to have shown that human relations could be complex, orderly and purposive, without having been designed. They showed for the first time, he argues, that an order “which was not the product of a designing human intelligence need not therefore be ascribed to the design of a higher, supernatural intelligence”; rather, they formulated “a third possibility—the emergence of order as a result of adaptive evolution.” ³³

Hayek’s use of the term “evolution,” and his account of the “survival of the successful,” has led certain critics to depict him as a social Darwinist, borrowing his terms from the natural sciences. ³⁴ Pierre Dardot and Christian Laval argue that Hayek “clearly draws on Darwin’s theory of evolution” in developing his account of social evolution, while Philip Mirowski depicts this appeal to evolution as a product of Hayek’s late embrace of cybernetics and complexity theory. ³⁵ In the 1970s, Hayek did attribute the insight that all enduring structures are explained by processes of selective evolution to the complexity theory of Ilya Prigogine and the systems theory of his friend Ludwig von Bertalannfy. ³⁶ Yet, his references to evolution and to the idea of spontaneous order date from the mid-1940s, well before what Mirowski terms his “evolutionary protocyberneticist” period. ³⁷

Even late in life, Hayek attempted to contest the argument that the theory of social evolution is derived from biological evolution. While our emphasis on the role of selection “is likely to create the impression that we are borrowing the idea from biology,” he writes in The Constitution of Liberty, “it is worth stressing that it was, in fact, the other way round: there can be little doubt that it was from the theories of social evolution that Darwin and his contemporaries derived the suggestion for their theories.” ³⁸ Elsewhere, Hayek argues that Darwin was influenced directly by Mandeville, by Hume, and by a reading of Smith. ³⁹ “A nineteenth-century social theorist who needed Darwin to teach him the ideas of evolution was not worth his salt,” Hayek contends. ⁴⁰ Even the newer science of cybernetics, he argues, is simply a further development of Smith’s account of the invisible hand. ⁴¹

Hayek’s references to Ferguson and the Scottish Enlightenment are undoubtedly polemical interventions into particular political and intellectual struggles. Yet, there is reason to take seriously his denial that his account of evolution was borrowed from biology. Hayek’s theory of evolution is premised on the competition and unconscious selection of institutions and rules of conduct, rather than genetic traits. The key problem with social Darwinism, as he sees it, is that it repeats an old Greek dichotomy between physis (nature) and thesis (decision) and therefore assumes that values are either natural or rationally produced. ⁴² In contrast, he argues that culture, institutions, and values are “neither natural nor artificial, neither genetically transmitted nor rationally designed.” ⁴³ Social evolution occurs through the unconscious selection of the values and institutions that provide those who submitted to them with the greatest benefits.

The evolution from the “small band” to the “Great Society,” Hayek argues, was possible only where individuals embraced “the morals of the market”: a set of commercial values according to which it is “better to invest one’s fortunes in instruments making it possible to produce more at smaller costs than to distribute it amongst the poor.” ⁴⁴ This evolution required the abandonment of feelings of personal loyalty and egalitarian commitments more suitable to tribal existence. The transition to the market economy, he argues, was achieved through (deeply resented) breaches of the solidarity that governed earlier social relations. ⁴⁵ In his contemporaries’ demands for social justice, Hayek saw atavistic attempts to return from the market society to the morals of the small band. Deliberately aiming to achieve common purposes, “which to most people still appears as more meritorious and superior to blind obedience to abstract rules, would destroy that larger order,” he contended. ⁴⁶ Socialism, from such a perspective, was not simply a rival political program but a “revival of primordial instincts,” which threatened the continued evolution of the human species. ⁴⁷

Accepting that Hayek’s theory of evolution was borrowed from biology not only effaces his debt to the Scottish Enlightenment, it also obscures the tensions he faces in detaching the spontaneous convergence of interests from providential guidance. So determined is Hayek to avoid the theory of providence, that he depicts even Aquinas as developing an account of utility “favouring a sort of natural selection of institutions.” ⁴⁸ Yet, it was precisely belief in the providential ordering of the world that informed the optimism about the convergence of blind human actions that Hayek seeks to extract from Ferguson’s work. Without this providentialism, Hayek struggles to explain why the unpredictable and incomprehensible results of the spontaneous order are superior to the results of deliberate human planning. As I show below, this struggle animated all his work, beginning with his contributions to the socialist calculation debates of the 1930s, extending through his influential theorizations of the role of knowledge in society, and ultimately leading him to the Scottish Enlightenment and to Ferguson’s providential account of social order.

It is to Smith that Hayek turns to demonstrate this superiority of spontaneous order: the successful entrepreneur, Hayek argues, “is led by the invisible hand of the market to bring the succor of modern conveniences to the poorest homes he does not even know.” ⁴⁹ For Smith, as Mike Hill and Warren Montag note, with a nod to John Rawls, “this ‘veil of ignorance’ that prevents individuals from knowing the benevolent consequences of their self-interested actions is necessary to the design of the whole.” ⁵⁰ So too for Hayek, the process by which the market produces beneficial effects remains opaque, as “each is made by the visible gain to himself to serve needs which to him are invisible.” ⁵¹ The superiority of the market lies not in fulfilling collectively determined ends—something Hayek rules out—but in enabling individuals to adapt to each other and “to conditions unforeseen and unknown to most people.” ⁵²

Such adaptation necessarily advantages some at the expense of others who may be thrown into penury by price rises or the destruction of industries. As Hayek acknowledges, “not all will hit it off so perfectly.” ⁵³ Yet he assures the reader—in a classic statement of what we have come to know as “trickle-down economics”—that all ultimately benefit from the subsequent increase in the aggregate supply of goods, even though each person’s share remains unpredictable. Hayek betrays only a slight doubt when he notes, of those who have lost their incomes as a result of the unrestrained market, that although “in the short run the unfavourable effects on them may out-balance the sum of the indirect beneficial effects, in the long-run the sum of all those particular effects, although they will always harm some, are likely to improve the chances of all.” ⁵⁴ In any case, he contends that the “known and concentrated harm” to those who lose their incomes must not be allowed to count against the “diffused, usually unknown and indiscriminate benefits to many.” ⁵⁵

As Hayek recognized, such faith in the invisible hand offers little consolation in periods of crisis, given our necessary ignorance of the means by which the threat of social disintegration will be averted. This ignorance often produces “panic-like alarm and the demand for government action,” he notes, which the economist could counter “only by the confident assertion that the required balance would establish itself somehow if we did not interfere in the spontaneous forces.” Given that the concrete circumstances which produced such “panic-like alarm” could include the mass unemployment of the Great Depression, or severe food shortages and the threat of starvation, it is unsurprising, as Hayek acknowledges, that, the assertions of the economist who is unable to predict how balance will be restored are “not very convincing.” ⁵⁶ Yet, Hayek’s commitment to the invisibility of the social mechanism means he too offers little other than “confident assertion” that the market will self-correct, and the pursuit of self-interest by the rich will bring “succor” to the poor.

So radical was Hayek’s faith in the market that even the Chicago School’s Milton Friedman argued in 1998 that it had “done the world a great deal of harm.” Throughout the 1930s, Friedman reflects, Hayek was in London rejecting fiscal and monetary remedies for unemployment, and arguing, “you just have to let the bottom drop out of the world. You’ve got to let it cure itself.” ⁵⁷ Even to the man dubbed “Mr. Market,” such an account of the self-correcting properties of the market evinced a dangerous faith. ⁵⁸

Why, then, does Hayek not embrace the theological underpinnings of the invisible hand? Peter Harrison has noted that while Smith’s contemporaries would almost certainly have understood his references to the invisible hand to refer to God’s providence, with the waning of theism, “God’s providential oversight, once considered indispensable to a coherent causal explanation, has simply faded from view since our present explanatory demands are more modest.” ⁵⁹ For Hayek, there is more at stake: obscuring the providential foundations of his own thought was necessary to make the spontaneous convergence of selfish actions acceptable to the non-religious. Moreover, Hayek followed his mentor Ludwig von Mises in attacking Marxism by depicting its philosophy of history as providential. And (like François Ewald much later), Hayek depicted the welfare state as a “providence state,” or oikonomia, which provides for humans and thereby keeps them in a perpetual state of childhood.

Hayek’s key challenge was to overcome the “constructivist prejudice which still makes so many socialists scoff at the ‘miracle’ that the unguided pursuit of their own interests by the individuals should produce a beneficial order.” ⁶⁰ The former Marxist and American Pragmatist Sidney Hook exemplified this scoffing in a 1960 review of Hayek’s Constitution of Liberty. “The conception of ‘self-regulating forces’ in history and society is largely mythical,” he wrote. “We would still be living in a state of slavery had we relied on them.” ⁶¹ For Hayek’s critics, the existing order is a product not merely of the aggregation of blind, self-interested actions, but of political action that consciously challenged what an eighteenth-century critic of the slave trade, writing in opposition to the related idea of unintended consequences, called “long sanctioned usages that militate against the principle of civil liberty.” ⁶² In attempting to contest such views, Hayek did resort to analogies taken from biology. Such prejudice, he argued, is the reverse form of “that dogmatism which opposed Darwin on the ground that the existence of order in organic nature was proof of intelligent design.” ⁶³ In both cases, he suggests, the detractors were unable to accept a third way: an order that was the product neither of human nor of divine design.

A Third Way? From Providence to Price

Hayek first defended what he later called the “spontaneous order” of the market during the “socialist calculation debates” of the 1920s and 1930s. Hayek joined the fray alongside his mentor Ludwig von Mises, who argued that rational planning was impossible in the absence of private ownership of capital goods and a system of market prices. ⁶⁴ Alongside Mises, Hayek challenged socialist claims for the efficacy of planning, and defended the competitive capitalist market from indictments of its irrationality. The socialists criticized the distorting influence of monopolies and advertising, and argued that capitalist inequalities systematically pervert the relation between market demand and social needs, ensuring that “while some are starving others are allowed to indulge in luxury.” ⁶⁵ They also highlighted the divergence between the economic costs borne by individual entrepreneurs and the social costs of production, which led to extensive “social waste”—in the form of ecological damage, contamination of water-ways, ill-health and work injuries—as the “life, security and health of the workers are sacrificed without being accounted for as a cost of production.” ⁶⁶

Hayek’s central contribution was to stress the superiority of the market in distributing dispersed knowledge. In so doing, he challenged both socialist planning and the positivism of neo-classical economics. Neo-classical equilibrium models, he argued in 1937, presupposed a “quasi-omniscient individual” with full knowledge of past, present, and future, making them largely useless for understanding actually existing markets. The real economic problem, he argued, was to ascertain the empirical conditions under which “the spontaneous interaction” of individuals, each of whom possesses only bits of knowledge, takes a coordinated form. ⁶⁷ Having recast the problem of equilibrium as a problem of the conditions under which individuals could acquire and communicate the knowledge needed to execute and coordinate their plans, Hayek’s essay took a despondent turn. It is “exceedingly difficult to say” on what basis it can be asserted that a such tendency towards equilibrium exists, he acknowledged, or to specify the conditions under which the results of spontaneous coordination would be “comparable to the results of direction by an omniscient dictator.” ⁶⁸

Hayek returned to this problem in what remains his most influential article, “The Role of Knowledge in Society” (1945). Distinguishing between scientific knowledge of general laws and contextual knowledge of time and place, he suggested that each individual possesses specific knowledge that cannot be adequately aggregated or expressed in statistical form. ⁶⁹ As individuals’ knowledge is fragmentary, the central economic question becomes how to convey to them the knowledge they require to pursue their individual plans. Our knowledge, Hayek argues, is necessarily imperfect. But, more importantly, we do not need to know the reasons for those social and economic dynamics that deeply affect us. Instead, we need an impersonal mechanism—the price mechanism—whose “economy of knowledge” enables us to adjust ourselves to changes of which we remain largely ignorant. ⁷⁰ Not only was the market not designed by anyone, but “the people guided by it usually do not know why they are made to do what they do.” ⁷¹ Price, he argued later, “is not determined by the conscious will of anybody.” ⁷² Competition, like ancient justice, is blind. An economy regulated by the price mechanism is depoliticized, removed from human control, and handed over to a technical mechanism to which individuals must submit; all this, Hayek suggests, is a “marvel.” ⁷³

It could be objected that Hayek’s account of the price mechanism provides a coherent and naturalistic foundation to his theory of spontaneous order, which therefore requires no supplement of faith. ⁷⁴ Yet, even in his 1945 “paean to the price mechanism,” Hayek made clear that a price system is just one formation necessary for social coordination. ⁷⁵ Looking back in 1967, he acknowledged that the problem of how to explain the creation of an overall economic order capable of utilizing dispersed, fragmented knowledge, which he first faced in the 1930s, could not be solved by the “very pure and narrow economic theorist” he was then. ⁷⁶ According to Hayek’s biographer Bruce Caldwell, Hayek’s early attempts to solve the coordination problem stumbled in the face of a gap between his faith in the equilibrating tendency of competitive markets and his inability to use economic theory to demonstrate that tendency, leading him to turn his attention from economics to broader philosophical, legal, and institutional questions. ⁷⁷

It was only by turning to the “age-old concept” of freedom under law, and the philosophical questions it raises, Hayek reflected later, that it was possible to develop a “tolerably clear picture of the nature of the spontaneous order,” which had long preoccupied liberal economists. ⁷⁸ The irony is that his departure from economics was simultaneously a turn to a providential tradition for which, no less than for neoclassical economics, the problem of how order was possible had already been answered.

“Happy Instruments of Providence”

It is in Ferguson’s work that Hayek claims to have discovered a third way between human and design divine, but this depiction of Ferguson falsifies him quite dramatically. Ferguson wrote in a climate in which providence was being adapted to the demands of the natural sciences to enable a third path between necessity and chance. ⁷⁹ He attempted to mediate between his own faith and his Enlightenment sensibility by dispensing with “particular providence” (miraculous interventions) and revelation in favour of an account of “general providence” for which God governed through natural laws. ⁸⁰ In common with the broader climate of “providential materialism”—which re-tooled an older theological idiom of design in order to insist on “the harmony of orders and the visible purpose of things” ⁸¹ —Ferguson saw order as a result of providential design. He shared in the optimistic theology Jacob Viner sees as characteristic of the period of the Enlightenment, for which a benevolent providence would lead humanity to moral perfection. ⁸² At numerous points in his essay on civil society, Ferguson rejects the attribution of natural order to worldly, physical powers: “physical powers, employed in succession, and combined to a salutary purpose,” he writes, “constitute those very proofs of design from which we infer the existence of God.” ⁸³ Nor, for Ferguson, is history simply a human product: men of “real fortitude, integrity and ability,” he writes, are “the happy instruments of providence employed for the good of mankind.” ⁸⁴

Ferguson’s belief in God’s providence is even clearer in his 1798 Institutes of Moral Philosophy. There, he follows Aristotle in distinguishing an efficient cause (“the energy or power producing an effect”) from a final cause (“the end or purpose for which an effect is produced.”) ⁸⁵ In stark contrast to Hayek’s depiction of him as showing that complex phenomena may be purposive without having been designed, Ferguson follows Aquinas in arguing that the very existence of purposiveness (or final causes) is proof of the existence of God. ⁸⁶ Nature presents final causes wherever our knowledge extends, he suggests. “Final causes may be considered the language in which the existence of God is revealed to man.” ⁸⁷ The belief in final causes, Ferguson contends, implies belief in the wisdom of “the author of nature.” ⁸⁸ “The wisdom of God,” he writes, “comprehends the knowledge of every nature, of the mutual relations and dependencies of different natures, and of what is best for each and for the whole.” ⁸⁹ Limited human foresight is the correlate of the wisdom and stewardship of an omniscient God, who orders the blind actions of individuals.

This clarifies why, in the Essay, Ferguson opposes those who attribute the establishment of nations to the designs of great founders and write histories in which “an author and a work, like cause and effect, are perpetually coupled together.” ⁹⁰ Human actions are efficient causes; only God is the first cause. Ferguson’s denigration of ascribing to human design “what no human wisdom could foresee” flows from his belief in the wisdom of God, which grounds his conviction that, left alone, the actions of individuals converge. ⁹¹ For Ferguson, invisibility cannot be dissociated from faith in a guiding hand. Contra-Hayek, Ferguson does not provide a third way between human and supernatural design; he minimizes the place of conscious human planning through an appeal an omniscient divine steward who ordered the world for our benefit. Without such “well-concerted design,” Ferguson believed, human effort would lead only to “disorder, confusion and extreme deformity.” ⁹²

When Foucault turns to Ferguson’s Essay, towards the end of The Birth of Biopolitics, his interpretation is remarkably similar to Hayek’s. Like Hayek, Foucault resists the providential interpretation and depicts Ferguson as offering an account of history in which various historical forms arise “from blind initiatives, egoistic interests, and calculations which individuals only ever see in terms of themselves”? ⁹³ Foucault’s interpretation of Ferguson largely retraces the contours of his previous reading of Hayek’s account of knowledge and invisibility. There, Foucault framed Hayek’s attempt to introduce the rule of law into the economy as the opposite of a plan, which assumes that the “the state decision-maker” is “the universal subject of knowledge in the order of the economy” with a clear overview of the economic process. ⁹⁴

Just as Foucault rules out the providential reading of Ferguson and Smith because it assumed a point from which the entire economy was visible, he depicts Hayek’s account of the rule of law as prohibiting a subject with a “bird’s eye view” of the economic process. ⁹⁵ The key point for both the later neo-liberal and the earlier classical liberals, Foucault argues, is that “the state must be blind to the economic processes.” ⁹⁶ Despite arguing that “neoliberalism is not Adam Smith,” Foucault’s account of knowledge and blindness serves to unify Hayek and his Scottish predecessors. Foucault therefore underplays the political stakes of Hayek’s own affirmation of blindness, which was central to his argument for the superiority of the market as an apparatus capable of depoliticizing social life. ⁹⁷

Similarly, Lisa Hill argues that the theological dimension does not “drastically effect” the explanatory power of Ferguson’s system, which is “effectively comparable” to Hayek’s spontaneous order. ⁹⁸ “So long as the main realm of action is located at the efficient causes level, and as long as those causes issue in positive aggregate outcomes, it qualifies as a proper theory of spontaneous order,” she writes. ⁹⁹ Yet a God who operates only through general providence, or embedded natural laws, remains the cause of the subsequent order, which is therefore hardly “spontaneous.” ¹⁰⁰ While Ferguson’s directing wisdom is immanent rather than transcendent, and action occurs in the realm of efficient causes, not miraculous interventions, this does not alter the fact that Ferguson saw the human actor as “a conscious and a willing instrument in the hands of his Maker for completion of his work.” ¹⁰¹ From such a perspective, the order that arises from such action appears to us as spontaneous only because the mechanism that transforms multiple, discordant individual actions into what Hill terms “positive aggregate outcomes” is not visible to a human gaze. For providential materialism, “the subvisible was the very realm of providential action.” ¹⁰²

Hayek’s own account is free of those final causes, or ends, in which Ferguson saw proof of God. Rejecting the idea of social ends, he argues that the only ends are those individuals establish for themselves. Yet, in pursuing their ends, he contends, new opportunities for exchange arise which are “for society as a whole beneficial.” ¹⁰³ Those who benefit from market transactions can use their resources to benefit others; thus, while “is true that such a system gives to those who already have . . . this is its merit rather than its defect.” ¹⁰⁴ In valorizing the invisibility of this process, and the place of ignorance in the market order, Hayek is starkly at odds with Ferguson.

Specializing in Ignorance

Although Hayek is best known for his account of knowledge, it is ignorance that occupies a central place in his writings on the market, social theory, the rule of law, and even his foray into cognitive psychology. In The Constitution of Liberty, Hayek argued that a lack of attention to the “fundamental fact of man’s unavoidable ignorance” had generated a belief that human institutions could be consciously altered. ¹⁰⁵ If “those intoxicated by the advance of knowledge so often become the enemies of freedom,” he argued, this is because they refuse to accept the limits of human knowledge and believe they can consciously transform social institutions. ¹⁰⁶ To contest such rationalist folly, Hayek turned to Ferguson’s account of the distinction between “the artifices of the beaver, the ant and the bee” and those of “polished nations.” While the latter are often taken to indicate a superior capacity to “rude minds,” Ferguson argued that the artifices of men, like those of animals, are suggested by nature, produced by instinct, directed by diverse circumstances, and achieved through successive improvements without overall direction. Consequently, human affairs are brought to “a state of complication, which the greatest reach of capacity with which human nature was ever adorned, could not have projected.” ¹⁰⁷

Although Hayek draws on this argument to denigrate human knowledge, Ferguson’s reference to ants and bees should be read in light of his critical remarks about Bernard Mandeville’s beehive, in which “private vices” produce “public benefits.” ¹⁰⁸ Referring to the “selfish philosophy,” which treats interest as the sole motive of human action, Ferguson remarks: “such is our opinion of what men are likely to do upon selfish principles, that we think it must have a tendency very dangerous to virtue.” ¹⁰⁹ The key problem with this philosophy, as Ferguson sees it, is its narrow and degrading understanding of self-interest as a concern for one’s property and the “means of mere animal life.” ¹¹⁰ Drawing on a Stoic conception of happiness as universal benevolence, Ferguson charges the “selfish philosophy” with excluding from man’s interest his highest capacities, amongst them his “independence of mind.” ¹¹¹ Whatever the resemblance between human and animal artifice, Ferguson’s Aristotelian contention is that humans differ from other animals in having concerns irreducible to the care of animal life. “Providence,” he writes, “has fitted mankind for higher engagements,” in the midst of which they are most likely to preserve their virtues. ¹¹²

This reveals much larger differences between Ferguson’s and Hayek’s respective accounts of unintended consequences than the latter is prepared to acknowledge. Ferguson made his remarks about the similarities between the artifices of animals and those of polished nations in the context of a discussion of human progress, but he referred specifically to “progress in cultivating the arts of life,” rather than moral or political progress. ¹¹³ Ignorance and blindness are indeed central to Ferguson’s account of the greater productivity enabled by the division of labour. Manufacture flourishes, he argues, as individuals are rendered unthinking mechanical parts in a mechanism that exceeds their understanding. In this sense, Ferguson does provide a source for Hayek’s contention that the “very division of knowledge increases the necessary ignorance of the individual.” ¹¹⁴

For Hayek, however, the increase in specialization is equated with the progress of civilization itself hence ignorance becomes a key marker of civilization. “The more civilized we become, the more relatively ignorant must each individual be of the facts on which the working of his civilization depends,” he writes. ¹¹⁵ Ferguson is decidedly more ambivalent, and he distinguishes those professions susceptible to specialization from political virtues that can only be damaged by it; “to separate the arts which form the citizen and the statesman, the arts of policy and war,” he writes, “is an attempt to dismember the human character, and to destroy those very arts which we mean to improve.” ¹¹⁶ Ferguson was more concerned than either Smith or Hume about the impact of commercial society on civic virtue and the moral basis of personality. ¹¹⁷ Specialization, he believed, dissipated the mental faculties, while commerce encouraged us to focus on our interests, narrowly conceived as the maintenance of animal existence.

In his 1969 doctoral thesis on Ferguson’s Essay, Ronald Hamowy, who edited Hayek’s Constitution of Liberty, writes: “What Ferguson calls for is a regime of security and order, for only under such a state can liberty and virtue flourish.” ¹¹⁸ This account obscures Ferguson’s concerns that the very security of a “polished” society—by enabling humans to enjoy their property without needing to defend it—may lead to a “weakness of the soul” conducive to political slavery. ¹¹⁹ Men who confine their interests to their subsistence, he argues, cannot be entrusted with the conduct of nations, and the servile condition of a polished society is a great threat to liberty. If any people makes it the object of policy to “secure the person and property of the subject, without any regard to his political character,” Ferguson warns, “the constitution may indeed be free, but its members may likewise become unworthy of the freedom they possess and unfit to preserve it.” ¹²⁰

It is just such a regime of security and order, designed solely to secure the person and property of the subject, that Hayek proposes in The Constitution of Liberty. In Law, Legislation and Liberty, he goes further, to advocate “the dethronement of politics.” “Politics,” he writes “has become much too important, much too costly and harmful, absorbing much too much mental energy and material resources.” ¹²¹ In his opposition to politics, Hayek and his neoliberal colleagues sought to extend market relations and subject all of life to the division and specialization Ferguson sought to confine to manufacture. They sought to displace a commitment to the political shaping of human relations, and realize a scenario already anticipated by Ferguson, in which “no engagement remaining on the part of the public, private interest and animal pleasure become the sovereign objects of care.” ¹²² This “dethronement of politics” requires that we renounce the attempt to produce a more just order, and submit to the invisible compulsion of the market.

Submissive Subjects

In The Road to Serfdom, Hayek famously bemoaned the “great reversal” in which Western culture replaced the rule of impersonal forces with conscious planning. In the aftermath of World War II, he diagnosed a generalized “economophobia,” which refuses to submit to incomprehensible market forces. ¹²³ “It was men’s submission to the impersonal forces of the market,” he argued, that was the necessary foundation of Western civilization. ¹²⁴ William C. Lehmann has suggested that the inevitability of order is an essential feature of a spontaneous order theory. ¹²⁵ Yet, there is no inevitability to Hayek’s account; without a providential God to secure it, the spontaneous order can always be disrupted by the interference of social planners or popular political action, and the evolutionary process can be reversed by those nostalgic for the egalitarian morality of the “small band.” It is because order is not inevitable that what Hayek terms submission to “the anonymous and seemingly irrational forces of society” is necessary. ¹²⁶

Later in life, Hayek stressed that a spontaneous order results from individuals obeying rules that make their conduct regular and predictable. While these rules themselves “evolve” through a process of selection, he nonetheless suggested that it is at least possible that the rules on which a spontaneous order rests may be designed. ¹²⁷ Rather than a doctrine of laissez-faire, Hayekian neoliberalism is concerned with fine-tuning the rules conducive to a functioning market. ¹²⁸ Rather than precluding all constructivism, then, Hayek sees a role for intentionally altering laws, but only to the extent that such deliberate design is necessary to preclude “interference” with the market, and thereby secure submission to the overall social order. ¹²⁹

While this concern to bolster an abstract market order motivated Hayek’s forays into jurisprudence, he was concerned as much with tacit rules and moral sanction as with the rule of law. While legal rules could conceivably be altered in the interests of securing order, Hayek suggests that most rules of custom and morality will be “spontaneous growths.” ¹³⁰ The rules on which a spontaneous order rests “exist and operate without being explicitly known to those who obey them,” and are not reducible to positive laws. ¹³¹ While Hayek stressed that government was necessary to secure obedience to law, the spontaneous order relies as much on the inculcation of a submissive subjective disposition. The Hayekian subject must follow rules without enquiring as to the consequences of doing so and display “a readiness to adjust himself to changes which may profoundly affect his fortunes and opportunities and the causes of which may be altogether unintelligible to him.” ¹³² In current terms—terms which themselves owe much to the later popularization of Hayek’s thought—economic subjects must be both flexible and resilient. ¹³³

While Foucault depicts political economy as a critique of governmental reason, Hayek’s subjects are not equipped with the critical attitude that Foucault describes as “the art of voluntary insubordination.” ¹³⁴ The “true individualism” Hayek upholds is conformist, and contrasted with the German individualism—associated with Humboldt and Goethe and inherited by J. S. Mill—that fosters a strong and distinctive personality. This latter individualism, Hayek argues, may “prove a grave obstacle to the smooth working on an individualistic system.” ¹³⁵ Hayek finds precursors to his preferred individualism in Ferguson, Smith, Tucker, and Burke, in whom he finds respect for tradition and humility before impersonal forces. In this too he distorts the position of Ferguson, who, as J.G.A. Pocock has noted, was republican insomuch as he believed that intense individuality and an independent citizenry must be maintained if a commercial society is not to succumb to despotism. ¹³⁶

In his famous 1960 essay “Why I Am Not a Conservative,” Hayek argues that the liberal, unlike the conservative, is willing to accept human ignorance without seeking recourse in supernatural sources of knowledge where reason fails. Although this seems an anti-religious position, faith is nonetheless central to Hayek’s liberal attitude. The liberal, he writes, assumes that “the self-regulating force of the market will somehow bring about the required adjustments to new conditions, although no-one can foretell how they will do this in a particular instance.” ¹³⁷ The content of this faith (whether in the self-regulating market or benevolent providence) is less important than its role in inculcating the requisite submission. It matters not, Hayek argued earlier, that people of the past submitted for reasons we now regard as superstitious: “from a religious spirit of humility or an exaggerated respect for the crude teachings of the early economists.” ¹³⁸ It is far more difficult to rationally comprehend the need to submit to forces we cannot understand than “to do so out of the humble awe which religion, or even respect for the doctrines of economics, did inspire.” ¹³⁹ Religious belief is advantageous in that it cultivates the willingness to submit, which is constantly threatened by rationalism.

Hayek returned to this theme in a 1952 essay, in which he acknowledges that submission has historically been achieved by religions, traditions, and superstitions “which made man submit to those forces by an appeal to his emotions rather than to his reason.” ¹⁴⁰ Hayek made clear this was preferable to the preoccupation with reason he saw in his own time. “The most dangerous state in the growth of civilization,” he writes, “may well be that in which man has come to regard all these beliefs as superstitions and refuses to accept or submit to anything which he does not rationally understand.” ¹⁴¹ Through this refusal, Hayek argues, the rationalist may become the “destroyer of civilization” and we will be “thrown back into barbarism.” ¹⁴² Distinguishing “true liberalism,” which is at ease with religion, from the rationalism of the French revolution, Hayek deplores “the militant and essentially illiberal antireligionism which animated so much of nineteenth-century Continental liberalism.” ¹⁴³ Unless the “breach between true liberalism and religious convictions can be healed,” he stressed in his opening address to the inaugural 1947 meeting of the neoliberal Mont Pèlerin Society, “there is no hope for a revival of liberal forces.” ¹⁴⁴

When asked about his own views of religion in 1979, Hayek responded: “I’ve had never publicly argued against religion, because I agree most people need it.” It is probably only through religion that essential traditions will be maintained, he explained. ¹⁴⁵ Hayek’s argument for religion was pragmatic, and he was himself skeptical of the truth-value of religious claims. ¹⁴⁶ He believed “most people needed it” because religion instills the humility and willingness to “bow to forces and obey principles which we cannot hope fully to understand, yet on which the advance and even the preservation of civilization depends.” ¹⁴⁷ For Hayek himself, as Emma Rothschild notes, “the invisibility or incalculability of economic order is itself an object of reverence.” ¹⁴⁸ In Hayek’s work, the social mechanism may no longer be guided by the invisible hand of God’s providence, but what it requires is Calvinist in its severity: submission to incomprehensible forces and the acceptance of our station in life as fate.

Invisible Compulsion

What, then, are the stakes of this trope of invisibility? In turning to Ferguson’s account of civil society, Foucault gestures to the prominence of the theme in his own time. The language of civil society, along with the neoliberal belief that the market resists conscious intervention, came to prominence in the 1970s in the context of the crisis of Marxism and the renunciation of its commitment to making visible the structures of exploitation of capitalist society. Since that time, as Peter Hallward notes, Simone de Beauvoir’s complaint of the late 1940s that “we no longer hope to help make history, we are resigned to submitting to it” has been “revalorized as celebration” by a growing consensus. ¹⁴⁹ Central to the consensus was the embrace of “civil society,” defined as a realm of voluntary association in opposition to the coercive realm of the state, and the recasting of social transparency as totalitarian. ¹⁵⁰ It is in this context that Hamowy situates the rising prestige of Hayek’s thought. ¹⁵¹ In a veiled critique of this political current, Foucault suggests a need to be “very prudent” regarding the depiction of civil society as a reality “which revolts against and is outside government or the state.” ¹⁵² Civil society, he argues, is a liberal technology of government; it is a “transactional reality” that emerges at the point where governors and governed meet. ¹⁵³ The language of civil society sensitized people in the West to the violence of the state, while it simultaneously obscured the violence that underpins civil society itself. ¹⁵⁴ The danger of this, as Ellen Meiksins-Wood argues, “lies in the fact that the totalizing logic and the coercive power of capitalism becomes invisible.” ¹⁵⁵

Hayek’s own epistemological claims about invisibility and limited foresight are indissociable from political claims about the good society as a capitalist society. The rationalism that refuses to submit to incomprehensible market forces is erroneous, he argues, because it fails to see that “the only alternative to submission to the impersonal and seemingly irrational forces of the market is submission to an equally uncontrollable and therefore arbitrary power of other men.” ¹⁵⁶ This forced choice between blind submission to impersonal forces and submission to the arbitrary power of men animates Hayek’s political philosophy. Rejecting theories of positive freedom for confusing freedom with power, he stresses that “‘freedom’ refers solely to a relation of men to other men, and the only infringement on it is coercion by men.” ¹⁵⁷ This account renders invisible the violence of capitalist social relations, which, as Wood notes, have “given private property and its possessors a command over people and their daily lives . . . which many an old tyrannical state would have envied.” ¹⁵⁸ For Hayek, an action is coercive only when it attempts to bend a particular person to a foreign will. Thus, while even peaceful union strike pickets are “severely coercive” and should be outlawed, ¹⁵⁹ “the powers of a Henry Ford” are not coercive, as Ford, or so Hayek claims, does not attempt to coerce particular individuals. ¹⁶⁰ Hayek’s thought renders invisible the direct violence and discipline that accompanies the imposition of capitalist labour, both inside and outside the workplace. Moreover, it obscures the fundamental characteristic of capitalism, in which “individuals,” as Karl Marx puts it, “are now ruled by abstractions” rather than by men—albeit abstractions, which are, in Marx’s words, “the theoretical expression of those material relations which are their lord and master.” ¹⁶¹

Hayek stressed that the “abstract society”—a term he borrowed from Karl Popper—requires submission to imperatives we cannot hope to understand. Despite this stress on unquestioning submission, he contends that rule by abstractions is not coercive. ¹⁶² I am not coerced, he argues, if the threat of starvation “impels me to accept a distasteful job at a very low wage, even if I am ‘at the mercy’ of the only man willing to employ me.” ¹⁶³ For Hayek, the “dull compulsion of economic relations” that secures my submission, to borrow another of Marx’s phrases, cannot be considered coercive, and nor should political actors attempt to ameliorate its effects. The proper response to the inequality and compulsion of the capitalist economy is a form of submission modelled on religious faith.

Conclusion

In highlighting the place of submission in Hayek’s account of the market, I have sought to show that Hayekian liberalism is not simply a critique of governmental reason. Its intent is not merely to disqualify the “great state decision-maker,” as Foucault has suggested, but to depoliticize social life and cordon off market relations and inherited inequalities from political challenge. ¹⁶⁴ The claim that the market order is invisible serves to disqualify not only welfarist state policies, from progressive taxation to subsidies on basic food-stuffs, but any collective political action that aims to establish and work towards collectively determined ends. We should therefore be very wary of assuming that a Hayekian account of spontaneous order and disseminated knowledge can be recuperated for a left or progressive politics that aims to open up spaces for collective political participation. Despite the superficial resemblances between Hayek’s position and a republican emphasis on independence from the imposition of another’s will, in Hayek’s account of spontaneous order public power is restrained while private domination is naturalized and sanctified. ¹⁶⁵ Thus, Hayek must dispense with the active citizenry that Ferguson saw as a bulwark against the corrupting influence of commerce, and replace it submissive individuals who resign themselves to the compulsion of the market.

As long as the act that placed me in a “predicament” of poverty or unemployment does not aim to make me serve another person’s ends, Hayek argues, “its effect on my freedom is not different from that of any natural calamity—a fire or a flood that destroys my house or an accident that harms my health.” ¹⁶⁶ Yet, unemployment and starvation, as Hayek well knew, are not natural calamities. Indeed, if they were, there would be no need for faith or submission: natural calamities occur, as is only too apparent in an age of climate change, whether or not we believe in them. Laws of nature do not require our submission. Hayek must counsel submission because the ever-present alternative is that political actors will contest the imperatives of the market, and seek to ameliorate the inequality, poverty and “unmerited disappointments” it brings about. ¹⁶⁷ Hayek’s spontaneous order is not the product of a designing intelligence, but it nonetheless demands our faith. Yet, in his stress on the necessity of submission, and the role of religion in inculcating it, we can discern an anxiety that political actors will challenge the reification of economic relations and demand that the economy be made to serve human ends.