The Fatal Conceit

Hayek’s `The Fatal Conceit’ – 1988

Friedrich Hayek – 1899 to 1992 was one among the several political and philosophers of the 20th century. Some of his most famous works like `The Road to Serfdom’, published in 1944 was an anti-socialist classic while his later works -`The Constitution of Liberty’ and `Law, Legislation and Liberty are considered permanent contributions to political philosophy. His final work `The Fatal Conceit’, published in 1988, seems to be something of a mystery.

The amount of involvement of the work’s editor, William Warren Barley is unknown, which has worried several scholars. Something that could be incorrect in the published version was brought to the notice by Jeffrey Friedman, editor of Critical Review in 1998. Friedman, in 1986, had written that `he had served as research assistant to W.W. Bartley, the editor of the book and the products of Bartley’s efforts were allegedly reviewed by Hayek.

 The Fatal Conceit – The Errors of Socialism is a non-fiction book written by Friedrich Hayek and edited by William Warren Bartley. The title of the book is related to a passage from Adam Smith in his `Theory of Moral Sentiments’. The attempt of the book is to contradict all forms of Socialism by indicating that socialist theories besides being logically incorrect, the premises they used in forming their arguments are also improper.

Birth of Civilization – Start of Societal Tradition

According to Hayek, the birth of civilization is because of the start of societal tradition with importance on private property which leads to expansion, trade and ultimately the modern capitalist system which is known as the extended order. He debates that this exhibits a key flaw in the socialist though that holds only what is purposely designed to be most efficient.

However in Hayek’s terminology of `socialist’, economies cannot be efficient due to the dispersed knowledge needed in modern economy. Moreover since modern civilization and other customs and traditions leading to current order, are needed for continuity, any fundamental change to the system trying to control it is destined to be a failure.

This is due to the impossibility or unsustainability in modern civilization and price signals are the only means in enabling each economic decision maker in communicating implied knowledge or dispersed knowledge to them for the purpose of solving the economic calculation problem. The Fatal Conceit has a unhappy history and Hayek has considered it as the great work of his last years of his career. It grew out of `The Three Sources of Human Value, the epilogue of `Law, Legislation and Liberty which was published in 1979.

The Three Sources of Human Values 

In May 1978, when Hayek was 79 years old, `The Three Sources of Human Values’, was initially given as a lecture at London School of Economics. Here, Hayek tried to convey the general direction wherein his ideas were moving towards the end of his career.

During his lecture he stressed the idea that there are three sources of human values and institutions. Besides this, there are subconscious sources that surface through group selection, in addition to genetic and intellectual sources.
These sources are not sufficiently regarded as either rational or innate. On the contrary, these are rules of human conduct which may be displayed due to the success of the human groups which practice them. Improved rules may result in more efficient human communities where the latter is defined as the communities that are most productive, materially.