Using Reason to Understand the Abuse and Decline of Reason

Hayek attempted to answer this question in what was an unfinished project that he had been writing in the late 1930s through the 1950s. Hayek expressed his enthusiasm for a new book that would not only investigate the “history of the influence of scientific and technological development on social thought and policy (to be called The Abuse and Decline of Reason)” (quoted from Hayek 2010, p. 312), but also “the fundamental principles of the social development of the last hundred years (from Saint-Simon to Hitler)” (quoted in Caldwell 2010 (2018), p. 1).

Though this greater project was never realized as Hayek had intended, readers are now fortunate to have a reconstruction of what Hayek had completed reassembled as Studies on the Abuse and Decline of Reason: Text and Documents, edited by Bruce Caldwell as part of The Collected Works of F.A. Hayek (Volume 13). Special credit must be given to Caldwell not only for his masterful introduction to this volume, but also the archival material provided in the appendix and the supplementary footnotes that provide further context to the text.

With the aid of Caldwell’s editorship, I will first briefly summarize Hayek’s argument before, secondly, situating the argument not only in the immediate historical context within which Hayek was writing, but also (and lastly) turning to the broader, and more fundamental, intellectual basis of Hayek’s argument.

Hayek’s Argument

Hayek’s fundamental motivation behind The Abuse and Decline of Reason project was to explain how human reason used in the natural sciences, as evidenced by the amazing scientific and technological advances of the 18th and 19th century, would later become the basis for hubris among social scientists. Such hubris rested on the belief that human beings could deliberately or consciously create economic, political, or social changes as a direct outcome of their own reasoning.

The “the fatal conceit,” as Hayek would later put it, of this intellectual attitude is based on an “intellectual somersault” (Hayek 2018, p. 148) among social scientists that Hayek refers to as scientism, the misconceived application by social scientists of the methods of the natural sciences to understanding the nature and causes of social order. According to Hayek, scientism is characterized by the “blind transfer of the striving for quantitative measurements to a field in which the specific conditions are not present which give it its basic importance in the natural sciences” without taking into account the plans or purposes attached to human action (2018, p. 114).

In order to understand what Hayek means by scientism, we must first understand the nature of social science in the first place. Any social science, including economic theory, attempts to explain the existence of a particular phenomenon through generalizable and systematic chains of cause and effect that is compositive of, but not directly reducible to, its ultimate source: the universal tendency of individuals to utilize the most effective means to achieve their ends. For example, money emerges as a generally accepted means of exchange for the purpose of avoiding a double coincidence of wants. But the source of that knowledge, according to Hayek, requires humility, not conceit. The explanation of social phenomena requires the social scientist to be concerned with explaining human action based on the appropriate “facts” of the social sciences: what people believe and think.

As Hayek states, “it is probably no exaggeration to say that every important advance in economic theory during the last hundred years was a further step in the consistent application of subjectivism. That the objects of economic activity cannot be defined in objective terms but only with reference to a human purpose goes without saying. Neither a ‘commodity’ or an ‘economic good,’ nor ‘food’ or ‘money,’ can be defined in physical terms but only in terms of views people hold about things” (Hayek 2018, p. 94).

Hayek’s emphasis on methodological subjectivism, however, is not synonymous with methodological behaviorism, or the notion that social science can be directly reduced to quantifiable, physical explanations of cause and effect. “It is a mistake,” Hayek writes, “to which careless expressions by social scientists often give countenance, to believe that their aim is to explain conscious action. This, if it can be done at all, is a different task, the task of psychology. It is only insofar as some sort of order arises as a result of individual action but without being designed by any individual that a problem is raised which demands a theoretical explanation” (emphasis in original; Hayek 2018, p. 103).

Though the purpose of all social sciences is to explain spontaneous order in terms of systematic chains of cause and effect, the source of such explanation in the social sciences is human reason, or the purposes and plans of human beings. However, by replacing the method of the social sciences with that of the natural sciences, the irony of scientism is that it dismisses human reason as an “unscientific” source for explaining the spontaneous order of society, while embracing human reason as the scientific basis for the deliberate organization of society.

To purge such subjective and qualitative knowledge as unscientific not only purges economic science of its “data,” but also purges scientists of the very theoretical knowledge upon which social order is understood. This leaves us with a notion of science that explains social outcomes only in terms of direct relationships of cause and effect that can be either quantified, deliberately determined by human reason, or otherwise explained by historical laws of nature.

The intellectual origins of socialism can thus be traced back to the narrowing of what the term science meant and how the practice of science came to be understood.

However, the tragedy of socialism that emerged in the 20th century cannot be explained by scientism alone nor by malevolent ends. “As Hayek always emphasized,” Caldwell writes, “both he and his opponents typically see similar ends and differ principally on the means that they think are best to achieve them” (Caldwell 2010 (2018), p. 40).

Moreover, Hayek’s critique is not directed against the scientist “in the special field in which he is competent, but against the application of his mental habits in fields where he is not competent” (Hayek 2018, p. 166). Rather, the tragic results of totalitarianism emerged from the application of central planning as a means to achieve a more prosperous and just society among the poorest and least advantaged.

But, central planning, as “fully recognized by its advocates” from “Saint-Simon to Marx to Lenin” (Hayek 2018, p. 161, fn. 8), was “nothing but such an application of engineering principles to the whole of society based on the assumption that such a complete concentration of all relevant knowledge is possible” (Hayek 2018, p. 161). Thus, the tragedy of socialism in the 20th century was defined by the unity of both statism and scientism, the use of state power in an effort to deliberately organize society as if it were an engineering problem (i.e., the allocation of given resources to achieve a single end) rather than a coordination problem (i.e., the discovery of the most appropriate means among an infinite set of unknown ends).

Historical Context

The immediate historical context of Hayek’s project, and why it was never completed as intended, can be understood by comparing Hayek’s originally intended organization of the project with the chronological order in which pieces of the project were published. Both the manner in which Caldwell has organized this volume and the correspondence between Hayek and Fritz Machlup, provided in the appendix, explain what Hayek had in mind. As clearly stated in his correspondence with Machlup, dated October 19, 1941, Hayek’s project was motivated by the immediate threats to Western civilization: “If one cannot fight the Nazis one ought at least to fight the ideas which produce Naziism” (quoted in Hayek 2018, p. 319).

In particular, Hayek wanted to disabuse individuals of the idea, popular at the time among British intellectuals, that Naziism is a reactionary, capitalist movement. This immediate motivation was intended to be the tail end of this broader project on The Abuse and Decline of Reason, but ended up being the initial pieces published, first as a pamphlet, Freedom and the Economic System (1939)—and later with greater exposition as The Road to Serfdom (1944).

Yet even after revelation of the horrors that had transpired in Nazi Germany and Stalinist Russia, intellectuals were not disabused of the hopes that central planning promised. Why not? As historian Tony Judt states in Postwar: A History of Europe Since 1945, there “was a great faith in the ability (and not just the duty) of government to solve large-scale problems by mobilizing and directing people and resources to collectively useful ends” (Judt 2005, p. 68). However, the fact that intellectuals across the political spectrum of his time could agree on the primacy of central planning was Hayek’s entire point (Caldwell 2010 (2018), p. 29), the fundamental intellectual origins of which Hayek wished to uncover in The Abuse and Decline of Reason project.

Intellectual Basis

The scientific justification for both the positivism and the socialism of Hayek’s time are descended from a common intellectual origin going back to Henri de Saint-Simon. This intellectual origin can be understood as the attempt to purge the social sciences of its explanandum, namely how the subjective knowledge that resides in the minds of individuals gives rise to the spontaneous formation and evolution of institutions as an indirect outcome of their own reasoning. Although the word socialism had been used in Italian by Giacomo Giuliani as early as 1803 (Hayek 2018, p. 229, fn. 57), according to Hayek, the positivistic and statist components of “scientific socialism” can be traced back to Saint-Simon’s Introducion aux travaux scientifiques du dix-neuvième siècle (2 vols, 1807-1808), which “combines, for the first time, nearly all the characteristics of the modern scientistic organizer.

The enthusiasm for physicism (it is now called physicalism) and of ‘physical language,’ the attempt to ‘unify science’ and to make it the basis of morals, the contempt for all ‘theological,’ that is anthropomorphic, reasoning, the desire to organize the work of others, particularly by editing a great encyclopedia, and the wish to plan life in general on scientific lines are all present. One could sometimes believe that one is reading a contemporary work of an H. G. Wells, a Lewis Mumford, or an Otto Neurath.

Nor is the complaint missing about the intellectual crisis, the moral chaos, which must be overcome by the imposition of a new scientific creed” (Hayek 2018, p. 195). As Hayek further explains, Saint-Simon’s work “is the beginning of both modern positivism and modern socialism, which, thus, both began as definitely reactionary and authoritarian movements” (2018, p. 195). Thus, we can trace the intellectual trajectory of Karl Marx back to Comte and Hegel and ultimately to Saint-Simon.

Although Hayek’s project was ultimately historical in nature, it cannot be understood without acknowledging that the ultimate source of modern socialism can be traced back to its very first casualty: the intellectual humility taught by the “compositive method” of economic science.

Nobel Peace Prize Laureate Christian Lange is quoted as saying that technology is a useful servant, but a dangerous master. If Hayek’s Studies on the Abuse and Decline of Reason can teach us anything, human reason is no different: it can be used to understand its own limitations, from which the rules that govern a free civilization can emerge to allow individuals to cope with such ignorance in pursuit of their own ends. In this sense, human reason can be a useful servant. Without such humility, however, “the individual whose reason is not sufficient to teach him those limitations of the powers of conscious reason, and who despises all the institutions and customs which have not been consciously designed, would thus become the destroyer of the civilization built upon them” (Hayek 2018, p. 154). In this regard, the conscious use of reason can become a dangerous master.

References

Caldwell, Bruce. 2010 (2018). “Introduction.” In The Collected Works of F.A. Hayek, Volume 13: Studies on the Abuse and Decline of Reason, edited by Bruce Caldwell (pp. 1–45). Carmel: Liberty Fund.

Judt, Tony. 2005. Postwar: A History of Europe Since 1945. New York: The Penguin Press.

Hayek, F.A. 1939. Freedom and the Economic System (Public Policy Pamphlet, No. 29). Chicago: University of Chicago Press.

Hayek, F.A. 1944. The Road to Serfdom. Chicago: University of Chicago Press.

Hayek, F.A. 2018. The Collected Works of F.A. Hayek, Volume 13: Studies on the Abuse and Decline of Reason, edited by Bruce Caldwell. Indianapolis: Liberty Fund.