Organizations and Markets

Pomo Periscope XII: Was Hayek a Pomo?

5 June 2007 at 9:14 am Nicolai Foss 2 comments

| Nicolai Foss |

It is well known that some Austro-libertarians have had a love-hate relation with the Left. The late Murray Rothbard quite actively flirted with the rather extreme Left for a substantial period in the 1960s (for an amusing historical account, see this). From the 1980s one manifestation of this perhaps latent Austrian tendency has been a flirtation with post-modernist currents that usually have a strong leaning to the left (for Rothbard’s hilarious take on this, see here).

As a possible example, here is Austrian Steven Horwitz writing in Reason on Ted Burczak’s Socialism After Hayek:

Burczak offers a fascinating reading of Hayek that lines up nicely with the work of many younger Austrian economists, including myself, the aforementioned Peter Boettke, and others associated with the late Don Lavoie and George Mason University. Burczak emphasizes that Hayek’s economics is distinctly different from the mainstream of the discipline in that it takes seriously the fact that human beings are, to some degree, socially constructed. . . . Combined with Hayek’s conception of knowledge as fragmentary, uncertain, and often tacit, this understanding produces a postmodern view of the market that is, in Burczak’s words, “a type of dialogical process that creates an evolving set of inter-subjective agreements and disagreements about efficient methods to produce ever-changing desirable goods.” . . . Just as scientific processes gradually enhance our knowledge even if at any given moment they cannot claim to possess Truth, markets continually enhance value by moving goods and services to more highly desired uses but at no point can be said to have created Value, in the final, finished sense that equilibrium-bound socialists like Lange thought possible.

I think this is a puzzling reading of Hayek.

• Hayek’s understanding of the market process in actuality seems far from the “dialogical process” understanding. To be sure, he does talk about the market in metaphorical terms that smack of “dialogue” (“a process of formation of opinion”, the “telecommunications system of prices” and so), but these are exactly that: Metaphor. In fact, it is arguable that by operating with an informational minimum — a main point in Hayek’s famed 1945 paper — markets exactly avoid “dialogue.”
• I know there is a distinction in pomo thought between truth and Truth — but what are we to do with a distinction between “value” and “Value” (“in the final, finished sense that equilibrium-bound socialists like Lange thought possible”)? What does it mean? Can it be found in Hayek’s work?
• Hayek was a Popperian. In which way is Horwicz’ account different from saying that market actors form fallible entrepreneurial conjectures that may be falsified under the impact of testing in the market (á la David Harper’s work), and that market selection determine entrepreneurial success? Popper’s realism and evolutionary epistemology seem to be more congenial philosophical underpinnings for market process theory than pomo thought.

No, much may perhaps be said of Hayek, but pomo he wasn’t.

HT to the Austrian Economists for the pointer.

(For earlier entries in our ongoing Pomo Periscope feuilleton see here.)

Entry filed under: - Foss -, Austrian Economics, Pomo Periscope.