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James Buchanan interviews Friedrich A. Hayek (Part I)


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The dynamic development of laws interacting with legislation and politicians is discussed by Friedrich Hayek in this interview with James Buchanan. Examining the concept of social justice, the evolutionary development of culture, and the philosophy of science, especially that of Michael Polanyi, Hayek highlights key points of his intellectual development and interactions with other scholars. Furthermore, he laments the decline of interdisciplinary studies in graduate schools, which he considers a critical component of his education.


Interview with Friedrich A. Hayek by James Buchanan
Thanks to Pacific Academy Advanced Studies for permission to distribute this program.

Digitized by: New Media -  UFM.
Digitization: Mario Estrada, Jorge Samayoa; content analysis: Alex Weller; content revisers: Daphne Ortiz, Jennifer Keller; publication: Rebeca Zuñiga

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BUCHANAN: Professor Hayek, I appreciate the opportunity to talk to you here today.  We had a chat last night, but I appreciate the opportunity to have a chance to talk to you again.  They told me I was supposed to talk to you pretty largely on, or at least to start on, the subject of political theory.  So I'd like to start off with what is a very general topic, if we might.  In his book published in April, in England, Lord Hailsham [Quintin Hogg] argued that one of the problems that we face in Western nations these days is that we have been suffering under this delusion that somehow, so long as governments were in fact responsible electorally to the people, we didn't need to worry about putting limits on government.  
Now, at a much more profound level, you argue that point also in the third volume of Law, Legislation and Liberty.  I think it would be useful to start off this discussion if you would just talk about that a little.  Why did we get involved in this sort of delusion--and I think it is a delusion--to the effect that somehow we didn't need to worry about limiting government if in fact we could make the politicians responsible? 
HAYEK: Well, I've been very much puzzled by this, but I think I have discovered the origin of this.  It begins with the utilitarians, with [Jeremy] Bentham and particularly James Mill, who had this conception that once it was a majority who controlled government, no other restriction on government was any longer possible.  It comes out quite clearly in James Mill, and later in John Stuart Mill, who once said, "The will of the people needs no control if it's the people who decide."  Now there, of course, is a complete confusion.  The whole history of constitutionalism till then was a restraint on government, not by confining it to particular issues but by limiting the form in which government could interfere.  
The conception was still very large then that coercion could be used only in the enforcement of general rules which applied equally to all, and the government had no powers of discriminatory assistance or prevention of particular people.  Now, the dreadful thing about the forgetting of this is that it's, of course, no longer the will of the majority, or the opinion of the majority, I prefer to say, which determines what the government does, but the government is forced to satisfy all kinds of special interests in order to build up a majority.  It's as a process.  
There's not a majority which agrees, but the problem of building up a majority by satisfying particular groups.  So I feel that a modern kind of democracy, which I call unlimited democracy, is probably more subject to the influence of special interests than any former form of government was.  Even a dictator can say no, but this kind of government cannot say no to any splinter group which it needs to be a majority. 
BUCHANAN: You said you think that in Britain this sort of view started with the utilitarians.  I'm wondering whether--and this is a more general question I've been planning to ask you anyway after reading your third volume--it is not true that perhaps this attitude, or this delusion, was more widespread in Britain than in the United States?  It does seem to me that sort of the notion of constitutional limits, separation of powers, was more pervasive in the United States, with our Founding Fathers, and later in the--
HAYEK: Well, among the Founding Fathers, there were some who very clearly saw the very point I am making.  And I believe they did try, by the design of the American Constitution, to achieve a limit on their powers.  After all, the one phrase in the American Constitution, or rather in the First Amendment, which I think most highly of is the phrase, "Congress shall make no law..."  Now, that's unique, but unfortunately [it goes] only to a particular point.  
I think the phrase ought to read, "Congress should make no law authorizing government to take any discriminatory measures of coercion."  I think this would make all the other rights unnecessary and create the sort of conditions which I want to see. 
BUCHANAN: I think that's interesting that you refer to that, because now we seem to have got ourselves in a position where the more laws Congress makes, that's the way we measure its productivity.  But let me go on a little bit to raise the question that this implies.  And that is-- I certainly have worked in this area, and you have too, somehow on the faith that we can impose some constitutional limits on government.  But are we not really-- Isn't that sort of a blind faith?  Don't we have to maybe come back to the Hobbsian view that either we have anarchy--and I think you and I would agree that anarchy wouldn't work--or else we have Leviathan?  And how do you base your faith that we can impose constitutional limits? 
HAYEK: Oh, on the fact, in which I profoundly believe, that in the long run, things are being governed by opinion, and opinion just has been misled.  It was the whole group of opinion makers, both the thinkers and what's now called the media--the secondhand dealers in ideas--who had become convinced that dependence on majority view was a sufficient limitation of governmental powers.  I think it's now almost universally recognized that it is not.  Now, we must hope that an intellectual situation like the one which existed in the United States at the time the Constitution was written could again be created. 
BUCHANAN: But can we have the opportunity to do that?  That's the thing. 
HAYEK: Yes.  I believe there is a chance of making the intellectuals proud of seeing through the delusions of the past.  That is my present ambition, you know.  It's largely concerned with socialism, but of course socialism and unlimited democracy come very much to the same thing.  And I believe--at least I have the illusion--that you can put things in a way in which the intellectuals will be ashamed to believe in what their fathers believed. 
BUCHANAN: Well, you made the point--I thought it was a very interesting point--that now the young people are rediscovering the principles of freedom.  And I think that is a very interesting point.  I mean, we can hope that, but I'm perhaps not as optimistic as you are, that ideas will ultimately matter.  It's partly just the general point that I don't quite see how they can be transmitted and have much effect, and then there's partly this question about how can we get ourselves in a situation where it would be equivalent to the situation of the Founding Fathers.  Will it come through an ordinary-- 
HAYEK: I could answer it only indirectly.  I think we have to be concerned in our argument not on current influence but in creating the opinions which will make politically possible what now is not politically possible.  It takes something like a generation before ideas conceived by philosophers or abstract thinkers take effect.  A Montesquieu or an Adam Smith began to operate on public opinion after a generation, or even more, and that's why I always say I think if the politicians do not destroy the world in the next twenty years, which is very likely, I think there's hope for afterwards.  
But we have to work for this distant date, which I shan't see to happen.  Perhaps twenty years is too short.  But one thing which gives me confidence is, having watched the United States for fifty years, you seem to change your opinion fundamentally every ten. 
BUCHANAN: Well, I think there are some encouraging signs, but I think I see-- 
HAYEK: And you don't always change in the right direction. 
BUCHANAN: --I see them slightly differently from you, and let me just try out my own view of things a little bit here.  It seems to me that we in the United States have really never had much understanding of sort of the principles of markets.  Some of the work by Jonathan Hughes and others has convinced me that the sort of interventionist-collectivist-socialist thrust has always been present, and that really the only reason we had burgeoning markets and rapid growth and so forth was largely because the government was decentralized, federalized, and so forth, with migration, frontier, and all of that.  
And I have a good deal of skepticism about the sort of principles of freedom being adopted by enough people to do much.  On the other hand, where I see the encouragement, or the encouraging signs, is that we have lost faith in the collectivist alternative.  It does seem to me that in the last twenty years in particular, people don't have faith in the alternative.  The market, as you and I know, will always emerge if you leave it alone.  And I think that's an encouraging aspect. 
HAYEK: I think people are quite likely to agree on general rules which restrict government, without quite knowing what it implies in practice.  And then I think if that is made a constitutional rule, they will probably observe it.  You can never expect the majority of the people to regain their belief in the market as such.  But I think you can expect that they will come to dislike government interference.  If you can make it clear that there's a difference between government holding the ring and enforcing certain rules, and government taking specific measures for the benefit of particular people-- That's what the people at large do not understand.  If you talk to an ordinary person, he'll say somebody must lay down the law, as if that involved all the other things.  
I think that distinction must be made clear, because not everything Congress resolves is a law.  In fact, as you know, I'm joking about the fact that we now do not call the legislature "legislature" because it gives laws, but we call everything a law which is resolved by the legislature!  The name "law" derives from "legislature," not the other way around. 
BUCHANAN: Well, this relates to a question, though, and again it creates the problem of whether or not we can get things changed.  It's something that people don't talk about now, but a century ago John Stuart Mill was talking about it: namely, the franchise.  Now, it seems to me that we've got ourselves in--again, it goes back to the delusion of democracy, in a way--but we've got ourselves into a situation where people who are direct recipients of government largesse, government transfers, are given the franchise; people who work directly for government are given the franchise; and we wouldn't question them not having it.  
Yet, to me, there's no more overt conflict of interest than the franchise [given] to those groups.  Do you agree with me?  I don't believe you discussed that in your book. 
HAYEK: No, I think in general the question of the franchise is what powers they can confer to the people they elect.  As long as you elect a single, omnipotent legislature, of course there is no way of preventing the people from abusing that power without the legislature's being forced to make so many concessions to particular groups.  I see no other solution than my scheme of dividing proper legislation from a governmental assembly, which is under the laws laid down by the first.  After all, such a newfangled conception gradually spreads and begins to be understood.  
And, after all, in a sense, the conception of democracy was an artifact which captured public opinion after it had been a speculation of the philosophers.  Why shouldn't--under a proper heading--the need for restoring the rule of law become an equally effective catchword, once people become aware of the essential arbitrariness of the present government. 
BUCHANAN: Well, how would you see this coming about, though?  Would you see us somehow getting in a position where we call a new constitutional convention and then set up this second body with separate powers?  Or how would you see this happening? 
HAYEK: I think by several experiments in new amendments in the right direction, which gradually prove to be beneficial, but not enough, until people feel constrained to reconstruct the whole thing. 
BUCHANAN: In this connection, you have long been-- I remember this comment at Wabash we were talking about.  You were at that time giving some lectures that later became The Constitution of Liberty, I think, and you were talking about proportional and progressive taxation.  And at that time, at least, you were arguing that you felt that proportional taxation would, in fact, come under this general rule or rubric, whereas progressive taxation would not.  Do you still feel that way, and would you elaborate on that a little? 
HAYEK: Oh, yes.  Well, I only think--and I don't know whether I saw it clearly then--it applies to the general rate of taxation, not particularly the income tax.  I do admit that it may be necessary to have a slightly progressive income tax to compensate for the regressive effect of other taxation.  But the principle which ought to be recognized is that the tax laws as a whole should end at proportional taxation.  I still believe in this.  
What I, in a way, think is more important is that under my scheme of the separation of legislation and government, government should determine the volume of revenue, but the legislative [branch should determine] the form of raising it.  The people who would decide on expenditures could not decide who should pay for it, but would know that they and their constituents would have to pay equally to every contribution they made.  Much of the increase of government expenditures is now happening under the illusion that somebody else will pay for it.  
So if you can create a situation in which every citizen is aware that "for every extra expenditure, I shall have to make my proportional contribution," I think they might become much more reluctant. 
BUCHANAN: I think that's very true.  As a matter of fact, we've taken that direct quotation in a thing that we're doing now, and we're trying to check out just precisely what the effects of these alternative constitutional amendment schemes are.  If I may come a little bit into current policy, as you know in this country now there are all sorts of schemes being put forward as to how we might limit the tax revenues of government.  
Some of them try to limit the government in terms of proportion of national product or state product or income; some of them try to put limits on rates and specific taxes.  Do you have any preference for either of those types? 
HAYEK: No, I'm puzzled by it, because all the discussion seems to turn on taxation and not on expenditure.  People even seem to assume that you can go on increasing expenditures without at the same time reducing taxation.  As I say, I know very little about it, but the offhand impression you get is that these people are frightfully confused, and they assume that you can cut taxation and carry on with government as it is. 
BUCHANAN: Well, perhaps we should talk a little more about this general distinction between law and legislation, which is certainly central to your political theory.  I think I have a pretty good conception of what you have in mind here, but perhaps you'd like to elaborate on that a bit. 
HAYEK: There used to be a traditional conception of law, in which law was a general rule of individual conduct, equally applicable to all citizens, determined to apply to an unknown number of future instances, and law in this sense should be the only justification of coercion by government.  Government should have no, under no circumstances--except perhaps in an emergency--power of discriminatory coercion.  That was a conception of law which in the last century, by the jurists, had been very fully elaborated.  
In the European continental literature, it was largely discussed under the headings "law in the material sense," which is law in my sense, and "law in the merely formal sense," something which has derived the name of law for having decided in the proper constitutional manner, but not by having the logical character of laws.  Now, the story of why these very sensible efforts foundered in the end is quite a comic one.  At one stage, somebody pointed out that [instituting material law] would mean that a constitution is not a law.  
Of course, a constitution is a rule of organization, not a rule of conduct.  In this sense, a constitution would not be a law.  But that shocked people so much that they dropped the whole idea and abandoned the distinction altogether!  
Now, I think we ought to recognize that with all the reverence a constitution deserves, after all a constitution is something very changeable and something which has a negative value but doesn't really concern the people very much.  We might find a new name for it, for constitutional rules.  But we must distinguish between the laws under which government acts and the laws of organization of government, and that's what a constitution essentially is.  A law of organization of government might prohibit government from doing certain things, but it can hardly lay down what used to be [known as] the rules of just conduct, which once were considered as law.  
BUCHANAN: Well, I'd like to explore this further with you.  But I'm sure I'd better leave that to Professor Bork when he talks to you.  But, let me raise another point here.  In-- I believe the preface to the second volume of your Law, Legislation and Liberty, you say--the mirage of social justice--in one sentence you say that you think that you're attempting to do the same thing, essentially, that John Rawls has tried to do in his theory of justice.  People have queried me about that statement in your book. 
HAYEK: Well, I perhaps go a little too far in this; I was trying to remind Rawls himself of something he had said in one of his earlier articles, which I'm afraid doesn't recur in his book: that the conception of correcting the distribution according to the principle of social justice was unachievable, and that therefore he wanted to confine himself to inventing general rules which had that effect.  
Now, if he was not prepared to defend social distributive justice, I thought I could pretend to agree with him; but studying his book further, my feeling is he doesn't really stick to the thing he had announced first, and that there is so much egalitarianism, really, underlying his argument that he is driven to much more intervention than his original conception justifies. 
BUCHANAN: I think there's much in what you say.  I think there's a lot of ambiguity, and the first articles were much more clear.  But in your notion--this mirage of social justice--is your idea that when we try to achieve "social justice," we're likely to do more harm than good?  Or is it somehow that the objective itself is not worth proposing or thinking about? 
HAYEK: It's undefinable.  People don't know what they mean when they talk about social justice.  They have particular situations in mind, and they hope that if they demand social justice, somebody would care for all people who are in need, or something of that kind.  
But the phrase "social justice" has no meaning, because no two people can agree on what it really means.  I believe, as I say in the preface, I'd written quite a different chapter on the subject, trying that [concept] in practice in one particular case after another, until I discovered that the phrase had no content, that people didn't really know what they meant by it.  
And the appeal to the word "justice" was just because it was a very effective and appealing word; but justice is essentially an attribute of individual human action, and a state of affairs as such cannot be just or unjust.  So it's in the last resort a logical muddle.  It's not that I'm against it, but I say that it has no meaning. 
BUCHANAN: Well, you remember our old friend Frank Knight used to say that one of the supports for the market is that people couldn't agree on anything else, in terms of distribution.  I think that there's probably much in that. 
HAYEK: Well, if they had to agree it would be good.  But with our present method of democracy, you don't have to agree, but you have to-- You are pressed, on the pretext of social justice, to hand out privileges right and left. 
BUCHANAN: Well, do you think this thrust is waning a bit in modern politics? 
HAYEK: Well, I don't know how it is in different countries.  I am most concerned, because it's the most dangerous thing at the moment, with the power of the trade unions in Great Britain.  While people are very much aware that things can't go on as they are, nobody is still convinced that this power of the trade unions to enforce wages which they regard as just is not a justified thing.  
I mean-- I believe it's a great conflict within the Conservative party at the moment that one-half of the Conservative party still believes you can operate with the present law and come to an understanding with the trade union leaders, while the others do see that unless these privileges of the trade unions to use coercion and force for the achievement of their ends is in some form revoked or eliminated, there's no hope of curing the system.  The British have created an automatic mechanism which drives them into more and more use of power for directing the economy, which unless you eliminate the source of that power, which is the monopoly power of the trade unions, you can't [correct this]. 
BUCHANAN: Well, is Britain unique in that, say, compared to the United States? 
HAYEK: Well, things seem to have changed a great deal since I knew the United States better.  Fifteen years ago, when I knew more about it, it seemed to me that the American trade unions were a capitalist racket rather than, in principle, opposed to the market as such.  There seem to be tendencies in public opinion and in American legislation to go the British way, but how far it has gone I don't know.  
The reason why I was so very much acutely aware of the British significance is because I happened to see the same thing in my native country, Austria, which is also a country governed by the trade unions.  At the present moment, nobody doubts that the president of the trade union association is the most powerful man in the country.  I think it works because he happens to be personally an extremely reasonable man.  But what will happen if they get a radical in that position I shudder to think.  In that sense, the position in Austria is very similar to that in Britain.  And I think it's worsening in Germany.  
I have always maintained that the great prosperity of Germany in the first twenty-five years after the war was due to the reasonableness of the trade unions.  Their power was greater than they used, very largely because all the trade union leaders in Germany had known what a major inflation was, and you just had to raise your finger--"If you ask for more, you will have inflation"--and they would give in.  That generation is going off now.  A new generation, which hasn't had that experience, is coming up.  
So I fear the German position may increasingly approach something like [the British], but not quite as bad as the British position, because the closed shop is prohibited by law in Germany, and I don't think that will be changed.  
So there are certain limits to the extension of trade union powers.  I can't speak about France.  I must say, I've never understood internal French politics, and the Italian position is so confused to me.  I'm getting more and more the impression that Italy has now two economies: one official one, which is enforced by law and in which people spend their mornings doing nothing; and an unofficial one in the evening, when they work in a second job illegally.  And that the real economy is a black economy. 
BUCHANAN: You speak of inflation.  I don't want to get into the economic aspects, which I'm sure you've discussed in some other interviews, but let me follow up a little bit in the political problems of getting out of inflation.  It does seem to me that we face the major political problem of the short term, not only in this country but also in Britain and other countries, of how can we politically get the government to do something about the inflation. 
HAYEK: Only by a very circuitous way.  First, by removing all limitations on people using money, other than the government's money; and by eliminating all of the, in the wider sense, foreign-exchange restrictions, including legal tender laws and so on.  This will give the people a chance of using other money than they would.  My example is always what would happen in Britain if there were no exchange restrictions, people discovered that Swiss francs are better money than sterling, and then began using Swiss francs.  
The thing is happening in international trade, you know.  The speed with which sterling has been replaced and the dollar is now being replaced in international trade, as soon as people have the chance to use another money, should be applied internally.  And I think ultimately it will be necessary.  That's a field where I am most pessimistic.  I don't think there's the slightest hope of ever again making governments pursue a sensible monetary policy.  
That is a thing which you cannot do under political pressure, because it is undeniable that in the short run you can use inflation to increase employment.  People will never really understand that in the long run you make things worse that way.  This thing is driving us into a controlled economy because people will not stop inflation inflating but try to combat inflation by price controls.  I'm afraid that's the way in which the United States is likely in the near future to slide into a controlled economy.  
Again, my hope is that you are so quick to change that you might find it so disgusting that [even though] you may erect an extremely complex system of price controls, after two years you're so fed up with it that you throw the whole thing over again!  
BUCHANAN: I'd like to shift back, if I could--I'm sure we could spend a lot of time following up on that--to your basic political theory, political philosophy, position I'd like to ask you a little bit of intellectual history here, in terms of your own position.  Both of us started out, more or less, as technical economists, and then we got interested in these more political-philosophical questions.  Could you trace for us a little bit the evolution of your own thinking in that respect? 
HAYEK: Well, I'll have to do a little thinking.  It really began with my doing that volume on collectivist economic planning, which was originally merely caused by the fact that I found that certain new insights which were known on the Continent had not reached the English-speaking world yet.  It was largely [Ludwig von] Mises and his school, but also certain discussions by [Enrico] Barone and others, which were then completely unknown to the English-speaking world.  Being forced to explain this development on the Continent in the introduction and the conclusion to this volume, which contained translations, I was curiously enough driven not only into political philosophy but into an analysis of the methodological misconceptions of economics.  
[These misconceptions] seemed to me to lead to these naive conceptions of, "After all, what the market does we can do better intellectually."  My way from there was very largely around methodological considerations, which led me back to-- I think the decisive event was that essay I did in about '37 on--what was it called?--"Economics and Knowledge." 
BUCHANAN: That was a brilliant essay. 
HAYEK: I think that was a decisive point of the change in my outlook.  As I would put it now, [it elaborated] the conception that prices serve as guides to action and must be explained in determining what people ought to do-- they're not determined by what people have done in the past.  
But, of course, psychologically the consequence of the whole model of marginal-utility analysis was perhaps the decisive point which, as I now see the whole thing--market as a system of the utilization of knowledge, which nobody can possess as a whole, which only through the market situation leads people to aim at the needs of people whom they do not know, make use of facilities for which they have no direct information, all this condensed in abstract signals, and that our whole modern wealth and production could arise only thanks to this mechanism--is, I believe, the basis not only of my economic but as much of my political views.  
It reduces the possible task of authority very much if you realize that the market has in that sense a superiority, because the amount of information the authorities can use is always very limited, and the market uses an infinitely greater amount of information than the authorities can ever do. 
BUCHANAN: Well, this is very interesting.  What you're telling me--as I get what you're telling me--is really that it came from an idea rather than sort of an observation of events. 
HAYEK: Very much so, yes. 
BUCHANAN: Many people, I suspect, consider your The Road to Serfdom, which came out about '44 or so, as sort of an observation of things that might be happening, and then-- 
HAYEK: No, you see The Road to Serfdom was really an advance sketch of a more ambitious book I had been planning before, which I meant to call "The Abuse and Decline of Reason."  The abuse being the idea that you can do better if you determine everything by knowledge concentrated in a single power, and the consequent effects of trying to replace a spontaneous order by a centrally directed order.  And the [results of the] decline of reason were the phenomena which we observed in the totalitarian countries.  I had that in my mind, and that in fact became the program of work for the next forty years.  
And then a very special situation arose in England, already in '39, that people were seriously believing that National Socialism was a capitalist reaction against socialism.  It's difficult to believe it now, but the main exponent whom I came across was Lord [William] Beveridge.  He was actually convinced that these National Socialists and capitalists were reacting against socialism.  So I wrote a memorandum for Beveridge on this subject, then turned it into a journal article, and then used the war to write out what was really a sort of advance popular version of what I had imagined would be the great book on the abuse and decline of reason.  [This was] the second part, the part on the decline of reason.  
It was adjusted to the moment and wholly aimed at the British socialist intelligentsia, who all seemed to have this idea that National Socialism was not socialism, just something contemptible.  So I was just trying to tell them, "You're going the same way that they do."  That the book was so completely differently received in America, and that it attracted attention in America at all, was a completely unexpected event.  It was written so definitely in an English-- And it was, of course, received in a completely different manner.  The English socialists, with few exceptions, accepted the book as something written in good faith, raising problems they were willing to consider.  
People like Lady [Barbara] Wootton wrote a very-- In fact, with her I had a very curious experience.  She said, "You know, I wanted to point out some of these problems you have pointed out, but now that you have so exaggerated it I must turn against you!"  In America it was wholly different.  Socialism was a new infection; the great enthusiasm about the New Deal was still at its height, and here there were two groups: people who were enthusiastic about the book but never read it--they just heard there was a book which supported capitalism--and the American intelligentsia, who had just been bitten by the collectivist bug and who felt that this was a betrayal of the highest ideals which intellectuals ought to defend.  
So I was exposed to incredible abuse, something I never experienced in Britain at the time.  It went so far as to completely discredit me professionally.  In the middle forties--I suppose I sound very conceited--I think I was known as one of the two main disputing economists: there was [John Maynard] Keynes and there was I.  Now, Keynes died and became a saint; and I discredited myself by publishing The Road to Serfdom, which completely changed the situation. 
BUCHANAN: I've heard you say that you were so surprised by the reaction to The Road of Serfdom.  On the other hand, I've heard--I don't believe I've heard you say it--but I've heard people say that you were greatly disappointed by the reaction to The Constitution of Liberty--that you expected much more of a reaction than you got.  Is that right? 
HAYEK: Yes, that is true. 
BUCHANAN: Do you attribute that to the fact that it was more comprehensive, that maybe you tried to include too much, or what? 
HAYEK: It was a book on political science by somebody who was not recognized as a political scientist.  It was on that ground very largely neglected by the professionals; it was too philosophical for the nonphilosophers.  When I say I was disappointed, I was disappointed with regard to the range of effect.  It was received exceedingly friendly by the people whom I really respect, but that's a very small crowd.  
I've received higher praise, which I personally value, for The Constitution of Liberty, but from a very small, select circle.  It has never had any real popular appeal, and perhaps it was too big a book for it, too wide ranging.  People picked out a chapter here and there which they liked; they would reprint my chapter on trade unions, because that fit in with their idea.  But very few people have fully digested and studied the book. 
BUCHANAN: It seemed to me that you were attacking two quite different things in The Constitution of Liberty, and in your three-volume Law, Legislation and Liberty.  In The Constitution of Liberty, you were going through and talking about particular areas of economic policy: trade unions, taxation, this type of things, coming out with quite specific proposals for reform; whereas in Law, Legislation and Liberty, you're really talking more about the structural changes in government that would be necessary before we could even hope to put in such reforms.  My own thinking would be that these, in a sense, are reversed. 
HAYEK: Well, I don't think you represent it quite correctly, since in The Constitution of Liberty, I deal with these problems only in the third part, which is a third of the book, just to illustrate the general principles I have elaborated in parts one and two.  But the other point is that in The Constitution of Liberty, I was still mainly attempting to restate, for our time, what I regarded as traditional principles.  
I wanted to explain what nineteenth-century liberals had really intended to do.  It was only at the time when I had practically finished the book that I discovered that nineteenth-century liberals had no answers to certain questions.  So I started writing the second book on the grounds that I was now tackling problems which had not been tackled before.  I was not merely restating, as I thought, in an improved form what was traditional doctrine; I was tackling new problems, including the problem of democracy. 
BUCHANAN: Yes, I do recall that, and I remember that it was only the last part of that book where you took those particular reforms up.  But it seems that in the discussion of that book, that is what has got most of the attention. 
HAYEK: That's perfectly true.  But that illustrates perhaps what I said before: the book was too philosophical on the whole, and people concentrated on the parts where I became more concrete. 
BUCHANAN: Let me just ask you a little bit now about your view on what I would call social-cultural evolution.  It comes out in several of your pieces in these two volumes of essays, and also in the third volume of Law, Legislation and Liberty, where you place a great deal of attention on the sort of spontaneous emergence of rules, customs, and institutions.  Yet, at the same time, you seem to be willing to classify some things that have emerged as undesirable.  How do you sort of reconcile these two positions? 
HAYEK: Well, there's no great difficulty.  The things which have been tested in evolution, by being selected as superior--by prevailing, because the groups which practice them were more successful than others--have proved their beneficial character.  What I object to is the attempt to alter that development by deliberate construction from the outside, which is not necessarily wrong, but where the self-correcting mechanism is eliminated.  While, if practices go wrong, the group concerned declines; if a government goes wrong and enforces the mistake it has made, there's no automatic correction of any kind. 
BUCHANAN: In this connection, do you consider your own views to be close to, or how do they differ from, those of Michael Oakeshott? 
HAYEK: I confess I still have-- There are two new books which I admit in my third volume I ought to have carefully studied before writing it, but if I had done so I would never have finished my own book.  They are by [Robert] Nozik and Oakeshott.  I sympathize with both of them, but I know only parts of them.  Now, Oakeshott I know at least personally fairly well; so I have a fairly good conception of his thinking without having studied his book.  I think, to put it really crudely, I am a nineteenth-century liberal and he is a conservative.  I think that is-- 
BUCHANAN: Well, one of your former students, Shirley Letwin-- I've talked to her about this problem a great deal, and when she talks about your work in this connection, she always also ties it in with Oakeshott.  So I had assumed there was obviously a closer connection between the two from personal relationships than maybe there is. 
HAYEK: We can talk with each other with complete understanding, but to my feeling--I may do him injustice--there are in Oakeshott's systems certain hardly conscious general prejudices in favor of a conservative attitude, where it is just his feeling which makes him prefer something without his being strictly able to justify his argument, but he will justify his not justifying it.  He believes that we ultimately must trust our instincts, without explaining how we can distinguish between good and bad ones.  My present attempt is to say, yes, we rely on traditional instincts, but some of them mislead us and some not, and our great problem is how to select and how to restrain the bad ones. 
BUCHANAN: Well, now that I'm mentioning people from London, let me also ask you about Sir Karl Popper, whom I saw a month ago, incidentally.  Shirley Letwin also suggested to me that you might have been influenced a good deal by some of Popper's work, apparently stuff that has not really been published, but what she calls his "evolutionary ethics," or his attempts to develop an evolutionary ethics. 
HAYEK: No.  I remember a time when Popper reproached me for my evolutionary approach. 
BUCHANAN: That's interesting. 
HAYEK: Now, the relation is, on the whole, curious.  You see, Popper, in writing already The Open Society [and Its Enemies], knew intimately my counterrevolution of science articles.  It was in these that he discovered the similarity of his views with mine.  I discovered it when The Open Society came out.  Although I had been greatly impressed--perhaps I go back as far as that--by his Logic of Scientific Discovery, his original book, it formalized conclusions at which I had already arrived.  And I arrived [there] due to exactly the same circumstances.  
Popper is a few years my junior; so I did not know him in Vienna.  We were not in the same generation.  But we were exposed to the same atmosphere, and in the discussion, then, we both encountered two main groups on the other side: Marxists and psychoanalysts.  Both had the habit of insisting that their theories were in their nature irrefutable, and I was already by this driven to the conclusion that if a theory is irrefutable, it's not scientific.  I'd never elaborated this; I didn't have the philosophical training to elaborate it.  
But Popper's book gives the justification for these arguments--that a theory which is necessarily true says nothing about the world.  So when his book came out, I could at once embrace what he said as an articulation of things I had already been thinking and feeling.  Ever since, I have followed his work very closely.  
In fact, before he went to New Zealand, I met him in London--he even spoke to my seminar--and we found very far-reaching, basic agreement.  I don't think there's anything fundamental with which I disagree, although I sometimes had, at first, hesitation.  His present new interest about the three worlds I was at first very puzzled about.  I believe I now understand it, and I agree.  When, in that Hobhouse Lecture, I speak about culture as an external element which determines our thinking, rather than our thinking determining culture, this is, I believe, the same thing Popper means when he speaks about the three worlds.  
Of course, in the few years we were together at the London School of Economics--only about from '45 to '50--we became very close friends, and we see completely eye-to-eye on practically all issues. 
BUCHANAN: He has written a new book with Sir John Eccles on the self and the brain-- 
HAYEK: I've read his part of it, but I haven't read Eccles's part.  This essentially develops the point I was just speaking about--the three worlds and-- 
BUCHANAN: Yes, I remember the "three worlds" lecture he gave in--where was it?--you know, in Switzerland, at the Mont Pelerin meeting in Switzerland. 
HAYEK: At that time I didn't understand it.  It is only in the things he has written since that it became clear to me, and [because of a] certain development in my own thinking, which goes in the same direction. 
Dock windowTable of Contents
Limiting government
Limits in the US Constitution
Imposing constitutional limits
Intellectuals and democracy
Creating laws
Voting and democracy
Systems of taxation
Difference between law and legislation
Social justice
British politics
Inflation and government policy
Hayek's progression from economics to political theory
The Road to Serfdom
The Constitution of Liberty
Sociocultural evolution
Michael Oakeshott
Karl Popper
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