Friedrich Hayek and evolution

"Indeed, in its endeavour to explain and predict particular events, which it does so successfully in the case of relatively simple phenomena (or where it can at least approximately isolate ‘closed systems’ that are relatively simple), science encounters the same barrier of factual ignorance when it comes to apply its theories to very complex phenomena. In some fields it has developed important theories which give us much insight into the general character of some phenomena, but will never produce predictions of particular events, or a full explanation—simply because we can never know all the particular facts which according to these theories we would have to know in order to arrive at such concrete conclusions. The best example of this is the Darwinian (or Neo-Darwinian) theory of the evolution of biological organisms. If it were possible to ascertain the particular facts of the past which operated on the selection of the particular forms that emerged, it would provide a complete explanation of the structure of the existing organisms; and similarly, if it were possible to ascertain all the particular facts which will operate on them during some future period, it ought to enable us to predict future development. But, of course, we will never be able to do either, because science has no means of ascertaining all the particular facts that it would have to possess to perform such a feat."

"The answer to this question, sketched in the first three chapters, is built upon the old insight, well known to economics, that our values and institutions are determined not simply by preceding causes but as part of a process of unconscious self-organisation of a structure or pattern. This is true not only of economics, but in a wide area, and is well known today in the biological sciences. This insight was only the first of a growing family of theories that account for the formation of complex structures in terms of processes transcending our capacity to observe all the several circumstances operating in the determination of their particular manifestations. When I began my work I felt that I was nearly alone in working on the evolutionary formation of such highly complex self-maintaining orders."

"Competition is a procedure of discovery, a procedure involved in all evolution, that led man unwittingly to respond to novel situations; and through further competition, not through agreement, we gradually increase our efficiency."

"My basic criticism of F. A. Hayek’s profound interpretation of modern history and his diagnoses for improvement is directed at his apparent belief or faith that social evolution will, in fact, insure the survival of efficient institutional forms. Hayek is so distrustful of man’s explicit attempts at reforming institutions that he accepts uncritically the evolutionary alternative. We may share much of Hayek’s skepticism about social and institutional reform, however, without elevating the evolutionary process to an ideal role. Reform may, indeed, be difficult, but this is no argument that its alternative is ideal."

"Hayek’s writings on cultural evolution are some of his most controversial. Some of the criticisms that have been advanced are:1) that his analysis of the evolutionary process is too pessimistic, leaving little room for attempts to improve the institutional or constitutional setting; 2) that Hayek’s endorsement of group selection as the mechanism by which cultural institutions are selected is inconsistent with his methodological individualism; and 3) that group selection itself has been discredited among biologists on grounds that are germane to its applications in the social sciences."

"By the 1960s Hayek was seeing complex orders everywhere. The orders were created as the result of individual elements following simple rules, and the principles at work could be effectively described using an evolutionary (though not Darwinian) metaphor. In the late 1960s Hayek explicitly added the mechanism of group selection to his description of cultural evolution. In the 1970s Hayek published the three volumes of Law Legislation and Liberty, and rules, orders and cultural evolution were all prominently on display. This was equally true of his last book, The Fatal Conceit, though there were also some new ideas to be found there. That Hayek’s health began deteriorating as this book was put together raises some intriguing interpretive issues."

"Hayek’s thought did not emerge in a vacuum, and part of the goal here, particularly in the early chapters, is to trace the intellectual background of his work. The dominating idea in Hayek’s early life was Darwinian evolutionary theory, stemming from his father’s and grand father’s work in botany and biology. Hayek ended his career with an evolutionary account of the growth of civilization."

"Regarding social order, Fukuyama writes, "The systematic study of how order, and thus social capital, can emerge in spontaneous and decentralized fashion is one of the most important intellectual developments of the late twentieth century." He correctly attributes the modern origins of this argument to F.A. Hayek, whose pioneering contributions to cognitive science, the study of cultural evolution, and the dynamics of social change put him in the forefront of the most creative scholars of the 20th century. But Hayek's views about the "spontaneity" of social order remain controversial. In their extreme form, they imply that all deliberate efforts to manipulate social order — social engineering — are doomed to failure because the complex nature of our cultural heritage makes a complete understanding of the human condition impossible. Hayek was certainly correct that we have, at best, a very imperfect understanding of the human landscape, but "spontaneous" it is not. What distinguishes human evolution from the Darwinian model is the intentionality of the players. The mechanism of variation in evolutionary theory (mutation) is not informed by beliefs about eventual consequences. In contrast, human evolution is guided by the perceptions of the players; their choices (decisions) are made in the light of the theories the actors have, which provide expectations about outcomes."

"Hayek’s theory of evolutionary rationality shows how traditions and customs (those surrounding sexual relations, for example) might be reasonable solutions to complex social problems, even when, and especially when, no clear rational grounds can be provided to the individual for obeying them. These customs have been selected by the ‘‘invisible hand’’ of social reproduction, and societies that reject them will soon enter the condition of ‘‘maladaptation,’’ which is the normal prelude to extinction."

"Hayek was influenced by the biological metaphor of evolution (in contrast to Walras, who was inspired by notions in physics of “equilibrium”). Darwin had talked about the survival of the fittest, and Social Darwinism similarly contended that ruthless competition with the survival of the fittest firms would imply ever-increasing efficiency of the economy. Hayek simply took this as an article of faith, but the fact of the matter is that unguided evolutionary processes may, or may not, lead to economic efficiency. Unfortunately, natural selection does not necessarily choose the firms (or institutions) that are best for the long run. One of the main criticisms of financial markets is that they have become increasingly shortsighted. Some of the institutional changes (such as investors’ focus on quarterly returns) have made it more difficult for firms to take longer-run perspectives. In this crisis, some firms complained that they didn’t want to take on as much leverage as they did—they realized the risk—but if they hadn’t, they wouldn’t have survived. Their return on equity would have been low, market participants would have misinterpreted the low return as a result of lack of innovativeness and enterprise, and their stock price would have been beaten down. They felt that they had no choice but to follow the herd—with disastrous effects over the long run, both to their shareholders and to the economy."

"Importantly, Hayek is keen to distance himself from the idea that by invoking the idea of cultural evolution he is drawing any strict analogy with the notion of natural selection in biology. […] Hayek, then, is clearly no believer in social Darwinism."