The Fatal Conceit
Encyclopedia
The Fatal Conceit: The Errors of Socialism is a non-fiction book written by the economist and political philosopher Friedrich Hayek
and edited by William Warren Bartley
.
by demonstrating that socialist theories are not only logically incorrect but that the premises they use to form their arguments are incorrect as well. To Hayek the birth of civilization is due to the start of societal traditions placing importance on private property
leading to expansion, trade, and eventually the modern capitalist system, also known as the extended order
. Socialists are wrong because they disregard the fact that modern civilization naturally evolved and was not planned. Additionally, since modern civilization and all of its customs and traditions naturally led to the current order and are needed for its continuance, any fundamental change to the system that tries to control it is doomed to fail since it would be impossible or unsustainable in modern civilization. Price signals are the only means of enabling each economic decision maker to communicate tacit knowledge
or dispersed knowledge
to each other, in order to solve the economic calculation problem
.
had on writing the book. Officially, Bartley was the editor who was supposed to prepare the book for publication once Hayek fell ill in 1985; however, the inclusion of material from Bartley's philosophical point of view and citations that other people provided to Bartley have led people to question how much of the book was written by Hayek and whether Hayek knew about the added material.
Friedrich Hayek
Friedrich August Hayek CH , born in Austria-Hungary as Friedrich August von Hayek, was an economist and philosopher best known for his defense of classical liberalism and free-market capitalism against socialist and collectivist thought...
and edited by William Warren Bartley
William Warren Bartley
William Warren Bartley, III, was an American philosopher and Professor of Philosophy at Stanford University.-Life:...
.
Main thesis and arguments
The book attempts to conclusively refute all forms of SocialismSocialism
Socialism is an economic system characterized by social ownership of the means of production and cooperative management of the economy; or a political philosophy advocating such a system. "Social ownership" may refer to any one of, or a combination of, the following: cooperative enterprises,...
by demonstrating that socialist theories are not only logically incorrect but that the premises they use to form their arguments are incorrect as well. To Hayek the birth of civilization is due to the start of societal traditions placing importance on private property
Private property
Private property is the right of persons and firms to obtain, own, control, employ, dispose of, and bequeath land, capital, and other forms of property. Private property is distinguishable from public property, which refers to assets owned by a state, community or government rather than by...
leading to expansion, trade, and eventually the modern capitalist system, also known as the extended order
Extended order
Extended order is an economics and sociology concept introduced by Friedrich August von Hayek in his book The Fatal Conceit. It is a description of what happens when a system embraces specialization and trade and "constitutes an information gathering process, able to call up, and put to use,...
. Socialists are wrong because they disregard the fact that modern civilization naturally evolved and was not planned. Additionally, since modern civilization and all of its customs and traditions naturally led to the current order and are needed for its continuance, any fundamental change to the system that tries to control it is doomed to fail since it would be impossible or unsustainable in modern civilization. Price signals are the only means of enabling each economic decision maker to communicate tacit knowledge
Tacit knowledge
Tacit knowledge is knowledge that is difficult to transfer to another person by means of writing it down or verbalising it. For example, stating to someone that London is in the United Kingdom is a piece of explicit knowledge that can be written down, transmitted, and understood by a recipient...
or dispersed knowledge
Dispersed knowledge
In economics, dispersed knowledge is information that is dispersed throughout the marketplace, and is not in the hands of any single agent. All agents in the market have imperfect knowledge; however, they all have a good indicator of everyone else's knowledge and intentions, and that is the...
to each other, in order to solve the economic calculation problem
Economic calculation problem
The economic calculation problem is a criticism of central economic planning. It was first proposed by Ludwig von Mises in 1920 and later expounded by Friedrich Hayek. The problem referred to is that of how to distribute resources rationally in an economy...
.
Contents
- Introduction: Was Socialism a Mistake?
- 1. Between Instinct and Reason
- 2. The Origins of Liberty, Property and Justice
- 3. The Evolution of the Market: Trade and Civilisation
- 4. The Revolt of Instinct and Reason
- 5. The Fatal Conceit
- 6. The Mysterious World of Trade and Money
- 7. Our Poisoned Language
- 8. The Extended Order and Population Growth
- 9. Religion and the Guardians of Tradition
- Appendix A. 'Natural' vs. 'Artificial'
- Appendix B. The Complexity of Problems of Human Interaction
- Appendix C. Time and the Emergence and Replication of Structures
- Appendix D. Alienation, Dropouts, and the Claims of Parasites
- Appendix E. Play, the School of Rules
- Appendix F. Remarks on the Economics and Anthropology of Population
- Appendix G. Superstition and the Preservation of Tradition
Controversy
There is much scholarly debate on how much influence William Warren BartleyWilliam Warren Bartley
William Warren Bartley, III, was an American philosopher and Professor of Philosophy at Stanford University.-Life:...
had on writing the book. Officially, Bartley was the editor who was supposed to prepare the book for publication once Hayek fell ill in 1985; however, the inclusion of material from Bartley's philosophical point of view and citations that other people provided to Bartley have led people to question how much of the book was written by Hayek and whether Hayek knew about the added material.
See Also
- Dispersed knowledgeDispersed knowledgeIn economics, dispersed knowledge is information that is dispersed throughout the marketplace, and is not in the hands of any single agent. All agents in the market have imperfect knowledge; however, they all have a good indicator of everyone else's knowledge and intentions, and that is the...
- Invisible handInvisible handIn economics, invisible hand or invisible hand of the market is the term economists use to describe the self-regulating nature of the marketplace. This is a metaphor first coined by the economist Adam Smith...
- Opportunity CostOpportunity costOpportunity cost is the cost of any activity measured in terms of the value of the best alternative that is not chosen . It is the sacrifice related to the second best choice available to someone, or group, who has picked among several mutually exclusive choices. The opportunity cost is also the...
- The Use of Knowledge in SocietyThe Use of Knowledge in Society"The Use of Knowledge in Society" is a scholarly article written by economist Friedrich Hayek, first published in the September 1945 issue of The American Economic Review Written as a rebuttal to fellow economist Oskar R...