In a blogpost titled “Hayek on the Two Orders,” Gene Callahan approvingly quotes the following passage from Hayek and admonishes market advocates not to forget or overlook the important insight within:
If we were to apply the unmodified, uncurbed, rules of the micro-cosmos (i.e., of the small band or troop, or of, say, our families) to the macro-cosmos (our wider civilization), as our instincts and sentimental yearnings often make us wish to do, we would destroy it. Yet if we were always to apply the rules of the extended order to our more intimate groupings, we would crush them. So we must learn to live in two sorts of worlds at once. – The Fatal Conceit
All well and good, and familiar to readers of Hayek. But then Callahan follows up with some commentary and things get increasingly murky:
I think this achieves just the right understanding of the balance we ought to seek between market and non-market orders. The market is a wonderful institution, which can achieve marvelous economic efficiency. Economic rationality, on the large scale, is impossible without markets, as Mises and Hayek so wonderfully demonstrated. And yet, markets can easily crush the “more intimate groupings.” Markets, especially at the local level, must be subject to social control, lest that crushing proceeds unchecked. Market advocates should remember both halves of Hayek’s insight!
Well, hold on now. I don’t see anything in that Hayek quote to the effect that markets can easily crush the “more intimate groupings” if left unchecked. Rather, he warns us not to impose the rules of one type of order on the other.
Moreover, what does Callahan mean by “markets, especially at the local level, must be subject to social control, lest that crushing proceeds unchecked”? Were he not openly a former libertarian cum pro-state (dare I say statist?) communitarian, I might think he meant family rules, voluntary community norms, and the like. Libertarians already support — as an extension of individual rights rather than some collectivist group “rights” — the right of families and voluntary associations to set private rules, and many are very family- and community-oriented. So, remind me again which market advocates want market rules imposed throughout society?
Now I’m not so sure that by “social control” Callahan doesn’t mean “government control.” If he does mean government control, then of course libertarians disagree that such is necessary to prevent markets from crushing the “more intimate groupings.” Callahan’s fear is, I think, overblown; but, to the extent that it is justified, the fragility of some “more intimate groupings” in the face of market forces does not justify aggression (i.e., the threat or use of initiatory physical force1) to preserve them.
But wait, is Hayek really saying that markets must be subject to local social control? that one type of order must impose controls on the other to keep it in check? Or, rather, does he not explicitly warn against this and say that “we must learn to live in two sorts of worlds at once.”
- Which, yes, includes people squatting on private property or having an uninvited picnic on someone’s property and refusing to leave. [↩]