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!
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In a previous post, Voting, Moral Hazard, and Like Buttons, I discussed the moral hazards of voting and why democracy does not legitimize the state or protect our liberty. I also discussed how statist democracy, particularly representative democracy, is manipulative and conducive to top-down central planning of society. (Statist) politics tends to reduce all basic social issues to problems requiring administrative manipulation. In this post, I’m going to delve into this issue further and draw upon insights by Hannah Arendt in The Human Condition to illustrate how (statist) politics is inherently an attempt to run society as one massive organization, organism, or machine.
Hannah Arendt’s analysis of the differences between action (praxis) and work – and between politics, which involves action, and fabrication or making (poi?sis), which involves work – has negative implications for the central planning of society that is characteristic of modern representative-democratic states. In particular, I have in mind her criticism of Plato, and to a lesser extent Aristotle, regarding their tendency to view society as a sort of organization and politics as the running of society as such an organization – or, in their words, politics as akin to household management. This fits with the tendency in many cultures to refer to one’s country as “the Fatherland” or “the Motherland” and with socialists and communitarians (on the left and the right) essentially modeling their ideal society after the family.
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