Hayek's System-Theoretic Social Theory
I've been inspired to do a deep dive into the evolution of Friedrich Hayek’s thinking on social science after learning about the ties between Hayek and Ludwig von Bertalanffy.1 A paper I read last week highlights a significant tension that arose for him between the 1940s and the 1960s.2
On the one hand, Hayek wanted to emphasize the importance of subjective individual decision making when explaining social phenomena. He was fighting to defend his “individualist” approach against those trying to “expunge all references to people’s purposes and intentions from social science.”
On the other, he recognized that it was essential to acknowledge the very real influence of external social structures on the behavior and decision-making of individuals.
This tension was reconciled in large part thanks to his adoption of concepts that were being developed in systems theory and cybernetics — system, organization, emergence, and the “hierarchical” nature of reality.
By embracing these concepts, Hayek eventually transformed his individualistic approach to economics into an “evolutionary” one. He was able to coherently tie his static account of spontaneous market order with his dynamic theory of cultural evolution. Social outcomes were the result of the causal interplay between social structure and human agency — each aspect of social reality was weighted equally.
Admirers and critics alike tend to portray Hayek as some sort of heroic (or evil) free market fundamentalist who believed ungoverned markets operating in isolation would magically solve all problems.
In reality, he was a complex and nuanced thinker. He was a pioneer in system-theoretic approaches to issues of political economy who was vocal about the need for simple, clear rules and the rule of law to be equally applied for markets to serve their proper function in society.
Thornton, S. (2024, June 25). On Hayek and Bertalanffy [Substack newsletter]. System Explorers. https://systemexplorers.substack.com/p/on-hayek-and-bertalanffy
Lewis, P. A. (2020). Tensions and Ambiguities in Hayek’s Social Theory: Ontology, Methodology, Substantive Claims, and Self-Description (SSRN Scholarly Paper 4016415). https://papers.ssrn.com/abstract=4016415