The Fatal Conceit: The Errors of Socialism, by F.A. Hayek

I purchased this book a while back and before encountering the controversy surrounding it. At any rate, I have finally started to read this work. So far, it's not very good. Does anyone have any thoughts on the contents of this book?

I read that about 2 years ago maybe. Just checked my Amazon review, wherein I called it Hayekian Socialism. I seriously dislike Hayek's utilitarian approach. Once you've accepted utilitarianism, the game is over; you cannot get to utilitarianism without a collectivist assumption.

If I remember correctly, the subject of the tome's final authorship had some serious questioning http://libertyunbound.com/archive/2005_03/ebenstein-deceit.html mainly as to what in it was actually Hayek's and what was the editors'. I believe the editor was something of a student of Popper which might explain a little in the book that might sound more socialistic or what not then it othewise would.

Not that I am a utilitarian but taking the "utilitarian" approach does not mean that one must resort to coercive (or voluntary) collectivism.

What do we believe a (total) free market will result in? Will it not result in a richer, happier, more prosperous society, with more opportunities, standard of living etc? Would you not say that laissez faire offers more utility then coerced collectivism? 

First off, I fairly certain that Mises was a utiliatarian, and that even though Rothbard was a strict believer in natural law ethics, he believed that the sum of individuals voluntary achieving their wants and needs would result in the greatest amount of utility. 

Does that prove that utilitarianism does not lead to collectivism? No. However, it should give you thought to reconsider that position. 

Whilst I have not read The Fatal Conceit, it should not be rejected merely for being suspect of "utilitarian drivel". : ) 

Mr Pruitt, once you accept that your freedom is contingent upon your freedom being conducive to the greatest happiness of the greatest number, you've accepted collectivism. This is the *starting point difference*. The collectivist starting point is to assert that some moral theory is applicable to all situations; the moralist then finds situations (people smoking, people getting obese, people not wearing seat belts, Rush Limbaugh making more money than public school teachers, etc) and demands that you justify it. That is the collectivist assumption to which I refer. The morality itself collectivizes everybody and everything. The individualist rejects this assumption. I don't have to justify Rush Limbaugh making more money than school teachers - it is none of my business. No moralist can say that. Only a rights theorist can say that. I know, you may think that utilitarian libertarians have proven that individual freedom actually is conducive to the greatest good of the greatest number. But that misses the point. Even if libertarian arguments succeed (which I do not think they do) they succeed only on the basis of somebody else's being happy with them. My rights ought not be contingent on X number of people being happy. The real absurdity is the collectivist starting point of utilitarianism. Why should I be asked to justify the situations of others? There is no such thing as individualist utilitarianism - the greatest happiness of the greatest number. See that? Collectivism is built into utilitarianism. How can you possibly justify Bill Gates having so much money when there are children starving in some African nation? You cannot; to attempt to do so would be absurd. The correct answer, IMHO, is to reject moral theory altogether as a source of rights.

John Scott:

The correct answer, IMHO, is to reject moral theory altogether as a source of rights.

It may well be, but let us continue to focus on the issue at hand... utilitarianism = coercive collectivism. 

 

John Scott:

Mr Pruitt, once you accept that your freedom is contingent upon your freedom being conducive to the greatest happiness of the greatest number, you've accepted collectivism

In part you are right, I must admit, however, let me get down to the definitional level to clarify my argument.

Utilitarianism is shall we say, the greatest good for the greatest number of people. 

And collectivism is much more difficult to define, yet doing so might assist us in our argument. When you say collectivism, are you referring to socialism as defined in economics (state control of all factors of production), do you mean something like the wiki definition that it" ...emphasizes the interdependence  of every human in some collective group and the priority of group goals over individual goals"?

In the latter sense, then yes, one could argue that utilitarianism is collectivism, and you would be quite correct and I would be wrong. However, what I assumed you to meant by collectivism (and that is my fault in doing so) was state control of all property, egalitarianism, collectivist anarchy etc etc.

 

John Scott:

Even if libertarian arguments succeed (which I do not think they do) they succeed only on the basis of somebody else's being happy with them

Why don't you think they do? You honestly believe that central planning, fiat currencies (insert statist policies here) result in greater "utility" for society then a free society? Maybe in the short run, but we should be concerning ourselves with the long run, for there is greater utility here. XD

John Scott:

How can you possibly justify Bill Gates having so much money when there are children starving in some African nation? You cannot; to attempt to do so would be absurd

 

If you look at it at that moment in time. Sure there would be greater utility for those african children if they instantaneously had his wealth. However if viewed from the long run effects of this (stealing bill gates money, reducing incentive to gain wealth, the institutions required to facilitate this action e.g states, suddenly you have less incentive to invest /acquire wealth).

Now my above argument assumes that one understands how a completely voluntary market makes society better off (just think about how society is today better off as compared to hunter/gather societies, pre industrial revolution). 

The poor under capitalism are most certainly better off in a voluntarist society then they are under a socialist society in the long run. 

Now what do you disagree with?

"collectivism is much more difficult to define"

Moral collectivism. If somebody came up with a moral theory which applied to one individual and one individual only, that would be an individualistic moral theory. However, most moral theories purport to apply to all moral agents. Not just utilitarianism, but all moral theories I know of. Of course, philosophers attempt to draw boundaries, like Rawls did in his Law of Peoples; but that came back and bit him on his tush.

This is the collectivism I reject. I have my morality; you have yours. Moral statements are nothing more than value statements, and value statements are necessarily subjective. There is no objectively true or even correct moral value.

Do you not find it odd that you should be asked to justify a difference in pay rate? I find that odd. I find it odder still that you would offer a justification. Let's say that Bill Gates is in Africa, and he's driving a semi truck full of water bottles. And he comes across a village and in this village there are 10,000 children who will die if they are not given a right to Bill Gates' water bottles. And the kicker is that Bill Gates was just going to water the desert anyway, so he really doesn't need the water bottles. But he's in a bad mood and he refuses to give the kids the water waters.

Here I have a solution not available to moralists. I can tell the kids to take the damn water bottles, even though they have no right to those water bottles. But, if you derive rights from moral theory, like utilitarians do, then you've just established a principle which defeats self ownership. It may have started with water bottles, but the next stop is a national health service, national day care, and national minimum income guarantee.

By deriving rights from utilitarianism, as JS Mill did, you've exposed yourself to claims from anybody and everybody who can claim that they would be happier if they could just violate your freedom.

"Now what do you disagree with?"

I'm 100% individualist (Lockean). I am in agreement with you in principle. The problem is how you arrive there. You know John Stuart Mill's "On Liberty" rejects natural rights, and bases liberty on utility. Do you know how many socialists have used his arguments against his own conclusions? I can't count. Amy Gutmann makes the case that all modern liberalism derives from J S Mill's utilitarianism. Robert Paul Wolff uses Mill's arguments in On Liberty to argue against free speech (religious speech is not conducive to the greatest happiness of the greatest number).

How can I think of utilitarianism as anything but the enemy when that is precisely the tool the left has used to promote statism?

I don't know why I can't get paragraph breaks to stay in my posts. ...

If you look at it at that moment in time. Sure there would be greater utility for those african children if they instantaneously had his wealth. However if viewed from the long run effects of this (stealing bill gates money, reducing incentive to gain wealth, the institutions required to facilitate this action e.g states, suddenly you have less incentive to invest /acquire wealth).

Now my above argument assumes that one understands how a completely voluntary market makes society better off (just think about how society is today better off as compared to hunter/gather societies, pre industrial revolution). 

The poor under capitalism are most certainly better off in a voluntarist society then they are under a socialist society in the long run. 

Now what do you disagree with?.

It sounds as if you are claiming that the African Children would derive greater utility from Bill Gates' wealth than Gates himself. You did not state this directly, but you seemed to imply it. Forgive me if I'm mistaken.

If this is indeed your claim, then you are committing a fallacy: the interpersonal comparison of utility. We cannot objectively measure how much utility people derive from something in cardinal terms (e.g., in utils) and then compare them interpersonally or intertemporaneously (that is, for one person at different points in time). Utility is a purely psychic phenomenon. As such, it can only be described in ordinal terms.

IMHO, therein lies the strongest argument in favor of voluntaryism and against socialism. No one can no an individual's value scale (his subjective evaluation of personal preferences and values) better than the individual himself. Therefore, no one is better at maximizing said individual's utility than said individual. He must be free from coercive restraints (unless he contractually binds himself) in order to pursue the fulfillment of his value scale.

In order for the planned society to be more efficient in satisfying the greatest number (and highest ranking) ends for the greatest number of people. we must do one of two things:

1) Postulate an omniscient planner

2) Fabricate the concept of social utility

Since the first option is an impossibility, most advocates of planning will resort to the second. Of course, "social utility" can mean whatever one wants it to mean. In the case of a democracy, since representatives are elected by the majority, it is claimed that they are allocating "society's" resources towards those ends with the greatest "social utility," otherwise, they would not be elected. In this manner, arguments for the planned society always resort to macro arguments, abandoning the concept of individual rights.

This leaves them open to the argument from morality. What if five men "vote" to gang rape a woman? It goes without saying that she "voted" against this since  I have used the term rape--meaning involuntary sex--to describe the act. Clearly under the planner's definition of social utility, there would be greater social utility if the rape was allowed to occur. To argue against allowing this rape is to admit the existence of an absolute moral rule; namely, that rape is wrong.

We can continue to stretch this moral rule out to other coercive actions (I usually start with rape, then move to murder, then to theft). Once we reach theft, we can demonstrate why taxation is wrong. Of course, if we go through this process long enough, we can eventually demonstrate the moral invalidity of a sufficient number of coercive actions to convince people (hopefully) of the non-aggression principle.

Most people don't know what utilitarianism or natural rights ethics are in, at least not in the technical way they are thrown about in political argument. Yet, they are also used in a simple way - "it's always right/wrong to do ____". Things obviously aren't so simple. Would it be a libertarian position to kill an innocent person to save 1,000 from being killed? Obviously the utilitarian would say it's moral. But shouldn't the libertarian? The answer is yes, to me. And there are a number of ways to square it with libertarian ethics. And in the same way, utilitarianism can't be stated so simply either. If you factor in the moral hazards and such created by morally justifying acts of aggression, then perhaps what is utilitarian for almost all people and over long periods of time is also libertarian. The point isn't being hardcore to one set of ethics. I think most regular people understand this better than intellectuals do, even though they've never really studied the issue. Ultimately our preference for what we determine is moral comes from our feelings, not our intellect. And while the intellectuals have aided our understanding of morality, I believe it can often cloud their judgment on what most people feel are simple issues. The only reason the state exists is because it has moral legitimacy, and it only has that because there is no clearly superior alternatives shown to work in practice. We need a new frontier. Once people see the state as unnecessary, they certainly won't believe it could possibly be proper. But I think that's a better idea than debating codes of morality, when in practice, most people already accept the most non-controversial aspects of moral codes.

Oh, and I don't mean to sound like a jerk, but the idea that it is impossible to compare interpersonal utility is silly. Of course we can't objectively measure it, but we can AND DO guess about it. Otherwise, how could judges and juries possibly punish convicts or calculate damages? How could anyone possibly pick a gift out for another person? Obviously there is no such thing as scientific utilitarianism. But it seems non-controversial to say that most people implicitly know how to improve or harm any random person's utility. Utilitarianism is only controversial when some have their individual utility strongly threatened for what some promote as a net gain. I feel most people defer to libertarian ethics when utilitarianism is controversial, and vice versa. And I don't think there's anything wrong with that.

One thing to remember is that after human action has taken place we CAN objectively identify a value or preference. We cannot quantify or assign it any kind of number but we can objectively see that people must have for example considered Microsoft Windows as providing some type of utility. Otherwise they would not have purchased it. Furthermore since the software has exploded in use worldwide we can probably assume that a great deal of people worldwide value this object to some extent. We can investigate further and see that things like Microsoft office has allowed third world companies the ability of sophisticated accounting practices, where before they were using pencil and paper. Via packages like MS Office. It's not that hard to see how a product brings wealth to the world, this process of innovating and creating new products(A form of capital accumulation), then watching consumers participate in acquiring these products shows to us objectively that there is a wide scale desire for it. Does that mean we can quantify it? Absolutely not, but that doesn't mean we can see that it's considered a value to people. IE, the world is better off having Microsoft Windows and Office, then not having it at all. Gates's fortunes were not won by extract wealth from a close pie, but instead by creating new wealth in increased "utility" as objectively observed by interested consumers. Our method of quantifying measurements of utility are found in the profit & loss framework. But you are correct, there is no direct comparison between people or products.

"Yet, they are also used in a simple way - "it's always right/wrong to do ____". Things obviously aren't so simple."

May I possibly disabuse you of the notion that moral theories are truth-apt or in any way objectively better than other moral theories? My moral theory - asputinnopherism - says that birds should rule the earth and humans need to feed and care for birds; humans do not submit to birds need to die.

Sounds strange, huh? Here's the kicker: Your utilitarianism and my asputinnopherism are equally true, since they both have no truth-aptness.

You can keep harking on that utilitarianism, but it's just as objectively true as the most absurd moral theory one can come up with.

"And there are a number of ways to square it with libertarian ethics."

Deriving your libertarianism from moral theory is the problem. Any rights you derive from your moral theory can be contradicted by rights I can derive from my moral theory.

Most people don't know what utilitarianism or natural rights ethics are in, at least not in the technical way they are thrown about in political argument. Yet, they are also used in a simple way - "it's always right/wrong to do ____". Things obviously aren't so simple. Would it be a libertarian position to kill an innocent person to save 1,000 from being killed? Obviously the utilitarian would say it's moral. But shouldn't the libertarian? The answer is yes, to me. And there are a number of ways to square it with libertarian ethics.

To answer your question, we should throw a parade for the guy who killed the innocent person (because he saved 1,000 lives)...

 

...

 

and then execute him.

That way, we uphold the NAP as an absolute and universal moral principle.

The difference is that your moral theory is fictitious and unrealizable. Birds simply cannot rule humans, does that need further explanation? Furthermore your moral theory is not economically feasible where as utilitarianism is, and utilitarianism is not inherently incompatible with other ethical or moral constructs, like religion. It's like having a moral theory where men should have wings and fly. Well thats just silly.

One thing to remember is that after human action has taken place we CAN objectively identify a value or preference. We cannot quantify or assign it any kind of number but we can objectively see that people must have for example considered Microsoft Windows as providing some type of utility. Otherwise they would not have purchased it. Furthermore since the software has exploded in use worldwide we can probably assume that a great deal of people worldwide value this object to some extent. We can investigate further and see that things like Microsoft office has allowed third world companies the ability of sophisticated accounting practices, where before they were using pencil and paper. Via packages like MS Office. It's not that hard to see how a product brings wealth to the world, this process of innovating and creating new products(A form of capital accumulation), then watching consumers participate in acquiring these products shows to us objectively that there is a wide scale desire for it. Does that mean we can quantify it? Absolutely not, but that doesn't mean we can see that it's considered a value to people. IE, the world is better off having Microsoft Windows and Office, then not having it at all. Gates's fortunes were not won by extract wealth from a close pie, but instead by creating new wealth in increased "utility" as objectively observed by interested consumers. Our method of quantifying measurements of utility are found in the profit & loss framework. But you are correct, there is no direct comparison between people or products.

Good post. You describe ordinal utility, the proper method for "measuring" utility.

"Any rights you derive from your moral theory can be contradicted by rights I can derive from my moral theory." Well which of us can raise the biggest army and impose our will upon the other, or at least defend ourselves? How we settle our differences certainly depends upon how motivated and numerous and skilled people are that support our platforms. "Deriving your libertarianism from moral theory is the problem." Where else should it come from? My personal profit motive? Also, I am not a utilitarian. I believe utilitarians would advocate some things that I could not endorse.

filc:

The difference is that your moral theory is fictitious and unrealizable. Birds simply cannot rule humans, does that need further explanation?

Your moral theory, likewise, is fictitious. If you think values are objectively true, you either don't know what values are or what truth is.

filc:

Furthermore your moral theory is not economically feasible where as utilitarianism is, and utilitarianism is not inherently incompatible with other ethical or moral constructs, like religion.

Why should I care about religion? And economy? You are begging the question: You are attempting to criticize a moral theory from the standpoint of a moral theory (utilitarianism) which has not been proven objectively better than my bird worshiping morality.

Try to establish utilitarianism with deductive reasoning.

filc:

It's like having a moral theory where men should have wings and fly. Well thats just silly.

Yes it is, and that's the point: Your moral theory is just as true as my silly moral theory. Don't be thick now. If your moral theory is just as true as my absurd moral theory, what's that make of your moral theory?

meambobbo:

Well which of us can raise the biggest army and impose our will upon the other, or at least defend ourselves?

I am guessing I can. Precisely because I don't wish to legislate morality; in fact, in Rightsland, imposing your morality on others is the crime, not the source of law.

meambobbo:

"Deriving your libertarianism from moral theory is the problem." Where else should it come from? My personal profit motive?

You're still thinking like a moralist. Stop trying to derive ought statements from is statements.

filc:

new wealth in increased "utility" as objectively observed by interested consumers.

Utility is always subjectively measured. No such thing as objective valuation of anything.

John Scott:

If you think values are objectively true, you either don't know what values are or what truth is.

Value's are subjectively decided, but can be objectively observed. No need to accuse me of what I do and do not know. I am not attacking you, and you have no need to attack me or my understanding. For follow up on ethics/rights/morals see http://mises.org/Community/forums/t/15228.aspx When you purchase something your actions become objectively visible. People can see that you preferred the ford taurus to the honda civic, otherwise your purchasing would have been different.

John Scott:

Why should I care about religion? And economy?

I can't tell you what you should or should not care about. Why do you assume I'm telling you what to do?

John Scott:

You are attempting to criticize a moral theory from the standpoint of a moral theory (utilitarianism) which has not been proven objectively better than my bird worshiping morality.

I am criticizing your moral theory but not from the standpoint of another moral theory. I'm criticizing it based on facts of reality. For example, man cannot fly and does not have wings. No moral theory need apply. On the contrary your saying that all moral theory's are nonesensical and you proceed to lump them into one catagory. I simply demonstrated to you how some "moral theory's" can be practiced, and how others, such as the one you mentioned, cannot. Your welcome to worship your birds as you see fit. In fact if it brings that much utility to you and your followers more power to you. Seems like a cheap way to be happy.

John Scott:

Try to establish utilitarianism with deductive reasoning.

That would depend on your definition of utilitarianism. After re-reading the thread I see that there are several versions floating around and no one has bothered to clarify.

John Scott:

Your moral theory is just as true as my silly moral theory.

I'm sorry whats my moral theory exactly? I don't remember telling you

John Scott:

Don't be thick now.

Wait.. Seriously? Please try and calm down. Try not to read too far into my posts. I get a sense that you are giving my post more credit then it deserves, and in a bad way.

John Scott:

Utility is always subjectively measured. No such thing as objective valuation of anything.

Please don't get pompus and lecture me. Especially when you didn't understand me. Also to critique you a second time, valuation is objectively recognized after human action has taken place. Now I will be like you and request that you do some follow up on your understanding of subjective valuation and praxeology. Thanks.

filc:

valuation is objectively recognized after human action has taken place.

The fact that a valuation took place is know; that fact does not render any valuation objectively correct or true.

[MOD EDIT: PLEASE DO NOT BE BELLICOSE AND INSULTING.]

I'll pass child. I don't need to prove myself to you lol....

Why would you even consider proving yourself to me? If you are being sincere in your arguments, then back them up. If you're just trolling, then leave.

John Scott:

Read, boy.

John Scott:

I said utilitarianism

http://en.wikipedia.org/wiki/Utilitarianism

John Scott:

Don't try to weasel out of it.

Weasel out of what?

John Scott:

and I have demonstrated your stupidity

I personally do not think I am stupid thank you very much. :)

John Scott:

we will move on to the numerous other idiotic statements you have uttered

Did you count them?

John Scott:

I'll school you good, and you can say thanks later.

Oh noes! He will school me! My epenis is too small :(

John Scott:

Your moral theory is just as true as my silly moral theory.

Whats my moral theory again? Where did I state I had a moral theory?

John Scott:

If you're just trolling, then leave.

And after all of this, I am the one trolling. *Gasp*

John Scott:

If you are being sincere in your arguments

The only thing that we can be demonstrated here in sincerity is your desperation in finding someone to argue with.

filc:

And after all of this, I am the one trolling.

Yes. Seeing how you would rather whine than debate the issues at hand.

John Scott:

filc:

And after all of this, I am the one trolling.

Yes. Seeing how you would rather whine than debate the issues at hand.

First you accuse me of trolling.
Told me what my moral beliefs are, without me even telling you what that is....
And now your calling me a whiner? Can you please tell me where I am trolling? Whining? And where I tell you what my moral "Theory" is?


Otherwise give it a rest dude. Antagonism does not grant more credit to your argument(and I don't even know what your argument is).

What do you think you're doing? You think you're debating? If you sincerely wanted to debate you would argue a point which had to do with the issues at hand, not your hurt feelings or your fragile emotional state.

filc:

Told me what my moral beliefs are, without me even telling you what that is..

Don't lie now. I told you an attribute of your moral beliefs, not "what your moral beliefs are." I don't have to know a person's blood type to tell them attributes of their blood.

John Scott:

What do you think you're doing? You think you're debating? If you sincerely wanted to debate

I think your confused, what your doing is not called debating. A polite discussion is fine. An petty childlike internet argument, not really. I'd rather not be badgered, harrassed, and insulted. Typically people who can hold themselves in a discussion don't need to resort to such crude and desperate measures to defend themselves. The louder you are does not mean the more correct.

John Scott:

I told you an attribute of your moral beliefs,

So now you know attributes of my moral beliefs? =D

John Scott:

your fragile emotional state

lol. If only one could look into the internet mirror and see themselves. I think it's fairly obvious who the emotionally excited one is. :)
The truth is you haven't any idea what my moral belief system is, not even the details, and I'll ask you to stop making claims on my behalf regarding the things I believe. Thanks!
At some point you should probably calm down.

filc:

John Scott:

I told you an attribute of your moral beliefs,

So now you know attributes of my moral beliefs? =D

Yes, I do. Care to prove me wrong? Or tuck tail and run?

No more further posts along these lines please. All member issues must be addressed in the member issues forum only.

Aquila:

It sounds as if you are claiming that the African Children would derive greater utility from Bill Gates' wealth than Gates himself. You did not state this directly, but you seemed to imply it. Forgive me if I'm mistaken.

Well that was certainly not my intention. :) I was attempting to show why it would be better for society, and those African children in the long run if an entrepreneur is allowed to retain his wealth rather then have the state apparatus redistribute an entrepreneurs wealth e.g Bill Gates fortune. I did not believe that those Children would derive greater utility from Bill gates fortune if they took it from him via force. And to be honest, I wasn't trying to prove which one would derive greater utility relative to the other. I was merely trying to show how both would be better off (or rather society) in the long run (from a utilitarian perspective) if a free market was allowed to operate, My reason for doing this was to demonstrate (using an Austrian or a free market economists perspective of the economy) how utilitarianism can justify a free market. Once again, let me state for the record, I'm not a natural law "rightist" or a utilitarian. I was simply trying to show why I believe that Scott was making an error to cast aside Hayeks work because it is "utilitarian drivel" and that using the morality of utilitarianism does necessarily result in collectivism.