New Book: "A Hayekian Worldview"

[hayekian]

Hello,

I recently published "A Hayekian Worldview: Natural Selection and the Evolution of Life, Society, the Economic Crisis,Hip-Hop, and F.A. Hayek's Coming Intellectual Revolution" and wanted to let people here know about it.


As the Ron Paul revolution continues to grow and more and more people stumble upon the Austrian School of Economics, the more they will inevitably stumble upon F.A. Hayek. And the more they stumble upon Hayek, the more they will stumble upon his evolutionary ideas that help explain how the entire world works. The central theme of the book can be summarized by the following words Hayek wrote:

"We understand now that all enduring structures above the level of the simplest atoms, and up to the brain and society, are the results of, and can be explained only in terms of, processes of selective evolution..."

The task of “A Hayekian Worldview” is to provide the layperson or motivated high school student with the necessary knowledge needed to fully comprehend Hayek’s quote and thus fully understand how natural selection and “processes of selective evolution” are they keys to understanding how the world works. After the introductory chapter, the book’s second chapter briefly discusses how natural selection evolved the mechanism of biological evolution and genetics as a way of creating biological orders and what we refer to as living things, the third chapter(intro to Austrian econ) explains how natural selection evolved what economists refer to as “the market process” and how “the market process” via things like money, prices, interest rates and competition creates the socioeconomic order or what British philosopher Herbert Spencer referred to as “The Social Organism” . The fourth chapter discusses how natural selection has shaped and evolved things like our culture, laws, and religion, and just as importantly how their evolution is intertwined with the evolution of the market process and the growth of the social order. The remaining chapters discuss the many ways in which governments screw things up, important bits of history like WWI, WWII, and the birth of the state of Israel and some of what grows out of it and a whole lot more. The Hayekian intellectual revolution is about to explode, not only thanks to people's interest in economics via the Ron Paul Revolution, but also due to the works of biologists like Matt Ridley(see his great book "The Rational Optimist: How Prosperity Evolves")

Via amazon.com's "look inside" feature one can read almost the first two chapters and the TOC. If you own a kindle and also have amazon prime you can read the book for free.

 

[roho76]

I'm convinced more and more everyday that the people who run the world (the statist mentality) are not only sociopaths but also obsessive compulsive. They can't allow for things to progress naturally. They think that if things aren't controlled then they will fall apart. They believe that they are the glue that holds society together. They constantly strive for perfection in a world that only works through chaos and chaos and OCD don't get along.

 

[hayekian]

I'm convinced more and more everyday that the people who run the world (the statist mentality) are not only sociopaths but also obsessive compulsive. They can't allow for things to progress naturally. They think that if things aren't controlled then they will fall apart. They believe that they are the glue that holds society together. They constantly strive for perfection in a world that only works through chaos and chaos and OCD don't get along.

I think your point follows very closely with the general theme of my book. Let's face it, our politicians, government, and most of our troubles are simply the inevitable outgrowth of the economic ignorance and 'tribalistic' nature of the public. They inevitably see government bureaucracies as being the sort of 'order-makers' while not having the slightest clue about the "market process", how it works or has evolved and how it is the real order-maker.

I really like how Herbert Spencer put it in this excerpt while referring to the increasing complexity and progress seen in England during the late 1800s:



“What has produced the transformation which has since taken place? Not legislation, not stern repression, not coercion. The improvement has slowly arisen, along with other social improvements, from natural causes. The vis medicatrix naturce has been in operation. But this large fact and other large facts having like implications are ignored by our agitators[politicians]. They cannot be made to recognize the process of evolution resulting from men's daily activities, though facts forced on them from morning till night show this in myriad fold ways. The houses they live in, their furniture, clothes, fuel, food — all are brought into existence by the spontaneous efforts of citizens supplying one another's wants. The pastures and cornfields they travel through, cover areas originally moor and bog, which have been transformed by individual enterprise. The roads, the railways, the trains, the telegraphs, are products of combined exertions prompted by desires for profit and maintenance. The villages and towns they pass exhibit the accretions due to private actions. The districts devoted to one or other manufacture have been so devoted by men who were simply seeking incomes to live upon. The enormous distributing organization with its vast warehouses and retail shops lining the streets, carrying everywhere innumerable kinds of commodities, has arisen without the planning of any-one. Market towns, large and small, have without forethought become places of periodic exchanges; while exchanges of higher and larger kinds have established themselves in London, where, from hour to hour, you may feel the pulse of the world. So, too, by spontaneous co-operation has grown up that immense mercantile marine, sailing and steaming, which takes men everywhere and brings goods from all places.
And no less are we indebted to the united doings of private individuals for that network of submarine telegraphs by which there is now established some-thing like a universal consciousness. All these things are non-governmental. If we ask how arose the science which guided the development of them, we find its origin to have been non-governmental. If we ask whence came all the multitudinous implied inventions, the reply is that their origin, too, was non-governmental.[One should keep in mind that while England was overflowing with innovation and leading the way in the Industrial Revolution, the government had nothing to do with any sort of ‘Science’ education or the funding of scientific research like it does today] Of the Press, daily, weekly, monthly, we still have to say it is non-governmental. It is so with the great torrent of books continually issuing, as well as with the arts — music, painting, sculpture, in their various developments — and with the amusements, filling hours of relaxation. This vast social organization, the life of which we severally aid and which makes our lives possible by satisfying our wants, is just as much a naturally-developed product as is the language by which the wants are communicated. No State-authority, no king or council, made the one any more than the other. The ridiculous Carlylean theory of the Great Man and his achievements, absolutely ignores this genesis of social structures and functions which has been going on through the ages. The deeds of the ruler who modifies the actions of his generation, it confounds with the evolution of the great body-politic itself, of which those actions are but incidents. It is as though a child, seeing for the first time a tree from which a gardener is here cutting off a branch and there pruning away smaller parts, should regard the gardener, the only visible agent, as the creator of the whole structure: knowing nothing about the agency of sun and rain, air and soil. Undeveloped intelligences cannot recognize the results of slow, silent, invisible causes.
Education and culture as we now see them, do nothing to diminish this incapacity but tend rather to increase it. In so far as they are more than linguistic, the "Humanities," to which the attention of the young is mainly given, are concerned with personalities. After the traditional doings of gods and heroes, of great leaders and their conquests, come the products of the poets, of the historians, of the philosophers. And when study of earlier ages is supplemented by study of later ages, we find the so-called history composed of kings' biographies, the narratives of their conflicts, the squabbles and intrigues of their vassals and dependents. In the consciousness of one who has passed through the curriculum universally prevailing until recently, there is no place for natural causation. Instead, there exists only the thought of what, in a relative sense, is artificial causation — the causation by appointed agencies and through force directed by this or that individual will. Small changes wrought by officials are clearly conceived, but there is no conception of those vast changes which have been wrought through the daily process of things undirected by authority. And thus the notion that a society is a manufacture and not an evolution, vitiates political thinking at large; leading, as in the case which has served me for a text, to the belief that only by coercion can benefits be achieved. Is an evil shown? then it must be suppressed by law. Is a good thing suggested? then let it be compassed by an Act of Parliament.”

 

[BrendenR]

hayekian, have you read "The Origin of Wealth"?

It discusses the economy as a complex adaptive system, that develops based on evolutionary principles.

Like Austrian economics, it critiques neoclassical economics as flawed in many ways.

His book The Origin of Wealth: Evolution, Complexity, and the Radical Remaking of Economics (Harvard Business School Press, 2006) describes how advances in fields ranging from evolutionary theory, to physics, biology, computer science, and cognitive science are fundamentally changing the way economists view the workings of the economy. For the past century, economists have viewed the economy as an equilibrium system made up of perfectly rational agents with access to full information, who produce and consume goods and services in economies with optimally efficient markets and institutions. This theory, known as neoclassical economics has dominated mainstream theory, particularly in the US and UK, since the late 19th century when it was developed by figures such as Leon Walras, William Stanley Jevons, and Vilfredo Pareto.
Beinhocker argues that neoclassical economics is fundamentally flawed, has a poor record of empirical validation, and that the strong assumptions the theory requires serve to make economics of less relevance to real world issues than the field otherwise might be. Beinhocker claims that neoclassical theory is in the process of being supplanted by what he calls complexity economics - the view that the economy is a complex adaptive system made up of realistically rational agents who dynamically interact with each other in an evolutionary system. Complexity economics is in turn built on foundations of a long-standing tradition of heterodox economics that includes areas such as behavioral economics, institutional economics, Austrian economics, and evolutionary economics.
In the Origin of Wealth Beinhocker reviews the work of researchers such as Brian Arthur, J. Doyne Farmer, Samuel Bowles, and a number of others, many of whom are affiliated with the Santa Fe Institute, who are pioneering work in this emerging field. He also discusses what the practical implications of these new ideas are for the fields of business strategy, organization, finance theory, as well as its impact on long-standing debates between the left and right in the political sphere, such as the role of states versus markets, and whether humans are inherently altruistic or self-regarding.
In the Origin of Wealth Beinhocker states that if sources of oscillations are endogenous rather than exogenous shocks, then one implication is that the standard solutions of interest rate cuts and increased government spending does not address the root causes of the cycle; they merely address the symptoms. p127.

 

[hayekian]

hayekian, have you read "The Origin of Wealth"?

It discusses the economy as a complex adaptive system, that develops based on evolutionary principles.

Like Austrian economics, it critiques neoclassical economics as flawed in many ways.

Yes, I have that book. A friend of mine who knew I was writing a book with a similar theme brought "The Origin of Wealth" to my attention not long after its initial publication in 2006. It has been a long time since I got it and I think I only read about 20% of it at the time before moving on to other things that interested me more at the time.


Your quote about "The Origins..." mentions Santa Fe Institute scholars like Brian Arthur and J. Doyne Farmer. It was actually by reading books like "COMPLEXITY: THE EMERGING SCIENCE AT THE EDGE OF ORDER AND CHAOS" by M. Mitchell Waldrop(which also describe the intellectual journeys of Arthur and Farmer) that my interest in an evolutionary worldview intensified. But when I stumbled upon Austrian Economics, and more specifically the writings of Hayek, I felt like I had stumbled upon a group of scholars that had not only explained the evolutionary nature and the real workings of the social order better, but also had done it WAY sooner. Brian Arthur himself admitted that he had essentially rediscovered ideas brought up by the Austrians. He said:

"Right after we published our first findings, we started getting letters from all over the country saying, 'You know, all you guys have done is rediscover Austrian economics.'...I admit I wasn't familiar with Hayek and von Mises at the time. But now that I've read them, I can see that this is essentially true."



If you are going to write a book like "The Origins..." that attempts to explain the evolutionary origins and nature of the social order, you want to understand how the social order works, which MUST include the Austrian Theory of the Business Cycle among many other contributions by the Austrians, and you also have to discuss the evolution of the market process and its mechanisms or components like money. And if you are going to talk about the evolution of money then you have to give credit to the man commonly referred to as the Founder of the Austrian school, Carl Menger. There isn't a single reference to either von Mises, and much less to Carl Menger in "The Origin of Wealth" , yet obviously these men made monumental contributions to the proper understanding of the social order long before the Santa Fe Institute came into existence. And sadly I don't think the people at the Santa Fe Institute have learned much about how the real world works. I had looked at their page(http://www.santafe.edu/) not long ago and just did so again. For example, you click on the main link titled "Risk, Markets, and Innovation" you get:

"Risk, Markets, and Innovation

Organizers: J. Doyne Farmer

SFI’s focus area in Risk, Markets, and Innovation uses both empirical, analytical, and theoretical methods to explore the origins of financial risk. Using unique, real-world data sets and modeling approaches that simulate, probabilistically, the individual and aggregated behaviors of agents acting in a financial market, SFI scientists develop and test new, quantitative theoretical frameworks that describe the complex dynamics at play in markets and whole economies. These theoretical frameworks are a departure from mainstream economic theory; they do not assume the self-correcting or bounding influence of an equilibrium, nor do they assume that agents act rationally. By incorporating these ideas and methods, as well as the transdisciplinary insights of economists, physicists, and biologists, SFI researchers are gaining improved understandings of such phenomena as the leverage cycle, liquidity, volatility, noise, non-rational decision-making, the size and trading frequencies of funds, the ecology and evolution of market strategies, and the proper method of discounting the future. "​

What is wrong with all this? Not a single word about the root of most of our ills, monopolistic fractional-reserve central banking and the horrendous distortions it causes on all levels of society coupled with a plethora of government interventions in the economy. These are the kinds of things that every day tons of teenagers who stumble upon mises.org and a few books by Dr. Paul or Tom Woods(Meltdown is superb!) are beginning to understand way better than all the people in the santa fe institute put together(regardless of how intimidating their mathematical models might look ). If all their wisdom really led to great insights, they'd be joining Dr. Paul in trying to abolish the FED



Sadly "The Origins of Wealth", although praising Hayek in some parts,mentions Hayek in a section titled "Cranks and Half-Baked Speculators". Bottom line "The Origins..." is great because it does discuss society as the result of an evolutionary process and it is full of insightful information. I'd still give it 5 starts on amazon, but like I said, I think it overlooks significant contributions by the Austrians and does not really teach you how the economy works.



From my perspective, the one I try to explain in the book, Natural Selection is the greatest algorithm, the great order-maker. It first evolved biological evolution to create the biological order and later it shaped human beings to evolve "the market process" which led to the explosive growth of the social order/organism and its bewildering complexity. In my book"A Hayekian Worldview" I try to explain all this from scratch, crediting and highlighting the key members of the Austrian school and some of their contributions, also discussing key historical events to sort of put it all into context and a whole lot more. Hopefully I've managed to do a decent job of condensing the wisdom of the Austrians and also books like "The Origins..." into a shorter, much easier to digest book.

 

[BrendenR]

Bottom line "The Origins..." is great because it does discuss society as the result of an evolutionary process and it is full of insightful information. I'd still give it 5 starts on amazon, but like I said, I think it overlooks significant contributions by the Austrians and does not really teach you how the economy works.

I think this summarizes it greatly. He focuses a lot on evolution, how technology advances and such. It also debunks the notion that the economy is always in equilibrium and covers the history of how economics borrowed these theories from the physical sciences that were clearly applied wrong, but stuck around and have never really gone away, because they make pretty models. It's a great supplement to books on Austrian economics, IMHO.

I'll be picking up your book, but I can't say when I'll get around to reading it .

 

[hayekian]

and covers the history of how economics borrowed these theories from the physical sciences that were clearly applied wrong, but stuck around and have never really gone away, because they make pretty models.

Yet even here, "The Origin of Wealth" essentially restates stuff Hayek had already explained well over half a century ago in one of his major works "The Counter-revolution of Science: Studies on the Abuse of Reason"(1952)

In a review of the book provided by link above, Bettina Bien Greaves summarizes:

Mises’ fellow- countryman, economist and personal friend, Nobel Prize Laureate F. A. Hayek, has carefully analyzed one of the most “fashionable” and yet one of the most destructive doctrines of modern economic thought—the idea that the methods of the physical sciences are applicable also to the study of society.

So again, even here the Austrians and Hayek were, and still are, way ahead of their time. But hopefully not too far ahead because thanks to the Ron Paul Revolution and the attention it is bringing to the Austrian School and people like Menger, Mises, Rothbard and Hayek, it looks like the mainstream will finally catch up.

Thanks for buying book