Hayek on the Impossibility of Designing Society

This week in my online class “How the World Works – an Introduction,” I introduced a few basic economics concepts — starting with the easy to understand law of demand and supply. We call it a law but it is not the same sort of thing we call laws in the natural sciences. Social sciences are qualitatively different from the physical sciences like physics and zoology. Societies are not machines made of inert matter engineered by designers; societies are ecosystems of organisms that have minds which have volition and act purposefully to achieve their goals.

Social engineering — the deliberate transformation of an entire society according to some design — is doomed to failure because people are not inanimate objects that can be manipulated at will. The basic difficulty boils down to a lack of knowledge and the open-ended nature of the future. Nobody has the required knowledge of the present conditions of every person in society and the future state of the society.

Here’s a bit from Friedrich von Hayek’s December 1974 lecture to the memory of Alfred Nobel:

To act on the belief that we possess the knowledge and the power which enable us to shape the processes of society entirely to our liking, knowledge which in fact we do not possess, is likely to make us do much harm. In the physical sciences there may be little objection to trying to do the impossible; one might even feel that one ought not to discourage the over-confident because their experiments may after all produce some new insights. But in the social field the erroneous belief that the exercise of some power would have beneficial consequences is likely to lead to a new power to coerce other men being conferred on some authority. Even if such power is not in itself bad, its exercise is likely to impede the functioning of those spontaneous ordering forces by which, without understanding them, man is in fact so largely assisted in the pursuit of his aims. We are only beginning to understand on how subtle a communication system the functioning of an advanced industrial society is based – a communications system which we call the market and which turns out to be a more efficient mechanism for digesting dispersed information than any that man has deliberately designed.

The best we can do is to leave society alone and trust in the social processes that create spontaneous order. Every bit of an advanced industrial society is designed — the machines, the tools, the buildings and factories, the cars, ships, planes, roads, ports, whatever — but the advanced industrial society itself cannot be designed. To believe that because we have designed every component material bit of society, we have the power to design society too is to commit a category error.

Author: Atanu Dey

Economist. View all posts by Atanu Dey