Friedrich A. Hayek was a 20th century Nobel Laureate in Economics and a noted social philosopher. In 1946, he made a speech at Trinity College, Dublin to which he gave the title Individualism True and False. He was speaking at a time when Europe and much of the world had committed self-destruction through warring governments. He wanted to point out how this could be avoided by future generations. His prescription was the system of Individualism.
The “false” interpretation of Individualism is that it means isolated, self-contained individuals who don’t collaborate. For Hayek, Individualism was a social concept with the potential to result in a better life for all.
Center For Individualism offers this somewhat modernized summary and language, in the strong belief that the underlying ideas are fully applicable today.
1) We all want social order.
Economists distinguish between ends – objectives or goals – and means – the method of achieving the objective. Social order is an objective. None of wants to live in strife or conflict, or feel we are fighting with others for our place in society. At the same time, we all want the opportunity to improve, to succeed, to better our circumstances. The condition for combining social stability with individual opportunity to improve is social order. It’s a desired state
2) But the way we try to achieve it is wrong.
Law and order is the current way: command-and-control by the state, based on the laws the state manufactures through the political process. Unfortunately, under these conditions, a society tends to drift towards the worst forms of state control. Hayek was making this point in 1947, when society was emerging from the ravages of two world wars, which were fights over different kinds of state control – communism, fascism, national socialism and democracy. Today is not so extreme, but the drift is manifest.
3) The alternative is Individualism: a set of general rules that everyone observes without government coercion.
Hayek advocated a system of general rules, equally applicable to all people and intended to be permanent (even if subject to revision with the growth of knowledge). These rules provide an institutional framework within which the decisions as to what to do and how to earn a living are left up to the individuals. Individual initiative is given the widest possible scope and the best opportunity to bring about effective coordination of individual effort.
4) We already know the general rules of Individualism.
The point about these general rules is that they are not prescriptive. They emerge over time as individuals in society collaborate in the marketplace. Hayek did set out a few in his 1947 speech.
- Everyone follows their own individual conscience.
- All property is private property, so I know what’s mine and respect what’s yours. None of it belongs to the state.
- Everyone is free to try their best, to see what they can achieve.
- Each individual contribution is tested and corrected by others.
- No-one is qualified to pass final judgment on others’ capacities or what they can do.
- The remunerations of the efforts of the individual correspond to the utility of the result of his effort to others.
5) An effective competitive market satisfies these conditions.
In the market, the individual takes the risk to find out if the results of their efforts create value for others. Everyone does their best, and the preferences of consumers tell producers what to produce more of and less of.
6) If freedom is granted to all individuals, they will contribute as much as possible to the needs of all others.
Individualism makes institutionalized charity and government welfare unnecessary, and, in fact, harmful to the degree that it interferes with the working of the market. Individuals are collaborative and giving. They focus their efforts on that part of society that they know – family, community, small group; they don’t need to serve the world. This spontaneous collaboration of free people results in great institutions on which civilization arises.
7) The system of Individualism does not require wise or powerful men to run it.
We err when we defer to other individuals or groups who tell us they know better than us what is the right thing to do. Nor is the majority always right. Individualism has no belief in majority decisions. It is a dangerous misconception to accept as true and binding the views of the majority. No-one knows what’s best. Everybody is allowed to try and see what they can do.
8) The political conclusion is that we must limit all coercive and restrictive power.
In order to ensure the benefits of voluntary and spontaneous collaboration, it is important not to place political or governmental restrictions on individuals. The individual should not be subjected to force or coercion by someone who claims to be acting for society as a whole.
9) Individualism is not egalitarian in the modern sense.
Individualism has no reason to try to make people equal. Instead, it treats them equally. Individualism is opposed to limitation on the position an individual may achieve. No-one should have the power to decide another’s status.
10) The spirit of Individualism is humility.
It is hubris to believe that some people or institutions can “run the country” or “plan the economy”. Every individual does their best. We are all awed by the result: mankind has achieved great things that have not been designed or understood by any individual.