Abstract
This paper examines Hayek's constitutional theory of the liberal state. Hayek argued powerfully that no central planner has sufficient knowledge to run an economy, and that no one has sufficient knowledge to determine ends for others. Pushed to their logical conclusion, these arguments would seem to prescribe the smallest possible state in both scope and size, or perhaps even no state at all. Elsewhere in his writings, however, Hayek explicitly endorsed government activity that goes far beyond a “night watchman” state (to include public works such as infrastructure, roads and bridge, as well as social insurance, conscription, a minimum safety net, and even countercyclical investment)—as long as state action was carefully constrained by a generality principle. After thoroughly setting forth Hayek's worries about knowledge and his proposals for acceptable station action, the paper synthesizes the two into a Hayekian constitutional theory of the liberal state, then closes with a brief discussion of some tensions in Hayek's work.
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Notes
Hayek (1952b) represents the fruition of his 1920s forays into psychology, which he set aside for the professional study of economics. See Caldwell (2005, 205) on Hayek's intellectual transformation with Hayek (1936), and Caldwell (2005, 241) on The Road to Serfdom (and thus Hayek's political economy) as part of the bigger “abuse of reason” project (Hayek 1936, 1945, culminating in Hayek 1952a, b, as well as essays in Hayek 1967, 1978). For a general discussion of Hayek's constitutional theory as a solution to epistemological problems, see Wenzel (2010).
Beyond the prevention of coercion, Hayek also allows for state action to defend individuals against fraud and deception, for the same epistemological reasons: “deception, like coercion, is a form of manipulating the data on which a person counts, in order to make him do what the deceiver wants him to do” (ibid, 143–144).
If we consider the ages of 45 and 60 to be youth, compared with the more seasoned 70s of Law, Legislation, and Liberty, and the late 80s of The Fatal Conceit!
We note here the parallel with Buchanan and Congleton (1998[2003], 201–204), who use slightly different language to differentiate between a “minimal but discriminatory [non-general]” state, and a “maximal but non-discriminatory” state. They also (ibid, 200) laud Hayek, pointing out that most classical liberals are willing to drop an insistence on non-discrimination (scope) in favor of a drop in size of the state; Hayek is explicitly not.
To be precise, Mill's test applies only to a government's decision to prohibit some action. Left unclear is whether he means to suggest there is a different justificatory hurdle for the two other forms of authoritative interference (a command to act, or a prescribed method of acting).
See Martin and Wenzel (2019b).
This section summarizes Martin and Wenzel (2018).
This section summarizes Martin and Wenzel (2019a).
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For feedback and foundational discussions, the authors thank the editors, the participants at the 2014 meetings of the Association of Private Enterprise Education and the Society for the Development of Austrian Economics, Zachary Caceres and his crack team of liberally educated students from the Michael Polanyi College at Universidad Francisco Marroquin, Peter Boettke and Jim Otteson.
Material from Hayek 1960 is reproduced from Constitution of Liberty RC, 1st Edition by F.A. Hayek, published by Routledge © 1960 by the University of Chicago, reproduced by arrangement with Taylor & Francis Books UK and the University of Chicago Press. Material from Hayek 1944 is reproduced from ROAD TO SERFDOM - RC, 2nd Edition by F.A., Hayek, published by Routledge, © 1944 by the University of Chicago, reproduced by arrangement with Taylor & Francis Books UK and the University of Chicago Press. Material from Hayek 1976 is reproduced from Law, Legislation and Liberty, Hayek, 1st Edition by F.A., Hayek, published by Routledge, © 1976 by F.A. Hayek, reproduced by arrangement with Taylor & Francis Books UK and the University of Chicago Press.
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Martin, C.S., Wenzel, N.G. Generality and knowledge: Hayek's constitutional theory of the liberal state. Const Polit Econ 31, 145–168 (2020). https://doi.org/10.1007/s10602-019-09299-x
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DOI: https://doi.org/10.1007/s10602-019-09299-x