ABSTRACT
In a symposium on The Fatal Conceit, the economic historian Robert Higgs chided Hayek for ignorance of modern developments in public choice. “From reading Hayek,” Higgs argued, “one would never know that public choice had been invented. Neither Buchanan nor Tullock nor any of their followers gets a single mention. Neither does Hayek show any awareness of public choice problems” (1988-9, pp. 8-9). According to Higgs, there is no discussion of interest groups, the motivation for voting, free rider problems, constitutional rules, etc., in Hayek’s work. I grant that Higgs’ discussion is limited to The Fatal Conceit and is not meant to address the entire corpus of Hayek’s work, but the impression on the reader is that this flaw in Hayek’s final work is symptomatic of something that permeates his entire body of work in economics and politics. The Fatal Conceit is seen as simply a restatement of Hayek’s earlier works and, that, in fact, is the problem, according to Higgs. Repeating familiar Hayekian themes about rational constructivism and the informational function of the price system does not suffice as an academically rigorous foundation for classical liberalism. Not only are the political issues raised by public choice scholars ignored, but so are the “market failure” arguments that have emerged from mainstream neoclassical economics. Hayek’s argument is analytically weak and rhetorically vapid, and, as a result, Higgs concludes, we should not expect Hayek’s argument to convince anyone who is not already deeply sympathetic to the Hayekian position.
