Hi Jim & Ken:
Jim wrote:
>For what it's worth, I agree with you totally on this. BTW, when my
>10-year-old son saw your name, he excitedly said "Yoshie!" in
>reference Nintendo.
I'm happy that you agree with me. But I don't get the reference to
Nintendo (in fact, I've never played any video game -- perhaps I
shouldn't mention this here, in case Justin thinks I'm a
Rousseau-like fan of Sparta).
>Hayek's position -- so ably put forth by Justin -- seems to be (a)
>in order to avoid market rule, there needs to be a God; but (b) God
>does not exist; so (c) market rule is inevitable. But then he
>assumes that God exists in the form of the Invisible Hand.
In this regard, we can think of Hayek's position as a reworking of
Hume's objection to the Levellers:
***** In a perfect theocracy, where a being, infinitely
intelligent, governs by particular volitions, this rule would
certainly have place, and might serve to the wisest purposes: But
were mankind to execute such a law; so great is the uncertainty of
merit, both from its natural obscurity, and from the self-conceit of
each individual, that no determinate rule of conduct would ever
result from it; and the total dissolution of society must be the
immediate consequence. (Hume, "Enquiry Concerning the Principles of
Morals") *****
No God, no alternative to the market for Hume, as you summed up!
Ken wrote:
>But how do you determine
>if that is any more wasteful then having entrepreneurs guess what might sell,
>competing and going bankrupt, or advertisers spending milliions trying to
>ensure there is a preference for pet rocks?
Hayek doesn't have an answer, and as many noted he was uninterested
in empirical work of actually comparing the cost of information
gathering for a planned economy with transaction costs &
externalities in a market economy. A Ronald Coase he wasn't.
>Would von Mises or Hayek really
>claim that we do not know our needs and desires without participating in a
>market?
What Hayek claims is that the price system brings about "the taking
into account of conflicts of desires which would have been overlooked
otherwise [i.e. under planned economy]," chiefly through "the
accounting of costs." Prices are for Hayek "signs which enable him
[a producer] to contribute to the satisfaction of needs of which he
does not know, and to do so by taking advantage of conditions of
which he also learns only indirectly" (Hayek, _Law, Legislation and
Liberty_). In a move that anticipates postmodernism, Hayek basically
says that we can't have direct knowledge of what we really need &
want & of how we should satisfy our needs & wants, unless we are
mediated by the "sign system" of prices. Prices as "signs" function
for Hayek as the symbolic order functions for Lacan. Failures are
not anomalous but essential in Hayek's economy of a "sign system":
"It is one of the chief tasks of competition to show which plans are
false." In other words, Hayek implies that truths are only
differentially revealed to us when set against market failures (false
plans), just as those who are influenced by Saussurian linguistics
have us conceive of the dichotomy of true/false in language as
chiefly differential, de-emphasizing or bracketing altogether the
role of reference in our language use. Further, just as the
Saussurian linguistics is synchronic, unlike the diachronic
conception of language in philology, in the Hayekian ecnonomy, "The
current prices, it must be specially noted, serve in this process as
indicators of what ought to be done in the present circumstances and
have no necessary relation to what has been done in the past" (Hayek,
_Law, Legislation and Liberty_). If Hayek had adopted psychoanalysis
(some version of which says an individual's unconscious can never be
made fully transparent to himself), he would have been _the_
forefather of postmodernism before the letter! Economy is a
discourse of desires in perpetual conflict of which we are only dimly
aware, not a historically determined ensemble of social relations
which we may consciously & collectively transform!
Needless to say, I think that Hayek's textualization of economy is
highly misleading (since it directs our attention away from the role
of the competitive market as *compulsion* & of prices as *alien
power* that heteronomously determines our lives, severing our means
from ends), and I add once again that Hayek doesn't explain why we
can't use planning as a democratic procedure of discovery through
trial and error, figuring out how to meet existing needs and to even
find out & develop new needs & desires.
Yoshie
