A Long-Standing Interest in Science

The details of Hayek's family background and education are well known and have also been recounted by Hayek himself (Hayek Reference Hayek, Kresge and Wenar1994; Leube Reference Leube, Nishiyama and Leube1984; Ebenstein Reference Ebenstein2001, Reference Ebenstein2003; Caldwell Reference Caldwell2004). In this first short section I will briefly set out the background against which Hayek developed his ideas insofar as it is important for understanding his later claims concerning the methodological differences between the physical and the social sciences.

Hayek came from a family of natural scientists. His grandfather, Gustav, was a secondary school science teacher and biologist who wrote a number of monographs and organized the first international ornithological exhibition in Vienna in 1881. His father, August, was a physician and botanist who published extensively on plant geography and taught as Privatdozent at the University of Vienna. Though Hayek himself never received a systematic scientific education, his father's occupation provided a good dose of knowledge in the natural sciences, specifically botany and biology. Hayek helped his father organize a large collection of various minerals, insects, and flowers, and even started his own herbarium. While he was a teenager, he also began a monograph on a specific type of orchid, Orchis condigera. The study was never completed because Hayek could not find a live specimen of this rare flower. Nonetheless, he intimated that “systematic botany, with its puzzle of the existence of clearly defined classes proved a useful education” (Hayek Reference Hayek, Kresge and Wenar1994, 43). Indeed questions of classification were paramount in Hayek's later work, as we shall soon see.

Hayek regretted the fact that he was too young when his father presented him with the two volumes of August Weismann's essay on evolution, Vorträge über Deszendenztheorie (Weismann Reference Weismann1902).Footnote ¹ He commented that his father recognized his “intellectual dissatisfaction with the taxonomic aspects of biology and longing for theory,” but alas the books were beyond his comprehension and were too great a challenge for him to read. Hayek believed that had he returned to Weismann's essay later in life he would probably have become a biologist. “The subject,” he added, “has retained for me an unceasing fascination, and work in that field [biology] would have satisfied my inclination for patient search for significant facts, an inclination which by the nature of the subject is permanently frustrated in economic theory and had to find its outlets in occasional dabbling in biographical, genealogical and similar amusements” (Hayek Reference Hayek, Kresge and Wenar1994, 43).

Hayek's decision to study economics was mainly practical. He was equally interested in psychology, but because, as he put it, “[psychology] died out by natural death during the wartime” – with its main figures either too old (e.g. Adolf Stöhr) or victims of the war – he opted to focus on economics (ibid., 51). From his own confessions, the appeal of both psychology and economics was due in part to the atmosphere in Vienna in the years immediately after the First World War. Hayek recalled that the two chief subjects of discussion among students at that time were Marxism and psychoanalysis. He claimed to have made a conscious effort to study both doctrines but found them to be “thoroughly unscientific because they so defined their terms that their statements were necessarily true and unrefutable, and therefore said nothing about the world” (ibid., 49).

Hayek's attempt to depict himself as a proto-Popperian may have been the result of his more mature reflections rather than an accurate description of his intellectual development. Nonetheless, it is clear that already in those early years he was intrigued by questions concerning the legitimacy of epistemic claims, and how to construct scientific knowledge. He even tried to conduct empirical research himself. During the winter of 1920, he spent a few months in the laboratory of brain scientist Constantin von Monakow in an attempt to trace the transmission of sensations (neural impulses) to the brain and their transformation into perceptions. His study was inspired by Ernst Mach's Beiträge zur Analyse der Empfindungen (Mach Reference Mach1886). Mach asserted that all knowledge comes from sensations, and he espoused a staunch empiricist-verificationist position arguing that any phenomenon, in order to be treated scientifically, must be empirically verifiable. Hayek claimed that it was through work on his 1920 paper that he realized that Mach was wrong: pure sensations cannot be perceived. Interconnections in the brain must be made, i.e. some sort of classification that can relate past experience to present experience must take place. He started writing a paper on his findings Beiträge zur Theorie der Entwicklung des Bewusstseins, which remained unfinished (Hayek Reference Hayek and Heinz1991). Twenty-five years would pass before Hayek returned to the investigation of how the mind works, which eventually led to the publication of The Sensory Order (Reference Hayek1952). Yet he did not abandon his interest in science and its methodology, and Mach's philosophy continued to provide the background against which he developed his ideas on scientific method.

Though Hayek never studied with Mach, he was a student at the University of Vienna when one of Mach's most important followers, Moritz Schlick, joined the faculty. Schlick was appointed professor of philosophy of the inductive sciences in 1922 and soon thereafter became the figurehead of a group of Viennese intellectuals known as the logical positivists. The logical positivists met at first for informal discussions conducted by Schlick, and in 1928 founded a philosophical association known as the Ernst Mach Association (Verein Ernst Mach), with Schlick as its chairman. In 1929, they published a manifesto titled “Scientific Conception of the World” under the collective name by which they were since then identified – “the Vienna Circle” (Wiener Kreis). Following Mach's philosophy, the two main claims in the Vienna Circle manifesto were: first, that experience is the only source of knowledge, and second, that a scientific explanation should follow a specific method of analysis that uses symbolic logic. The aim of this logical analysis was to show that only claims that can be reduced to simple statements about experience are scientific, and those that cannot – for instance metaphysical statements – have no meaning.

Hayek was very impressed by Moritz Schlick and confessed that he was the first after Mach who persuaded him that “philosophy could make sense” (Hayek Reference Hayek, Kresge and Wenar1994, 64). But he was manifestly more impressed with Popper's criticism of the logical positivists. Hayek was one of the early readers of Popper's seminal work from Reference Popper1934, The Logic of Scientific Discovery (Logik der Forschung), which was first published in the collection Writings on the Scientific Conception of the World (Schriften zur wissenschaftlichen Weltauffassung) of the Vienna Circle. He embraced Popper's scientific method, which relied on falsification rather than verification, and decided to push further the search for truth criteria in the social sciences. Bruce Caldwell, one of Hayek's recent biographers, claimed that the question of the difference between science and pseudo-science constituted Hayek's “final puzzle,” and accordingly methodological views came to inform most of his substantive work (Caldwell Reference Caldwell2004, 10–11). From Hayek's own recollections it seems that these issues motivated his intellectual endeavors all along: “My interests, even from the beginning, were – My reading was largely philosophical . . . it was method of science. You see, I had shifted from the wholly biological approach to the social field, . . . and I was searching for the scientific character of the approach to the social sciences” (Hayek, quoted in Ebenstein Reference Ebenstein2003, 36). A close examination shows, however, that Hayek did not totally shift away from biology, and eventually tried to establish important parallels between economics and evolutionary biology on the theoretical level. This move was inspired by historical reflections and Hayek's criticism of the “rationalist approach.” He dedicated the years of the Second World War to analyzing the characteristics and origin of this approach, which he located in French intellectual thought of the eighteenth and nineteenth centuries.

Historical Lessons

Hayek believed that John M. Keynes was not a good economist due to his lack of training in economic history, in particular, that of the nineteenth century “because he disliked it for aesthetic reasons. The nineteenth century is ugly. . . . It's all Dickens” (Hayek Reference Hayek, Kresge and Wenar1994, 97). In contrast, Hayek thought that the key to understanding some basic truths about the nature of the social sciences – economics in particular – lay in the study of the history of the “ugly century”: the century that saw the misguided development of the social sciences and the growth of socialism. He called it the time of “the abuse and decline of reason,” and planned to write a two-part treatise on the subject. The first part, “Hubris of Reason,” was to be a historical representation of the fundamentals of individualism, followed by an analysis of the intellectual sources hostile to it, and concluding with four chapters on the development of socialist ideas in France, Germany, England, and America. The second part, “Nemesis of the Planned Society,” was meant to be a criticism of the idea that social evolution follows necessary laws of progress that allow planning for the future, as exemplified by fascism and communism (Ebenstein Reference Ebenstein2003, 112). Hayek never realized the project in the form intended, but he published a number of articles in the journal Economica that were later grouped in a collection: The Counter-Revolution of Science: Studies on the Abuse of Reason (Hayek Reference Hayek1955). The sketch for the second volume became the famous The Road to Serfdom (Hayek Reference Hayek1944).

The Counter-Revolution of Science has been the object of multiple interpretations in the secondary literature (Caldwell Reference Caldwell2004, chap. 11 and appendix D). In my examination of this text, I propose to highlight two essential elements that merit special attention in reconstructing the path Hayek took in forming his ideas. First, I intend to emphasize the educational value that Hayek assigned to the study of history, and the important role of historical analysis in leading him to certain methodological claims. Second, I will show how Hayek's rather crude separation between English and French philosophical traditions and his criticism of the latter, in particular Comte's positivism, served as the basis for a new definition of the data and goals of the social sciences.

The Counter-Revolution of Science is divided into two main parts. The first and more theoretical “Scientism and the Study of Society” is a compilation of articles published from 1942 to 1944; the second part comprises articles published in 1941. Hayek decided to reverse their order because he thought that this exhibited his ideas in a more systematic manner. Yet, there was more to Hayek's “accidental order” of publication than he wished to admit. In fact, he got his inspiration from history, and began to elaborate his own philosophy of the social sciences through a review of past intellectual legacies. It is therefore no accident that Hayek was a great admirer of Edmund Burke. He described himself as a “Burkean Whig” (Hayek Reference Hayek, Kresge and Wenar1994, 141), and echoed Burke's views, claiming that confidence in scientific progress led the “great scientists of the eighteenth and nineteenth century, which were congregated in Paris, to a new mental attitude towards social affairs” (Hayek Reference Hayek1955, 105). This mental attitude prepared the terrain for the rise of positivism and what in Hayek's eyes was its natural offshoot: socialism. Like Burke, Hayek blamed the French Revolution for the bad turn that Enlightenment ideas took. But he also insisted that the source of the problem lay deeper, in the philosophies of francophone Enlightenment figures as compared to their British counterparts.

In a lecture delivered in 1945 entitled “Individualism: True and False” (Hayek Reference Hayek1948), and which includes ideas that were meant to appear in the first part of The Abuse of Reason project, Hayek attempted to highlight the fundamental differences that separated the philosophical currents on both sides of the English Channel. He identified “true individualism” with John Locke, Bernard Mandeville, Josiah Tucker, Adam Ferguson, Adam Smith, and “their great contemporary, Edmund Burke.” Oddly enough, he included in this group of British intellectuals also the Frenchman Alexis de Tocqueville, though de Tocqueville was strongly influenced by francophone Enlightenment philosophers. Hayek argued that “true individualism” was primarily a “theory of society,” viz. “an attempt to understand the forces which determine the social life of man, and only in the second instance a set of political maxims derived from this view of society.” He stressed that “true individualists” do not base their assumptions on the existence of isolated or self-contained individuals. They start instead from the postulate that man's nature and character are determined by social existence. As a result, “true individualists” believe that the only way to understand social phenomena is through an “understanding of individual actions directed toward other people and guided by their expected behavior.” Accordingly, they do not view society as a product of conscious design, or as a sui generis entity that exists independently of the individuals who compose it, but rather as something that forms spontaneously from their interactions. Their attitude is anti-rationalist in the sense that it is one of “humility toward the impersonal and anonymous social processes by which individuals help to create things greater than they know,” and despite the fact that their own individual reason is imperfect and limited (Hayek Reference Hayek1948, 4–10).

The opposite approach is the rationalist one, which Hayek identified with the Encyclopaedists and the Physiocrats. He considered it to be “false individualism” because it tends to develop into “the opposite of individualism, namely socialism or collectivism.” The rationalist element in this approach is the legacy of Descartes’ philosophy “which assumes that Reason, with a capital R, is always fully and equally available to all humans and that everything which man achieves is the direct result of, and therefore subject to, the control of individual reason.” Thus, the Cartesian school has deep contempt for anything that has not been consciously designed by reason or is not fully intelligible to it. Hayek viewed Rousseau's theory of the social contract as representative of this approach, since Rousseau attempted to explain the creation of society as a deliberate act of reason. On a more general level, he claimed that the rationalist approach was “the characteristic attitude of the engineers to social problems,” as exemplified by the Ecole Polytechnique in Paris. The foundation of this engineering school was, in his eyes, one of the disastrous consequences of the French Revolution. It embodied the collapse of existing social institutions, the total destruction of the old order, and the aspiration to replace it with a new and entirely rational order. Such a project therefore completely ignored the importance of the past and failed to grasp the meaning of historical phenomena. Paraphrasing Burke's views in Reflections on the Revolution in France (Burke Reference Burke1790), Hayek argued: “To this generation the wisdom of the ages was a closed book and the technical specialist appeared, who was regarded as educated because he passed through difficult schools, but has little or no knowledge of society, its life, growth, problems and values, which only the study of history, literatures and languages can give.” In short, the mechanical approach of the engineer led to a ludicrous attempt “to construct society like one constructs a bridge” (Hayek Reference Hayek1955, 110, 113).

The main figures that symbolized for Hayek the “engineer attitude” were Henri de Saint-Simon and his disciple Auguste Comte. Saint-Simon wished to transform politics into a science equal in rank to physics or chemistry by reducing it to a set of necessary causal laws, and “plan life in general on scientific lines.” According to Hayek, his followers became “the inspirers of practically all socialist movements” (ibid., 144, 156, 164). Auguste Comte attempted to turn Saint-Simon's ideas on the unification of science into a complete philosophical system: positivism. The main law in this philosophy – the law of the three stages of development – identified human history with the growth of the natural sciences, but according to Hayek this identification came at a heavy price. The idea of recognizable laws of human knowledge presupposes that the human mind “could look down upon itself from a higher plane and be able not merely to understand its operation from the inside, but observe it from the outside” (ibid., 179). Thus, Comte's deification of reason entailed a logical contradiction. On the one hand, Comte presupposed that the human mind is imperfect, since his philosophy aimed to describe the laws of perfection of this instrument of knowledge. Yet, on the other hand, he claimed that the mind has the unique power to understand its own imperfection as well as the course it follows in its progress. And not only can the mind understand the principle of its operation, it also has the power to control and direct it: “it can, as it were, lift itself up by its own bootstraps” (ibid., 180).

In Hayek's opinion, Comte's error was shared by all socialists, for they misjudge the power of their own reason and thus believe that they are able to design and control society on the basis of strictly rational principles. Hayek maintained that this misguided attempt to fashion politics on the basis of the physical sciences had its roots in a fundamental misunderstanding of the data with which the human and the social sciences deal. He argued that, for Comte, the phenomena of the mind were equivalent to the phenomena of the physical sciences in the sense that they were given as objective things, subject to external observation and control. Yet this parallel does not hold. The social sciences are concerned with man's conscious or reflected action, not with man as a physical entity. Hayek distinguished between what he called the “social sciences in the narrow sense, i.e. those that were described as the moral sciences” and other disciplines of knowledge concerned with the life of human beings in groups. The study of heredity or physical anthropology, for instance, do not differ much from the physical sciences since they study men from a purely physical perspective. But the “social sciences in the narrow sense” study man as a thinking being. In other words, they study the human decision-making process (ibid., 25–26). Naturally, human beings choose between alternatives on the basis of physical reality and in relation to it. However, Hayek argued, there was a substantial difference between how people perceive the world and how the world truly is. In order to better grasp the implications of this claim and understand the grounds for Hayek's attack on what he termed “scientism,” we need to take a closer look at his definition of perception and how it is related to various types of classification.

The Data of the Social Sciences

To perceive, Hayek maintained, is to assign to a familiar category, since “the qualities which we perceive are not properties of the objects but ways in which we (individually or as a race) have learnt to group or classify external stimuli” (ibid., 47). It follows that every act of perception is simultaneously an act of categorization, or classification. Nevertheless, according to Hayek, it would be unwarranted to postulate that things which our senses or mind treat as pertaining to the same category must have something else in common beyond being registered in the same manner by our mind. In fact, this “anthropomorphic tendency” – i.e. the tendency of human beings to interpret events in the external world as animated by a mind like their own – was in Hayek's opinion the main obstacle to the development of the natural sciences. The progress of these sciences consisted, and continues to consist, in replacing the mind's classification with a new order based on the objective features of the phenomena observed and the true relations between them, independently of the way they appear to us. This is achieved through systematic testing and experimenting in which we compare our sense perceptions rather than treat them as natural units. But, Hayek claimed, what is true of the physical sciences isn't true of the social sciences, and he offered a new definition for the data and goal of the social sciences.

According to Hayek, the aim of the social sciences is to study the consequences of the fact that we perceive the world and each other through concepts and sensations, which are organized in a mental structure common to us all. “The question here is not how far man's picture of the external world fits the facts, but how by his actions, determined by his views and concepts he possesses, man builds up another world of which the individual becomes a part” (ibid., 24). Thus, data in the social sciences is of a different kind than in the physical sciences. The social scientist studies the ways people interpret reality, rather than reality itself. In other words, he studies the results of a classification process that takes place in the human mind, and to which he does not have direct access. He knows or assumes to know how external stimuli are classified from his own subjective experience of this kind of classification, not because he can rely on objective tests.

This, however, does not entail that all concepts with which the social sciences deal are subjective ideas, for if that were the case, Hayek claimed, there would be no room at all for scientific research in this domain. Like the physical sciences, the social sciences aim at “revising popular concepts which men have formed about the objects of their study and replacing them with more appropriate ones.” In the social sciences this task encounters a particular difficulty because their objects of study – people's views and thoughts – appear in two capacities. On the one hand, people's beliefs are the causes of social phenomena since “society, as we know it is . . . built up from the concepts and ideas held by the people.” Hayek referred to these views as “motivating or constitutive opinions.” On the other hand, there are also views that people hold about social phenomena. These are the “speculative or explanatory views.” The first kind of opinions are conditions for the existence of “wholes” such as society or the economic system, which will exist irrespectively of the second kind of opinions, namely the concepts which people have formed about these wholes (ibid., 36–37).

Prima facie, it may seem that what Hayek defined as data in the social sciences, namely the ideas that motivate people to behave in specific ways, is not fundamentally different from Comte's treatment of the phenomena of the mind as objective things. But in fact, Hayek's distinction between “constitutive opinions” and “explanatory views” allowed him to distance himself from Comte and argue that the data of the social sciences cannot be observed as a whole, because that would entail a logical fallacy.Footnote ² We cannot treat the mind, our “apparatus of classification,” as a super-mind, i.e. something that not only possesses a greater degree of complexity than any one of the different things which it classifies, but can also produce a complete explanation of the particular ways in which it itself classifies external stimuli. This was the error of “objectivism,” the view that “to explain our own knowledge we should know more than we actually do which is a self-contradictory statement.” Instead, Hayek claimed that the dispersion of knowledge between many individual minds was “one of the basic facts from which the social sciences have to start.” In other words “constitutive opinions” should be included in the basic facts of the social sciences, but “explanatory views” should be left out. If, Hayek argued, the dispersion and imperfection of knowledge did not exist, there would be no need for the social sciences as a specialized field; psychology would be enough. He then concluded that the goal of the social sciences should be “to explain the unintended or undesigned results of the actions of many men” (ibid., 25, 30, 49).

Hayek's claim concerning the dispersion of knowledge recalls ideas expounded in a lecture given in 1936 on “Economics and Knowledge.” He regarded this lecture as one of his most original contributions to economics and stated that it was the decisive point of change in his outlook (Hayek Reference Hayek, Kresge and Wenar1994, 79–80). “Economics and Knowledge” was intended as a criticism of the concept of equilibrium and of the method employed in pure economic analysis. According to Hayek, both have a clear meaning only when confined to the actions of a single person. But when the theory of equilibrium is used to explain the interactions of a number of different individuals it must assume the condition of a “perfect market,” where every event becomes known instantaneously to every member. This is problematic since “the statement that, if people know everything, they are in equilibrium is true simply because that is how we define equilibrium. The assumption of a perfect market in this sense is just another way of saying that equilibrium exists but does not get us any nearer an explanation of when and how such a state will come about.”

In other words, when we talk about equilibrium we mean a situation where the data that informs the decisions and actions of some individuals are compatible with the plans and mode of behavior of other individuals. It is a situation where expectations meet reality, and where demand (reflecting individual desires, preferences, and subjective facts) meets supply. In the case of a single individual, we can say that his or her actions are in equilibrium insofar as they are part of a single plan, and so long as expectations tend to be correct, because this means that there is a correspondence between the subjective facts as things known to the individual and the objective facts as the reality in which that individual operates. The problem with the traditional theory of equilibrium is that it assumes that this type of correspondence exists also between individuals, which means that data is given equally to all individuals. In Hayek's view, this amounted to an equivocation between two different uses of the term “datum.” On the one hand, it is used to describe subjective facts known only to the individual player, and on the other it is used to denote objective facts, which describe a general situation. The two kinds of data are simply assumed to be the same, which of course means that by definition equilibrium exists (Hayek Reference Hayek1948, 36–41).

Hayek claimed that in order for economics to become an empirical science (instead of an exercise in pure logic) economists must be able to make valid assumptions. Such assumptions have to be not only possible (which is not the case when one assumes that people are omniscient) but also likely to be true. Therefore the task of economists should be to show how much knowledge and what kind of knowledge different individuals need to possess for equilibrium to occur. In doing so they need to distinguish carefully between two kinds of data: on the one hand, the “objective real facts, as the observing economist is supposed to know them,” and on the other hand, subjective facts “as things known to the persons whose behavior we try to explain.” The first kind corresponds to “explanatory views,” and the second kind to “constitutive opinions.” In Hayek's eyes, this division of knowledge was “the really central problem of economics as a social science” (ibid., 39, 46, 50).

Hayek gave different names to approaches that failed to recognize the division of knowledge: objectivism, collectivism (which denoted the error of treating wholes like society and the economy as given objects), and historicism (which referred to the view that one can deduce general laws from the study of history). Finally, he used “scientism” or “the scientistic prejudice” as the general name for the “slavish imitation of the method and language of Science” (Hayek Reference Hayek1955, 15, 53, 65).Footnote ³ The alleged rationality of “scientism” symbolized for Hayek an arrest in progress, because the assumption that reason should direct its own growth meant that it would set limits to this same growth. He sought to explain the success of “scientism” as a function of form rather than content: “the laws enounced looked like the kind of laws which the natural sciences produced, and . . . these last were the standard by which all intellectual effort was measured.” And he lamented that the imitation inspired by progresses in the physical sciences took place without careful consideration as to whether the methods and procedures used in one domain could apply to the questions and problems of another (ibid., 74, 91).

For Hayek, the confusion between the physical and the social sciences, with the latter trying to resemble as much as possible the former, was the reason for the “extreme stage” at which the “self-destructive forces of our ‘scientific’ civilisation” have arrived. In the 1940s and 1950s he sensed an increase in “the desire to apply engineering technique to the solution of social problems,” and so gave himself a mission: “to show to what an extent sheer intellectual error in this field may profoundly affect all prospects of humanity” (ibid., 91, 94, 101). He preached against the misuse of science, and spoke of the necessity to avoid “the application of the scientist's mental habits in fields where he is not competent.” To remedy the situation, Hayek advised moving away from technical education and returning to traditional education in the humanities. The human sciences, he argued, encourage us to study things from the perspective of men and their ideas and so they are more likely to give us the correct view of social reality and show civilization to be a spontaneous process that comes about through the interaction of individuals (ibid., 101–102). Hayek also offered a new alternative approach to the study of the social sciences with his theory of complex phenomena. But while he may have been successful in avoiding the pitfalls of “scientism” by divorcing the social from the physical sciences, the theoretical parallels he attempted to establish between economics and evolutionary biology as models of complex phenomena presented other logical inconsistencies. In the next and final section I will challenge Hayek's proposed analogy through a comparison with Darwin's views as presented in The Origin of Species.

Complex Models in Evolutionary Biology and Economics

In 1955, the same year as the publication of The Counter Revolution of Science, Hayek published an article titled “Degrees of Explanation,” in which he developed the claims that followed from his critique of “scientism.” Building explicitly on Popper's criterion of falsifiability, Hayek stated that “the conclusions toward which [scientific] theories lead are essentially of the nature of prohibitions: they forbid the occurrence of certain events and can never be definitely verified only increasingly confirmed by unsuccessful attempts to prove them false” (Hayek Reference Hayek1967, 4). He also argued that prediction and explanation are two aspects of the same process. In prediction, rules are used in order to derive from known facts what will occur; in explanation, rules are used to derive from the facts what preceded them. Thus, if theories in the social sciences are to be considered as scientific explanations they must be capable of prediction or else there would be no way to falsify them. This however does not entail that their predictions should be specific, and here lies the essence of Hayek's theory of complex phenomena. In order to explain what he meant by complex or “highly organised phenomena” Hayek used a familiar strategy: comparing the social and the physical sciences and highlighting their differences. But this time he also drew an explicit parallel between human history and evolutionary biology.

The “theoretical science of how garden plots are covered with weeds” is of course no other than Darwin's theory of natural selection. In fact, in The Origin of Species Darwin himself used the example of garden plots to emphasize that “we know not exactly what the checks [on the increase in numbers within and between species] are in even one single instance;” and he spoke of “ever increasing circles of complexity” with which the struggle for existence regulates the proliferation of species (Darwin [Reference Darwin1859] 2003, 67, 73). Darwin would have probably agreed with Hayek that evolution's objective is not to explain a particular phenomenon, and that in order to explain how garden plots are covered with weeds we do not need to know everything that can be known about the space-time interval in which the phenomenon occurred. The reason for this lies with the unique attributes of complex phenomena. According to Hayek, the definition of “degree of complexity” of a phenomenon has to do with the minimum number of variables required to produce what is characteristic of it, which means the minimum of variables necessary for building a meaningful model that accurately describes said phenomenon. In physics, for instance, the number of “significantly connected variables is sufficiently small to enable their study as if they formed a closed system for which it is possible to observe and control all the determining factors” (Hayek Reference Hayek1967, 3). What Hayek termed “significantly connected variables” are those variables which behave differently from each other, which potentially influence each other, and which therefore have to be taken into account in a model. In physics models, the data points can be very numerous but the categories they are assigned to are relatively few. This is why statistics is an efficient method for dealing with large quantities of data in physics: it treats the individual elements it counts as if they were “black boxes which are all the same” (ibid., 31). In other words, statistics can help explain large numbers of variables by eliminating complexity and substituting for the individual elements information on the frequency with which their different properties occur.

Given these considerations, Hayek concluded that statistical techniques cannot help scientists who deal with complex phenomena, be they biologists who seek to elucidate the complex structure of organic molecules and explain how organisms function, or social scientists who deal with a large number of different variables, namely the individuals that compose the social order. The chief difficulty in these disciplines is one of ascertaining all the data that determine a particular manifestation of the phenomenon in question, a difficulty that is “often insurmountable in practice and sometimes even an absolute one.” Because practitioners in the biological and social sciences cannot measure, test, and even observe all the possible combinations of data in their respective fields, they need to resort to a mode of explanation different from the one used in physics. Hayek referred to it as the “explanation in/of principle” or “pattern prediction,” and claimed that understanding its significance requires “a reversal of what has been described as the standard scientific procedure” (ibid., 9, 27). However, when examined closely, it seems that Hayek's “explanation of principle” simply redefines scientific prediction in looser terms in order to have it correspond to what is feasible in sciences that deal with complex phenomena.

“Pattern prediction” accounts for observed phenomena by predicting that what has produced it in the past would be able to produce in the future certain results but not others. In other words, it tells us what kind of events to expect by indicating a range of possible outcomes, and can be proven false if the phenomena observed show characteristics that the postulated mechanism could not produce. According to Hayek, the best example in the natural sciences of “explanation of principle” is the theory of evolution, since this theory “doesn't aim at specific predictions of particular events and it also isn't based on initial statements that can be confirmed or refuted by observation” (ibid., 11–12). Undoubtedly, the range of what is permitted by the theory of evolution is very wide and Hayek was well aware of the fact that this means that its “empirical content” – that which may possibly be refuted in it – is quite small. Incidentally, this was Popper's view at one point, namely that the possibility of falsifying the theory of evolution was too small to allow for the falsifiability criterion.Footnote ⁴ Hayek anticipated such criticism, and he advanced a number of counter-arguments. Firstly, he claimed that the prohibitions of evolutionary theory are much wider than we are able to fathom: “it is only the limitation of the imagination that prevents us from being more aware of how much greater is the range of the prohibited or how infinite is the variety of conceivable forms thanks to evolution” (ibid., 33). Thus, what evolutionary theory prohibits, or its “empirical content,” is much larger than what intuitive thinking tells us.

Secondly, Hayek claimed that evolution is not solely an explanation of life on Earth, but the description of a mechanism that is independent of the particular circumstances in which it has taken place. It could have happened elsewhere with very different results, i.e. produce a set of different organisms. In this sense, evolution predicts a general outcome: diversity, because it postulates that the presence of certain conditions – reproduction with transmittable variations, struggle for existence and natural selection – will, in the course of time, produce a variety of living forms adapted to the environment and to each other. “The validity of this proposition isn't dependent on the truth of particular applications which were first made of it. If, for example, it should have turned out that in spite of their structural symmetry man and ape were not joint descendents from a comparatively near common ancestor but the product of two convergent strands starting from ancestors which differed much more from each other (such is true of the externally very similar types of marsupial and placental carnivores), this would not have refuted Darwin's theory but only the manner of its application to the particular case” (ibid., 31–32).

Finally, Hayek argued that the possibility of falsifying the theory of evolution should be applied only when the mechanism is perceived as a whole, and not when testing the individual premises from which the theory starts. For instance, Malthus’ theory on population is unlikely to be disproved, but the assertion that the observed differentiation between species is always due to the operation of the factors that evolutionary theory describes, can be refuted. The aim in testing evolution should therefore be to see whether this particular combination of premises is adequate and sufficient to arrange the facts in a “meaningful order.” Hayek referred to the construction of such an order as “model building,” and warned against confusion between “model building” and the search for natural laws in the sense of “a direct relation between cause and effect,” or “the simple dependence of one magnitude on another” (ibid., 41–42). Such simple explanations of complex phenomena are always false unless they have specific ceteris paribus assumptions; and when those assumptions are fully stated the theory is no longer simple.

According to Hayek, the various misinterpretations of Darwin's theory were the result of a basic misunderstanding of it in terms of a complex model. He claimed that it would have saved “a lot of confusion if theoretical science wasn't identified with the search for laws” and “Darwin's great achievement” wasn't incorrectly taken for a theory of definite and necessary stages of evolution. It is significant, he contended, “that this theory has always been something of a stumbling block for the dominant conception of scientific method” (ibid., 31, 42). Darwin's biology represented a new mode of scientific explanation, which challenged the old ways. It also had the disadvantage, like other theories that offer “explanation of principle” that it is difficult to disprove because of the wide range of its predictions. Thus, the elimination of inferior rival theories is “a slow affair, connected to argumentative skill and persuasiveness of expounders since there are no experiments which can decide between them” (ibid., 19).

Yet Hayek maintained that there was no ground for treating fields that deal with complex phenomena as “immature sciences” compared to those that allow for more specific predictions. He predicted that as science advances bigger and bigger parts of it will have to deal with complex phenomena, and as a result “explanation of principle” will become more prevalent. Physics might later reach the stage at which the biological and social sciences are at present, and so it makes no sense for these last to imitate the models and methods of the former. For Hayek, this was no grim prospect, because though he admitted that models in both evolutionary biology and the social sciences might be little more than schemes of classification, they still allow us to make useful prognoses. In his concrete example of such prognoses he established a direct parallel between biology and economics as a matter of fact:

But the parallel between biology and economics isn't as straightforward as Hayek presented it, especially when it comes to discussing the conclusions one can draw from models of complex phenomena. Hayek claimed that prognoses in both evolutionary biology and economics are mostly of a negative kind – they predict what will not occur, or more specifically which phenomena will not occur together. However, they have a positive or practical value as well, which consists “largely in that it protects us from striving for incompatible aims.” “Pattern prediction” therefore becomes a guide for action because it makes the world around us more familiar, one in which “we can move with greater confidence that we shall not be disappointed because we can at least exclude certain eventualities.” Hayek stressed that the limited character of pattern predictions should not be confused with their degree of certitude. Pattern predictions may be said to be more uncertain only in the sense that they leave more uncertain since they say less about the complex phenomena they explain. But what they do say about it isn't less certain. This claim led him to argue that the knowledge gained in the social sciences, though it does not enable us to bring about particular results, enables us nonetheless to set conditions that are necessary for the results we desire. As he put it: “explanation of principle allows creation of favourable circumstances not favourable control of outcomes.” This assertion was proof, in his eyes, that limitation of prediction implies limitation of control, but not vice versa (ibid., 17–19).

Here we find encapsulated the theoretical basis for Hayek's defense of the free market and his staunch opposition to central planning. He argued that activities that are guided by limited predictions “are better described as cultivation rather than control, cultivation in the sense in which the farmer/gardener cultivates his plants when he knows or can control only some of the determining circumstances and in which the wise legislator/statesman will attempt to cultivate rather than control the forces of the social process” (ibid., 19, emphasis in the original). The reference to cultivation is particularly interesting in view of Darwin's research on artificial selection and its predominant role in his theory. The first chapter in The Origin of Species is a detailed account of Darwin's various correspondences on the topic and his personal experience with pigeon breeding. His aim was to show that evolution – the slow transformation of organic forms via accumulative selection of differences – was not a hypothetical thing, but a process that can be witnessed daily, and from which we have learned to benefit. It was then but an additional step to claim that the variety of living forms in nature was due to a similar selection process, but with infinitely greater powers of modification.

Using the parallel with artificial selection to explain the evolution of living forms was a problematic strategy. It allowed Darwin to offer empirical evidence for selection and modification in the very beginning of his book, as the basis for his theory, but only in a limited way. He himself argued that there was an important difference between artificial and natural selection: “Man can act only on external and visible characters: nature cares nothing for appearances except in so far as they may be useful to any being” (ibid., 83). It seems therefore that Darwin used artificial selection both to demonstrate that natural selection occurs in a similar way to it and to claim that natural selection surpasses artificial selection. No one contested his views on artificial selection, but many doubted whether the mechanism of natural selection was indeed enough to explain life's diversity. As Hayek noted: “debates on evolution have been often not on facts but whether the postulated mechanism can account for evolution having taken place in the time available” (Hayek Reference Hayek1967, 13). This is the reason why Darwin insisted so much on the importance of geological time for his theory and dedicated two chapters to explaining why the geological record is incomplete and therefore cannot produce evidence of gradualism (the “missing links”) in the transformation of living forms. Nevertheless, for Darwin, there was a true parallel between artificial and natural selection. The former, though of a much smaller scope, had real positive effects: man is clearly able to alter to some extent the characters of domesticated animals and plants according to his preferences.

Unlike Darwin, when Hayek spoke of artificial selection, or “cultivation,” he insisted more on its limitations than its achievements. His argument in defense of “the wise legislator's” surrender to the forces of the social process was not only a warning against any futile attempt to control these forces; de facto, it robbed the legislator of any real power to direct the economy. When speaking of biology, Hayek was right to claim that even if we knew precisely the circumstances in which mutations occur and also the precise advantages they would confer on specific individuals, we would still not be able to predict what new forms would arise. But it does not follow that “the sheer number of . . . facts would have prevented us from ever being able to manipulate them, i.e. insert the data into the appropriate blanks of a theoretical formula and solve the ‘equation’ thus determined” (ibid., 33). We are able to modify to a certain extent the characteristics of animals and plants according to our preferences. We have done so for centuries and with great success, even without knowing all the facts involved in, or implied by, such modifications. It may require a certain level of expertise, as Darwin himself realized, but it is not impossible, nor is it a futile exercise that never gives us the results we expect.

It seems therefore that with regard to economics, Hayek's attitude of reverence and humility toward the social forces was somewhat exaggerated. In comparison to Darwin's biology, he underemphasized the positive aspects of “cultivation” and thus his conclusions were not entirely supported by the analogy he sought to establish between evolutionary biology and economics. This is no small detail, since Hayek's views on scientific methodology, which informed his theory of complex phenomena, were at the core of his defense of free market politics. Thus, when referring to his most important opponent in matters of economic policy, J. M. Keynes, Hayek asserted:

The quotation above shows that Hayek's interest in the philosophy of science was not a secondary, side occupation. In fact it inspired and shaped his political views as expounded in his most famous works. Thus, it is no coincidence that The Road to Serfdom was part of The Abuse of Reason project. The criticism developed in the essays that were written as part of the latter and the new alternative methodology for the social sciences that they promoted, informed the neo-liberal ideology of the former.