Normal Science Austrian Economist

Without becoming embroiled in the question of what legitimately counted as Austrian economics circa 1925, I would suggest that Hayek was an exemplary member of this social group. He was deeply concerned with macroeconomic issues of inflation and unemployment, as were many who lived through the economic cataclysms of Mitteleuropa of the 1920s. He attempted to address those issues through what the Austrian school believed was one of its most cherished doctrines, the relationship between capital in its temporal existence and the operation of markets. In a way that was readily recognizable, Hayek modeled capital as a ‘substance’ which was highly constrained in how it might flow through time; the temporal obstacles and bottlenecks would create problems for the suitable distribution and investment of resources in a manner which would, in a well-functioning world, absorb the available workforce. While individual investors might make ‘mistakes’, their cumulative effect was deemed transitory; the real villains were governments and their monetary authorities, who through the ill-advised expansion of credit forced capital into unsustainable channels. I believe it is important to note that already in the 1920s, Hayek was pursuing a research program which bore as its major implication the essential inability of governments to successfully plan and control economies; in other words, the over-arching heuristic of Hayek's quest was already situated firmly in place. I am surprised that Caldwell opts to play down this facet of Hayek's career, for it indicates that our protagonist was already casting about for an intellectual justification for his hostility to socialism.

Whatever the motives for developing the Austrian program in this direction in the 1920s, and irrespective of the fact that it was responsible for the bestowal of the economics chair at the LSE to Hayek, I think it fair to say that this program was on its last legs by the middle of the 1930s. This has recently been depicted in nice detail by (Klausinger, Reference Klausinger2006). As he writes, ‘at the end of the period in question, there appears to have been a split among the Austrian economists, not so much in their continuing support for a liberal economic policy, but more so with regard to the theoretical framework from which such a defense of liberalism could be derived’ (pp. 655–6). The endless wrangling in the secondary literature about why Hayek lost out to Keynes in the British context essentially overlooks this fact. Models of capital substances sluiced through different time-phased pipes in velocities disproportional to the equilibrium requirements of the economy were coming to seem more and more contrived, especially as the grave and widespread disruption of the Great Depression became ever more apparent.Footnote ⁷ But even more importantly, it had lost any resonance with contemporary notions of ‘science’ then prevalent in either Austria or England. Substance notions of value were on the wane, physical notions of dynamics were not accessed, and Austrian models were not expressed in the conventional scientific idiom of the mathematics of classical mechanics or hydrodynamics. Hayek and his comrades could prattle on and on about ‘equilibrium’ all they liked, but increasingly they looked like imposters in the larger culture. And worse, the supposed ‘home base’ in Vienna had been vacated of allies by 1934 (Klausinger, Reference Klausinger2006: 622). On many fronts, but particularly as a bulwark against socialism, Austrian normal science was coming up a loser in the mid-1930s sweepstakes for intellectual legitimacy.

This is where the significance of Oskar Morgenstern comes into play for my revisionist narrative. I believe that Morgenstern was the first Austrian economist to realize this impasse, and to innovate a viable escape from it; and by so doing, he paved the way for Hayek to follow later on.Footnote ⁸ As early as the late1920s, Morgenstern argued that the central topic of Austrian economics should be the epistemology of the economic agent over time, and that once the analyst would come to acknowledge the limits to reason and prediction encapsulated in the doctrines of modern logic, they would come to abjure the portrait of cognition encapsulated within orthodox economics. Moreover, Morgenstern insisted upon an interactive epistemology, and not the crude Crusoe accounts of the isolated monads then prevalent in philosophical circles. I believe Morgenstern does not get the credit he deserves in Caldwell's account because he creates all sorts of problems for the triple objectives we identified in our previous section: Morgenstern cannot be dragooned as a team player in Caldwell's reconfiguration of the Austrian canon, nor does he fit especially well into the attempt to recruit the modern orthodoxy to an appreciation for Hayek, nor is he a stalking-horse for an anti-positivist movement.

The spanner in the works is the historical fact that Hayek refused to acknowledge Morgenstern's pioneering efforts, I conjecture in part, because he could not be made to fit the overall heuristic of hostility to socialism. Worse still, Morgenstern rapidly decided that Hayek's ‘transformation’ was a badly garbled realization of his own conception of the future of Austrian economics. Both facts can be illustrated by passages from Morgenstern's unpublished diaries:Footnote ⁹

A survey which took Morgenstern more concertedly into account might raise the issue of whether Hayek really deserves his reputation as such a stunning innovator in the area of the ‘economics of knowledge’. Without here rendering any judgment about the success or failure of game theory,Footnote ¹⁰ I think it indisputable that it was another Austrian who deserves the laurels as ‘precursor’ of advocacy of the centrality of knowledge to economics, as well as the limits to its predictive ambitions, and, furthermore, had the developed sensibilities to seek out collaboration with the one figure most responsible for the late-twentieth century cognitive turn in the natural sciences, namely, John von Neumann. Finally, what this counter-narrative suggests is that there was nothing ‘natural’ about the anti-socialist politics of the construct of the market as an information processor. That required much more work.

The above quotes raise a further disturbing issue: to what extent was Hayek such a lone voice in the wilderness in the 1930s? When Hayek was called to the LSE in 1931, this was intended to bring the Austrian tradition to Albion, something that did not quite pan out the way Lionel Robbins had anticipated. In our rival narrative, it would not at all be obvious to someone situated in that era that the middle-aged Hayek would one day be lionized as such an epoch-making thinker.

The Abuse of Reason Project and the Anti-Scientism Crusade

One thing that struck me about Hayek's Challenge is the way in which it so systematically sought to historicize what was happening in economics in the period of concern, but resisted doing so in the case of the natural sciences, psychology, and even in philosophy itself. It occurred to me that this was not simply an oversight – I have independent evidence that Caldwell is quite sophisticated in his appreciation for the histories of these other fields. Rather, I believe that Caldwell found himself poised between a rock and a hard place in his quest to ‘historicize’ a protagonist who so loudly denounced historicists during the latter two-thirds of his career. The rock in this instance was his own admiration for Hayek's thought, and the hard place was the relative contempt that Hayek betrayed for historical understanding. I realize that some might find the latter description outré, given that in this second phase of his intellectual career, Hayek himself dabbled in writing intellectual history; but I also believe that his entire attempt to deny any real legitimacy to historical understanding comes across fairly clearly in his writings. ‘Only those who have really mastered one science – and in spite of all the respect I have for history, I am inclined to say one theoretical science – know what science is’ (Hayek, Reference Hayek1967: 266). Therefore, it has occurred to me that Caldwell essentially skirts the issue of the quality of Hayek's works on intellectual history, and, more to the point, neglects the role of the philosophical context in shaping the roster of Hayek's perceived enemies and allies. This then results in the curious asymmetry in the text broached at the beginning of this paper: some philosophers get reprimanded for their readings of Hayek, whereas most economists get let off the hook with almost no rebuke.

As Caldwell mentions, Hayek's philosophical career began steeped in the positivism of Ernst Mach (HC: 137).Footnote ¹¹ What he does not adequately emphasize, in my view, is the fact that most of the positivists whom Hayek encountered in Vienna were avid socialists: ‘Most of us [in the Vienna Circle], myself included, were socialists. But we liked to keep our philosophical work separated from our political claims’ (Carnap, Reference Carnap and Schlipp1963: 23). The one exception to this latter reticence was Otto Neurath, who openly championed positivism as a means to socialist (but not conventionally Marxist) ends.Footnote ¹² At the other end of the spectrum stood Ludwig Wittgenstein, with whom Hayek was acquainted, and who was claimed by the Vienna Circle as one of their own, but was left cold by socialism and harbored a deep streak of what Neurath disparaged as the ‘philosophy of the ineffable’: for Wittgenstein, ‘A language which had not grown organically seemed to him not only useless, but despicable’ (Carnap, Reference Carnap and Schlipp1963: 26). If we entertain the premise that Hayek's politics were of paramount consideration in his development, then this must have created a very uncomfortable situation for one who regarded himself as subscribing to the project of a scientific understanding of society.

While resident in Vienna, this lurking contradiction might not chafe so insistently, and Caldwell does an excellent job of situating Hayek in the context of the ‘socialist calculation controversy’, and the various methodological positions then promoted by his economist colleagues. However, I feel he does not sufficiently explicate the ways in which what was a minor irritation in Vienna became a debilitating syndrome in London. There, the issue was not so much the dominance of positivism as a philosophical position, as it was the almost ubiquitous association of the ‘scientific method’ with socialist ambitions. Although Caldwell does point to some of the major players in this drama (HC: 235–240), he tends to omit some of Hayek's formative political activities in this period, which were not aimed at Marxists per se as they were at scientists who were promoting socialism and planning as the logical extrapolation of a scientific world-view. Among other activities, which I would cite as pivotal, there was Hayek's participation in the founding of the ‘Society for Freedom in Science’, and his attempt to ally himself with Michael Polanyi to argue for an entirely different portrait of the operation of science.Footnote ¹³

I believe it is no accident that the period of Hayek's Transformation (first pointed out by Bruce) and his oft-quoted ur-text ‘Economics and Knowledge’ coincides with his ‘Abuse of Reason’ project, for they are more closely connected than Caldwell would concede. In ridiculously telegraphed summary, Hayek had recourse to a cobbled-together ‘philosophy of the ineffable’ to try and square his ambition to be a scientist, his hostility to socialism, the ambition of many natural scientists to portray socialism as scientific, and the failure of his previous ‘Austrian’ macroeconomic theory. As is well known, from thenceforth Hayek argued that the market was no longer a set of pipes channeling capital though roundabout channels, but rather an information processor, organizing and conveying the appropriate information to the relevant actors, by an instrumentality that could not be fully comprehended or manipulated by any central planner.Footnote ¹⁴ Just as he began to assert in this period that the mind could not come to an adequate understanding of its own operations, he also wanted to assert that ‘Reason’ could not on its own devices fully comprehend why markets are the superior format of social organization.

There were many severe problems with this position, but one of the most insistent was to differentiate it from a rather more hallowed and familiar ‘Mysterian’ tradition within conservative thought that praised Tradition as the unquestionable font of social stability. Hayek might have appealed to the ‘ineffable’ after the manner of Wittgenstein, but instead he opted for recourse to the long Germanic philosophical tradition which sought to differentiate the Naturwissenschaften from the Geisteswissenschaften, particularly the neo-Kantian school of Heinrich Rickert (1863–1936) and Wilhelm Windelband (1848–1915), as filtered through Dilthey, Weber and their students. I am at a loss to understand why Caldwell neglects to examine this extremely important influence on Hayek's thought. In this period, Hayek began to denounce ‘scientism’ in terms recognizable to those steeped in neo-Kantian Germanic philosophy, but one rather less familiar to his new English audience. In Rickert's terminology, the natural sciences were ‘nomothetic’ (i.e., looking for trans-temporal natural laws), whereas the social sciences were intrinsically ‘idiographic’ (treating individual phenomena in their unique aspects, especially with regard to their historical rootedness and distinctive ‘complexity’). Hayek, in the essays collected together in his Counter-revolution of Science, sought to explain the enthusiasm of the natural scientists for social planning as an illegitimate conflation of the two distinct projects.Footnote ¹⁵ Because the ‘engineers’ were treating the economy as a natural object subject to prediction and control, they were not in any position to understand the kind of information-mediation functions that Hayek was now insisting were the mainstay of market functions: since no mind could fully encompass the operations of the Market, neither could the cognitive capacities of the scientists.Footnote ¹⁶ This was a garbled reprise of the anti-positivist German precept that prediction and control were inappropriate goals for the Geisteswissenschaften, since they would violate human freedom and epistemological novelty. Furthermore, the natural scientists’ putative instrumentalist orientation precluded any appreciation for the notion that traditional practices might have grown up to ameliorate societal problems about which the analyst might not be aware. This error was traced by Hayek back to certain biases of the Continental Rationalist philosophies, as represented there by figures such as Saint-Simon and Comte.

This is not the place to question the details of the ‘historical’ reconstruction as presented by Hayek to motivate his own idiosyncratic construct of ‘scientism’.Footnote ¹⁷ It is enough to note that his attempt to identify ‘scientism’ with ‘historicism’ would have dumbfounded most of his Anglophone audience; his historical account of the errors of historicism would have nonplussed them; and given the ‘abuse of reason’ project tended to peter out before reaching the writers of the middle of the nineteenth century, it did almost nothing to upbraid those modern scientists, such as J.D. Bernal, whom were the real target of its critique. The conviction that the social and natural sciences were unified, and not distinct, was almost taken as a priori truth in the Anglophone world of the mid-twentieth century: this was not a local quirk of the positivists. Hence the disconnect between Hayek and his potential audience was huge. Thus I would argue that the second phase of Hayek's career was an abysmal failure, when evaluated from the vantage point of the attempt to recruit philosophy to try and split the alliance between the natural scientists and the socialists. Furthermore, there were other nascent attempts to treat markets as akin to information-processors, which had the virtue of seeming substantially less vague and more resonant with contemporary scientific developments – Morgenstern's, for one, or that of the American WalrasiansFootnote ¹⁸ – but they were not so openly hostile to socialist doctrines. Therefore, as a consequence of his ‘Abuse of Reason’ project, in this period Hayek became saddled with the reputation of being ‘not an economist.’ If ‘Reason’ was impotent to demonstrate the actual superiority of market operation, then whatever was the purpose of a series of turgid papers attempting to locate the historical genealogy of ‘constructivist’ ambitions in some half-forgotten Continental authors? Footnote ¹⁹

Caldwell's volume would instead seek to accentuate the positive: first by downplaying the 1930s rupture in Hayek's career concerning the meaning and significance of ‘science’ in the quest to undermine socialism; and then by suggesting that he finally arrived at the goal which he had been aiming at all along in his third, and final, phase: ‘the key to understanding his sudden abandonment of the Abuse of Reason project is that he saw a new way to defeat his scientistic opponents with what he thought were truly scientific arguments’ (HC: 260). But by that time, Hayek was in no position to lecture anyone on what was and was not ‘truly scientific’.

The evolutionary proto-cyberneticist and compleat strategist

I heartily endorse Caldwell's thesis that sometime after 1945 Hayek finally decided that he would employ natural science to ‘naturalize’ the Market and therefore paint socialist planning as ‘unnatural’; but, in opting for this stratagem, I would argue instead that Hayek was not at all innovative or imaginative in this regard. Rather, by jumping on someone else's Natural Science bandwagon, he was finally conceding that all his earlier attempts at refutation of socialists had been for naught. I think this second intellectual transformation was comprised of at least three components:

1. (a) Hayek would now concede the portrait of a single ‘unified science’, which he had been resisting for at least a decade or more. There was no open renunciation of his prior position; instead, he simply began to rely upon Karl Popper to inform people on what ‘real science’ looked like (Hacohen, Reference Malachi2000).

2. (b) Hayek began to endorse various aspects of the ‘cybernetics’ project, which sought to reduce thought to mechanism. This was the source of his embrace of the ‘sciences of complexity’, which he derived from Warren Weaver (Mirowski, Reference Mirowski2002a: 175).

3. (c) With a lag, Hayek began to appeal to ‘evolution’ to explain how an ineffable complex order, which he simply equated with The Market, could have come about. The onus for ineffability was thus shifted from Germanic philosophy to biologistic metaphor.

Here is where I might diverge most dramatically from the narrative as related by Caldwell. It seems that in the book Caldwell wants to portray Phases (ii) and (iii) as if they were essentially continuous and coterminous, whereas I would instead stress the dramatic nature of the rupture. Admittedly, Caldwell does mention the importance of certain key cybernetic figures (HC: 299–303), that Hayek found his ‘spontaneous order’ amongst cyberneticists (HC: 362); he acknowledges by Reference Mirowski and vanHorn1955 Hayek replaces the natural science/social science distinction with the simple/complex distinction (HC: 301), and that Hayek's acceptance of (b) allowed him to come closer to Popper (HC: 346), and even that testimonials to ‘evolution’ came to outweigh his endorsements of ‘individualism’ (HC: 306). But what he does not entertain is the idea that the defense of the Market has been altered radically.

To put the matter with a certain crude concision: for Hayek, the proposition that ‘Markets do the thinking that people cannot’ was extricated from its relatively Mysterian status in Phase (ii) to assume its more concertedly Naturalistic status in Phase (iii) by means of an endorsement of the proposition that ‘Matter can think’. While this move was forward-looking (and became the hallmark of the neoclassical orthodoxy in the later twentieth century: Mirowski Reference Mirowski2002a), it was not particularly original with Hayek, nor was it developed much beyond the original insight. The ontological flattening of the ‘Thing that thinks’ allowed him to blur the level that his analysis operated upon, be it ‘brains’ or ‘individuals’ or ‘groups’. ‘It is more than a metaphor to describe the price system as a kind of machinery for registering change, or a system of telecommunications’ (1972: 87). The reason that he could distribute cognition in this manner was that he was concurrently describing the individual mind equally as a machine for registering change. Thus I cannot accept Caldwell's assertion that, at least in Phase (iii), Hayek's ‘agent is a real human being who inhabits a specific social space, not some atomistic and asocial automaton’ (HC: 286).

The secondary literature on Hayek the evolutionist has already become dauntingly massive, so I will not even venture to comment upon it here, except to suggest that in light of the above periodization, some of Geoffrey Hodgson's strictures on Hayek begin to make more sense than Caldwell has been willing to concede (Caldwell, Reference Caldwell2001; Hodgson, Reference Hodgson2004). The conviction that a ‘non-Darwinian evolution’ could still support a Naturalistic defense of the market was a precept more or less lifted from some of the cyberneticists, who were rather thick on the ground in postwar Chicago. The idea that evolution displays an unambiguous ‘arrow of time’ in the direction of greater complexity was another of their favored doctrines. Hayek sought to package together the ontology of cybernetics with a special version of ‘evolution’ so as to maintain that not only were markets adaptive, but that

Here Hayek's thesis that the brain will never fully comprehend itself became wedded to the parallel thesis that Science informs us that we ourselves will never fully comprehend the evolved Natural Order.Footnote ²⁰ Finally, we observe that Hayek in Phase (iii) sought to Naturalize the Market and thus refute socialists by committing something very akin to the ‘Naturalistic Fallacy’ (Angner, Reference Angner2004).Footnote ²¹ Hence, we can also not accept Caldwell's assertion that Hayek's ‘evolutionary thought had no teleology attached to it’ (HC: 357). It may not be nice to ‘fool Mother Nature’, but how would we know that we had transgressed, except through a self-referential tissue of natural science metaphors? After all, why accord Hayek special status in interpreting what Nature meant for us?

But in the final analysis, all the sound and fury over natural philosophy was not the most important legacy of Hayek's Third Period. That instead came with his project to mobilize a cadre of scholars to come up with a New- or Neo-Liberalism to rally the anti-socialist cause at its post-WWII nadir.Footnote ²² The organization Hayek first convened in Mont Pelerin on 1–10 April 1947 became by all accounts the effective zero point from which the Neoliberal Thought Collective was born.Footnote ²³ It was the institutional resolution to the failures which had plagued Hayek's quest in the first two periods of his life.

The reason the Mont Pèlerin Society [MPS] should serve as our talisman is because it exists as part of a rather novel institutional structure of intellectual discourse, one we tend to think of as a ‘Russian Doll’ approach to the integration of research and praxis in the modern world. The Neoliberal Thought Collective was structured very differently from the other ‘invisible colleges’ that sought to change people's minds in the second half of the twentieth century. Unlike most intellectuals in the 1950s, the early protagonists of MPS did not look to the universities or the academic ‘professions’ or to interest group mobilizations as the appropriate primary instruments to achieve their goals. The early neoliberals felt, with some justification, that they were excluded from most high-profile intellectual venues in the West. Hence the MPS was constituted as a private members-only debating society whose participants were hand-picked (originally by Hayek, but later through a closed nomination procedure) and which consciously sought to remain out of the public eye. The purpose was to create a special space where people of like-minded political ideals could gather together to debate the outlines of a future movement diverging from classical liberalism, without having to suffer the indignities of ridicule for their often blue-sky proposals, but also to evade the fifth column reputation of a society closely aligned with powerful but dubious postwar interests. Even the name of the society was itself chosen to be relatively anodyne, signaling little substantive content to outsiders (Hartwell, Reference Hartwell1995: 44). Many members would indeed hold academic posts in a range of academic disciplines, but this was not a precondition of MPS membership. MPS could thus also be expanded to encompass various powerful capitalist agents. One then might regard specific academic departments where the neoliberals came to dominate (University of Chicago Economics,Footnote ²⁴ the LSE, L'Institut Universitaire des Hautes Etudes Internationales at Geneva, Chicago Law, St. Andrews in Scotland, Freiburg, the Virginia School) as the next outer layer of the Russian Doll, one emergent public face of the thought collective – although one often never publicly linked to the MPS. Another shell of the Russian Doll became the special-purpose foundations for the education and promotion of neoliberal doctrines, such as the Volker Fund and the Foundation for Economic Education. These institutions were often set up as philanthropic or charitable units, if only to protect their tax status and seeming lack of bias.Footnote ²⁵ The next shell would consist of general-purpose ‘think tanks’ (Institute for Economic Affairs,Footnote ²⁶ American Enterprise Institute, Schweizerisches Institut für Auslandforschung [Swiss Institute of International Studies]) who sheltered neoliberals, who themselves might or might not also be members in good standing of various academic disciplines and universities. The think tanks then developed their own next layer of protective shell, often in the guise of specialized satellite think tanks existing to get quick and timely position papers out to friendly politicians, or provide talking heads for various news media and opinion periodicals. Further outer shells have been innovated as we get closer to the present – for instance, ‘astroturfed’ organizations consisting of supposedly local grass-roots members, frequently organized around religious or single-issue campaigns.Footnote ²⁷ Outsiders would rarely perceive the extent to which individual protagonists embedded in a particular shell served multiple roles, or the strength and pervasiveness of network ties, since they could never see beyond the particular shell of the Russian Doll right before their noses. This also tended to foster the impression of those ‘spontaneous orders’ so beloved by the neoliberals, although they were frequently nothing of the sort. Yet the lose coupling defeated most attempts to paint the thought collective as a strict conspiracy.

It is a shame that Caldwell so neglects the MPS, since it is the culmination of Hayek's own third-period prognostications. It is the obverse face of his late period works on law and the state. No single mind could comprehend itself, therefore no single mind could oppose the anti-market Weltanshcauung which so oppressed Hayek and his comrades in the 1940s. To oppose those despised ‘second-hand dealers in ideas’, he realized one had to nurture his own battalion of dealers, as well as some of the ideas they would retail. Hayek thus conjured a Groupthink congenial to what he considered to be the Truth, since it would not conjure itself. The Group then conjured a State that fostered a Market, since it would not conjure itself. Hayek realized that one had to embrace and revel in the contradiction of an ‘organized’ spontaneous order, and create an entire set of institutions to generate and promote the sort of social science (and even natural science!) he felt would stand as a bulwark against creeping totalitarianism. No conventional ‘intellectual history’ can begin to do justice to the extent to which his vision has been successful at the dawn of the twenty-first century – which is why his name continues to live on, when that of other ‘economists’ rapidly slide into oblivion.

Hence we come full circle to Caldwell's possible objectives mooted in Section 1 above. While I will not comment on the possible impact my suggested reading might have upon modern Austrian economics, it does give different answers to the attempt to portray a Hayek acceptable to modern orthodoxy, as well as use him as a stalking horse to ‘explain’ the trajectory of postwar neoclassicism. As to the former, the sheer diversity of the different ‘phases of Friedrich H’ helps broaden his appeal to various segments of the modern economics profession. Far from remaining innocent of any whiff of teleology, in the alternative narrative I have proposed here, Hayek's entire career was driven, not by some unwavering commitment to a few scientific propositions, but rather by faithful adherence to the one unwavering teleological heuristic: namely, socialism was bogus, and there had to be some way to make a halfway decent intellectual case that this was true. That Hayek made not one, but three conflicting cases for that ideological proposition is part of what sustains his popularity in the present climate. There are a few neoclassical economists, such as Robert Lucas, who seem to be most enamored of Phase (i). The hermeneutic and postmodern cadres seem most attracted to Phase (ii), even though Caldwell would rather do without their company (HC: 436). And finally, there are those whom Caldwell would wish to recruit, the Vernon Smiths of the world, thinking that what economics needs is just one more purgative dose of neurological, evolutionary, experimental hard science to permit it to finally ascend to the Valhalla of timeless truth.

But, when we come to the diagnosis of the predicament of modern economics, the many faces of Friedrich H were not so much vindicated by subsequent events, as they were shaped by them. Hence, for instance, Hayek did not prophesy that economics would become ever more concerned with information processors, or might change its stance towards the Walrasian equations, or change its attitudes towards predictive adequacy, as much as he served as one possible expression of those nascent trends. He learned to go with the flow, and stop playing the unwelcome part of Cassandra. Hayek did not ‘explain’ the twists and turns of the modern orthodoxy, any more than he ‘explained’ the collapse of the Soviet Union. This itch to render Hayek as the charismatic ‘seer’ of our profession strangely contradicts much of what Hayek himself wrote.