An extract from the very excellent and versatile (economics and philosophy of mind) Don Ross.

In light of this history, it is not surprising that, as many commentators have noted, The Sensory Order was relatively neglected for a few decades, but has recently enjoyed a wave of scholarly appreciation. Much of this has centered on the ways in which Hayek’s philosophical psychology complements and completes his general model of adaptive complexity (Butos & Koppl, 1996; Horwitz, 2000, 2008; McQuade & Butos, 2005): both minds and markets are path-dependent incremental learning systems and distributed information processors that depend for their efficiency on freedom from executive planning bottlenecks. Thus the resistance of social processes to social engineering is reinforced by a kind of fractal reproduction of a ‘free market’ in information at the scale of the individual mind. Some cognitive scientists (Edelman, 1985; Fuster, 1995) have noted that Hayek’s high-level conception of mental architecture was substantively vindicated long after the fact. Regrettably, however, only occasional philosophers (e.g., Marsh, 2010) have drawn attention to his remarkable anticipation of sensible opinions that their profession spent decades groping toward, namely: that perception and conceptual filtering dynamically influence one another; that implicit procedural and explicit declarative knowledge form an epistemological continuum (Lycan, 1988; Wilson, 2006); that moderate functionalism is a sound view of the mind-brain relationship but radical functionalism that declares the brain irrelevant is nonsense (Clark, 1989); that consciousness is not the central planning commission of the mind (Dennett, 1991); and that Kant was right that categorical preconceptions structure mental experience, while empiricists were right that science can, does, and should ride roughshod over these preconceptions without limit (Humphreys, 2004; Ismael, 2007; Ladyman & Ross, 2007). As Marsh notes, Hayek even anticipated the ‘monochromeMary’ thought experiment (Jackson, 1996) that later distracted philosophers of consciousness (Dennett, 1991, 2006), but he immediately diagnosed its scientific idleness. [Some of the thought experiment’s philosophical proponents recognized the same thing eventually (Jackson, 2003).] No aspect of The Sensory Order is more impressive than its opening and closing philosophical framing, which remains fresh as paint.

Economic methodologists who study The Sensory Order tend to think that this issue is in turn important because the (relative) autonomy of intentional description and explanation is at the heart of the Austrian view of capital and of the principles by which the political economy best flourishes. Such an assumption is among the shared premises, animating lively debates over detailed implications, that is carried on by the authors collected in Butos (2010) when they take up a brief to explicate the significance of The Sensory Order for the study of the social order in both its positive and normative aspects. We might unpack the common premise in more detail as follows. Austrian social theory will enjoy a considerably shrunken pool of potential followers if it is thought to be hostage to the transcendental post-Kantian philosophy of human thought and action developed by von Mises (1966), because this underlying metaphysic of mind is uncongenial to most epistemological naturalists, and thus to most contemporary social scientists. In the current philosophical atmosphere, Austrian methodological and normative theory stands on much firmer ground if a semi-autonomous domain of intentionality is thought to spontaneously emerge from the interactions of brains and their physical environments. Happily (for pro-Austrians), such ideas are now widespread among scientists in a range of disciplines that study complexity. Still more happily, the aspects of this perspective that are derived from principles of neural organization and functioning were clearly and explicitly developed by Hayek in The Sensory Order; so we have evidence that Austrian social theorizing is not merely compatible with emergentist naturalism about intentionality, but is indeed part of its original intellectual context. This view is not wrong; Hayek indeed provides Austrian methodologists with a more satisfactory philosophy of mind than von Mises’s. However, many would be disappointed to think that all The Sensory Order does for them is show them that they don’t have to endorse von Mises’s declaration of independence from empirical behavioral science. I will argue, however, that Hayek’s philosophical psychology fails to provide any stronger support for Austrian economics or economic methodology. Two widespread, and interrelated, assumptions made by Hayek’s apologists have obscured this. First, there is a tendency to take for granted that the (relative) autonomy of intentional patterns from neuroelectrical and neurochemical patterns is directly associated with the (relative) autonomy of individual choices. If this is not the case, then rejection of neuro-reductionist foundations for economics yields no particular implications in favor of Austrian over neoclassical methodology or policy philosophy. Second, there is a tendency to assume that if brains implement distributed neural networks, then relative economic values must be computed by these networks through the sculpting of global vectors of weights in state spaces by conceptually mediated environmental contingencies. This assumption courts potential dialectical disaster, at least in the short run, for Austrian apologists, because the most flourishing current research programme in neuroeconomics is based precisely on denying it.