Hayek in Today’s Cognitive Neuroscience

My chum, the extraordinarily distinguished and generous neuroscientist Joaquín Fuster, has this excerpt from his essay:

In bold characters I mark the concepts advanced by Hayek in his The Sensory Order. In parentheses, under each conclusion, the text passages are noted in which he makes reference to those concepts:

1. The cognitive code is a relational code; memories are self-organized networks of associative connections formed in the cortex by the temporal coincident activation of dispersed neuronal assemblies.

(The Sensory Order 2.1-2.5, 3.51-3.78)

2. The networks or cognits of perceptual memory self-organize hierarchically in posterior cortex; those of executive memory do it in frontal cortex.

(The Sensory Order 4.1-4.26, 5.17-5.32)                                                                              

3. The prefrontal cortex, at the top of the perception/action (PA) cycle, integrates behavior, language and/or reasoning by, among other operations, working memory.

(The Sensory Order 4.45-4.55, 5.33-5.49)

4. Working memory is maintained by recurrent activity within the PA cycle between perceptual and executive cognits.

(The Sensory Order 5.63-5.91)

Thus far I have summarized the contributions of modern neuroscience that support Hayek’s thinking in The Sensory Order. There, in accord with the latest data at the time he theorized, that perceived knowledge was distributed in the cerebral cortex in the form of associative networks (“maps”) that bound together the sensory elements of every perceptual experience. He also theorized that the cortical perceptual system thus constituted a classificatory apparatus that was embedded in memory and would serve to classify future percepts by association or similarity. He proposed that that perceptual-knowledge apparatus of the brain was a hierarchically self-organized system that, in its ensemble, constituted what we now call a complex adaptive system. Clearly he was using a methodology very similar to the one he had been using with respect to socio-economic systems. This is most apparent on reading his earlier 1937 paper, Economics and Knowledge, of which he always spoke very fondly.

What Hayek did not say in The Sensory Order, because it was not yet known when he wrote it, is that his hypothetical “maps,” which we now call cognitive networks or cognits, interconnect profusely with one another through nodes of common linkage. In other words, that all the items of memory and knowledge in our brain constitute a massive system of relational encoding and communication. Most importantly, that knowledge is dispersed and distributed in the cerebral cortex much as it is in the marketplace among individuals. Further, that it makes sense, metaphorically, to speak of a cerebral marketplace of knowledge. This would be the cognitive counterpart of the sub-cortical marketplace of values and rewards that Ainslie et al. (2004) hypothesize.

In both “marketplaces” the unit of exchange would be synaptic strength. Thus, with more empirical knowledge, Hayek could have extended to the brain concepts very similar to those he used to explain the relationships between marketplace participants and between price and cost. He could have applied those concepts more explicitly than he did in his book to the cybernetic relation between perception and action, as encapsulated in the PA cycle. My presumptions are the more plausible if we view his stance on the role of subjective factors in the behavior of complex economic systems.

Thus current cognitive neuroscience not only confirms Hayek’s hypotheses on the brain/mind relation, but also incorporates gradually into the cerebral cortex some of the same principles of operation that he and other liberal economists tell us govern the behavior of individuals in an economic system as complex as the human brain. Indeed, there is in the cortex an endless competition between cognits for action. Cognits are, after all, self-organized units of information that is incomplete by definition — insofar as it is subjective. Out of that competition emerge, spontaneously, not only the sensory but also the action order. And the PA cycle engages the self with the environment in a dynamic cybernetic interplay much as the one that governs market transactions. In neither of the two is a “central executive” necessary.

Thus the brain dynamics between perception and action is more than a metaphor of market dynamics, not only because the former underlies the latter, but also because both serve the continuous regulation toward adaptive equilibrium that characterizes the dynamics of all open adaptive systems in biology as well as human society. Feedback and self-correction are essential components of adaptive systems. Central design and planning are generally blind to both, and therein is the cause for failure of many self-sustained bureaucracies and multi-annual plans.

For proper operation, a cybernetic cycle needs built-in feed-forward as well as feedback. Here is where Hayek’s “foresight” in an economic system appears essential to deal with what he called “imperfect competition,” in the brain as in the market. Much as in the latter, the cortical cognitive system, where cognits compete with estimates of risk and success in the PA cycle, contains within it a substrate of executive cognits or “enablers.” They reside in the prefrontal cortex on top of the cycle, which collects the information available to it in preparation of action and expectation of outcome. For this reason we can rightfully envision the prefrontal cortex as the organ of pre-adaptation of the cognitive system, which through its PA cycle ever strives for maximal future success with minimal risk.

Finally, our cortex serves our individual goals with more knowledge than we are aware of. Unconsciously, we can intuit probabilities of risk and benefit a great deal better than any conscious “central planner” inside our brain could ever do. Much of our decision-making is laden with the imponderable yet beneficial force of intuition. Inasmuch as we may derive individual benefit from intuitive knowledge, and inasmuch as our intuitive knowledge may serve our fellow humans, it is entirely possible that there is in our brain an “invisible hand” sustaining that larger one that Adam Smith (1976) proposed for society at large.