In a post on the OUP blog Adrian Vermeule writes:
The basic problem with “The Use of Knowledge in Society” is what we might call the Hayek Fallacy: a false comparison between the aggregate product of many minds and the product of a single mind. Perhaps that comparison is relevant in special contexts, such as the question whether a judge or a jury should be responsible for the verdict. However, in a comparison between markets and either socialist or democratic lawmaking – the major comparison that concerned Hayek – the comparison is not relevant and Hayek’s argument is not relevant either. Hayek went astray by reifying or personifying “the planner” or the “single mind” who chooses policies, and then overlooking that in any recognizably complex modern state, especially democratic states, policies are chosen by highly complex institutional structures and processes that themselves aggregate multiple sources of information. None of this is to say anything substantive about when or under what conditions collective or democratic policymaking will better aggregate and utilize dispersed information or tacit knowledge than the market will. It is to say that Hayek’s analysis cannot help us figure out those questions.
Versions or relatives of the Hayek Fallacy pop up in many other contexts. One important context is the comparison between lawmaking by common-law courts and lawmaking by legislatures. In the sharpest case for this comparison, the issue is whether a vague or ambiguous or highly general written constitution – like the United States Constitution – should be given content by judges deciding constitutional cases in common-law style over time, or rather by legislatures and presidents enacting laws and making rules to which the judges defer. Here the Hayek fallacy is to say that the aggregate wisdom of many judges over time, drawing when appropriate upon the aggregate wisdom of broader social traditions and norms, will outperform “the lawmaker,” whose epistemic capacities are inferior. The problem is that there is no such “lawmaker.” Rather there is a large modern legislature with many hundreds of members, who in turn draw upon the expertise of thousands of staff and upon information supplied by the bureaucracy, citizens, and interest groups. Moreover, the legislature can delegate, as appropriate, to a gigantic cadre of agencies who themselves use expert panels and citizen input to formulate policies. The litigation process might or might not outperform this massively complex, integrated lawmaking machine in constitutional matters, if we judge performance on the sort of epistemic or informational grounds Hayek favors. However, a comparison between the many minds of the judges, on the one hand, and some personified lawmaker, on the other, contributes nothing. In modern lawmaking, that comparison is never at issue.
In another later post Vermeule writes:
As applied to the judiciary, rather than to lay jurors, the problem of cognitive free-riding has interesting implications. It suggests that district judges or three-member appellate panels, where free-riding is easy to monitor and check, might ascertain the law more accurately than a large en banc appellate panel or even a multi-member high court. It also suggests grounds for skepticism about a common claim offered by legal theorists influenced by Edmund Burke and F.A. Hayek. According to this claim, precedents embody the distilled wisdom of many generations of judges. We can immediately see, however, that some or even all judges participating in the line of precedent might be free-riding on other judges, cognitively speaking; they might be hoping that other judges will figure it all out, and might then be following the lead of others, who may be following the lead of yet others. It is quite possible – not merely logically possible, but really possible – that the precedents generated through the collective wisdom of the whole bench and bar might actually contain less information than they would if one judge, or a small number, had been charged with formulating the legal rules.
Two points are in order.
First, I don’t read Hayek as ascribing some quasi-Hegelian notion to collective intentionality. The commonalities and disanalogies of mind and society in Hayek is a line of thought that has received its treatment from some. This said, these theorists, alert to Hayek’s super-brain admonition, wish to show that Hayek’s theory of mind has analogs in the social domain. They do not think that people and neurons are comparable in any other sense than that they can form mutable interaction patterns with each other. What’s been emphasized as the common denominator is emergence arising from interminable positive and negative feedback characteristic of adaptive systems.
Second, Burke and Hayek never claim that the distilled wisdom embodied in practices and traditions are infallible. On the contrary, they are positively non-normative. All they say is that a socio-economic order in its complexity is not amenable to being centrally managed – knowledge is distributed across a multitude of agents and condenses in dynamic traditions, customs and practices. It’s a skeptical position and argues that large-scale social planning can often be a leap of faith and thus a spurious claim to knowledge. Society is too complex, has too many variables, local and ephemeral, to offer a predictive science of politics and economics. It should be noted that this is not a blanket admonition against social change or social amelioration. The complexity thesis takes to task a global, often rationalistic style of thinking, that abstracts its recommendations from the minutiae of lived, contextualized experience. Extant and spontaneous arising customs, practices and traditions are the sources of practical reasoning: to totally disregard them is to be irrational.
