A Hayekian Explanation of Hayek’s ‘Epistemic Turn’

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The present essay investigates the development of F.A. Hayek’s thought concerning industrial fluctuations from the perspective of his methodology of sciences of complex phenomena and concludes that – to the extent this evolution is representative of Hayek’s more general ‘epistemic turn’ away from technical economics towards philosophy – there is no mystery concerning the relationship between Hayek’s early technical work and his later more philosophical work. According to Hayek’s methodology, an inquirer who runs into phenomena too complex for adequate explanation on the basis of current knowledge must move to a more general, albeit less testable, explanation. This is precisely what happened in the evolution of Hayek’s thought concerning trade cycles.

Posted for comments on 24 Oct 2014, 9:19 am.

Comments (4)

  • I like this paper but want to see more evidence, more substance on the bare bones of the argument. My overall view is that I am none-the-wiser as to what precisely the “epistemic turn” did for Hayek’s appreciation of trade cycles? In other words what views and substantial arguments did he develop on trade cycles post- the “turn” if any? His 1974 Nobel Lecture has very little in it that would count as a coherent view on cycles. What types of explanation did he develop on cycles specifically that demonstrate how the “turn’’ worked-out in the practice of theorizing/testing? I suspect that there were none. It is all vey well to talk about pattern explanations and pattern predictions etc, but that is not enough to make a full paper on the subject of “trade cycles”.

    On details: page 7, mentions Hayek’s “epistemic concept of equilibrium” but here and elsewhere in the paper I find no discussion of Hayek’s later (1968) rejection of the equilibrium metaphor in favour of an alternative notion: “order”. See his “Competition as a discovery procedure” (1968) reprinted in his New Studies 1978.

    On page 9: that Hayek was “dead” as a “technical economist” raise questions about what is meant by “technical”? His well-known microeconomics papers on knowledge and on competition in the 1940s published in Economica—how do we classify these? As “non technical”? Why? One of the flaws in the paper is that terms like this are not defined. In fact, Hayek’s articles in microeconomics in the 1940s were pertinent to some core issues in economic theory, not least being the theory of choice and the theory of market competition. To argue that Hayek turned wholesale against “technical’’ economics makes no sense to me.

    So what is new about the material on pages 10-11? Karl Heinz Paqué wrote about this in his HOPE 1990 article: “ Pattern Predictions in Economics: Hayek’s Methodology of the Social Sciences Revisited” vol. 22( 2), pages 281-94. A minor point—how about pages refs to the quotes on pages 11-12 from the Caldwell volume?

    In the light of Hayek’s rejection of the equilibrium metaphor referred to above, the material on page 12 beginning with the long paragraph “I have …” contains many anachronistic statements reading far too much into Hayek’s thinking post- 1968. Expositing his ideas after that date using the metaphor of equilibrium, will not do.

  • Scott Scheall says:

    Many thanks to Professor Endres for his thoughtful and constructive comments. The present essay is an extension of a paper that will soon be published in History of Economic Ideas entitled “Hayek’s Epistemic Theory of Industrial Fluctuations” (Scheall Forthcoming 2015). I’ve since provided a copy of this paper to Professor Endres offline. These two papers were originally written as a single piece and it was only relatively late in the project that I split them in two. I was hoping the argument of the current paper could be established without too much reliance on the argument of the HEI paper, but I see now that I need to say more in the present paper, especially, about my argument concerning Hayek’s later (or “epistemic”) theory of fluctuations.

    Professor Endres is quite right that Hayek’s Nobel Lecture (AKA “The Pretence of Knowledge” (Hayek [1975] (1978))) does not contain anything like a coherent cycle theory. However, my argument in the HEI paper, (if I might be permitted to quote from that paper at length)

    “defends three main theses:
    1. Hayek has an “epistemic theory of industrial fluctuations” (or, at least, a sketch of one) that consists of

    a. his epistemic conception of equilibrium, according to which, equilibrium exists to the extent that economically-relevant beliefs of individual market participants are mutually consistent and accurate with respect to the external facts;
    b. his treatment of a freely-adjusting price system as the mechanism that serves to coordinate the relevant beliefs; and
    c. his empirical claim that policymakers are constantly interfering with the price system because, subscribing as they do to a scientistic methodology, policymakers convince themselves that they possess knowledge, which would facilitate the making of effective countercyclical policies, which they do not in fact possess, and (because of the complexity of the phenomena and their own cognitive limitations) cannot acquire.

    In effect, my argument here is that if one combines the relevant parts of “The Pretence of Knowledge” (Hayek [1975] (1978)), “Economics and Knowledge” (Hayek [1937] (1948)), and “The Use of Knowledge in Society” (Hayek [1945] (1948)), the result is a (sketch of a) theory of industrial fluctuations.

    2. Considerations of the limits of human knowledge play a similar role in Hayek’s early theory as they do in the later epistemic theory. In particular, epistemic concerns figure in both as motives for and causal factors in Hayek’s explanation.
    3. With respect to the causal role that each assigns to actions based on inadequate knowledge, the early theory is a special case of the later theory.”

    (Scheall Forthcoming 2015 [page numbers currently unavailable])

    If these theses are accepted, then the argument of the present essay follows more or less readily. If we assume that this development of Hayek’s thought concerning fluctuations is emblematic of his broader “epistemic turn” (a premise that I do not defend at length in the paper, but which does not seem unreasonable given the centrality of trade cycle theory to Hayek’s early career), then what we observe is Hayek giving up a highly complex theory of the cycle in which ignorance played a very precise causal role (i.e., one in which only those market disturbances originating from the market for money were explicitly attributed to ignorance, namely, bankers’ ignorance of the data necessary to keep the loan rate aligned with the natural rate) in favor of a (sketch of) a far less complex theory of fluctuations in which ignorance plays a more general causal role (i.e., exogenous manipulations of the price structure based on inadequate knowledge [especially an artificial pretence of knowledge] can potentially discombobulate any market and set disequilibrating [or, if you prefer, “disordering”] forces in motion). This transition from a highly specified theory to a more general theory is – I argue – perfectly in keeping with what Hayek’s methodology of sciences of complex phenomena says that a scholar must do when confronted with phenomena of unmanageable complexity. Thus, we have a Hayekian explanation of Hayek’s own “epistemic turn.”

    As for the question about relying on “equilibrium”-talk rather than “order”-talk, I rely on Hayek’s ([1937] (1948)) conception of equilibrium as plan coordination. I take it that this notion can be easily translated into “order”-talk. Hayek’s motivation for shifting to “order”-talk in “Discovery Procedure” ([1968] (1978), 184) is that it allows him to speak of varying degrees of order, i.e., of varying degrees to which plans might be coordinated. Given this translatability, I thought it better not to invoke a new term – “order” – somewhat needlessly.

    Regarding the matter of Hayek’s turning against “technical” economics, I’m mostly relying on Hayek’s own pronouncements here: See, e.g., “Kinds of Rationalism” (Hayek [1964] (1967), p. 91):

    “This brings me to what in my personal development was the starting point of all these reflections, and which may explain why, though at one time a very pure and narrow economic theorist, I was led from technical economics into all kinds of questions usually regarded as philosophical. When I look back, it seems to have all begun, nearly thirty years ago, with an essay on ‘Economics and Knowledge’ [i.e., Hayek [1937] (1948)] [.]”

    So, “technical economics” is Hayek’s own term for what he took himself to be doing before “Economics and Knowledge.” In any case, I don’t believe that anything central to the paper requires a hard-and-fast distinction between Hayek’s “technical” economics and his philosophy. There is no argument in the paper that Hayek “turned wholesale” against technical economics. There is the summary remark on page 9 that “[f]or all intents and purposes, from that point forward, Hayek-the-technical economist was dead—long-lived was Hayek-the-philosopher.” This might be read as a claim that Hayek turned completely against economics, but I do say “[f]or all intents and purposes,” so I think I have a bit of wiggle room here. In any case, I don’t take this comment to be central to the argument of the paper, so I’m happy to revise or delete it.

    It’s enough for my purposes that Hayek started in one place, ended in another, and that the transition can be explained by a recognition (which may have only been tacit and, in any case, gradual) that the complexity of the phenomena of industrial fluctuations outstripped the explanatory capacities of the explanatory tools upon which Hayek relied in the early part of his career; and which therefore, required the crafting of new tools that, though they produced a more general, less testable explanation, allowed Hayek to rise above some of the limitations of the old tools and penetrate some of the complexity of the phenomena.

    Many people have written on pattern predictions, explanations of the principle, etc. I don’t take myself to be doing anything new on pages 10-11. The purpose of those passages is merely to collect and exposit some of the evidence from Hayek’s writings on the methodology of sciences of complex phenomena that is most relevant to my thesis. I don’t believe that this thesis requires that I be doing anything new on pages 10-11.

    The Caldwell volume had not been published at the time that I wrote the paper, so I was relying on unnumbered pre-prints of the article in question that Bruce was kind enough to send to me. Now that the volume (Hayek [1961] (2014)) has been published, I can supply these details in the revised version of the paper.

    I believe (hope) that the argument on page 12 will appear less anachronistic in light of the companion article to be published in HEI. If not, I’ll be glad to field further comments and criticisms.

    Again, many thanks to Professor Endres for his very helpful comments. I hope this response has addressed his most pressing concerns. In any case, I’m only too happy to continue this conversation, as it can only mean that the paper will be further improved.

    Scott Scheall, PhD
    Arizona State University – Department of Science, Technology, and Society
    George Mason University – F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center
    Co-editor, Research in the History of Economic Thought and Methodology


    Scheall, S. (Forthcoming 2015). Hayek’s Epistemic Theory of Industrial Fluctuations. History of Economic Ideas. 23 (1), page numbers currently unavailable.

    Hayek, F.A. [1937] (1948). Economics and knowledge. In Individualism and Economic
    Order. Chicago: University of Chicago Press, 33-56.

    Hayek, F.A. [1945] (1948). The use of knowledge in society. In Individualism and
    Economic Order. Chicago: University of Chicago Press, 77-91.

    Hayek, F.A. [1961] (2014). A new look at economic theory. In B. Caldwell, (Ed.) The
    Collected Works of F.A. Hayek, vol. 15, The Market and Other Orders. Chicago: University of Chicago Press, 373-426.

    Hayek, F.A. [1964] (1967). Kinds of rationalism. In Studies in Philosophy, Politics, and Economics. Chicago: University of Chicago Press, 82-95.

    Hayek, F.A. [1975] (1978). The pretence of knowledge. In New Studies in Philosophy, Politics, Economics, and the History of Ideas. Chicago: University of Chicago Press, 23-34.

  • Erwin Dekker says:

    Scott Scheall’s paper is an attempt to explain Hayek’s transformation as it has been called by Caldwell (1988) and Foss (1995). I absolutely agree with Scheall that understanding Hayek’s work requires us to understand the continuity or break between his earlier work and his later work. That will determine whether we read Hayek’s work primarily as an alternative economics or alternatively as a contribution to political philosophy and the philosophy of science.

    This turn has been described, by others, more openly as a failure (Klausinger, 2006). In my own work I have argued that the transformation has to be at least partly explained by a shift in the scope of his work, influenced by the social and political crisis of the 1930’s and 1940’s (Dekker, 2014). Unfortunately Scheall does not really engage with any of these explanations (including those of Foss and Caldwell), and it is therefore unclear to what extent his account differs from these mentioned before.

    More recent work by Caldwell on ‘The Economic Calculus’ by Hayek (forthcoming) even questions the extent to which Hayek gave up his technical economic work.

    As Professor Andres points out it is hard to judge what this transformation in the context of business cycles consists of, since Hayek did not really develop one after his ‘epistemic turn’. Scheall points out in his response that through a combination of some of Hayek’s work on knowledge we could arrive at one, but if so that rational reconstruction would have to be part of the paper, to demonstrate what this turn entails precisely.

    Even so, I think the paper would leave me unsatisfied then. The turn in Hayek (I would in fact prefer something like maturation, but that is beyond our scope here) is much bigger than one about how to explain the cycle. Around the time that Hayek gives up his work in capital theory, he starts to explore the concept of Freedom (Hayek, 1939) and the nature of knowledge in the human and moral sciences in a historical perspective (Hayek, 1941). The turn is therefore at least as much one of scope as it is one of method. But even in terms of method it is at least two-sided for it is concerned with methodological dualism (the human vs. natural sciences) and it is concerned with simpler and more complex phenomena. The current paper leaves the former out of consideration. One could add to these two considerations the distinction between general knowledge and the knowledge of time and place, to which the paper does pay attention. But the relative importance of these in the ‘turn’ would be an important consideration, one that can only be judged relative to the ‘later’ theory of business cycles.

    Finally the paper is original in its attempt to use Hayek’s theory to explain Hayek’s transformation. But this might also be considered a weakness, for it is unlikely to convince anybody who is already unsatisfied with Hayek’s (not very specific) distinction between simplex and complex phenomena and his distinction between pattern predictions and specific predictions. This, to some extent, is unavoidable. But the problem could be mitigated if alternative explanations would be considered. If Scheall is primarily interested in a ‘theory of the history of ideas’ (p. 13) it would interesting to hear what competing theories are that could be applied in this case. Or to contrast them with some other hypotheses in the existing literature. If I interpret Klausinger’s work (2006) correctly he suggest at least two rival explanations:

    1. The unstoppable rise of Keynesianism

    2. The idea that Austrian economics was no longer a progressive research program (both by insiders such as Morgenstern and Haberler, as well as outsiders)

    Caldwell, Bruce. 1988. “Hayek’s Transformation.” History of Political Economy 20(4): 513–41.
    Dekker, Erwin. 2014. “The Viennese Students of Civilization: Humility, Culture and Economics in Interwar Vienna and Beyond.” Erasmus University Rotterdam. http://repub.eur.nl/pub/50316.
    Foss, Nicolai Juul. 1995. “More on ‘Hayek’s Transformation’.” History of Political Economy 27(2): 345–64.
    Hayek, Friedrich A. 1941. “The Counter-Revolution of Science.” Economica 8(31): 281–320.
    Hayek, Friedrich A von. 1939. Freedom and the Economic System. Chicago: University of Chicago Press.
    Klausinger, Hansjörg. 2006. “‘In the Wilderness’: Emigration and the Decline of the Austrian School.” History of Political Economy 38(4): 617–64.

  • Scott Scheall says:

    I am grateful to Professor Dekker for his perceptive and penetrating comments, which have forced me to better clarify my thoughts concerning the argument of the present paper, its relationship to a “companion” essay recently published in History of Economic Ideas, and its significance for the secondary literature on Hayek. The version of the paper currently posted to the Economic Thought Open Peer Discussion page is in need of a substantial revision in order to better explain the intended scope of the argument and to account for various ways in which my thinking has changed since the paper was last revised.

    As Professor Dekker indicates, a prominent theme in the secondary literature on Hayek concerns (what Bruce Caldwell [1988, 2004] called) “Hayek’s Transformation.” Indeed, the question of the exact nature and extent of the changes in Hayek’s scientific, methodological, and philosophical attitudes is perhaps the central issue in Hayek scholarship. Terence Hutchison (1981) was the first to argue for a major break in Hayek’s thought. According to Hutchison, the relevant rupture consisted of a rejection of Hayek’s early Misesian (apriorist) methodology in favor of a Popperian approach. However, according to Caldwell, who engaged in a spirited debate with Hutchison in the early 1990s, the nature of Hayek’s transformation couldn’t be as postulated by Hutchison as, on Caldwell’s (1992) reading, Hayek was never much of a Misesian or much of a Popperian.* Caldwell (1988, 2004) argued instead that it was better to interpret Hayek’s transformation as a rejection of the standard, equilibrium-based, toolbox of the technical economist in favor of a conception of economic order (née equilibrium) as coordinated knowledge. Nicolai Juul Foss (1995) sanctioned Caldwell’s view of Hayek’s transformation, but argued that the shift in Hayek’s attitude toward equilibrium theorizing was more subtle and gradual than Caldwell let on.

    Several other scholars have attempted to clarify the nature and extent of various posited shifts in Hayek’s thought. Steve Fleetwood (1995) distinguished three unique “Hayeks” differentiated in terms of distinct ontologies (or, perhaps better, ontological attitudes) that Hayek purportedly accepted at one time or another. Ulrich Witt (1997) argued for a fundamental inconsistency between Hayek’s early business cycle project and his subsequent work on spontaneous order, and attempted to reinterpret the former through the lens of the latter. Jack Birner (1999) – who coined the phrase “epistemic turn” to describe Hayek’s transformation – argued that Hayek’s early work on cognitive psychology did not figure in his technical-economic project, but was eventually rediscovered by Hayek, and played a central role in the subsequent development of his thought concerning social order and knowledge coordination. More recently, in what (if I might be permitted to flatter) must be counted a masterful piece of historical scholarship, Professor Dekker (2014) himself has argued that Hayek’s transformation consisted of a widening of interests beyond the narrowly economic brought about by the great social upheavals of the 1930s and 1940s.**

    Somewhat opposed to these arguments, there is another stream in the secondary literature that aims to establish and defend the fundamental unity of Hayek’s research program and the consistency of its development over time. The most representative example of this literature is probably Gerald O’Driscoll’s (1977) argument in Economics as a Coordination Problem that Hayek’s writings on knowledge coordination are best interpreted as both consistent with and the logical outgrowth of his early work on the business cycle. Peter Boettke (2015) has argued for a fundamental unity, not only in the development of Hayek’s methodological thought over time, but in both Hayek and Mises’s methodological projects. As Professor Dekker indicates in his comments, recent archival research by none other than Bruce Caldwell (unpublished manuscript) has cast doubt on his earlier view that “Economics and Knowledge” (Hayek 1948 [1937]) marks the end of Hayek’s work in technical economic theory.

    Professor Dekker is quite right that the current paper – together with its companion essay, “Hayek’s Epistemic Theory of Industrial Fluctuations” (2015b), recently published in History of Economic Ideas (HEI) – is intended as a contribution to this literature. However, the relation between this multi-essay project and the secondary literature on Hayek’s transformation is more complicated than might appear at first glance. The HEI paper is a more or less straightforward exercise in the history of economic thought. I argue that one can infer from certain of Hayek’s methodological writings an explanation of economic-cyclical phenomena that relates in certain ways to his early theory of industrial fluctuations. In particular, I argue that “with respect to the causal role that each assigns to actions based on inadequate knowledge, the early theory is a special case of the later theory.” (Scheall 2015b, 116). However, at the same time, the HEI paper emphasizes certain discontinuities between Hayek’s earlier and later accounts. The early theory is based on Walrasian equilibrium and Böhm-Bawerk’s capital theory; the later theory rejects both of these in favor of Hayek’s unique conceptions of economic order and the price system.

    Thus, in the HEI paper, I’m concerned merely to establish certain facts about Hayek’s intellectual development. This is essentially what the aforementioned contributions to the secondary literature have done, i.e., pointed to (or, more exactly, argued for) certain respects in which Hayek’s thought was consistent and other respects in which his thought changed over time. In this sense, the HEI paper is just another run-of-the-mill contribution to the literature on Hayek’s transformation.

    However, in the present paper under review, I aim to do something that, to my knowledge, is unique in this literature. I’m not interested in discovering further facts about Hayek’s intellectual development. Rather, I’m looking for a principle that might unify some of the seemingly disparate facts established in the literature about this development. In particular, I’m looking for an explanation that makes sense of both the continuities and discontinuities that I posit in my HEI paper. I argue that, as it happens, such a principle can be found in Hayek’s own methodology of sciences of complex phenomena. According to this principle, when a scholar aiming to explain some complex phenomena runs up against the limits of the available analytical tools, the scholar must shift to a “higher-level” plane of analysis and settle for a more general, but less testable, explanation that abstracts from some of the complexities of the relevant phenomena. I argue in the present paper that this is exactly what Hayek did (consciously or not) when his early approach to the business cycle proved unfruitful. The standard tools of Walrasian equilibrium analysis were not up to the task of an adequate explanation of cyclical phenomena. But, Hayek’s re-conceptions of equilibrium as coordinated knowledge and of the price system as a knowledge-coordinating mechanism, together with his anti-scientistic methodology, led to his later, more general, albeit less testable, epistemic theory of industrial fluctuations. The phenomena to be explained by a theory of fluctuations remained the same for Hayek – the discombobulating effects of action taken on an inadequate epistemic foundation – but, because these phenomena proved intractable with the standard tools of equilibrium analysis, Hayek was forced to the “higher-level” methodological plane in order to abstract from many of the details that undermined his technical-economic business cycle project. So, the present paper ultimately aims for a unifying explanation of the principle of certain consistencies and inconsistencies in Hayek’s intellectual development.

    For what it’s worth, I would further argue that this same principle might serve to unify other, seemingly mutually inconsistent, accounts in the secondary literature on Hayek. Consider, for example, the apparent inconsistency between O’Driscoll’s (1977) argument that Hayek’s writings on spontaneous order are of a piece with his work on the business cycle and Caldwell’s (1988, 2004) argument that Hayek’s conception of economic order as coordinated knowledge amounts to a rejection of the general equilibrium-theoretical assumptions at the basis of his business cycle theory. It would seem that we might explain both the consistency of Hayek’s concern for knowledge coordination and his rejection of general equilibrium theory in terms of the principle that a scholar whose concerns outrun the limits of his tools must aim lower, i.e., for a more general, less testable, explanation of the principle.

    When I say that I’ve adopted the guise of a “theoretician of the history of ideas” in the present paper (p. 13), it is this search for unifying principles that I have in mind. What the various contributions to the secondary literature – including my HEI paper – do is point to certain bits of data that might enter into an explanation of the principle (either as explanans or explananda). I take it to be interesting that, in the present case, it is possible to find in Hayek’s own methodology a principle that makes sense of seemingly disparate bits of these data. The result would appear to be a nice, tidy, internally consistent, account – the “Hayekian Explanation” of the paper’s title – of an aspect of Hayek’s intellectual development. But, of course, it need not be the case that all of the principles that might serve to unify the various bits of data of Hayek’s career need be inferable from his own methodology. The overarching point is that it is possible to go beyond arguing for certain facts about Hayek’s development. We can look for explanatory principles that make (some) sense of the facts we’ve discovered. (And we might even find some of these principles in Hayek’s own writings.)

    Of course, much of this might be of general relevance to the history of ideas and the practice of intellectual biography. As I mention in the closing paragraph of the current essay, we might see how far the relevant Hayekian principle takes us in explaining the vicissitudes of other prominent scholars, such as Wittgenstein, whose thought is said to have “turned” over time. But, as someone who is interested in Hayek, I’m less concerned with the general implications of this approach for the history of ideas than I am with its particular implications for the secondary literature on Hayek’s intellectual development. It is here that the relationship between this multi-essay project and the secondary literature gets rather knotty. There’s a sense in which this project can be read as an immanent criticism of the literature—or, more exactly, of the tendency that one discovers in certain places in the literature to leap from premises covering a limited part of Hayek’s career to some more general conclusion. I would argue that this tendency starts with Hutchison’s (1981) original “Hayek I” / “Hayek II” essay, where he leaps from some, at best, limited (and, at worst, confused [see Scheall 2015a]) premises to a (much too) strong conclusion concerning purported changes in Hayek’s methodological development. To varying degrees, this same tendency to leap from some particular discontinuity (continuity) to a conclusion of more general discontinuity (continuity) runs throughout the literature on Hayek’s transformation.

    I offer some relevant comments in the concluding section of the HEI paper:

    “[T]he present paper might be interpreted as an extension of O’Driscoll’s thesis concerning the essential unity of Hayek’s economics: Hayek’s work through the 1940s and beyond ‘forms a unified whole and must be appreciated as such’.

    This being said, although the paper does point to one respect in which Hayek’s thought is continuous over time – namely, in his focus on the implications of ignorance and the limits of human knowledge – it also recognizes other respects in which his approach changed, i.e., his movement away from both the Walrasian equilibrium construct and the Böhm-Bawerkian theory of capital. Thus, I want to resist the notion that the present paper bears significant implications for the questions whether and to what extent Hayek’s thought ‘transformed’ over time, or whether there might be multiple ‘Hayeks’ distinguishable in terms of various views that Hayek accepted or emphasized at one point, but rejected or downplayed at some other time. More exactly, if the present essay establishes anything about these questions, it is their futility. It should be apparent as soon as it is stated that in a scholarly career as long as Hayek’s – spanning nearly three-quarters of history’s most tumultuous century – one should expect to encounter neither complete continuity nor (absent a clinical diagnosis of schizophrenia) utter discontinuity. Thus, any attempt to interpret Hayek’s thought as maximally consistent over time will confront some obvious counterexamples; but, so too will any attempt to draw strict lines of division between different ‘Hayeks’.

    Moreover, the ultimate justification for a particular demarcation between various ‘Hayeks’ can be nothing more substantive than (usually implicit) value judgments about the importance of competing definitions of continuity. For example, the arguments of the present paper imply that, at least with respect to industrial fluctuations, certain elements of Hayek’s thought were consistent over time (the emphasis on ignorance as a source of price disturbances), but others were not (Walrasian equilibrium, Böhm-Bawerk’s theory of capital). Stated another way, the conclusions of Hayek’s cycle arguments were mostly continuous, though he supported them with different premises over time. Whether this means that Hayek’s career was more continuous than discontinuous requires some value judgment as to whether continuity-of-conclusions is more reflective of general continuity than discontinuity-of-premises is reflective of general discontinuity. That is, we would be more or less equally justified in insisting that Hayek’s career displayed remarkable continuity, because his conclusions were essentially consistent over time, as we would be in insisting that his career displayed remarkable discontinuity, because different premises supported his conclusions at different times. There is no fact of the matter here; there are only competing definitions of continuity according to which the question is answered in different ways, and judgments of value as to which definitions are more acceptable than others. Such arguments are more likely to reflect the interests of the individual scholars who defend them than anything of significance for Hayek’s career.

    The current paper emphasizes the ever-present, but ever-expanding, role that ignorance played in Hayek’s thinking about industrial fluctuations. However, I resist the temptation to defend ignorance as the consideration that unifies Hayek’s diverse canon.” (Scheall 2015b, 117-119)

    My point here is that the leap from the discovery of some change (or continuity) in Hayek’s thought to the conclusion that Hayek’s development was fundamentally discontinuous (continuous) requires some standard by which the continuity of a long and varied career such as Hayek’s can be measured. The data of Hayek’s career will always be somewhat ambiguous, displaying elements of both continuity and discontinuity. Indeed, I would suspect that one could pick at random any two years of Hayek’s academic career (say, 1929 and 1964) and find both continuities and discontinuities between the earlier and the later Hayeks. Without some standard by which the continuity of a scholar’s career might be measured, any leap to a conclusion of either general continuity or discontinuity is more likely a reflection of the historian’s interests than the interests of the scholar under investigation. But, beyond this, there remains the possibility of discovering some methodological principle – Hayekian or otherwise – that might serve to unify otherwise disparate pieces of data. If it’s possible to explain some discontinuity (continuity) in Hayek’s career in terms of a principle that unifies this discontinuous (continuous) aspect with other aspects of Hayek’s career, then the leap to a conclusion of more general discontinuity (continuity) is untenable.

    There are elements of both continuity and discontinuity in Hayek’s intellectual development. In the absence of some shared standard for evaluating continuity across time, there is no fact of the matter with respect to the question whether Hayek’s career was more continuous than discontinuous. But, even if we possessed some such standard of scholarly continuity, there remains the possibility of a unifying explanation of the principle of particular continuities and discontinuities in Hayek’s intellectual development. The relevant “immanent criticism” here is that parts of the secondary literature on Hayek bog down in the hopeless task of drawing unjustified general conclusions from an array of particular facts about Hayek’s career, while ignoring the more hopeful task of searching for principles that might explain these facts.

    In the forthcoming revision of the present paper, I hope to better clarify the argument, its relationship to my recently published work, and its significance for the relevant secondary literature. I am grateful to Professor Dekker for focusing my attention upon these deficiencies in the current draft.


    *I’ve recently made a small contribution to resolving part of this debate in favor of Caldwell. In my (2015a) “Hayek the Apriorist?” I argue that Hutchison’s thesis of marked similarities between Mises and the young Hayek is untenable. The two Austrians maintained mutually inconsistent conceptions of a priori knowledge so that, even if Hayek had at one point accepted methodological apriorism (a claim he always denied), it would have meant something radically different to him than it meant to Mises.

    **For the record, I would count Hansjörg Klausinger’s (2006) “In the Wilderness”: Emigration and the Decline of the Austrian School” as less an attempt to come to grips with the nature and extent of Hayek’s transformation than an analysis of the consequences for a school of thought of the diasporization of its members.


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    Boettke, Peter. 2015. “The Methodology of Austrian Economics as a Sophisticated, Rather Than Naïve, Philosophy of Economics.” Journal of the History of Economic Thought 37(1): 79-85.

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    Caldwell, Bruce. 1992. “Hayek the Falsificationist? A Refutation.” Research in the History of Economic Thought and Methodology 10: 1-15.

    Caldwell, Bruce. 2004. Hayek’s Challenge: An Intellectual Biography of F.A. Hayek. Chicago: University of Chicago Press.

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