The Fatal Conceit by F. A. Hayek

Author:F. A. Hayek [Hayek, F. A.]
Language: eng
Format: epub
Publisher: The University of Chicago Press
Published: 1988-06-15T00:00:00+00:00

SIX

THE MYSTERIOUS WORLD OF TRADE AND MONEY

Disdain for the Commercial

Not all antipathy to the market order arises from questions of epistemology, methodology, rationality and science. There is a further, darker, dislike. To understand it, we must step behind these relatively rational areas to something more archaic and even arcane: to attitudes and emotions that arise especially powerfully when commercial activity, trade and financial institutions are discussed by socialists – or encountered by primitives.

As we have seen, trade and commerce often depend importantly on confidentiality, as well as on specialised or individual knowledge; and this is even more so of financial institutions. In commercial activities, for example, more is at risk than one’s own time and effort, and special information enables individuals to judge their chances, their competitive edge, in particular ventures. Knowledge of special circumstances is only worth striving for if its possession confers some advantage compensating for the cost of acquiring it. If every trader had to make public how and where to obtain better or cheaper wares, so that all his competitors could at once imitate him, it would hardly be worth his while to engage in the process at all – and the benefits accruing from trade would never arise. Moreover, so much knowledge of particular circumstances is unarticulated, and hardly even articulable (for example, an entrepreneur’s hunch that a new product might be successful) that it would prove impossible to make it ‘public’ quite apart from considerations of motivation.

Of course action in accordance with what is not perceived by all and fully specified in advance – what Ernst Mach called the ‘observable and tangible’ — violates the rationalist requirements discussed earlier. Moreover, what is intangible is also often an object of distrust and even fear. (It may be mentioned in passing that not only socialists fear (if for somewhat different reasons) the circumstances and conditions of trade. Bernard Mandeville ‘shuddered’ when confronted by ‘the most frightful prospect [which] is left behind when we reflect on the toil and hazard that are undergone abroad, the vast seas we are to go over, the different climates we are to endure, and the several nations we must be obliged to for their assistance’ (1715/1924:I, 356). To become aware that we depend heavily on human efforts that we cannot know about or control is indeed unnerving – to those who engage in them as well as those who would refrain.)

Such distrust and fear have, since antiquity and in many parts of the world, led ordinary people as well as socialist thinkers to regard trade not only as distinct from material production, not only as chaotic and superfluous in itself, not only as a methodological mistake, as it were, but also as suspicious, inferior, dishonest, and contemptible. Throughout history ‘merchants were objects of very general disdain and moral opprobrium . . . a man who bought cheap and sold dear was fundamentally dishonest. . . . Merchant behaviour violated patterns of mutuality that prevailed within primary groupings’ (McNeill, 1981:35). As I

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