Table Of ContentHayekian Systems
The central theme in the work of F.A. Hayek was the problem of order in society,
and his focus was epistemological: he was concerned with the constraints on
knowledge, the problems associated with its distribution, the structures in which
it inheres, and the implications of these issues for the understanding of social phe-
nomena generally. But while his work has greatly improved our understanding of
market processes, application to more complex social arrangements was not an
unambiguous success.
In seeking to progress beyond Hayek’s difficulties in formulating a more general
theory of spontaneous order, this book fleshes out an analogy between social orders
and the biological order detailed in Hayek’s The Sensory Order into a theory of
adaptive systems. It focuses first on those aspects of the systems which enable them
to learn about their environments, and then on the entrepreneurial processes which
implement their anticipatory capabilities. The inclusion of anticipatory elements,
inspired by the work of Robert Rosen, results in a theory of social orders which
integrates many of the disparate findings of Austrian economists into a self-consist-
ent conceptual framework and has applicability to other social arrangements such
as firms and governments. Of particular interest is the interaction between the
systems of science and government, an issue of significant current concern which
is comprehensively explored here both theoretically and empirically.
This book is essential reading for anyone interested in Hayek, Austrian econom-
ics, social theory, and the history of economic thought more broadly.
William N. Butos is Professor Emeritus in economics at Trinity College,
Hartford, CT, and deputy editor of the journal Cosmos + Taxis. His research inter-
ests include the economics of science and the interaction of government and sci-
ence, monetary economics, the history of economic thought, and the social
science implications of the work of F.A. Hayek.
Thomas J. McQuade is an independent scholar. He is a former software entre-
preneur and has taught economics at Trinity College in Hartford and as a visiting
scholar at New York University. His research interests include the economics,
philosophy, and history of science, and the development of the concept of “antic-
ipatory systems” as an approach to social theory that encompasses arrangements
such as market, science, government, and firm.
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Hayekian Systems
Research into the Structure of Social Interaction
William N. Butos and Thomas J. McQuade
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SE0104
Hayekian Systems
Research into the Structure of Social
Interaction
William N. Butos and
Thomas J. McQuade
First published 2023
by Routledge
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© 2023 William N. Butos and Thomas J. McQuade
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British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging-in-Publication Data
Names: Butos, William N., author. | McQuade, Thomas J., author.
Title: Hayekian systems : research into the structure of social interaction
/ William N. Butos and Thomas J. McQuade.
Description: Abingdon, Oxon ; New York, NY : Routledge, 2023. | Series:
Foundations of the market economy | Includes bibliographical references
and index. |
Identifiers: LCCN 2022043875 (print) | LCCN 2022043876 (ebook) | ISBN
9781032372730 (hardback) | ISBN 9781032372747 (paperback) | ISBN
9781003336150 (ebook)
Subjects: LCSH: Hayek, Friedrich A. von (Friedrich August), 1899-1992. |
Economics--Philosophy. | System theory. | Economics--Sociological
aspects.
Classification: LCC HB101.H39 B88 2023 (print) | LCC HB101.H39 (ebook) |
DDC 330.092--dc23/eng/20221103
LC record available at https://lccn.loc.gov/2022043875
LC ebook record available at https://lccn.loc.gov/2022043876
ISBN: 978-1-032-37273-0 (hbk)
ISBN: 978-1-032-37274-7 (pbk)
ISBN: 978-1-003-33615-0 (ebk)
DOI: 10.4324/9781003336150
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It would be no exaggeration to say that social theory begins with – and has an
object only because of – the discovery that there exist orderly structures which
are the product of the action of many men but are not the result of human
design.
(F.A. Hayek 1973, p. 37)
It was … the great contributions of Bernard Mandeville and David Hume, of
Adam Ferguson and Adam Smith, which have opened the way for an under-
standing, both in biological and social theory, of that interaction between the
regularity of the conduct of the elements and the regularity of the resulting
structure.
(1967, p. 77)
[Social theories] are not about the social wholes as wholes; they do not pretend
to discover by empirical observation laws of behavior or change of these
wholes. Their task is rather … to constitute these wholes, to provide schemes
of structural relationships …
(1948, p. 72)
The economic problem of society … is a problem of the utilization of knowl-
edge not given to anyone in its totality.
(1945, pp. 519–520)
I have said on another occasion, and it seems to me important enough to
repeat it here, that he who is only an economist cannot be a good economist.
Much more than in the natural sciences, it is true in the social sciences that
there is hardly a concrete problem which can be adequately answered on the
basis of a single special discipline.
(1967, p. 267)
Contents
List of figures x
Preface xi
1 Introduction 1
Notes 4
Bibliography 4
2 Background 7
Notes 12
Bibliography 12
3 Spontaneous order and its discontents 14
Polanyi and Hayek in context 15
Polanyi and the order of science 16
Hayek and the order of market 18
Prescriptivism and interventionism in Polanyi and Hayek 20
The way forward in spontaneous order theory 23
Notes 24
Bibliography 27
4 Inspiration from The Sensory Order 30
Hayek’s theory of the sensory order 31
The sensory order and social orders 33
Notes 35
Bibliography 36
viii Contents
5 Inspiration from biological systems theory 38
Process closure and systemic anticipation 39
Process organization 40
Back to The Sensory Order 41
Biological analogies in social theory 42
Notes 44
Bibliography 47
6 Economic systems 50
The structure of market systems 51
Firms and markets 54
Entrepreneurship in firms and markets 58
Money and banking 59
Notes 62
Bibliography 66
7 Science systems 69
The emergence of modern science 71
The structure of science systems 74
Empirical considerations 78
Issues in the philosophy of science 84
Notes 90
Bibliography 93
8 Government systems 96
Legislatures 97
Government bureaucracies 103
Notes 108
Bibliography 113
9 Interactions with government 116
Categories of effect 116
Effects on markets 118
Effects on money and banking 119
Effects on science: boom and bust 124
Effects on science: distortion 127
Notes 131
Bibliography 132
Contents ix
10 State-sponsored science 135
The history of US government science funding 135
Rationales for government funding 140
Funding-induced destabilization 147
Central planning in science 148
Distortion in nutritional science 149
The boom in climate science: background 152
The boom in climate science: funding 155
The boom in climate science: distortion 157
The boom in climate science: effects on markets 159
Notes 161
Bibliography 169
11 Hayekian systems 174
Notes 177
Bibliography 178
Index 179
