By Ebeling, Richard M.
Freeman , Vol. 56, No. 3
The Political Sociology of Freedom: Adam Ferguson and F. A. Hayek by Ronald Hmowy Edward Elgar * 2005 * 265 pages * $110
When I was a young economics major back in the 1970s, one of the standard arguments that many of my professors would hurl at me was: "Your ideal of free-market capitalism may have been all right 200 years ago, when society was a lot simpler, but in a society as complex as ours is today, such a policy of laissez faire just won't work. The complexity of modern life requires the government to interfere and regulate to see that everything works harmoniously, otherwise there would be chaos." Any reference I made to Adam Smith's "invisible hand" in The Wealth of Nations brought forth mockery and snide remarks.
The idea that a complex social order can arise and function without a human creator who designs and guides it often seems counterintuitive to our everyday experience. All that we consume shows signs of human planning and human action.The farmers plant the crops and bring them to harvest. The manufacturers design and oversee the production processes that bring all desired goods and services to market. All works of art and literature are the result of creative minds that put paint on canvas or words on a page.
Surely, it is said, there must an overarching design to fit all those individual plans into a society-wide coordinated pattern, just as the pieces of a jigsaw puzzle fit properly together. In the history of ideas, there have been two groups of thinkers who not only challenged that presumption, but who also showed how social order evolves and coordinates the actions of multitudes of people, without a planner imposing a design on everyone: the Scottish moral philosophers and the Austrian economists.
Ronald Hamowy offers a fairly detailed exposition of many of their ideas in The Political Sociology of Freedom. In this series of essays Hamowy traces the development of a theory of spontaneous social order in the works of Bernard Mandeville, David Hume, Adam Smith, Adam Ferguson, and a number of other writers of the eighteenth century. Their premise was that if man and society are to be properly studied and understood, we must use our reason and the historical record to find out what is the actual nature of man and how society's institutions actually come into existence.
Their conclusion was that man is a frail and imperfect creature, who applies his reasoning to solve problems, but who is also influenced by his passions. Man's knowledge is far from perfect about his past and current circumstances, and especially weak about what the future might hold. While capable of cruel and violent acts, man's nature also contains a spirit of benevolence based on his desire and need for the company of others. He is far from the hyper-rationalistic "economic man" that critics of the market later tried to portray him as.
What their study of history demonstrated was that none of the institutions and social norms of interpersonal conduct and commerce had been introduced by some great and all-knowing philosopher king; nor had their development and change over the centuries been anticipated or even thought about by those whose actions brought them into existence. (As the Austrian economist Ludwig von Mises once expressed it, "History is made by men. . . . But the historical process is not designed by individuals . …