Academic journal article Journal of Markets & Morality

Philanthropy, Markets, and Commercial Society: Beyond the Hayekian Impasse

Academic journal article Journal of Markets & Morality

Philanthropy, Markets, and Commercial Society: Beyond the Hayekian Impasse

Article excerpt


Like many classical liberals of the Cold War era, F. A. Hayek was of two minds about the role of philanthropy in modern commercial societies. In digressions sprinkled throughout his published works, Hayek hailed philanthropy as a Tocquevillian alternative to the welfare state and praised voluntary associations for their uniquely effective "recognition of many [philanthropic] needs and discovery of many methods of meeting them that we could never have expected from the government" (Hayek 1979, 50).

At the same time, Hayek's vision of a free society was based upon a radical critique of philanthropic action. He associates philanthropy with the Aristotelian injunction "to restrict our actions to the deliberate pursuit of known and observable beneficial ends" (Hayek 1988, 80). From Hayek's perspective, this diminishes each individual's capacity to assist others. Persons committed to finding "a proper cure for misfortunes about which we are understandably concerned" (ibid., 13) would do better to "[withhold] from the known needy neighbors what they might require in order to serve the unknown needs of thousands of others" (Hayek 1978, 268 and Hayek 1979, 165) because the latter "[confers] benefits beyond the range of our concrete knowledge" (Hayek 1988, 81) and thus provides "a greater benefit to the community than most direct 'altruistic' action" (ibid., 19). (1) Altruism and philanthropy may always be with us, yet these "old instinctual responses" play no necessary role in modern liberal societies. They are, in Hayek's view, "irreconcilable with the open society" (Hayek 1976, 168).

In this article, I propose a constructive revision of Hayek's Great Society. I first examine the conceptual dualisms through which Hayek constructs the commerce-philanthropy relationship (e.g., modern versus tribal-socialist, Adam Smith versus Aristotle) and the historical-philosophical context in which they were formulated. This helps to illuminate the logic of Hayek's approach and the ways in which this logic prevented Hayek from integrating philanthropy into his theory of economic and social order. Second, I explore the foundations of an Aristotelian liberal view of philanthropic action. This discussion is inspired by the pioneering work of Cornuelle (1993) as well as the emerging literatures of positive psychology (Seligman and Csikszentmihalyi 2000; Seligman 2002; Haidt 2006; Keyes and Haidt 2003; Gable and Haidt 2005) and Austrian social capital theory (Chamlee-Wright 2004, 2006, 2008; Chamlee-Wright and Myers 2008; Lewis and Chamlee-Wright 2008). Without abandoning Hayek's theory of markets, I sketch a post-Hayekian view of commercial society in which markets and philanthropy ("voluntary giving and association that serves to promote human flourishing" [Ealy 2005, 2]) work together to enhance human freedom, flourishing, and voluntary social cooperation.

The Hayekian Impasse

In his 1947 address to the inaugural meeting of the Mont Pelerin Society, Hayek challenged his classical liberal colleagues to tackle the "great intellectual task" of "purging traditional liberal theory of certain accidental accretions which [had] become attached to it in the course of time, and facing up to certain real problems which an oversimplified liberalism [had] shirked or which [had] become apparent only since it had become a somewhat stationary and rigid creed" (Hayek 1967). Among the chief items Hayek sought to excise from received liberal thinking were Aristotle's ethics, politics, and economics (Hayek 1967 and 1988). The fatal conceit of modern socialism, Hayek argued, was its Aristotelian attempt to engineer large-scale economies based on the ethical and epistemological principles of an oikos: a face-to-face community in which order arises as "the result of deliberate organization of individual action by an ordering mind ... and only in a place small enough for everyone to hear the herald's cry" (Hayek 1988, 11 and 45-47). …

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