Taking Hayek Seriously

The graph explained.

And five book recommendations.

The first thing to say about this book is that much the most of it is a fantasy.

But there are bigger problems with the book that that.

Nicholas Wapshott grew up as a British journalist and his approach to truth and objectivity and getting the story right unfortunately reflects that worst of that dubious background.  The ethic Wapshott brings to material is the ethic Mark Twain brought to the Western story — reality never gets in the way of the demands of the tale he is determined to tell.

But it’s even worse than that.  The text is marred by all sorts of basic factual mistakes: John Bates Clark, we are told, was a German and a socialist; lecturers at the LSE who cut their teeth studying with British or German economists are described as “Hayek pupils”; Keynes is credited as the originator of econometrics; John Hicks is characterized as an unknown economist made famous by his work on Keynes; Thomas Wolfe’s “Me” Decade is transplanted from the 1970s to the 80s & 90s; GOP efforts to modestly slow the growth of Federal spending in the 1990s are described as “massive cuts” … these items are essentially picked at random — I could extend the list indefinitely.

And, irritatingly, a number of the footnotes and even short passages in the text read like a high school students cut and past borrowings straight out of Wikipedia.  (I won’t embarrass the author by providing examples here, but anyone with a copy of the text can check for themselves, simply compare the short bios of important figures in the footnotes against what is written in Wikipedia.)

More later.

For now I leave you with this from economist Herbert Gintis’ Amazon review of the book:

“Read this for fun, dear reader, the same way you read People magazine. Don’t think you will get some deep insights in the the nature of modern political economy. You won’t.”

And this from another Amazon reviewer:

“I picked up this book in the hope that it would clarify the issues between the so-called Keynesians and the conservatives who frequently cite Hayek. Unfortunately, beyond a few oft-repeated cliches, there is no explanation in any detail of the similarities and differences between the apparently competing views. Technical terms are scattered throughout with little or no attempt to include the layman. We are told about sexual preferences, styles of dress, and the reactions of various groups to presentations, but the economic and philosophical content of this book is very weak. Who was the intended audience?”

A new collection of essays on Hayek’s work in neuroscience, psychology, and the philosophy of science and mind. Table of contents and abstracts at the link.

Of special interest:

“Hayek in Today’s Cognitive Neuroscience” by Joaquín M. Fuster

Abstract:

Purpose – To show that Hayek’s prescient concepts on the cerebral cortex have received substantial support from modern neuroscience.

Methodology – Update the terminology of The Sensory Order to adjust it to prevalent concepts of cognitive network, plasticity, association, connectivity, and cortical dynamics. Extend his concepts of perception to other cognitive functions, notably memory. Reveal significance of modern methods to study the formation and organization of cognitive cortical networks (cognits), applying the same basic methodologies that he applied to perception. He also applied those methodologies to knowledge transactions in economics and the social order.

Findings – As Hayek proposed or assumed in his theoretical monograph:

•Cognitive networks are spontaneously formed by associations (connections) between neuronal assemblies representing simultaneous elementary sensations.

•Perceiving is classifying the world into categories of objects defined by those associations, in accord with a relational code.

•Networks are hierarchically organized, with smaller networks constituting, and nested within, larger ones.

•After formed and organized, a network becomes memory, which will make and shape future perception.

•The interactions between the organism and its environment are governed by the perception/action (PA) cycle, a concept intuited by Hayek. This is the cybernetic interplay between the mammalian organism and its environment that courses through perceptual and executive networks of the cortex.

•The dialog with an interlocutor epitomizes the PA cycle of language, unique to the human.

Social Implications – The brain embodies structure and dynamics similar to those relating the individual to society. They include a complex adaptive system, the cerebral cortex, which engages the brains of others through the PA cycle. Language is the highest operation of that cycle at interpersonal level. Transactions of knowledge within the cortex are similar to those of the market place, with their attributes of spontaneity, self-organization, and incompleteness.

Originality/Value of paper – This paper is unusual in that it highlights: (a) the insight of Hayek in cognitive neuroscience, anticipating by several decades the verification of his thinking on the role of the cerebral cortex in knowledge utilization and storage; and (b) the value for brain science of the principles of organization of knowledge that Hayek successfully applied to social sciences.

Here.