Reply To: Rothbard and Hayek


Mr. Herbener, thank you for the help, this article was much more clear and direct.

However, I must add that the article was also very surprising to me. Either am I profoundly misreading Hayek, or the author.

Allow me to comment on a point or two. I’m putting the “…..” around quoted parts, and then add my own reading of Hayek.

1. “Hayek’s solution is not private property, but the decentralization of the use of knowledge.”

Yes, but he didn’t mean to actually avoid private property in the real world… quite contrary, private property is THE essential spontaneously emerged mechanism to enforce coordinated use of dispersed information. Remove private property and the wide social order would break down since there isn’t anything else known that could replace it. So (I think) Hayek is saying that private property is so far the only functional instrumentation of wide social order, but also that it does not need to be the most fundamental theoretical concept… underneath this concept, the coordination of dispersed information is even more fundamental. Private property is one possible instrumentation, maybe the only one possible, maybe not – nothing else has historically emerged.

2. “First, if the centralized use of knowledge is the problem, then it is difficult to explain why there are families, clubs, and firms, or why they do not face the very same problems as socialism.”

This is, for me, a very strange misunderstanding. Hayek was, seemingly, emphasizing that there are two separate orders of coordinating information. One is happening in the visible, perceptible world around each individual, the world of more-or-less directly interacting people, so yes, families, clubs, insides of individual firms. I’d add clans, tribes, groups of friends etc. These do not critically require private property to coordinate information, because more-or-less direct human interaction is enough. Then there is another order of coordinating information that is happening in the vast social order where direct informational exchange is not enough by large… so entities like private property become a must. This clear separation of the two orders of coordinating information is what Hayek is emphasizing all along. Has Mr. Hoppe missed this very important point? For analogy, individual atoms and molecules have completely different properties when assembled into solids and liquids – the famous “more is different”.

I could go on and on further down this article, as criticisable interpretations and conclusions seem to abound, but this seems enough for now. Either I am completely lost with this article, or the author, Mr. Hoppe is very, very wrong.

So, at the moment, I don’t understand if Hayek branch is differing from Mises branch on some very concrete point.. apart from simply “digging deeper” to find some deeper theoretical goodies and a wider vista. It seems to me that these are two self-consistent historical lines of reasoning that move on separately, each in its own groove, but not really disagreeing whenever they overlap.

Anyway, thank you, now it’s back to Mr. Salerno’s paper from above, second trial.