Friedrich Hayek (1899–1992) was among the greatest political and pure philosophers of the 20th century. His most famous work, "The Road to Serfdom," published in 1944, is an anti-socialist classic. His later works, "The Constitution of Liberty" and "Law, Legislation and Liberty," are rightly considered permanent contributions to political philosophy. His works in pure philosophy, extending from "Economics and Knowledge" in 1936 through studies published in the 1940s through early 1980s, are permanent contributions to human understanding. Hayek's was one of the greatest minds of the 20th century.
Alan Ebenstein is author of "Friedrich Hayek: A Biography" and "Hayek's Journey: The Mind of Friedrich Hayek."
The state of his final work, "The Fatal Conceit," published in 1988, is something of a mystery. The degree of involvement by the work's editor, William Warren Bartley, is not commonly known, troubling many scholars. The first indication that something might be amiss in the published version came from Jeffrey Friedman, editor of Critical Review, in 1998. "In 1986," Friedman wrote, "I served as research assistant to W.W. Bartley . . . the 'editor' of the book . . . [T]he products of Bartley's labors were allegedly reviewed by Hayek. . . . The extent of Hayek's supervision of the project . . . is called into question by the appearance in the book, verbatim, of passages I submitted to Bartley as suggestions for how Hayek might consider updating his critique of constructivist rationalism. Among these are . . . passages mentioning Marcuse, Habermas, and Foucault. Since Hayek had not previously referred to these figures in print, I was surprised to learn, upon the appearance of the book, that he would have accepted without alteration discussions of their work written by someone he had never met."1
Other scholars in the past seven years have questioned how much of "The Fatal Conceit" was written by Hayek. Austrian economist Peter Boettke writes that "Bartley was an extremely active editor . . . and scholars are just beginning to assess not only the extent of the revisions made by Bartley — perhaps with or without Hayek's approval — and the judgment of whether the editorial changes made improved the manuscript or decreased the value of the final product."2 Intellectual historian Jerry Muller writes of his own work on Hayek and "The Fatal Conceit" that "I have not made much use of this volume because the question of how much of it was actually written by Hayek and how much by his editor, W.W. Bartley III, remains an open question among scholars."3 The general editor of Hayek's collected works, Bruce Caldwell, notes "interpretive puzzles surrounding Hayek's last book," and speculates that "comparison between the finished and earlier manuscript version of 'The Fatal Conceit' might . . . help us to decipher what Hayek originally had in mind."4
Fortunately, it is now possible to engage in such comparison. In 2003, Hayek's longtime, final secretary, Charlotte Cubitt, deposited her extensive records with the Hoover Institution at Stanford University. These records demonstrate that Bartley's role in the published "Fatal Conceit" was significant, far more significant than has heretofore been known.
"The Fatal Conceit" has a sad history. Hayek considered it the great work of the last years of his career. "The Fatal Conceit" grew out of "The Three Sources of Human Values," the epilogue of "Law, Legislation and Liberty," which was published in 1979. "The Three Sources of Human Values" was originally given as a lecture at the London School of Economics in May 1978, when Hayek was 79 years old. He here attempted to convey the general direction in which his ideas were moving at the end of his career. In this lecture, Hayek put forward the idea that there are three sources of human values and institutions. In addition to genetic and intellectual sources, there are subconscious sources that emerge through group selection — sources that are not adequately characterized as either rational or innate. Rather, these are rules of human conduct that flourish because of the success of the human groups that practice them. Better rules result in more effective human communities, with the latter defined as the communities that are the most materially productive.
The preface conveyed the impression that Hayek had recently been involved in writing "The Fatal Conceit," that Bartley's role was minimal, and that Hayek had at least somewhat recovered from his illness. None of this was the case.
Hayek saw economics as fundamentally about knowledge and information, how they are generated and transmitted. He considered prices and profits to be knowledge-conveying devices. Prices and profits convey information about the supply of and demand for goods, and the effectiveness of individuals in producing them. According to Wesley Clair Mitchell, one of the greatest teachers of economists in the first half of the 20th century, whose students included Hayek and Milton Friedman: "Men who are trying to make money are the servants of consumers — that is, of the whole society. . . . [T]he money economy gradually put the task of making goods under the direction of men who provided most efficiently what solvent consumers wished to buy, and whose continued leadership depended on maintaining their efficiency."5 This, in a nutshell, is the theory and justification of capitalism.
Hayek came to see whole societal systems — their webs of rules, customs, values, and governments — as competitors with one another. Just as the most efficient individuals and firms come out on top in the market, so the most materially productive society will ultimately prevail. He saw the market as the prototype for intersocietal competition.
He worked on "The Fatal Conceit" for seven years, from mid-1978 through mid-1985. In about August 1985, he fell ill, never to recover. He thereafter did no work on it.
"The Fatal Conceit" was published in late October 1988, more than three years after Hayek last worked on it. During this period, it was substantially remolded by editor Bartley. Though Hayek reviewed some of Bartley's work, he did not participate in any substantial way in the changes — he was too ill to do so. His mental capacities had diminished precipitously with his 1985 illness.
When "The Fatal Conceit" was published, it included a preface, purportedly written by Hayek and dated April 1988, that ended with Hayek expressing his "deep gratitude . . . to Professor W.W. Bartley . . . who — when I fell ill for a time, just prior to the completion of the final draft — took this volume in hand and prepared it for the publishers."6 It is not known whether Hayek or Bartley wrote this closing to the preface.
Readers of "The Fatal Conceit" were given a misleading impression of Hayek's recent participation in the book by the concluding sentence of the preface and its 1988 dating. The preface conveyed the impression that Hayek had recently been involved in writing "The Fatal Conceit," that Bartley's role in it was minimal, and that Hayek had at least somewhat recovered from his illness. None of this was the case. That Bartley himself intentionally misled readers about Hayek's recent participation in the book and inaccurately stated his own role is inescapable from his editorial foreword to the work, in which he wrote that "'The Fatal Conceit' . . . is fresh from Hayek's hands."7
Actually, during the more than two and a half years that Bartley worked on "The Fatal Conceit," from about late 1985 through the first half of 1988, he changed the work substantially. He rearranged, reorganized, and retitled chapters. He introduced much extraneous material, deleted paragraphs and sentences, added others, and rewrote many more. He inserted paragraphs from individuals who reviewed the manuscript and added citations (including to his own work). He changed terminology and emphasis. He apparently composed the conclusion of the work on page 140, Hayek's final word.
Bartley's interpretation of Hayek was heavily influenced by philosopher Karl Popper, a Viennese near-contemporary of Hayek, who, like him, taught for many years at the London School of Economics. Bartley was a student of Popper, whose primary philosophical message was the tentativeness of knowledge.
This resulted in a Bartleian Hayek who was more concerned with the evolution of knowledge than Hayek was. Hayek's major point with respect to economics was the incompleteness of knowledge rather than its evolution, Bartley's focus. Thus, when it was said in the last paragraph of the introduction of the published "Fatal Conceit" that "I suggest . . . we need . . . an evolutionary epistemology"8— the latter two words being Bartley's favored terminology — it is hard to know who was doing the talking here, Hayek or Bartley. Caldwell is "leery of putting too much emphasis on Hayek's apparent new enthusiasm for Popperian themes in 'The Fatal Conceit,'"9 as a result of Bartley's participation.
There was little reason for most of the changes Bartley made. In a July 26, 1985, letter from Hayek to Bartley, just before Hayek fell ill and was unable to continue working, he wrote to Bartley that he had completed all but one chapter of the first part of "The Fatal Conceit," which he hoped to finish in the next few weeks. Instead of bringing this final chapter to completion (chapter 6, of seven chapters in the first part, for which good material existed that Hayek had written), and publishing Hayek's introduction and six chapters of the first part, Bartley rewrote the first part of "The Fatal Conceit."
Unfortunately, as a result of restrictions imposed by Hayek's literary heirs, it has not yet been possible to quote from much of Hayek's correspondence — particularly with respect to sensitive topics such as "The Fatal Conceit" — and it is only possible to paraphrase his and Bartley's correspondence. Nonetheless, as a result of the Cubitt donation to the Hoover Institution, it is now possible to verify the information presented here. Curiously, prior to Cubitt's deposit, little of the relevant correspondence between Hayek and Bartley was in the Hayek archive at Hoover, nor were Hayek's drafts of "The Fatal Conceit" there.
A new version of "The Fatal Conceit," including all three parts and consisting of Hayek's final drafts, should be prepared and published.
In the editorial foreword of "The Fatal Conceit," Bartley wrote that the published book was at one point "a large work in three parts; then the whole was compressed into the short book . . . presented here."10 This was misleading. While "The Fatal Conceit" was intended as a three-part work, the book as published was not a compression of the three parts. Rather, it was almost exclusively the first part. The latter two parts were intended for separate publication, which has not occurred.
During the seven years Hayek worked on "The Fatal Conceit," there were two basic versions of it, which has caused some confusion. Hayek worked on the first version from about 1979 until the summer of 1982, when a group of economists from the Mont Pelerin Society met with him to discuss this manuscript. According to James Buchanan, one of the participants: "I reveal no secrets when I state that the participants were skeptical, even after two-days discussion, about prospects for the circulated material to be transformed into a publishable book."11
For the next three years, Hayek then worked on the second version of "The Fatal Conceit," particularly its first part, which is what Bartley used to produce the published volume. Hayek's own second version of "The Fatal Conceit" was not a casually written document, but one on which he worked for years and that he anticipated would be his last and perhaps most important book.
This helps to explain Buchanan's further comment that when "The Fatal Conceit" was "eventually published . . . we were quite pleased that the book had been markedly improved." Buchanan went on to say that it was improved "due not only to Hayek's diligence in responding to our criticisms, but, probably, also to the help of William Bartley, who took over as editorial assistant in the final stages of preparation."12 But Hayek's own second version of the first part of "The Fatal Conceit" was improved over what Buchanan and others saw in 1982.
Hayek expressed conflicting views regarding Bartley's work on "The Fatal Conceit." It should be emphasized that Hayek's mental state fluctuated during his last years. At one point, he sent a memo to a few friends saying he had suffered a nervous breakdown. In a Jan. 24, 1986, letter to Bartley, he noted great fluctuations in his state. From at least 1987 on, he experienced significant diminution of memory, being unable to remember individuals with whom he had, even recently, been in frequent correspondence. His son, Larry, once remarked to me that his father was "out of it" during a considerable part of his last years. At the same time, Hayek experienced periods of mental comprehension and lucidity, though his physical state prevented him from work.
In a Dec. 11, 1986, letter to Bartley, Hayek told Bartley that Bartley's initially revised version of "The Fatal Conceit" should not be published during Hayek's lifetime, and that when it did appear, it should be under both their names. According to Cubitt, when Hayek received a copy of the published "The Fatal Conceit," he told her that Bartley's changes were so significant that he hardly recognized it.
At the same time, in other late correspondence to Bartley and others, Hayek expressed the view that Bartley had improved the text, and Hayek ultimately agreed to publication of Bartley's version. According to Cubitt, he agreed because "Bartley had spent so much time and effort on it."13
Bartley's approach to editing was perhaps best described in a Jan. 16, 1988, letter to Leif Wenar, another of Hayek's research assistants, who was to edit the latter two parts of "The Fatal Conceit." In this correspondence, also at the Hoover Institution, Bartley encouraged Wenar to edit Hayek's work on a massive scale: to compose introductions, conclusions, connective material, and summaries on Hayek's behalf, to link the second and third parts to the first part Bartley was working on, and to compose its conclusion.
Hayek's essential message in "The Fatal Conceit" could be lost in the circumstances surrounding the work. This message was that people do not like capitalism because it relies on an unseen extended order over time to produce goods and services, and people instinctively like to see immediate, visible good. Similarly, the glamorous idea of what he termed "constructivist rationalism" (that individuals can design any sort of society they wish) is false. Rather, by following rules that enforce contracts, promote and preserve private property, and encourage exchange, mankind can produce the most and be freest and happiest.
Clearly, a scholarly version of "The Fatal Conceit," including all three parts and consisting of Hayek's final drafts for as many chapters as possible, should be prepared and published. Fortunately, most — perhaps all — of these chapter drafts are now at the Hoover Institution. Hayek's goal in writing "The Fatal Conceit," as in so much of his other work, was to free men from misconceptions about the free society made possible through private property. A new edition of his last great work would be a valuable step in realizing this goal.
1 Jeffrey Friedman, "What's Wrong with Libertarianism?" Critical Review (Summer 1998), p. 463
2 Peter Boettke, "Which Enlightenment, Whose Liberalism?: Hayek's Research Program for Understanding the Liberal Society" (undated Internet article), p. 24.
3 Jerry Muller, "Chapter 12. The Untimely Liberalism of Friedrich Hayek," Internet chapter from "The Mind and the Market: Capitalism in Modern European Thought" (2002), p. 68.
4 Bruce Caldwell, "The Emergence of Hayek's Ideas on Cultural Evolution," Review of Austrian Economics (February 2000), p. 19.
5 In Arthur F. Burns (ed.), "Wesley Clair Mitchell: The Economic Scientist" (1952), p. 247.
6 Friedrich Hayek, "The Fatal Conceit: The Errors of Socialism" (1988), p. 5.
7 Ibid., p. xii.
8 Ibid., p. 10.
9 In Alan Ebenstein, "Hayek's Journey: The Mind of Friedrich Hayek" (2003), p. 228.
10 Hayek, op. cit., p. x.
11 Caldwell, op. cit., p. 17.
12 Ebenstein, op. cit., p. 230.
13 Correspondence between Charlotte Cubitt and Alan Ebenstein (July 8, 1996).