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F. A. Hayek made many valuable contributions to the field of economics as well as to the disciplines of philosophy and politics. This volume represents the second of Hayek's comprehensive three-part study of the relations between law and liberty. Here, Hayek expounds his conviction that he continued unexamined pursuit of "social justice" will contribute to the erosion of personal liberties and encourage the advent of totalitarianism.
GENERAL WELFARE AND PARTICULAR PURPOSES
It is evident, that if men were to regulate their conduct ..., by the view of a peculiar interest, either public or private, they would involve themselves in endless confusion, and would render all government, in a great measure, ineffectual. The private interest of every one is different; and though the public interest in itself be always one and the same, yet it becomes the source of great dissentions, by reason of the different opinions of particular persons concerning it.... Were we to follow the same advantage, in assigning particular possessions to particular persons, we should disappoint our end, and perpetuate the confusion, which that rule is intended to prevent. We must, therefore, proceed by general rules, and regulate ourselves by general interests, in modifying the law of nature concerning the stability of possessions. David Hume
In a free society the general good consists principally in the facilitation of the pursuit of unknown individual purposes
It is one of the axioms of the tradition of freedom that coercion of individuals is permissible only where it is necessary in the service of the general welfare or the public good. Yet though it is clear that the stress on the general or common or public character of the legitimate objects of governmental power is directed against its use in the service of particular interests, the vagueness of the different terms which have been employed has made it possible to declare almost any interest a general interest and to make large numbers serve purposes in which they are not in the least interested. The common welfare or the public good has to the present time remained a concept most recalcitrant to any precise definition and therefore capable of being given almost any content suggested by the interests of the ruling group.
The chief reason for this has probably been that it seemed natural to assume that the public interest must in some sense be a sum of all the private interests, and that the problem of aggregating all those private interests seemed insoluble. The fact, however, is that in a Great Society in which the individuals are to be free to use their own knowledge for their own purposes, the general welfare at which a government ought to aim cannot consist of the sum of particular satisfactions of the several individuals for the simple reason that neither those nor all the circumstances determining them can be known to government or anybody else. Even in the modern welfare societies the great majority and the most important of the daily needs of the great masses are met as a result of processes whose particulars government does not and cannot know. The most important of the public goods for which government is required is thus not the direct satisfaction of any particular needs, but the securing of conditions in which the individuals and smaller groups will have favourable opportunities of mutually providing for their respective needs.
That the prime public concern must be directed not towards particular known needs but towards the conditions for the preservation of a spontaneous order which enables the individuals to provide for their needs in manners not known to authority was well understood through most of history. For those ancient authors whose ideas chiefly provide the foundations of the modern ideal of freedom, the Stoics and Cicero, public utility and justice were the same. And on the frequent occasions when utilitas publica, was invoked during the Middle Ages, what was generally meant was simply the preservation of peace and justice. Even to seventeenth century writers like James Harrington the 'public interest ... was no other than the common right and justice excluding all partiality or private interest' and therefore identical with 'the empire of laws and not of men'.
Our concern at this stage is solely whether those rules of individual conduct which serve the general welfare can aim at some aggregate of known particular results or merely at creating conditions likely to improve the chances of all in the pursuit of their aims. Apart from the fact that the particular aims pursued by the different individuals must be mostly unknown to those who lay down or enforce the rules, it is also not part of the general interest that every private desire be met. The order of the Great Society does rest and must rest on constant undesigned frustrations of some efforts—efforts which ought not to have been made but in free men can be discouraged only by failure. The interest of some individuals will always be that some changes in the structure of society made necessary by changes in circumstances to which in the general interest that structure ought to adapt itself, should not be allowed to take place. In the process of exploration in which each individual examines the facts known to him for their suitability for his own uses, the necessity of abandoning false leads is as important as the adoption of more successful means when they become generally known. Nor can the choice of the appropriate set of rules be guided by balancing for each of the alternative set of rules considered the particular predictable favourable effects against the particular predictable unfavourable effects, and then selecting the set of rules for which the positive net result is greatest; for most of the effects on particular persons of adopting one set of rules rather than another are not predictable. It will not be the interests of particular people but kinds of interests which we shall alone be able to balance against each other; and the classification for this purpose of interests into different kinds possessing different degrees of importance will not be based on the importance of these interests to those directly concerned, but will be made according to the importance to the successful pursuit of certain kinds of interests for the preservation of the overall order.
Moreover, while agreement is not possible on most of the particular ends which will not be known except to those who pursue them (and would be even less possible if the ultimate effects of the decision on particular interests were known), agreement on means can to a great extent be achieved precisely because it is not known which particular ends they will serve. Among the members of a Great Society who mostly do not know each other, there will exist no agreement on the relative importance of their respective ends. There would exist not harmony but open conflict of interests if agreement were necessary as to which particular interests should be given preference over others. What makes agreement and peace in such a society possible is that the individuals are not required to agree on ends but only on means which are capable of serving a great variety of purposes and which each hopes will assist him in the pursuit of his own purposes. Indeed, the possibility of extending an order of peace, beyond the small group which could agree on particular ends, to the members of the Great Society who could not agree on them, is due to the discovery of a method of collaboration which requires agreement only on means and not on ends.
It was the discovery that an order definable only by certain abstract characteristic would assist in the pursuit of a great multiplicity of different ends which persuaded people pursuing wholly different ends to agree on certain multi-purpose instruments which were likely to assist everybody. Such agreement became possible not only in spite of but also because of the fact that the particular results it would produce could not be foreseen. It is only because we cannot predict the actual result of the adaptation of a particular rule, that we can assume it to increase everyone's chances equally. That it is thus ignorance of the future outcome which makes possible agreement on rules which serve as common means for a variety of purposes is recognized by the practice in many instances of deliberately making the outcome unpredictable in order to make agreement on the procedure possible: whenever we agree on drawing lots we deliberately substitute equal chances for the different parties for the certainty as to which of them will benefit from the outcome. Mothers who could never agree whose desperately ill child the doctor should attend first, will readily agree before the event that it would be in the interest of all if he attend the children in some regular order which increased his efficiency. When in agreeing on such a rule, we say that 'it is better for all of us if ...' we mean not that we are certain that it will in the end benefit all of us, but that, on the basis of our present knowledge, it gives us all a better chance, though some will certainly in the end be worse off than they would have been if a different rule had been adopted.
The rules of conduct which prevail in a Great Society are thus not designed to produce particular foreseen benefits for particular people, but are multi-purpose instruments developed as adaptations to certain kinds of environment because they help to deal with certain kinds of situations. And this adaptation to a kind of environment takes place through a process very different from that in which we might decide on a procedure designed to achieve particular foreseen results. It is based not on anticipation of particular needs, but on the past experience that certain kinds of situations are likely to occur with various degrees of probability. And the result of such past experience gained through trial and error is preserved not as a recollection of particular events, or as explicit knowledge of the kind of situation likely to occur, but as a sense of the importance of observing certain rules. The reason why one rule rather than another was adopted and passed on will be that the group that had adopted it did in fact prove the more efficient, not that its members foresaw the effects the adoption of the rule would have. What would be preserved would be only the effects of past experiences on the selection of rules, not the experiences themselves.
Just as a man, setting out on a walking tour, will take his pocket knife with him, not for a particular foreseen use but in order to be equipped for various possible contingencies, or to be able to cope with kinds of situations likely to occur, so the rules of conduct developed by a group are not means for known particular purposes but adaptations to kinds of situations which past experience has shown to recur in the kind of world we live in. Like the knowledge that induces one to take his pocket knife with him the knowledge embodied in the rules is knowledge of certain general features of the environment, not knowledge of particular facts. In other words, appropriate rules of conduct are not derived from explicit knowledge of the concrete events we will encounter; rather, they are an adaptation to our environment, an adaptation which consists of rules we have developed and for the observance of which we will usually not be able to give adequate reasons. In so far as such rules have prevailed because the group that had adopted them was more successful, nobody need ever have known why that group was successful and why in consequence its rules became generally adopted. In fact, the reason why these were adopted in the first instance, and the reason why they have proved to make this group strong, may be quite different. And although we can endeavour to find out what function a particular rule performs within a given system of rules, and to judge how well it has performed that function, and may as a result try to improve it, we can do so always only against the background of the whole system of other rules which together determine the order of action in that society. But we can never rationally reconstruct in the same manner the whole system of rules, because we lack the knowledge of all the experiences that entered into its formation. The whole system of rules can therefore never be reduced to a purposive construction for known purposes, but must remain to us the inherited system of values guiding that society.
In this sense the general welfare which the rules of individual conduct serve consists of what we have already seen to be the purpose of the rules of law, namely that abstract order of the whole which does not aim at the achievement of known particular results but is preserved as a means for assisting in the pursuit of a great variety of individual purposes.
The general interest and collective goods
Though the maintenance of a spontaneous order of society is the prime condition of the general welfare of its members, and the significance of these rules of just conduct with which we are chiefly concerned, we must, before we further examine these relations between rules of individual conduct and welfare, briefly consider another element of the general welfare which must be distinguished from the one in which we shall be mainly interested. There are many kinds of services which men desire but which, because if they are provided they cannot be confined to those prepared to pay for them, can be supplied only if the means are raised by compulsion. Once an apparatus for coercion exists, and particularly if this apparatus is given the monopoly of coercion, it is obvious that it will also be entrusted with supplying the means for the provision of such 'collective goods', as the economists call those services which can be rendered only to all the members of various groups.
But though the existence of an apparatus capable of providing for such collective needs is clearly in the general interest, this does not mean that it is in the interest of society as a whole that all collective interests should be satisfied. A collective interest will become a general interest only in so far as all find that the satisfaction of collective interests of particular groups on the basis of some principle of reciprocity will mean for them a gain in excess of the burden they will have to bear. Though the desire for a particular collective good will be a common desire of those who benefit from it, it will rarely be general for the whole of the society which determines the law, and it becomes a general interest only in so far as the mutual and reciprocal advantages of the individuals balance. But as soon as government is expected to satisfy such particular collective, though not truly general, interests, the danger arises that this method will be used in the service of particular interests. It is often erroneously suggested that all collective interests are general interests of the society; but in many instances the satisfaction of collective interests of certain groups may be decidedly contrary to the general interests of society.
The whole history of the development of popular institutions is a history of continuous struggle to prevent particular groups from abusing the governmental apparatus for the benefit of the collective interest of these groups. This struggle has certainly not ended with the present tendency to define as the general interest anything that a majority formed by a coalition of organized interests decides upon.
That this service-part of governmental activities which aims at the needs of particular groups has in modern times achieved such prominence is a result of the fact that it is with such particular aimed services that politicians and civil servants are mainly concerned, and that it is through providing them that the former can earn the support of their constituents. It is a sad fact that a service aimed at the truly general welfare will gain little credit because nobody feels that he specially benefits by it, and few even know how it will affect them. For the elected representative a specific gift in his hands is much more interesting and a more effective key to power than any benefits he can procure indiscriminately for all.
The provision of collective goods for particular groups is, however, frequently not in the general interest of society. A restriction of output, or some other limitation, will often be a collective good to all members of a particular trade, but it will certainly not be in the general interest that this collective good be provided.
While the comprehensive spontaneous order which the law serves is a precondition for the success of most private activity, the services which the government can render beyond the enforcement of rules of just conduct are not only supplementary or subsidiary to the basic needs which the spontaneous order provides for. They are services which will grow in volume as wealth and the density of population increase, but they are services which must be fitted into that more comprehensive order of private efforts which government neither does nor can determine, and which ought to be rendered under the restrictions of the same rules of law to which the private efforts are subject.
Government, in administering a pool of material resources entrusted to it for the purpose of providing collective goods, is of course itself under the obligation to act justly in doing so, and cannot limit itself to ensuring that the individuals do not act unjustly. In the case of services aimed at particular groups, the justification for financing them through taxation is that only thus can we make those who benefit pay for what they receive; similarly justice clearly requires that what each group receives out of the common pool should be roughly proportional to what it is made to contribute. A majority is here evidently under an obligation to be just; and if we entrust decisions of this kind to democratic or majority government, we do so because we hope that such government is more likely to serve the public interest in this sense. But it would obviously be aperversion of that ideal if we were to define the general interest as whatever the majority desires.
Excerpted from Law, Legislation and Liberty, Volume 2 by Friedrich A. Hayek. Copyright © 1976 F. A. Hayek. Excerpted by permission of The University of Chicago Press.
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Corrigenda to Volume 1
7. General Welfare and Particular Purposes
8. The Quest for Justice
9. 'Social' or Distributive Justice
10. The Market Order or Catallaxy
11. The Discipline of Abstract Rules and the Emotions of the Tribal Society