". . . the structures of the extended order are made up not only of individuals but also of many, often overlapping, sub-orders within which old instinctual responses, such as solidarity and altruism continue to retain some importance by assisting voluntary collaboration, even though they are incapable, by themselves, of creating a basis for the more extended order. Part of our present difficulty is that we must constantly adjust our lives, our thoughts and our emotions, in order to live simultaneously within different kinds of orders according to different rules. If we were to apply the unmodified, uncurbed, rules of the micro-cosmos (i.e., of the small band or troop, or of, say, our families) to the macro-cosmos (our wider civilization), as our instincts and sentimental yearnings often make us wish to do, we would destroy it. Yet if we were always to apply the rules of the extended order to our more intimate groupings, we would crush them. So we must learn to live in two sorts of world at once" (18).The macro-cosmos is the world of extended--even global--social and economic exchange among huge numbers of people who are generally unknown to one another, which is the world of market relationships. The micro-cosmos is the world of small groups--families, social networks of friends, firms, schools, churches, clubs, and other voluntary associations--where people interact face to face with other people whom they know and love. To live in both worlds at once requires that we live under the impersonal rules of the macro-cosmos and the personal rules of the micro-cosmos without imposing the rules of one world on the other.
But then Hayek often contradicts this teaching when he says that living in the extended order of the macro-cosmos requires that we repress the social instincts for solidarity and altruism in the micro-cosmos. This is what Beck means when she speaks of Hayek as recommending that our "new market morality" must "override," "replace," "subjugate," or "substitute" for the old social instincts of families and intimate groups (52, 70, 92). Here then is one of those "incoherencies" that Beck sees in Hayek's writing. On the one hand, he recommends living in two worlds at once. On the other hand, he insists that one world must replace the other.
The reason for Hayek's confusion here is his Freudian theory of human social evolution. He believes that our evolved human nature was shaped over hundreds of thousands of years of living as hunter-gatherers in families and small bands who never engaged in long-distance trade or exchange, and so we have evolved social instincts for living in families and small groups where everything is shared in common, but since trading with strangers arose first only a few thousand years ago, we have no instinctive propensities for the extended order of trade. So, in effect, Hayek agrees with the Marxist anthropologists who have argued that the first human beings lived as primitive communists, and therefore modern communism could satisfy our evolved instinctive adaptation for communism. To defend capitalism, Hayek must argue for the repression of those communist instincts, because "an atavistic longing after the life of the noble savage is the main source of the collectivist tradition" (1988, 19). Oddly, in Law, Legislation, and Liberty (1:198), Hayek says that anthropological studies of primitive societies has shown the Marxist idea of "primitive communism" to be a "myth," because even the most primitive societies must recognize property.
Beck rightly points to this problem in Hayek's thinking. But she is silent about how some of the evolutionary anthropologists that she cites--such as Peter Richerson, Rob Boyd, John Tooby, and Leda Cosmides--have corrected the mistake that created Hayek's problem. Contrary to what Hayek assumed, we can now see that our hunter-gatherer ancestors were not pure communists, and that in fact they engaged in trade and exchange, so that the modern extended order of trade can be understood as an extension of the ancient social instincts for exchange. We can live in two worlds at once because both worlds are rooted in the evolved instincts of our universal human nature.
Beck refers to Richerson and Boyd and their "tribal social instincts hypothesis" as explaining how "there was no opposition between the morality of primitive tribal societies and that of large civilized ones" (115). But she is completely silent about their argument that this explains why "the free enterprise system that dominates the world economy today has deep evolutionary roots," because "the free enterprise societies' combination of individual autonomy, wealth, and welfare bear a strong resemblance to the preferences that are rooted in our ancient and tribal social instincts" ("Evolution of Free Enterprise Values," in Paul Zak, ed., Moral Markets [Princeton University Press, 2008], 107, 134). The anthropologist Alan Fiske has shown that "market pricing" is one of the four models of social cooperation that are universal to all human societies. As Jonathan Haidt has observed, our evolved human nature makes us both tribal and trading animals. Adam Smith was right about human beings as showing a natural propensity to truck, barter, and exchanged that is expressed in the modern market economy.
Beck is silent about this because this shows how evolutionary science can support capitalism as rooted in our evolved human nature.
Hayek does seem to contradict himself in saying that we should not use the rules of the macro-cosmos to "crush" the micro-cosmos, but then saying that the macro-cosmos must "repress" the micro-cosmos. Hayek might have said that there is no contradiction if "repress" means "restraining" without "crushing." Hayek objected to the original Greek meaning of oikonomia as "household management," which mistakenly suggests transforming the market order into a "household state" (The Constitution of Liberty, 260-61; Law, Legislation, and Liberty (1), 37; Law, Legislation, and Liberty (2), 107-108). "Home economics" is a top-down organization that can be centrally planned by the adults in the household for the common good of all in the family. But a large market economy must emerge from the bottom-up as a spontaneous order without central planning. The mistake of socialism is the belief that a large modern economy can be organized as a single household. To avoid this mistake, we must repress but not crush the social instincts of household economics to protect the freedom of market economics based on the social instincts of exchange and trade.
Although Hayek said very little about family life, what he did say made it clear that protecting the household economics of the family as an organization was crucial for the liberal social order. This denies the common claim that the liberalism of free markets subverts the solidarity of family life. Some Hayekian economists--such as Steve Horwitz in Hayek's Modern Family: Classical Liberalism and the Evolution of Social Institutions (2015)--have elaborated a Hayekian account of the family as an organization in which parents have both the knowledge and the incentives for properly rearing children. The failure of socialist central planning is manifest not only in its failure to plan a modern economy without markets but also in its failure to provide a centrally planned substitute for private families. Beck is totally silent about this.
It is common for the right-wing critics of Hayekian liberalism--like Patrick Deneen and Rod Dreher, for example--to argue that liberalism teaches a false individualistic conception of human beings as naturally solitary and autonomous beings. Since human beings really are naturally social animals, who yearn for social bonding in families, friendships, and social groups, these critics argue, people in liberal societies who live as solitary individuals suffer an unhappy loneliness. The Hayekian idea of living in two worlds at once denies this criticism by recognizing the crucial importance of the social life lived in families, friendships, and voluntary associations.
These points are elaborated in other posts here, here, here., here., here, and here.
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