Poppper, Hayek, and Classical Liberalism; J. Shearmur

Now Newton's Principia was possibly the best-confirmed scientific theory of all time. Al exander Pope, when composing an epitaph for Newton, wrote: Nature and Nature's laws lay hid in night, God said: Let Newton Be! and all was light. It would scarcely be an exaggeration to say that, as more and more impressive confirma tions of Newton's work were discovered, a ma jor problem for philosophers became: How can we explain that, on the basis of experience, we have knowledge of truths such as Newton's the ory. Popper reflected on the character of Ein stein's achievement, and was led to a new ac count of the development of scientific know1Jeremy Shearmur was educated at the London School of Economics, University of London, where he worked for eight years as Assistant to Professor Sir Karl Popper in the Department of Philosophy. His Ph.D. dissertation was on the political thought of F. A. von Hayek. He is currently a Senior Research Fellow at the Institute for Humane Studies, George Mason University, Fairfax, Virginia 22030.

The author would like to thank Sheldon Richman and Pamela Shearmur for their comments on an earlier version of this paper. edge. In Popper's account, science is the product not of induction, but of a process of conjecture and of refutation. Science, which for Popper is probably mankind's greatest cultural achievement, always remains conjectural in its character, and human beings are seen as ines capably fallible. All this also led Popper to a more general view of our condition. Popper sees human be ings, like other animals, as involved in prob lem-solving. We have various inbuilt expecta tions and mechanisms by which we interpret the world around us. But our expectations and our interpretative mechanisms are fallible. We need to learn by trial and error. Unlike animals, how ever, it is possible for man, using the descrip tive and argumentative functions of his lan guage, to construct a world of culture, outside of himself, in which he is able to externalize, and thus to criticize, his knowledge. By this means, as Popper has often said, men differ from the animals, because it is possible for man to let his theories die in his stead.

Popper is also well-known for his writings on political philosophy, notably his The Open So ciety and Its Enemies. In this work, written dur ing the Second World War, Popper drew upon themes from his philosophy of science. He crit icized those who, like Plato, wished to claim power on the grounds that they had access to secure knowledge. And he criticized those like Marx who had allowed their essential humani tarianism to be channeled into directions that were hostile to the Open Society, because they held false theories of knowledge and of history. Popper's Open Society contains much detailed 72 THE FREEMAN. FEBRUARY 1989 critical discussion of both Plato and Marx. In addition, it contains Popper~s own picture of an Open Society. Popper is here concerned with the freedom and well-being of all citizens. He pictures a democracy as functioning very much in the spirit of the scientific community. Poli tics, for Popper, is a matter of our discovering problems and putting forward tentative solu tions to them. Just as in science, we should then hold our conjectures open to criticism-to feed back and critical responses from all citizens so that we can most effectively discover where things are going wrong.

Learning from Our Mistakes When Popper was writing, he considered that the big issue after the war would be the defense of the ideals of a free society against those who called them into question, from the left and from the right. Today, however, we may look to Popper's work with a different question in mind. What form of social organization would best enable us to learn from his insights about human fallibility and the need for us to learn from our mistakes? Considered from this perspective, Popper's work does not fit too easily within the usual approaches to politics. Popper, when writing The Open Society, showed great sympathy for working people. He had no time at all for con servatives who felt that working people were unfit for citizenship, and he was also critical of the policy of "laissez faire. " At the same time, Popper strongly emphasized the importance of markets and of the government's acting only through a legal framework.

Bryan Magee, at one time a member of the British Labour Party, has argued that "the young Popper worked out what the Philosoph ical foundations of democratic socialism should be. ,,1 And Popper has been hailed as a kind of secular patron saint of social democracy by a number of leading political figures, especially in West Germany. 2 Magee himself notes that Popper's own views have changed and that he would now describe himself as a liberal in the "old-fashioned" sense. And Popper, in his au tobiography, has said that "if there could be such a thing as socialism combined with indi vidual liberty, I would be a socialist still.,,3 But is it the case that the logic of Popper's argument points toward one rather than another form of social organization? I believe that, per haps despite the views of the younger Popper, the logic of his argument points toward a form of social organization in which the market plays a major role, and politics a rather restricted one.

I would thus suggest that the best way of mak ing use of Popper's ideas about politics would be through those ideas that have been advocated by his old friend, Friedrich Hayek. Popper and Hayek have influenced one an other in many ways. Hayek has told us that his views on science were importantly changed as a result of his contacts with Popper. And Pop per's political writings seem to bear the mark of Hayek's work (notably in his appreciation of the importance of markets and of a legal frame work for government action).4 There are certain common themes to their writings. Both see hu man freedom and well-being as of the greatest importance. They both see all human beings as fallible, and give great weight to the idea that, in designing social institutions, we should put a premium upon our ability to learn. They both believe that, in an affluent society, we have an obligation to help those who need it. And they both recognize the importance of our being able to change governments through elections, rather than only by force.

There are differences between them, how ever. Hayek views the market and a liberal con stitutional order as a mechanism, by which in dividuals can learn by trial and error. For Popper, learning by trial and error in social af fairs is made more the responsibility of govern ment. Politicians and civil servants would diag nose our problems and offer solutions to them. Democratic politics is regarded as a mechanism by which they may learn that they have got things wrong. But which is the most effective means through which we can learn in the realm of social affairs? Let us contrast the behavior of the entrepreneur and of the politician. The entrepreneur wishes to discover if he is wrong. If he has backed a bad idea, he will want to discover this as quickly as possible and aban don it, because a bad idea will lose him money. He cannot peddle his bad ideas to people, be cause they will buy his ideas-his goods----only POPPER, HAYEK, AND CLASSICAL LIBERALISM 73 if they consider them worthwhile. And while no one likes to discover that they have made a big mistake, the entrepreneur has every incentive to abandon old failures and to move on to new and better ideas. He also has every incentive to try out bold and daIing ideas. There is nothing wrong with his doing so, for only those citizens who choose to adopt his idea will share the risk.

And there are excellent mechanisms to tell the entrepreneur when he has made a mistake. Contrast with this the politician. When did you ever hear a politician who still had an elec tion to fight admit that he had made a serious mistake? And if he did admit it, would he ever be allowed to forget it? Unless he was very lucky, it would dog him to his grave. Indeed, politicians typically die with their mistakes. And so--they seldom admit they are wrong. If they are wrong, they will attempt to cover it up. And if they are in power, they will be able to use the mechanisms of government to force their errors onto the rest of us, while telling us that they are successes. Above all, politicians are interested in power: and thus, in democratic countries, in their popularity, and in not saying anything out of tum. After spending over a year as Director of Studies of a public policy insti tute, I was still amazed by the unwillingness of politicians to say what they really felt about anything, even in private conversation.

In a country in which government plays a major role, much of the power is in the hands of civil servants. Civil servants, while usually dedicated to their work, are creatures of rou tine. And there simply do not exist mechanisms for assessing whether most of what government actually does should be undertaken at all, let alone whether it is being undertaken effec tively.5 Above all, it is difficult for us to tell our masters-whether politicians or civil ser vants-in what respect they have got things wrong, or what in our view the trade-offs should be between, say, expenditure on one thing or another, and letting us keep our money in our own pockets. The lesson in all this, it seems to me, is that we should put into the hands of government nothing that we can organize by other means. And we should also be reluctant to take from individuals the power of deciding what they want and to give it to anyone else. Once that power is shifted, we move decisions away from our most effective mechanism of accountabil ity: accountability to individuals in the market place.

Many years ago, Friedrich Hayek came to the conclusion that it was not socialism (in which he had believed as a young man), but institu tions in the tradition of classical liberalism that would do most for the well-being of his fellow citizens, especially the poor. It seems to me that it is the tradition of classical liberalism, as ex emplified by Hayek's work, that also offers us the best institutional model for putting into practice Karl Popper's insights about our need to learn by trial and error in political and social affairs. 0 1. Bryan Magee, Popper (London: Fontana Books, 1973), p. 84. 2. Cf. G. Luehrs et al. (eds.) Kritischer Rationalismus und So zialdemokratie, I and II (Berlin and Bonn-Bad Godesburg, 1975, 1976). 3. Karl Popper, Unended Quest (London: Fontana Books, 1976), p. 115. 4. It is largely in this context that Popper refers to Hayek in his notes to The Open Society and Its Enemies.

5. If this seems an exaggeration, I would suggest the perusal of the discussion of rationality and decision-making in any standard text on policy making in the public sector, such as Christopher Ham and Michael Hill, The Policy Process in the Modern Capitalist State (Brighton: Wheatsheaf Books, 1984) or Brian Hogwood and Lewis Gunn, Policy Analysis for the Real World (Oxford: Oxford Univer sity Press, 1984).