Hayek finds that the errors of the social justice warriors are in their thinking, which is highly influenced by their misuse of language and their misunderstanding of terms. He devoted a lot of his energies to trying to find and introduce better and clearer terms with fully-agreed meanings, but it was a vain pursuit.
Earlier in The Mirage Of Social Justice, he pointed out that there is no such thing as “society”. It does not have shared aims, it does not have needs or opinions, and does not make decisions or wield authority. It doesn’t exist. It is a collectivist mirage.
Similarly, Social Justice Warriors make a mistake when they refer to “the economy”. There is no such thing as the economy of a country or a society. The word “economy” can be applied to a system like a household or a farm or a factory, allocating means among competing ends according to their relative importance. Such an economy can be directed according to a plan based on economic decisions to serve a single set of ends that all participants agree on.
But a society is not an economy. A country is not an economy. What social justice warriors are trying to direct is what Hayek calls the market order, or what we might call the free market system. It is not a system that can be managed according to a single plan or governed by a single scale or a hierarchy of ends. In fact, it’s a network of many interlaced systems, serving the many different ends of all its individual and separate members. It can’t be governed by a single end, such as “equality”. It can not be a complex of deliberately controlled actions serving a single scale of ends.
Hayek Tries To Get Us To Use New Terminology, Since The Old Is Broken.
Hayek attempts to create a name other than economy, and came up with catallaxy. It stems from Greek meaning exchange but also “to admit to the community” and “to change from an enemy to a friend”. That’s exactly what a free market exchange does – welcomes everyone who wants to trade and makes them voluntary collaborators. Social Justice Warriors do the opposite: they change friends into enemies by seeing everything through the lens of envy.
Good luck with getting the word catallaxy to catch on, however.
Catallaxy is the special kind of spontaneous order produced by the market through people acting within the rules of the law of property tort and contract. A free society is a pluralistic society without a common hierarchy of particular ends. That it lacks agreed ends is a merit not a fault – people can live together in peace and mutually benefit each other without agreeing on particular individual aims. Each individual gains from the skill and knowledge of others whom he need not know and whose ends could be wholly different. When two individuals transact, there is no need to agree on the purposes of the transaction, so long as an individual need is satisfied. One might be contributing to the achievements of ends he would disapprove of if he was aware of them. If I buy a tie-died T-shirt from a hippie, I am happy to have the shirt; if the seller spends the dollars from the transaction on marijuana, even though I may disapprove, I am indirectly supporting the behavior. The catallaxy reconciles different knowledge and different purposes.
Unity Is Not A Goal To Strive For.
The market order has nothing to do with “solidarity” or “unity” and is, in fact, irreconcilable with these concepts in the sense of the pursuit of common goals. The two greatest threats to the market order are nationalism and socialism, collectivist arrangements which enforce a common goal or set of goals on all participants.
The relations that hold us together are not relations of solidarity or unity or sentiment, they are purely economic relations. Many people have an emotional negative reaction to this – it sounds cold, impersonal, lacking empathy.
Hayek’s Game Analogy.
Hayek suggests it may help people’s understanding to think of these economic relations as a game we all come together to play. A wealth-creating game. One that leads to an increase in the stream of goods and services and the prospects for all participants to satisfy their needs. “A contest played according to rules and decided by superior skill, strength or good fortune”. (OED)
This analogy probably does not work as well as Hayek had hoped, but let’s play it out.
Like any game, a mixture of work rate, skill and chance will determine the outcome. Wealth is created based on marketplace feedback. The individual plays the game by making an effort to serve others – applies for a job, or opens a store, or manufactures a product – and gets a response in return, either positive or negative: gets the job or makes a profit. A positive signal is the incentive to continue providing the service, or to do more. A negative signal is the necessary information to change course and try something different, or to change pricing, or both.
The rules provide information for all, but can’t determine what use any individual makes of the information, and so do not eliminate uncertainty. The results of any individual’s use of the information from the market also depend on what others do.
Rules determine that everyone has a chance in the game, and luck plays a role. There is no need to try to morally justify specific distributions of income or wealth, or specific outcomes. By analogy, there is no moral implication when Houston beats Boston, or vice-versa (whatever the game they are playing). The rules of the game do not treat people differently and everyone is respected equally. The market signals to everybody when there is an opportunity.
Everyone acts on their own knowledge and for their own purposes to discover if they can be rewarded within this game. They are guided by their own moral beliefs. The aggregate effects can not be judged on some ideal of distributive justice, but as the result of a process which improves the chances of all. There is no guarantee that the goods and services which an individual has to offer will have a particular value, only that he will be allowed to obtain for them what price he can. Trial and error involves constant disappointment to some expectations. Negative feedback is the response to differences between expected and actual results so that these differences will, in time, be reduced.
We Have A right To Our Property, But Not To Its Value.
Nor can individual expectations be based on past positions. If circumstances change and customers or employers find new partners, an individual may lose their job or their profit or their position. Do they have a right to retain their old position? No. Because the change is a result of the same process that rewarded them earlier. The market adapts and changes without regard to the past. Society may benefit as a whole, even though some individuals and groups feel a loss. There are no special privileges for groups threatened with the loss of positions they achieved in the past. Market values are not protected – we each have a right to our property but not to its value.
Winners And Losers.
Rules determine chances, but they don’t determine results. Even in a game with equal chances for all players, there will be some winners and some losers. Undeserved disappointments are unavoidable. They are bound to cause grievances. They may cause a feeling of having been treated unjustly, but no-one has acted unjustly. Those affected will make claims for remedial measures but it is essential that government should not possess the power to accede to such demands. Even if members of a large group share the sense of grievance – and it comes to be called a “social problem” – this is no less true. There is always the opportunity to play the game again.
Also published on Medium.