Entrepreneurship, Money and Coordination

Entrepreneurship, Money and Coordination

Hayek’s Theory of Cultural Evolution

New Horizons in Institutional and Evolutionary Economics series

Edited by Jürgen G. Backhaus

Hayek’s theory of cultural evolution has always generated controversy. Interest in Hayek’s theory, and others’ analysis and criticism of it, has been rising of late. This volume urges a reconsideration of Hayeks’ theory of evolution and aims to explore the relevance of Hayek’s theory for its own sake and for evolutionary economics more generally.

Chapter 1: Hayek’s Theory of Cultural Evolution: A Critique of the Critiques

Horst Feldmann

Subjects: economics and finance, austrian economics, evolutionary economics

Extract

Horst Feldmann The gradual evolution of certain rules of behavior and other institutions has resulted in an enormous increase in the human population and an unprecedented improvement in the standard of living over the past three centuries. Friedrich A. von Hayek thoroughly analysed this process of cultural evolution, developing a theory that some scholars regard as one of the most significant social theories of the twentieth century.1 The growing number of publications discussing Hayek’s theory shows that interest in it is rising. At the same time, the theory itself is very controversial and has been harshly criticized by many scholars. Is this criticism justified? This chapter takes a critical look at the major points raised by Hayek’s critics.2 SYNOPSIS OF THE THEORY The starting point of Hayek’s theory is the fact that for millions of years, humans and their hominid ancestors lived in small groups in which every member knew all the others personally.3 Life in such a group was characterized by concrete common goals and a similar perception of the environment, an environment recognized by all members chiefly as a potential source of food and danger. Cooperation within the group was narrowly circumscribed. It was during this period that certain instincts evolved and became genetically fixed. They guided individual behavior. These instincts were adapted to life in small groups and served to ensure the cohesion and continued existence of the group (in particular instincts of solidarity and altruism that applied to the members of one’s own...

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