Hayek’s argument in “Three Sources of Human Values” (published as an epilogue to Law, Legislation and Liberty) is relatively straight-forward. There are, he claims, three sources of value: biological, cultural, and rational. The biological source of value consists of genetically inherited instinctual drives. Hayek believes these drives were instrumental in the survival of small, hunter-gatherer type societies. Given the same environmental cues, these shared innate drives helped ensure that members were likely to coordinate their action effectively in the pursuit of common goals. But as these social groups became larger, it became less likely that all members would share the same perspective on their environment and so be able to coordinate their action on the basis of innate drives. Selective pressures on these developing societies meant that only those which were able to repress the now disruptive influence of biological instincts in favour of alternative ways of coordinating action would end up surviving.
What emerged triumphant out of this evolutionary trial over tens of thousands of generations, Hayek claims, is the regulation of behaviour through cultural customs and norms. Crucial to his account of this second source of human values is the claim that these norms emerged out of the impersonal process of adapting to the social environment, and they were neither rationally planned nor well understood by those who followed them. They could not be the product of human reason, Hayek argues, because the mind co-evolved with these cultural norms — language and morals are themselves artefacts of culture and make possible rational thought. With the emergence of modern, market-based societies, it was these cultural traditions which formed the moral foundations (i.e. liberal principles) upon which the “abstract rules” of the market could regulate the social order as a complex division of labour, efficiently coordinating action through impersonal market signals.
Hayek also recognises a third source of value, the deliberate institution of rules or laws. Unlike the other two sources of value, these rules are the product of human reason. Since Hayek believes that deliberate planning tends to disrupt the spontaneous social order brought about by tradition and the unregulated market, he argues that such rules should only be used sparingly. Hayek ends his essay by warning that civilisation is today threatened by social movements seeking to replace the dominant role of tradition in society with one of the other sources of value: either the imposition of a planned social order (socialism) or a regression to our animal instinctual drives (counter-cultures influenced by psychology, sociology, etc.)
My main concern in looking at this essay is to reflect on the concept of value. But before I move on to that topic, I’d like to make a few observations about Hayek’s argument as outlined above.
First, Hayek relies on a notion of social evolution to motivate the idea that spontaneous social order is superior to planned social order, because those societies which survived were, for the most part, ordered by traditions and customs which were the outcome of unplanned and “irrational” adaptations to their environment. This serves as the justification for his claim that modern market economies should be allowed to operate with minimal intervention from governments; and is no doubt the source of his appeal to libertarians. But what Hayek’s notion of adaptation amounts to is the trite claim that societies which have survived must have survived because, in fact, they survived; it doesn’t explain anything at all about the institutions and development of such societies. His occasional, implicit appeal to a “survival of the fittest” principle for sorting out the winners and losers of social evolution is as crude and unpersuasive as it sounds. (For more on the problems with this kind of simplistic application of evolution to social change, see Anthony Giddens’ discussion in The Constitution of Society, chapter five.)
Second, while Hayek does have a point when he argues that both the human mind and culture must have co-evolved together, it does not follow from this that human reason was the passive partner in the developmental process. Hayek writes that “Man did not adopt new rules of conduct because he was intelligent. He became intelligent by submitting to new rules of conduct.” (p. 495) And yet even in the earliest rituals, tools and myths, by which humans first attempted to represent and master their world, some exercise of intelligence must have been present. It really makes no sense to think that human culture somehow emerged other than through the application of human intelligence.
More charitably, Hayek could be understood as arguing that human reason represents a rather late cognitive development vis-a-vis human traditions and customs. The neuro-anthropologist Donald Merlin has speculated that human cognition and culture have developed together through three distinct stages: the mimetic, mythic and theoretic. (Prior to this process of development, an episodic mode of cognition would have been operative in the absence of human culture.) The transition to theoretic culture, the latest in the series, became possible with the externalisation of human memory storage through writing and architecture. This technological development greatly reduced the memory demands of certain tasks and simplified the execution of complex mental operations such as arithmetic. The resulting style of thinking (paradigmatic or logico-scientific thought) is distinct from more basic modes of thought, the mimetic and mythic, which have to some extent been hardwired into the brain and which humanity still depends on to a great extent.
Certainly, on this picture, one could not claim that reason in the theoretic sense played a role in the development of earlier forms of culture (the mimetic and mythic). At the same time, however, institutions which Hayek wants to locate in these earlier forms of culture, such as money, law and economic markets, could not in fact have existed without the cognitive advances brought about by theoretic culture. Hayek claims that money and the law, together with language and morals, constitute the “basic tools of civilisation,” which are “the result of spontaneous growth and not of design.” (p. 495) But the implication that money and law developed independently of reason, or what we calling theoretic culture, cannot be right, even on this more charitable reading of Hayek’s thesis. One needs the externalisation of memory in the form of writing and number systems, and the sophisticated “thought-algorithms” such a cognitive culture facilitates, in order to develop social institutions such as money, law and markets. Whatever Hayek means by “spontaneous growth” with regard to these institutions, it is wrong to treat them as somehow unbounded by human cognition, even when limiting the notion of cognition to a relatively late stage of cultural development.