Adam Smith And Friedrich Hayek: Comparison Of Ideas About The Construction Of Society

Adam Smith and Friedrich Hayek: Comparison of ideas about the construction of society

This essay addresses the issue of moral philosophy as the basis of the price system in two of the greatest representatives of economic thought, Adam Smith (1723-1790) of the Scottish School of Economy and Friedrich Hayek (1899-1992) of the Austrian Economic School.

Both authors have a common place, the idea that sociability depends on the individual, this means that they conceive human action in relation to its consequences. In this line you can highlight the role that the concept of individualism plays in both authors to understand spontaneous social reality based on the relationship between action and desire. The staging of individualism as a method was possible not only in the field of a particularity of the man expressed in the desires in the context of the struggle, but also produced a way of thinking about the action of the State. Indeed, it is suggestive, that this supports the idea of ​​the coordination of human action guided by general rules, in which the double character that underlies the appetite can be responded: the one corresponding to the horizon of the world of things And, the other, in relation to the appetite of the other.

Without a social theory it is difficult to sustain the idea that appetite is a bulwark to clarify the conjunction of man with his environment, as well as a reference point to understand that needs cannot be divided into natural and cultural.

Therefore, it should be noted the importance of the authors, individualism as a methodological effort to make the approach to life in society.

The two authors illuminate the idea that the existence of the social order lies in the mutual consolidation of men in the absence of something external or blind forces, where the human finds their gravitation center, in the economic and social behavior of self-interest of self-interest And the own ends. Of course, it is not an isolated individual, "atomistic", but is located in a dialogue with the other. His action goes into and through interdependence. In this sense, the consequences that come from this conception allow us to understand that self-interest (Smith) and their own purposes (Hayek) lead to increasingly rigorous issues of moral philosophy, constituting the basis of social competence.

Economic reality is configured by the operation of the exchange. It should not be surprising that the aforementioned authors resort to ethical-individual foundations. Adam Smith supports that human beings act chasing their own interests, meanwhile, Hayek proposes the idea that man pursues his own ends. These notions incorporate the idea of ​​preservation by the individual of their economic activity. In that sense, it is likely that the achievement of both purposes affects the pricing system of the economic market, becoming the basis of the individual analysis of social life processes. Everyone uses his media to achieve those goals that he considers priority or better, making it clear that this situation explains the execution of the action.

There is no doubt that the interest itself is a must for classical liberalism. Let’s stop for a moment in it. For Smith, the notion of one’s interest is guided by objective laws, which act outside the reach of the individual’s will, a kind of invisible hand:

"By guiding that activity so that it produces a maximum value, he seeks only his own benefit, but in this case as in others an invisible hand leads him to promote an objective that did not enter into his purposes" (Smith p. 115).

At this point we can understand that this is limited to providing the conditions for individuals to consider their own interests, produce benefits not agreed to others.

The schematic description of the place that occupies the issue of self-interest in Smith, is academic treatment by Hayek. In principle, this author takes distance from the reduction made of the content of self-interest, due to bias towards the selfishness that occurs, present moral difficulty for classical liberals and their empirical character:

"Of course, there can be no doubt that in the language of the great thinkers of the 18. These terms referred mainly to a moral attitude that, they thought, would prevail widely. However, these terms did not mean selfishness in the restricted sense of exclusive for the immediate needs of oneself ” (Hayek p. 13).

From the point of view of the Methodology of the Austrian school that is based. The governing principle of praxeology, is the action of human beings, means that individuals are aware of their actions aimed at their ends and also that they are, in this same sense, of the media; Likewise, the particular action can only be carried out in the context of uncertainty, motivating precisely the action towards the search for the ends.

A part to take into account in the work of both authors, is that each one tracks the idea of ​​the average relationship, in different contexts, Smith points out the productivity or efficiency of the market and Hayek emphasizes man as value as value as value In itself (individual freedom). Thus, it would be accepted that both’s positions is a source of knowledge coordination.

Another clear difference that we can find in these two authors is that Adam Smith argues that the source of richness of a nation is at work, unlike the physiocrats who claimed that it was the possession of the land, or of the mercantilists, who based wealth in gold and other precious metals. Smith also said that the economic impulse of a society lies in the attitude of its individuals to improve its own life condition ‘to improve the condition’. However, in order to provide the beneficial social fruits of this impulse, it is necessary. Consequently, not only work is the one that generates wealth, since they work in Germany and also work in Cuba, and the Germans are rich and prosperous, while Cubans are poor.

On the other hand, Friedrich Hayek said that society is an ‘extensive order’ and are not easy to understand their processes. Adam Smith tried to explain it and turned to the metaphor of the ‘invisible hand of the market’. It is not a very successful metaphor because it gives the idea that there is a hand that manages the economy, which is not true. More precise was Frédéric Bastiat, who took the idea of ​​Adam Smith, took his hand and said: ‘What is seen and what is not seen in society’, and what are not seen are the processes and causes and the causes and the causes. It is evident that many do not see those processes (or do not want to see them) and the liberal theory is systematically rejected by most politicians, academics, journalists and social communicators, which refer in their articles and speeches to opposite opposing concepts to the market and when not, Marxists.

Smith’s moral theory expresses an imposing form of coordination of intersubjective meetings, where the continuous communication is presented that allows non -consciously renewing the moral play rules that guarantee coexistence. Finally, it is to remember that, both in Smith and Hayek, the conduct thread is drawn by individual action, it is worth mentioning, the conception of liberalism. In the two authors there is a closeness in relation to the security of the freedom of individuals in their private world, restricting the exercise of state power; substantive idea to explain the spontaneous origin of the institutions and discard the teleological origin of the same.

conclusion

It is noteworthy that with great subtlety Smith and Hayek, they go to the ideas about the construction of modern society that pay unique attention to the contractual character. It is not an isolated reflection in his works. The authors’ style of thinking gives entry to the historical process in their evolutionary aspect; The role of institutions in the free market and the constitution of a spontaneous social order, whose basis is the action of individuals.

You cannot lose sight of the fact that the capitalist social form is organized with reference to the implication of the free market on private property and also in the production of goods. In the case of Smith, his moral philosophy is aimed at considering the moral contents of the actions of individuals since their own interests and their unwanted consequences are present. The meeting of the desires together with the partialities of individuals, push the author to carry out a mental laboratory, using the principles of sympathy and the impartial spectator for the constitution of market ethics.

It is not difficult to confirm that the configuration of the moral subject is at the same time the liberal man or market man, necessary for the convergence of social interests and the survival of the norms. From there, the prices recognition thesis. That is, the market makes imperative that individuals act rationally in economic competition.

A point that distance to the two authors is the way in which the norms emphasize, in Smith it is of great value the survival of it as it makes it possible for passions not to dismantle life in society; Meanwhile Hayek, although he recognizes them, insists on the survival of man to make life in society, is his ethical problem. However, the importance of the norm as a principle that guides the action of individuals in the price system, brings the two authors. He not only is inclined to respect or recognition of the norm, but not to reconfigure it, to be put to the order of arbitrary action. In all this, it should be noted that for both authors prices play the coordinating function in economic competition, but also emphasize the role they play transmitting information and dispersed knowledge.

Bibliography

1. Mariano Grondona. (1986). The thinkers of freedom. Buenos Aires: South America
2. Hayek, f. (1937). Economy and knowledge. Economic IV. pp. 33-54.
3. Smith, a. (1997). The theory of moral feelings. Editorial Alliance: Madrid
4. Smith, a. (nineteen ninety six). The richness of nations, book I. Folio Editions: Barcelona.
5. Hayek, f. (1998). The foundations of freedom. Editorial Union: Madrid
6. Sebastián Botticelli. (January 4, 2015). Liberal conceptions of the State: Adam Smith and Friedrich Hayek. March 5, 2020, from the University of Buenos Aires Website: http: // www.Scielo.org.CO/SCIELO.PHP?Pid = S0120-46882018000100061 & script = sci_abstract & tlng = is