Secondly, Hayek is known in current economics for his early comments on the relevance of ‘knowledge’. My hesitation on this remains, though. This hesitation derives from the consideration that he apparently didn’t advance beyond Walras’s solution of assuming tatonnement, and similarly I find it hard to believe that other early economists disregarded knowledge. (Keynes for example emphasised ‘expectations’.) But ‘knowlegde’ is an issue.
Subsequently, though, I was jolted by Hayek’s discussion of the philosophical consequences of his theory of knowledge. Some of his thoughts are precisely the same as mine ! Notably (I could not have said it better!):
“The sense data, or the sensory qualities of the objects about which we make statements, thus are pushed steadily further back; and when we complete the process of defining all objects by explicit relations instead of by the implicit relations inherent in our sensory distinctions, those sense data disappear completely from the system. In the end the system of explicit definitions becomes both all-comprehensive and self-contained or circular; all the elements in the universe are defined by their relations to each other, and all we know about the universe becomes contained in those definitions. We should obtain a self-contained model capable of reproducing all the combinations of events which we can observe in the external world, but should have no way of ascertaining whether any particular event in the external world corresponded to a particular part of our model. Science thus tends necessarily towards an ultimate state in which all knowledge is embodied in the definitions of the object with which it is concerned; and in which all true statements about these objects therefore are analytical or tautological and could not be disproved by any experience. The observation that any object did not behave as it should could then only mean that it was not an object of the kind it was thought to be. With the disappearence of all sensory data from the system, laws (or theories) would no longer exist in it apart from the definitions of the objects to which they applied, and for that reason could never be disproved.” Hayek (1984:230-231)
Clearly, a fully ‘self-contained model’ might take a million years to make - and I doubt whether sense input can be really fully eliminated - but the Definition & Reality approach of using a ‘reduced form of stylized facts’ is quite along the same tracks, and differs only in digits of accuracy.
Thirdly, Hayek (1984) discusses constitutional reform. I’d rather not use this space to comment on those particular thoughts, especially on those of constitutionally allocating younger women to older men, since I would digress on my subject. But it remains useful to note, then, that more economists have taken up the issue of the constitution. (And to be clear about it: I write these lines with lots of laughter.)
It appears (more soberly) that Hayek is mentioned a number of times by Sen (1999a) “Development as freedom”. Sen even states: “(…) my admiration for Friedrich Hayek and his ideas (he has contributed more than perhaps anyone else to our understanding of constitutionality, the relevance of rights, the importance of social processes, and many other central social and economic concepts) (...)” (Sen:257) !
Sen’s “freedom” is Hayek’s “liberty”, see in particular p289-292 where Sen clarifies that ‘income’ has been and is a useful indicator but tends to be overvalued and mistaken for the true objectives relating to freedom. See the discussion of Sen’s book above.
Sen however rightly criticises Hayek’s misuse of the argument of ‘unintended consequences’ against social change, and in fact makes fun of it:
“The idea that unintended consequences of human action are responsible for many of the big changes in the world is not hard to appreciate. Things often do not go as we plan. Sometimes we have excellent reason to be grateful for this, whether we consider the discovery of penicillin from a leftover dish not intended for that purpose, or the destruction of the Nazi party caused by - but not intended in - Hitler’s military overconfidence. One would have to take a very limited view of history to expect that consequences match expectations as a general rule.” (Sen:254)
“If it is, as Hayek puts it, a “profound insight,” then there is something wrong with profundity.” (Sen:257)