Hayek: The Fatal Conceit

Hayek is a very precise and organized thinker, I'll open with his statement on what the book is about:

This book argues that our civilization depends, not only for its origin but also for its preservation , on what can be precisely described only as the extended order of human cooperation, an order more commonly, if somewhat misleadingly, known as capitalism. To understand our civilization, one must appreciate that the extended order resulted not from human design or intention but spontaneously: it arose from unintentionally conforming to certain traditional and largely moral practices, many of which men tend to dislike, whose significance they usually fail to understand, whose validity they cannot prove, and which have nonetheless fairly rapidly spread by means of an evolutionary selection – the comparative increase of population and wealth – of those groups that happened to follow them. The unwitting , reluctant, even painful adoption of these practices kept these groups together, increased their access to valuable information of all sorts, and enabled them to be ‘fruitful, and multiply, and replenish the earth, and subdue it’ (Genesis 1: 28). This process is perhaps the least appreciated facet of human evolution.

He points out what in many ways ought to be completely obvious -- that humans have no more control over the economic systems that were evolved by trial and error have been selected because they were more successful than than we control our lack tails or gills, or that we tend to enjoy sex. Capitalism wasn't designed, it was evolved (or created by God).
Worse, like disease, dying, not being able to fly, etc in life, there are aspects of Capitalism that we tend to dislike. SO, we WANT to change them! We don't want to have to "unintentionally conform to certain traditional and largely moral practices" -- we want to create what works and is better, NOW, intentionally!

Contrast that with his statement on Socialism:

The demands of socialism are not moral conclusions derived from the traditions that formed the extended order that made civilization possible. Rather, they endeavor to overthrow these traditions by a rationally designed moral system whose appeal depends on the instinctual appeal of its promised consequences. They assume that, since people had been able to generate some system of rules coordinating their efforts, they must also be able to design an even better and more gratifying system.

And so we have a "Conflict of Visions", described excellently by Sowell in his book of that title which I reviewed here. "The Fatal Conceit" is this idea that "we can do better" -- in the large, as in the replacement of Capitalism with Socialism.

Fatal Conceit can be viewed as source work for Sowell's "Conflict" ... Sowell is more readable and easier to follow, but Hayek is worth the effort. There is a FUNDAMENTAL difference between the visions of people that believe in either a created or evolved state of human civilization and social mechanisms like Capitalism, and those that believe that humans are completely capable to create any form of civilization / mechanisms they desire, including Utopia -- usually socialist/communist.

Fatal Conceit covers a good deal of detail on how the two sides view economics and the kinds of problems with production, motivation and outcome that command driven (Socialist systems) have and will always encounter, and how/why the distributed Capitalist system surmounts those problems.

Hayek was an agnostic, but he closes the book with a chapter that he put in reluctantly -- since in general he is not religious, but I found quite interesting. He makes a point I've tried to make a few times:

In any case, the religious view that morals were determined by processes incomprehensible to us may at any rate be truer (even if not exactly in the way intended) than the rationalist delusion that man, by exercising his intelligence, invented morals that gave him the power to achieve more than he could ever foresee.

and

even an agnostic ought to concede that we owe our morals, and the tradition that has provided not only our civilization but our very lives, to the acceptance of such scientifically unacceptable factual claims.

There are many intelligent thinkers from history that finally admit (often grudgingly)  that even though they are not believers, Western civilization was not possible without Judaeo / Christian religion.

Well worth the read, but read Sowell first.