Increasing Marginal Utility

A blog so good it violates the law of diminishing marginal utility.

The common libertarian mischaraterization of Hayek

This is something that has bothered me for a while. Here is a classic example of it.

This is a very confused and biased question. Simply put, I do not know what an ideal criminal justice system should or would look like in a free society – no one does. That is the whole point of the Hayekian perspective.

This is emphatically not how Hayek himself would have approached the question. Hayek’s “solution” to the question was absolutely not that we necessarily should put things that have traditionally been handled by the state in the hands of free markets. We should treat them the same way we treat any other institution that has been handed down to us, whether it is the rule of law, the price system, or the state. We don’t know why any of the things work the way we do, and it is very literally *the* fatal conceit to believe that we can tear down any of these institutions and put in place whatever we like. This was covered in detail in both LLL3 and The Fatal Conceit. Of course, Hayek’s primary target is socialism, but Hayek never once says we should tear down all of our institutions which relate to the state and let people spontaneously order themselves to solve these problems. The state and our current criminal justice system were among the things that evolved through group selection. Pointing failures of the criminal justice as evidence of the need to get rid of the criminal justice system is analogous to pointing to externalities as evidence of needing to get rid of the market. We don’t have the market in this area, so we are unable to say whether the current content of the system is in some sense efficient, but that isn’t the same thing as saying that therefore we need the market there. It may lead somewhere worse.

Hayek gave us the way to change these things: tinkering. Saying that we should tear down the criminal justice system because your reading of the historical record and “rational choice theory” says so is the height of scientism, even if it’s in the form of anarchism instead of socialism. The Hayekian response is that we should find different margins on which we can make the criminal justice system more “market-like” and see what happens. If you do that gradually over a century or longer, and get to an anarcho-capitalist criminal justice system, so be it. That’s the point of the Hayekian perspective.

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