The Fatal Conceit (1988) by FA Hayek is an incredible book. It is a short summary of Hayek’s thought and his huge contribution to economic thought. Hayek and Ludwig von Mises were remarkable thinkers who correctly predicted that Communism would fail because it destroyed price information and argued against much of modern macro-economics on the basis that it ignored what they saw as the real roots of wealth creation.
The book looks at how the market system evolved rather than was designed and how traditions upheld and expanded it. Hayek looks at how much of history concentrates on states because they retained records while ignoring the information that was created by private individuals. Hayek points out that it was in the relatively weak states of Europe rather than the stronger European or even stronger Chinese state that modern society took off due to the increase in wealth due to private property and free exchange.
The book looks at how socialists have failed to grasp the remarkable features of the catallaxy or the order that has slowly created itself for the benefit of all. Hayek points out how people refuse to accept that people can do good while maximizing profit rather than ‘doing good’ by design. Hayek’s skepticism about how little people understand of the overall picture is remarkably insightful.
The book also looks at how religion provided a social good that encouraged people to work hard, save and be loyal to their family. It’s an interesting addition for a book by an agnostic.
The Fatal Conceit is a book that young adults would be well advised to read. Most would probably not appreciate it but for those who do it would provide a view of one C20’s important thinkers. For anyone who wants to know what ‘Austrians’ are on about it is very much worth reading.