White Paper

Hayek’s Terra Incognita of the Mind

Although Friedrich Hayek has been long recognized for his economic insights, and in fact was awarded the Nobel Prize in 1974 for his theory of money and economic fluctuations, very little academic attention has been paid to other aspects of his thought. This oversight is unfortunate. Hayek’s theory of mind provides us with a compelling defense of the market system. Moreover, with the publication of books like Daniel Dennett’s Consciousness Explained, Paul Churchland’s Matter and Consciousness, and Francis Crick’s The Astonishing Hypothesis, Hayek’s views regarding the unpredictability of the human mind are particularly timely.

In the following paper, I undertake to examine Hayek’s theory of mind. Toward this end, the paper is organized into three sections: In the first section I will summarize Hayek’s theory of mind. In the second section I will explain Hayek’s claim that the human mind can never be predicted by man or machine. In the final section I will focus on how Hayek’s theory of mind provides a compelling defense of the market system.

Read the Full White Paper

Gary T. Dempsey is assistant director of development at the Cato Institute.