The Use of Money in Society: Friedrich Hayek’s Social Work

• Date: 01 October 2021
• DOI: 10.1177/0090591720980472
• Author: Jacob Swanson
• Published date: 01 October 2021
• Subject Matter: Articles

https://doi.org/10.1177/0090591720980472

Political Theory

2021, Vol. 49(5) 801 –827

© The Author(s) 2020

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DOI: 10.1177/0090591720980472

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Article

The Use of Money

in Society: Friedrich

Hayek’s Social Work

Jacob Swanson1

Abstract

Recent studies of Friedrich Hayek have focused on his theorization of

spontaneous order and its relationship to his views on freedom and

market individualism. For many scholars, the impersonal nature of Hayek’s

spontaneous order, which optimally coordinates human action without

human coordination, and/or Hayek’s contention that freedom consists of

the exercise of individual choice in a market, reveals Hayek’s neoliberal

project to replace or erase the social domain of human life and activity.

This article makes the claim that two different, but related, versions of the

social exist in Hayek’s writings. The logic of his first and prominent view of

social order as spontaneous order depends, I argue, upon a second account

of the social, found in Hayek’s writings on money, which consists of forms

of conscious and collective social integration and subject formation that the

first view requires but cannot account for. In this way, Hayek’s social order

is sustained not spontaneously but by money-based collective activities and

social(ized) subjectivities that make it possible, and his neoliberal project

thus depends on fundamental, if disavowed, connections between the social

and the political.

Keywords

Friedrich Hayek, money, spontaneous order, social theory, neoliberalism

1Department of Government, Cornell University, Ithaca, NY, USA

Corresponding Author:

Jacob Swanson, PhD candidate, Department of Government, Cornell University, 214 White

Hall, Ithaca, NY 14853, USA.

Email: jgs275@cornell.edu

980472PTXXXX10.1177/0090591720980472Political TheorySwanson

research-article2020

802 Political Theory 49(5)

Introduction

Recent interest in Friedrich Hayek as a key figure of twentieth-century post-

war economic and political thought has sparked a renewed focus on the

importance of his social theory and conceptualization of spontaneous order

for understanding Hayek’s own thinking, how it shaped the emergence of

neoliberalism, and the impact of neoliberalism on contemporary life. For

some scholars, Hayek’s arguments against social justice, his attacks on the

idea that collective human action has a meaningful and beneficial impact on

the constitution of social life, and his contention that freedom consists of the

exercise of individual choice in a market all demonstrate that he did not

believe in any such thing as society.1 To them, Hayek’s social theory is anti-

social, and its impact is nowhere clearer than in the individualism of homo

oeconomicus, who finds freedom neither in society nor social change but in

individualistic participation in neoliberal institutions and practices, espe-

cially the market.

Other scholars argue, by contrast, that Hayek does in fact believe in

something called society, viewing it as a spontaneous order that optimally

coordinates human action without human coordination.2 For such scholars,

insofar as what distinguishes Hayek’s idea of society is that it comes about

without its participants knowingly or intentionally contributing to and con-

structing it, his social theory is not so much antisocial but asocial. The

freedom of homo oeconomicus, from this perspective, is rooted in and

contingent upon the operation of a transcendent and self-directed social

order buttressed by neoliberal institutions, laws, and norms. While these

approaches differ on the nature of Hayek’s social theory, they nonetheless

share the broader view that Hayek understands the social to be in no way

intentionally and substantively shaped by collective or coordinated human

action and that his social theory severs all connections between the social

and the political.

This article argues that Hayek’s theory of spontaneous order depends on a

view of how social coordination and organization come about that has been

undertheorized by scholars and also by Hayek himself. In my view, Hayek’s

theory of spontaneous order, or what I will call Social-1 (S-1), especially

salient in his writings from his “epistemological turn” in 1937 onward,3

depends on a second set of conceptions about the social that appear in his

writings about money. Despite its textual presence, however, Hayek does not

acknowledge this second social. To illuminate it and understand its relation-

ship to Social-1, I develop a distinction between Social-1 and the set of social

dynamics I find in his monetary writings, which collectively I call Social-2

(S-2).4