Did F. A. Hayek understand optionality?

Nassim Nicholas Taleb writes in Antifragile,

We may be drawn to think that Friedrich Hayek would be in that antifragile, antirationalist category. He is the twentieth-century philosopher and economist who opposed social planning on the grounds that the pricing system reveals through transactions the knowledge embedded in society, knowledge not accessible to a social planner. But Hayek missed the notion of optionality as a substitute for the social planner. In a way, he believed in intelligence, but as a distributed or collective intelligence— not in optionality as a replacement for intelligence.1

Au contraire, Hayek wrote in The Constitution of Liberty, in Chapter 2: “The Creative Powers of a Free Civilization,”

It also follows that the importance of our being free to do a particular thing has nothing to do with the question of whether we or the majority are ever likely to make use of that particular possibility. To grant no more freedom than all can exercise would be to misconceive its function completely. The freedom that will be used by only one man in a million may be more important to society and more beneficial to the majority than any freedom that we all use.2

In a footnote for the paragraph, Hayek cites a comprehensive scholarly history for the idea:

Cf. Rev. Hastings Rashdall, “The Philosophical Theory of Property,” in Property; Its Duties and Rights: Historically, Philosophically, and Religiously Regarded, Charles Gore and Leonard Trelawney Hobhouse, eds. (new ed.; New York: Macmillan, 1915) pp.61-62: “The plea for liberty is not sufficiently met by insisting, as has been so eloquently and humorously done by Mr. Lowes Dickinson (Justice and Liberty: A Political Dialogue, e.g. pp. 129 and 131), upon the absurdity of supposing that the propertyless labourer under the ordinary capitalistic regime enjoys any liberty of which Socialism would deprive him. For it may be of extreme importance that some should enjoy liberty—that it should be possible for some few men to be able to dispose of their time in their own way—although such liberty may be neither possible nor desirable for the great majority. That culture requires a considerable differentiation in social conditions is also a principle of unquestionable importance.” [The full citation of the book quoted by Rashdall is: Goldsworthy Lowes Dickinson, Justice and Liberty: A Political Dialogue (London: J. M. Dent, 1908).—Ed.] See also Bennett E. Kline and Norman H. Martin, “Freedom, Authority, and Decentralization,” p. 69: “If there is to be freedom for the few who will take advantage of it, freedom must be offered to the many. If any lesson is clear form history, it is this.”3

1 Nassim Nicholas Taleb. Antifragile (New York: Random House, 2012), Kindle edition.

2 F. A. Hayek, The Constitution of Liberty: The Definitive Edition (Chicago: The University of Chicago Press, 2011), 83.

3 Ibid.


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