• A Book Review of The Mirage of Social Justice, by Friedrich Hayek. Volume II of his Law, Legislation, and Liberty1

Published in 1976, The Mirage of Social Justice was the second volume of Friedrich Hayek’s trilogy Law, Legislation, and Liberty. My review of the first volume, Rules and Order, appeared on Econlib2 following the publication earlier this year of a new consolidated edition of the three volumes by Jeremy Shearmur.

To summarize briefly, Rules and Order argued that general, impersonal, uniform, and abstract moral and legal rules (“rules of just conduct”) have evolved in our civilization to produce and coordinate a social order characterized by individual liberty and economic prosperity. To maintain this self-regulated social order, government must avoid submitting society to the sort of ad hoc, hierarchical commands that are typical of particular organizations such as business firms or clubs. Legislation is only useful to modify or replace an existing legal rule that is found to be inconsistent with the existing social order under current circumstances.

General Welfare and Particular Purposes

The first two chapters of The Mirage of Social Justice—still labelled “Volume 2” in the consolidated Shearmur edition—bring a new light on the rules underlying a self-regulated (or spontaneous) social order and their relation to justice. The “Great Society” (alternatively called the Open Society) is pluralistic, as opposed to a small tribe. Each individual has his own ends (purposes or goals). As we review the book, it will become obvious that Hayek’s Great Society has little to do with President Lyndon Johnson’s social engineering and political slogan of the 1960s. General agreement is only possible on rules that facilitate the pursuit of each person’s individual ends. There can be no universal agreement on particular ends and interests. The “general welfare” or “public good,” or “common welfare” can only reside in rules that facilitate the pursuit of individual ends by all individuals—a crucial idea.

The rules of just conduct represent the general opinion or values in society, its “culture.” Under these rules, each individual is free “to pursue his own interest his own way,”3 as Adam Smith wrote. But how can individual actions be compatible? How will each individual be informed of what all the others are doing and be able to adjust his own behavior accordingly? The answer is that if each individual is “allowed to use his own knowledge for his own purposes,” all knowledge of particular facts in society (what is scarcer, what is most needed) will be incorporated in, used through, individual interactions. For example, if individuals are free to choose their occupations, each will consider wage signals, which are themselves the products of the actions of all other individuals using their information to attain their own ends.

“In a free social order, the ultimate test of a rule is the compatibility of the actions it permits or requires with the actions guided by other rules.”

In a free social order, the ultimate test of a rule is the compatibility of the actions it permits or requires with the actions guided by other rules. This may suggest moral relativism, that there is “no absolute system of morals independent of the kind of social order in which a person lives.” For example, writes Hayek, “it seems to me it would be morally wrong to revive an already unconscious old Eskimo who, at the beginning of their winter migration, in accordance with the morals of his people and with his approval, had been left behind by his group to die.”

Normative Values of the Liberal Order

The moral relativism is only apparent. There exists, in Hayek’s system, a presumption of the moral superiority of a liberal social order, because only the general rules on which it is based can make an “open or ‘humanistic’ society possible where each individual counts as an individual and not only as a member of a particular group.” Individual freedom is the moral justification of the liberal spontaneous order. Perhaps we find here the sort of rational test to which any system of rules must be subjected and which James Buchanan blamed Hayek for not having.4 (Like Hayek and Buchanan, I use “liberal” in the sense of “classical liberal.”)

For Hayek, the liberal system of rules does the best that can be achieved to “increase the opportunities for any unknown person picked at random.” The general prosperity of liberal societies does not contradict this theory.

The Quest for Justice

In a spontaneous social order based on general rules of conduct, where nobody issues commands to coordinate individual actions, justice can only be an attribute of human conduct. It consists in individuals following the end-independent rules that maintain the order. The position of an individual is the outcome of the equally free actions of all other individuals within the rules.

Recall that “a rule of just conduct serves to reconcile the different purposes of the several individuals.” Another important argument of Hayek is that the search for justice is negative: we can only hope to eliminate injustice, that is, incompatibility between the actions of free individuals. “Mere justice is, upon most occasions, but a negative virtue,” wrote Adam Smith, “and only hinders us from hurting our neighbour.”5 We don’t know enough about the consequences of our actions to do anything else than to gradually remove injustice from the system of rules.

In a free society, argues Hayek, “the existence of strongly and widely held moral convictions” is not “by itself a justification for their enforcement.” Coercion is only justified “to secure the private domain of the individual against interference by others”; and “actions which affect nobody but the individuals who perform them ought not to be subject to the control of law, however strongly they may be regulated by custom and morals.” As formulated, this principle appears to be stronger than in Rules and Order, and Hayek is definitively closer to liberalism than to conservatism.

Hayek wages a frontal attack against the doctrine of legal positivism, represented by Hans Kelsen, John Austin, and other legal theorists. The doctrine claims that law is simply what is decreed by the sovereign. As Thomas Hobbes put it, “no Law can be Unjust.”6 In the same vein, Soviet legal theorist Evgeny Pashukanis, wrote that under socialism laws are “converted into administration, all fixed rules into discretion and utility.” Not protected by law, Pashukanis was later eliminated by Stalin. Contrary to state decrees, Hayek argues, law can only be made of general rules that meet general agreement among the public.

The same laws should apply to all men on earth, but any attempt to realize this ideal now “would lead to a revival of strong nationalist sentiments and a retreat from positions already achieved.” Sovereignty, Hayek argues, remains a dangerous concept. In a liberal order, nobody is sovereign. The legislator is limited by “the state of widespread opinion concerning the kind of rules he is authorized to lay down.”

Hayek explains that the market, itself an auto-regulated order, is a central component of the Great Society. The market order or “catallaxy” is made of “people acting within the rules of the law of property and contract.” Economic activity reconciles the competing ends of individuals, ends which are ultimately always non-economic: by pursuing his own ends—e.g., selling his production in order to earn money to do whatever he wants to do—every individual helps others achieving theirs.

On the market, remuneration is earned according to the value of services rendered, evaluated by those who receive them, with no direct relation to “merit, deserts or needs” of the supplier. Luck plays a big role, like in the case of the entrepreneur who has the right idea at the right time. Protected domains are secured, but not market values.

The opportunities of all will increase most, Hayek explains, “if we act on principles which will result in raising the general level of incomes without paying attention to the consequent shifts or particular individuals or groups from one position on the scale to another.” The aim of policy in a free society can only be the achievement and maintenance of an abstract order that “increase[s] equally the chances of any unknown member in society” to attain his ends. “The aim of law should be to improve equally the chances of all.”

If the maximum correspondence of individual expectations will generally be realized, some expectations are bound to be disappointed. Adaptation to change is facilitated by the market, but uncertainty cannot be eliminated.

“Social” or Redistributive Justice

Once the foregoing is admitted, the analysis and conclusions of the central chapter of the book on social or distributive justice (chapter 9) follow. There is no sense in saying that an abstract social order run by nobody is just or unjust. This could only be true of a regimented society on the model of an organization run by some authority. “Just” rewards have no more sense than the “just prices” imagined by medieval thought. Hayek emphasizes that there is no such thing as “value to society,” only value to individuals and the moral value of an impersonal order where liberty can flourish.

Hayek persuasively argues that no pre-determined pattern of distribution can be achieved through individuals following general, uniform, impersonal, and abstract rules of conduct. Any such patterned distribution precludes that “the several individuals act on the basis of their own knowledge and in the service of their own ends, which is the essence of freedom.” The rules of social justice “cannot be rules for conduct towards equals, but must be rules for the conduct of superiors towards their subordinates.”

Morals are very different between the Great Society and the tribe. The Great Society is based on “general rules and abstract rational principles.” The morals of the tribal society, are based on “emotions deeply ingrained in human nature through millennia of tribal existence.” These genetically and culturally inherited emotions lead us to dream of collective ends such as social justice. But this is “un-civilized,” Hayek argues, and “leads straight to the interpretation of all politics as a matter of friend-enemy relations,” as glorified by Nazi jurist Carl Schmitt.

For similar reasons, the Great Society is incompatible with “solidarity” in the sense of “unitedness in the pursuit of known common goals” imposed to all individuals in society. Today, this tribal instinct comes out in nationalism and socialism. The Great Society has taught us, but still imperfectly, to abandon these instincts in favor of negative rights that only secure an equal protected domain for each individual.

To accept the abstract rules of the Great Society and refrain from our tribal instincts “requires a degree of insight into the working of a spontaneous order which a few persons have yet attained.” Hayek’s last book, The Fatal Conceit,7 will later explore the dire consequences of this difficulty.

The Rise of Organization Rules

“Social and economic rights” of the sort stated in the United Nations’ Universal Declaration of Human Rights are positive rights, claims against “society,” that is, against unnamed individuals. Not only are such rights meaningless, but they draw attention away from the old negative rights necessary to maintain a liberal spontaneous order.

Hayek wonders why tribal morals have made a return under the guise of organization-type commands supposed to be applicable to, and desirable for, society. The main reason, he believes, is that a large proportion of members of society have come to work for large organizations and to believe that a similar hierarchical structure can work efficiently at the level of society. Political philosophers are affected, too:

  • It should not surprise us that academic philosophers in their sheltered lives as members of organizations should have lost all understanding of the forces which hold the Great Society together and, imagining themselves to be Platonic philosopher-kings, should propose a re-organization of society on totalitarian lines.

A Dangerous Mirage

As the title of the volume suggests, its main thesis identifies social justice as a mirage whose pursuit will gradually destroy, or complete the destruction of, the liberal spontaneous order. It is a mirage because the more it is espoused, the more individuals and groups will feel aggrieved by the privileges of others and will clamor for redress. The government’s response to these demands with still more “social justice” will deepen discontent and confrontation. Democratic governments will thus gradually transform the spontaneous order into an organization-type society ruled by authoritarian commands. Social justice will lead to “the destruction of the indispensable environment in which the traditional moral values alone can flourish, namely personal freedom.”

Hayek views social justice as an emotional instinct” and a “quasi-religious superstition” which is “probably the greatest threat to most other values of a free civilization.” It directly clashes with “perhaps the greatest discovery mankind ever made”, that is, “[t]he possibility of men living together in peace and to their mutual advantage without having to agree on common concrete ends, and bound only by abstract rules of conduct.”

In this book, Hayek identifies socialism as the main bearer of social justice, but old, European-style conservatism (“true conservatism”) just promoted a different form of “social justice,” that is, different ends to be imposed on society. In his previous major work, The Constitution of Liberty,8 Hayek emphasized that his position differed “as much from true conservatism as from socialism.”

Some Questions

To complete this review, a few questions may be raised.

Hayek was a strong critic of utilitarianism, which he viewed as a constructivist philosophy that “postulates a personified society.” In his introduction to Law, Legislation, and Liberty, however, Jeremy Shearmur suggests that Hayek uses “a highly attenuated form of utilitarianism.”9 Is this how Hayek implicitly weighs the satisfaction of most people’s expectations against the loss of those whose expectations are disappointed? I suspect that Hayek would answer that the proper criterion is not utilitarian but is given by the value of insuring coordination in a liberal order beneficial to everybody. We must remember that he expressed agreement with John Rawls’s contractarianism, or at least a version of it. Buchanan’s criterion of unanimous consent seems to avoid utilitarianism in a neater way. On the other hand, it could be argued that Hayek’s fuzzier criterion is more realistic.

If Hayek opposes social justice as a moral, if not self-interested, claim on other people’s resources and social positions, he does agree with some redistribution through certain forms of government assistance that can be expressed as general, non-discriminatory rules—for example, “providing on an equal basis the means for the schooling of minors” or “an assured minimum income, or a floor below which nobody needs to descend.” But is this criterion tight enough to prevent social justice from coming through the back door? It is notable that most liberals have accepted limited forms of government assistance. For example, James Buchanan and Gordon Tullock argued that an “income insurance” could be unanimously approved as part of a virtual social contract.10

For more on these topics, see

One exception that Hayek proposes to his rule-based, purpose-independent order lies in “such special passing circumstances as war, rebellion or natural catastrophes.” These emergencies, however, have provided easy excuses for much of the growth of modern governments, through ratchet effects that never brings their power back to the pre-emergency situation.11 How can it be different in the future? At the very least, this exception must be very carefully circumscribed.

This being said, Hayek’s criticism of social justice remains unevadable.


[1] F.A. Hayek, The Mirage of Social Justice. Volume 2 of Law, Legislation, and Liberty (1973-1978). Also available in Volume 19 of the Collected Works of F.A. Hayek, edited by Jeremy Shearmur (Chicago: University of Chicago Press, 2022).

[2] “F.A. Hayek: Between Classical Liberalism and Conservatism,” by Pierre Lemieux. Library of Economics and Liberty, March 7, 2022.

[3] Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, edited by Edwin Cannan, (Methuen & Co., 1904). See Vol. 2, pp. 162 and 184. Online, see Book IV, Chapter 9, para. 51.

[4] James M. Buchanan, Why I, Too, Am Not a Conservative: The Normative Vision of Classical Liberalism (Edward Elgar, 2006), pp. 74-75.

[5] Adam Smith, The Theory of Moral Sentiments (1759) (Henry G Bohn, 1853), p. 117. Or, see The Theory of Moral Sentiments, para. II.II.9.

[6] Thomas Hobbes, Leviathan (1651) (Clarendon Press, 1909), p. 268.

[7] The Fatal Conceit: The Errors of Socialism, by Friedrich Hayek. (University of Chicago, 1988).

[8] “Why I Am Not a Conservative,” by Friedrich Hayek. Postcript to The Constitution of Liberty (University of Chicago Press, 1960), pp. 395-411.

[9] Law, Legislation, and Liberty, by Friedrich Hayek. p. xxv.

[10] See James M. Buchanan and Gordon Tullock, The Calculus of Consent: Logical Foundations of Constitutional Democracy (1962) (Liberty Fund, 1999), pp. 194-197. See also my review “The State Is Us (Perhaps), But Beware of It!” Library of Economics and Liberty, January 3, 2022.

[11] Robert Higgs, Crisis and Leviathan: Critical Episodes in the Growth of American Government (Oxford University Press, 1987).

*Pierre Lemieux is an economist affiliated with the Department of Management Sciences of the Université du Québec en Outaouais. He blogs on EconLog. He lives in Maine. E-mail: PL@pierrelemieux.com.

For more articles by Pierre Lemieux, see the Archive.

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