Scandinavian Working Papers in Economics

Ratio Working Papers,
The Ratio Institute

No 118: Choosing One’s Own Informal Institutions: On Hayek’s Critique of Keynes’s Immoralism

Niclas Berggren ()
Additional contact information
Niclas Berggren: The Ratio Institute, Postal: The Ratio Institute, P.O. Box 3203, SE-103 64 Stockholm, Sweden

Abstract: In the main, Hayek favored rules that apply equally to all and located such rules in tradition, beyond conscious construction. This led Hayek to attack Keynes’s immoralism, i.e. the position that one should be free to choose how to lead one’s life irrespective of the informal institutions in place. However, it is argued here that immoralism may be compatible with Hayek’s enterprise since Hayek misinterpreted Keynes, who did not advo-cate the dissolving of all informal rules for everybody. By avoiding this misinterpretation, immoralism can be seen as institutional experimentation at the margin, which Hayek himself favored.

Keywords: Institutions; rules; traditions; morality; liberty; rule of law

JEL-codes: B25; O17; P48; Z13

26 pages, April 14, 2008

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