'‘Man will never be able to know what money is any more than he will be able to know what God is’
The Evolutionary Theodicy: Extended Order, Economic Calculation & Epistemic Distance
On the market mysticisim of the Hayekian philosophy of economics
by Max Ramsahoye
Red Algae (Florideae)
Ernst Haeckel - Kunstformen der Natur (1904), plate 65
❝ The demands of socialism are not moral conclusions derived from the traditions that formed the extended order that made civilisation possible. Rather, they endeavour to overthrow these traditions by a rationally designed moral system whose appeal depends on the instinctual appeal of its promised consequences. They assume that, since people had been able to generate some system of rules coordinating their efforts, they must also be able to design an even better and more gratifying system. But if humankind owes its very existence to one particular rule-guided form of conduct of proven effectiveness, it simply does not have the option of choosing another merely for the sake of the apparent pleasantness of its immediately visible effects. The dispute between the market order and socialism is no less than a matter of survival. To follow socialist morality would destroy much of present humankind and impoverish much of the rest. ❞
❝ I do claim that, whether we like it or not, without the particular traditions I have mentioned, the extended order of civilisation could not continue to exist and that if we discard these traditions, out of ill-considered notions of what it is to be reasonable, we shall doom a large part of mankind to poverty and death. Only when these facts are fully faced do we have any business - or are we likely to have any competence - to consider what the right and good thing to do may be. While facts alone can never determine what is right, ill-considered notions of what is reasonable, right and good may change the facts and the circumstances in which we live; they may destroy, perhaps forever, not only developed individuals and buildings and art and cities (which we have long known to be vulnerable to the destructive powers of moralities and ideologies of various sorts), but also traditions, institutions, and interrelations without which such creations could hardly have come into being or ever be recreated. ❞
❝ The decisive effects that led to the creation of the order itself, and to certain practices predominating over others, were exceedingly remote results of what earlier individuals had done, results exerting themselves on groups of which earlier individuals could hardly have been aware, and which effects, had earlier individuals been able to know them, may not have appeared at all beneficial to them, whatever later individuals may think. As for those later individuals, there is no reason why all (or any) of them should be endowed with a full knowledge of history, let alone of evolutionary theory, economics, and everything else they would have to know. ❞
❝ For there is no known way, other than by the distribution of products in a competitive market, to inform individuals in what direction their several efforts must aim so as to contribute as much as possible to the total product. ❞
— Freidrich Hayek, The Fatal Conceit
Religious Theodicy: Superintelligent Design & The Only-Way Theodicy
Some theodicies simply appeal to God's ineffable wisdom ('God works in mysterious ways', 'As mortal humans, we cannot know the mind of God'). His ways transcend human understanding; apparent evil serves purposes our finite minds cannot grasp. Or, in evolutionary theodicy: God used natural selection to create life, and natural evil—predation, disease, extinction—constitutes an unavoidable byproduct of this only possible creative mechanism. The laws enabling life necessarily produce suffering. We cannot have complexity without cruelty, consciousness without catastrophe.
Capitalist Theodicy: The Blind-Watchmaker of the Market
Hayek's theodicy mirrors this perfectly. Markets constitute "spontaneous orders"—emergent coordination mechanisms beyond anyone's design or comprehension. The "economic calculation problem" proves central planning cannot improve on markets because planners lack the dispersed local knowledge markets aggregate through prices. Our "epistemic distance" from the system's totality means apparent evils might serve functions we cannot grasp. Moreover, market evolution isn't just efficient—it's the only possible coordination mechanism for complex economies. Just as you cannot have biological evolution without extinction, you cannot have economic evolution without creative destruction, unemployment, inequality. The suffering isn't incidental; it's the selection pressure making the system functional and even self-improving according to it's own logic.
The Parallel Structure: (Super-)Naturalisation & Ideological Closure
Both theodicies demand faith before incomprehensible complexity, positioning the system beyond rational critique. Both claim processes operate according to necessary laws (natural and economic) we cannot alter without destroying the whole. Both insist: trust mechanisms you don't understand, accept costs you cannot eliminate, acknowledge your cognitive limitations. Critique becomes epistemological hubris; acceptance becomes traditional wisdom. Most crucially, both insist their respective mechanisms—natural selection, market competition—represent not merely good ways of organizing complexity, but the only ways. Suffering transforms from a contingent consequence into a logical necessity.
The Market Evolutionary Only-Way Theodicy
The natural evolutionary theodicy claims that suffering, death, predation, and extinction aren't divine cruelties but necessary features of the only process capable of generating complex life—natural selection logically requires variation (inequality), competition (conflict), differential reproduction (winners and losers), and death (elimination of the unfit), such that God didn't choose to create a world with these features but rather couldn't create life without them, making evolution not one creative method among alternatives but the sole metaphysically possible mechanism for producing biological complexity. Hayek's market evolutionary theodicy deploys identical logic: economic suffering, inequality, unemployment, and crisis aren't capitalist failures but necessary features of the only process capable of coordinating complex economies—spontaneous order logically requires competition, price signals reflecting scarcity, profit-loss mechanisms, and creative destruction, such that societies didn't choose capitalism over alternatives but rather couldn't achieve coordination without it, making markets not one economic system among possibilities but the sole epistemologically viable mechanism for rational calculation and resource allocation. Both theodicies transform contingent suffering into logical necessity, reframe historical outcomes as evolutionary inevitability, and foreclose alternatives by claiming the system's harmful features aren't regrettable costs to be minimized but constitutive requirements without which the system's benefits literally cannot exist—making critique not merely wrong but logically incoherent, like demanding natural selection without death or market coordination without externalities.
Analysis of Excerpts from The Fatal Conceit
These excerpts from Hayek's late work crystallize the complete theodical structure we've traced, revealing how evolutionary necessity, epistemic distance, and mystical faith converge to transform capitalism into unquestionable reality while positioning critique as civilizational suicide.
Excerpt One: The Only-Way Theodicy and Apocalyptic Consequences
The first passage deploys what we've identified as "only-way" theodicy with explicitly apocalyptic stakes. Hayek's opening move—contrasting socialism's "rationally designed moral system" with traditions that "formed the extended order"—establishes the fundamental opposition between constructed rationality (hubris) and evolved tradition (humility), mirroring theological contrasts between human presumption and divine/natural wisdom. The claim that "humankind owes its very existence to one particular rule-guided form of conduct" transforms market institutions from contingent arrangements into existential prerequisites—we literally wouldn't exist without them, making capitalism not a system we inhabit but the condition of our very being.
The theodical payoff arrives in the statement: "it simply does not have the option of choosing another merely for the sake of the apparent pleasantness of its immediately visible effects." This performs multiple ideological operations simultaneously. First, it naturalizes necessity: what resulted from specific historical processes (enclosure, commodification, proletarianization) gets reframed as evolutionary inevitability without alternatives. Second, it dismisses suffering as merely apparent: poverty, exploitation, and crisis are "immediately visible effects" that seem unpleasant only because we lack the comprehensive evolutionary perspective that would reveal their necessity. This precisely parallels skeptical theism's move—what appears as gratuitous evil reflects our limited epistemic position, not actual purposelessness. Third, it establishes a temporal hierarchy of value: "immediately visible effects" (present suffering) must be subordinated to long-term evolutionary survival, just as theodicy subordinates present suffering to eternal divine purposes.
The apocalyptic conclusion—"To follow socialist morality would destroy much of present humankind and impoverish much of the rest"—reveals the theodicy's ultimate function: foreclosing alternatives through existential terror. This isn't empirical prediction but theological pronouncement: just as abandoning God leads to damnation, abandoning market traditions leads to civilizational collapse. The parallel to religious "only-way" soteriology (salvation exclusively through one path) is exact: there is no alternative that doesn't result in catastrophe. Notice how this immunizes capitalism against critique: any suffering markets generate becomes preferable to civilizational extinction, any proposed alternative becomes literally genocidal. The theodical structure is complete—market suffering isn't justified through explanation but through comparative apocalypse: however bad capitalism is, alternatives are infinitely worse (mass death, universal poverty). This transforms capitalism from a system requiring justification into the sole barrier against apocalypse, from one option among many into existence itself versus oblivion.
Excerpt Two: Epistemic Distance, Fatal Conceit, and the Mystification of Tradition
The second passage elaborates the epistemic distance theodicy while revealing its function as political mystification. Hayek's assertion—"without the particular traditions I have mentioned, the extended order of civilisation could not continue to exist"—again deploys only-way necessity, but the epistemic move is more subtle. He claims that "ill-considered notions of what it is to be reasonable" might "destroy...traditions, institutions, and interrelations without which such creations could hardly have come into being or ever be recreated."
This establishes asymmetric epistemology: we can know traditions are necessary (negative knowledge: their absence causes collapse) but cannot know whether alternatives might work (positive knowledge requires comprehensive understanding we lack). We possess sufficient knowledge to predict disaster from abandoning traditions but insufficient knowledge to design improvements. This asymmetry is ideologically convenient—it authorizes conservatism (don't change what works) while delegitimizing reform (can't know improvements won't cause catastrophe). The parallel to theological epistemic distance is precise: we know enough to trust God's/market's wisdom but not enough to question God's/market's methods.
The phrase "ill-considered notions of what it is to be reasonable" performs crucial work. It suggests that reason itself might be "ill-considered"—that applying rational standards to evolved traditions represents epistemic category error. This is the mystical turn: traditions embody wisdom beyond reason, accumulated through evolutionary selection operating over timescales and through mechanisms exceeding rational comprehension. Attempting to rationally evaluate or redesign them represents the fatal conceit—presuming rational mastery over what transcends reason. Just as mystics warn that applying rational categories to God produces heresy, Hayek warns that applying rational critique to market traditions produces catastrophe.
The warning that critique might "destroy, perhaps forever...traditions, institutions, and interrelations" without which civilization is impossible transforms intellectual disagreement into existential threat. Questioning capitalism becomes not merely wrong but dangerous—like heresy threatening community salvation, socialist critique threatens civilizational survival. This rhetorically positions defenders as guardians of existence and critics as agents of apocalypse, foreclosing debate through existential stakes.
Most revealing is Hayek's insistence: "Only when these facts are fully faced do we have any business...to consider what the right and good thing to do may be." This establishes a gatekeeping epistemology: before we're permitted to make moral judgments about capitalism, we must first "fully face" its necessity. But "fully facing" means accepting Hayek's evolutionary narrative—that markets are necessary, alternatives impossible, traditions sacred. The structure is circular: you can critique capitalism only after accepting premises that make critique impossible. This parallels theological requirements that one must first accept God's existence and goodness before questioning divine actions—the preconditions for legitimate critique negate the possibility of fundamental critique.
Excerpt Three: Radical Epistemic Distance and the Inscrutability of Evolutionary Selection
The third passage achieves the most explicit statement of epistemic distance as theodicy. Hayek acknowledges that the "decisive effects that led to the creation of the order itself" were "exceedingly remote results" of actions whose consequences earlier individuals "could hardly have been aware" and which "may not have appeared at all beneficial to them."
This is breathtaking in its theodical sophistication. Hayek admits that market institutions emerged through processes opaque to participants and produced outcomes that didn't seem beneficial to those experiencing them. The suffering of proletarianization, the violence of enclosure, the brutality of early industrialization—these "may not have appeared at all beneficial" to those who endured them. But Hayek suggests this doesn't matter: what matters is the evolutionary outcome ("whatever later individuals may think"), not the experience of those ground up in the process.
This precisely mirrors natural evolutionary theodicy's logic: individual organisms suffer and die in ways meaningless to them, serving purposes (species adaptation, ecosystem balance) they cannot perceive and which offer them no consolation. Their suffering "may not appear beneficial" from their limited perspective, but evolutionary selection operates on scales and toward ends transcending individual experience. Similarly, workers immiserated by capitalism suffer in ways that "may not appear beneficial" to them, but market evolution operates toward civilizational ends transcending individual welfare.
The epistemic distance is radical and multilayered. First, historical distance: earlier individuals couldn't perceive the long-term consequences of institutions they developed. Second, causal distance: the "decisive effects" were "exceedingly remote results," mediated through countless intermediate steps no one could trace. Third, perspectival distance: what benefits "later individuals" needn't have benefited earlier ones—evolutionary selection doesn't optimize for present participants but for systemic reproduction across time. Fourth, comprehension distance: even later individuals (us) needn't understand the full causal chains—"there is no reason why all (or any) of them should be endowed with a full knowledge of history...evolutionary theory, economics, and everything else they would have to know."
This final point completes the theodical structure: no one, at any time, needs to comprehend the market order for it to be justified. Neither those who suffered creating it, nor those who benefit from it, nor those who theorize it need "full knowledge" of its operations. The order justifies itself through evolutionary survival, independent of anyone's understanding or consent. This is pure mysticism: the market becomes a transcendent intelligence operating through human action but exceeding human comprehension, producing outcomes that serve purposes no individual grasps, demanding faith rather than understanding.
The theodical parallel is complete: just as God's purposes remain inscrutable to creatures, operating on scales and toward ends we cannot grasp, the market's evolutionary logic remains inscrutable to participants, operating through mechanisms and toward systemic outcomes we cannot comprehend. Our proper stance is epistemic humility: accepting that market outcomes serve purposes we cannot perceive, trusting evolutionary selection despite our inability to discern its rationale, having faith in what we cannot know.
Excerpt Four: Economic Calculation as Divine Inscrutability
The final excerpt—"there is no known way, other than by the distribution of products in a competitive market, to inform individuals in what direction their several efforts must aim"—encapsulates the mystical epistemology undergirding Hayek's entire theodicy. This apparently technical claim about information processing performs profound ideological work.
First, it establishes markets as epistemologically unique: they alone possess the capacity to generate and communicate the knowledge necessary for coordination. This isn't merely comparative superiority (markets work better) but ontological exclusivity (only markets work at all). The parallel to theological exclusivism—extra ecclesiam nulla salus (no salvation outside the church)—is exact: extra mercatum nulla coordinatio (no coordination outside the market).
Second, it positions prices as irreplaceable information technology: they "inform individuals" about how to coordinate efforts in ways no other mechanism can. Prices become epistemological infrastructure—not merely useful tools but conditions of possibility for rational economic action. Just as revelation provides access to divine truth unavailable through natural reason alone, prices provide access to coordination knowledge unavailable through planning, deliberation, or democratic decision-making. This makes markets not merely efficient but necessary for rationality itself.
Third, the phrase "no known way" performs subtle work. It doesn't claim logical impossibility (no way in principle) but epistemic limitation (no way we know). Yet this slides toward stronger necessity: if no alternative is known, and if (per earlier passages) attempting unknown alternatives risks civilizational collapse, then "no known way" effectively means "no legitimate alternative"—the epistemic claim forecloses political possibility.
Fourth, the passage reveals the circular epistemology we identified earlier: we know markets are necessary for coordination because we lack alternative ways of generating coordination knowledge, but we lack alternative ways because only markets generate the prices that enable us to recognize coordination problems and solutions. We cannot evaluate market efficiency without prices, but prices only exist within markets. This creates an epistemologically closed system: the market generates the standards by which it's evaluated, making it self-validating. The parallel to theological circularity—we know God's ways are good because God defines goodness—is exact.
Fifth and most profoundly, this passage positions the market as possessing intelligence transcending human intelligence. Prices "inform individuals" about how to coordinate—the market itself does the informing, with individuals as passive recipients of its wisdom. This inverts the usual understanding: rather than markets being tools humans use, humans become instruments markets use to achieve coordination. The market becomes the subject with knowledge and purposes; individuals become objects it manipulates. This is theological structure: just as humans are instruments of divine purposes they cannot fully grasp, economic actors are instruments of market coordination they cannot fully comprehend.
Synthesis: The Complete Theodical System
These passages together reveal Hayek's theodicy as a comprehensive system addressing every challenge to market legitimacy:
When confronted with market suffering, appeal to evolutionary necessity (only-way theodicy): this suffering is the price of civilization's existence; alternatives would cause universal immiseration and mass death.
When asked to justify this necessity, appeal to epistemic distance: we cannot comprehend the full causal chains, opportunity costs, and evolutionary purposes that make these outcomes optimal; our cognitive limitations prevent us from perceiving the justification.
When evidence suggests alternatives might work, appeal to the fatal conceit: presuming we can rationally design superior systems represents dangerous hubris; our "ill-considered notions of what is reasonable" might destroy traditions whose functions we don't understand.
When reforms are proposed, appeal to unintended consequences: given our epistemic limitations, any intervention will likely produce catastrophic cascades we cannot anticipate; the rational stance is non-interference.
When the system's opacity seems problematic, appeal to evolutionary wisdom: traditions embody tacit knowledge deposited through selection processes operating beyond individual comprehension; we should trust what we cannot understand.
When asked for evidence of market beneficence, appeal to survival: the extended order exists because it survived evolutionary competition; its survival proves its functionality; questioning it is questioning existence itself.
When the circularity of this reasoning is noted, appeal to epistemological uniqueness: only markets generate the price signals necessary to evaluate coordination; standing outside the market to judge it is impossible because markets provide the criteria for judgment.
The system is hermetically sealed: every challenge redirects to another element of the theodicy, every question about markets requires accepting market premises, every doubt about capitalism gets reframed as doubt about civilization, reason, or reality itself. This is unfalsifiable ideology masquerading as epistemic humility—it positions itself as merely acknowledging human limitations while actually asserting the unchallengeable authority of market outcomes.
The theological parallel is now complete and devastating: Hayek's market philosophy deploys every classical theodical strategy—evolutionary necessity paralleling natural law, epistemic distance paralleling divine inscrutability, mystical faith paralleling religious submission, apocalyptic warnings paralleling damnation threats, circular epistemology paralleling self-validating revelation. What presents as economic science is actually economic theology: a comprehensive system for reconciling market suffering with market legitimacy by transforming capitalism from a contingent institution requiring justification into a transcendent necessity demanding faith.
The critical insight is that exposing this theodical structure doesn't refute it within its own terms—theodicies are precisely designed to absorb counterevidence by attributing it to epistemic limitations. Rather, the exposure reveals that we're not engaged in empirical debate but theological dispute—not adjudicating facts but confronting articles of faith. And faith, by definition, persists regardless of evidence, justified precisely by what exceeds rational demonstration. Hayek's achievement, and capitalism's ideological triumph, is transforming economic arrangements into objects of religious devotion—not to be evaluated but to be believed, not to be questioned but to be trusted, not to be improved but to be submitted to as expressions of wisdom exceeding human comprehension. The market, like God before it, escapes accountability by ascending to transcendence.
