Key Contemporary Thinkers


Jeremy Ahearne, Michel de Certeau: Interpretation and its Other

Peter Burke, The French Historical Revolution: The Annales School 1929–1989

Simon Evnine, Donald Davidson

Andrew Gamble, Hayek: The Iron Cage of Liberty

Graeme Gilloch, Walter Benjamin

Phillip Hansen, Hannah Arendt: Politics, History and Citizenship

Christopher Hookway, Quine: Language, Experience and Reality

Douglas Kellner, Jean Baudrillard: From Marxism to Post-Modernism and Beyond

Chandran Kukathas and Philip Pettit, Rawls: A Theory of Justice and its Critics

Lois McNay, Foucault: A Critical Introduction

Philip Manning, Erving Goffman and Modern Sociology

Michael Moriarty, Roland Barthes

William Outhwaite, Habermas: A Critical Introduction

Susan Sellers, Hélène Cixous: An Introduction

Georgia Warnke, Gadamer: Hermeneutics, Tradition and Reason

Jonathan Wolff, Robert Nozick: Property, Justice and the Minimal State


Alison Ainley, Irigaray

Sara Beardsworth, Kristeva

Michael Best, Galbraith

Michael Caesar, Umberto Eco

James Carey, Innis and McLuhan

Colin Davis, Levinas

Eric Dunning, Norbert Elias

Jocelyn Dunphy, Paul Ricoeur

Judith Feher-Gurewich, Lacan

Kate and Edward Fullbrook, Simone de Beauvoir

Adrian Hayes, Talcott Parsons and the Theory of Action

Sean Homer, Fredric Jameson

Christina Howells, Derrida

Simon Jarvis, Adorno

Paul Kelly, Ronald Dworkin

Carl Levy, Antonio Gramsci

Harold Noonan, Frege

John Preston, Feyerabend

Nick Smith, Charles Taylor

Geoff Stokes, Popper: Politics, Epistemology and Method

Ian Whitehouse, Rorty

James Williams, Lyotard


The Iron Cage of Liberty

Andrew Gamble

Polity Press

Copyright © Andrew Gamble 1996

The right of Andrew Gamble to be identified as author of this work has been asserted in accordance with the Copyright, Designs and Patents Act 1988.

First published in 1996 by Polity Press in association with Blackwell Publishers Ltd.

Reprinted 2004, 2007

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For Tom, Corinna, and Sarah

While it may not be difficult to destroy the spontaneous formations which are the indispensable bases of a free civilisation, it may be beyond our power deliberately to reconstruct such a civilisation once these foundations are destroyed.

Hayek, The Road to Serfdom

There is simply no other choice than this: either to abstain from interference in the free play of the market, or to delegate the entire management of production and distribution to the government. Either capitalism or socialism: there exists no middle way.

Mises, The Free and Prosperous Commonwealth




1  Introduction: Rethinking Hayek

The Crisis of Liberalism

The Liberty Crusade


The Austrian School


The Turn to Politics

Hayek’s Project

The Critique of Socialism

2  Morals

Evolution, Progress, and Civilization

Two Types of Rationalism

Cosmos and Taxis

Individualism and Socialism

Freedom and Coercion

Abstract and Concrete

Social Justice

3  Markets

Methodological Individualism

The Impossibility of Socialism

Economic Calculation in the Socialist Commonwealth

Market Socialism

The Uses of Knowledge

The Theory of Competition

4  Politics

The Road to Serfdom

Socialism and National Socialism


The Rule of Law

5  Conservatism

Hayek and Conservatism



Limited Politics

6  A Constitution for Liberty

A Liberal International

The Mont Pèlerin Society

Law and Government

The United States Constitution

A Constitution of Liberty

7  The Economic Consequences of Keynes

Hayek and Keynes

The Middle Way

Inflation and Social Democracy


Monetary Policy

Trade Unions

Public Spending

8  The Iron Cage of Liberty

Hayek and Weber

The End of History

The Modern State

Conservatism and Liberalism

The Future of Socialism

Knowledge, Co-ordination, and Institutions





Hayek has long held a peculiar fascination for me, connected as he is with so many of the themes and problems which have interested me since I was a graduate student. Many of these obsessions appear in some form in these pages. David Held first suggested that I should turn some of my thoughts on Hayek into a book. I did not think it would take me as long as it has, and I am conscious of only having scratched the surface of some topics. The more I have explored Hayek, the more aware I have become of the complexity and range of his thought and the difficulty of some of the issues he raises, for which we lack answers. What I have tried to do here is to provide an assessment and a critical analysis of Hayek’s achievement, to indicate some of the limitations of his thought, and to suggest why he is still relevant to us.

One of my particular interests in Hayek is his role in the ideological change in the British Conservative party in the 1970s. One of the origins of this book, as well as much other work I have done in the last fifteen years, is the article ‘The Free Economy and the Strong State’ published in the Socialist Register in 1979. The exploration of Hayek as an ideologue remains one of the central themes of the book. But I have also become interested in the contrast between Hayek the ideologue and Hayek the social scientist, and the extent to which he failed to develop many of his insights because of the ideological closures he imposed on his work. These ideological closures have also been responsible for Hayek not reaching a wider readership. It has been too easy to dismiss him as engaged in a forlorn project to restore the liberalism of an earlier era. I hope to have shown that there is great deal more to Hayek than that.

I have incurred many debts in the writing of this book. An invitation to a Liberty Fund symposium on the relationship between ideas, interests, and circumstances was very valuable at an early stage, and I particularly benefited from conversations with Arthur Seldon, David Willetts, John Burton, and Norman Barry among others about some of the general themes of the book. Others from whom I have learnt a great deal include Raymond Plant, Richard Bellamy, Martin Durham, Hilary Wainwright, Andrew Denham, Rodney Barker, and Jeremy Shearmur. David Miliband invited me to give a presentation on Hayek to an Institute of Public Policy Research seminar which produced a lively exchange, and I have also benefited from seminar discussions at Kobe, Strathclyde, Manchester, Cambridge, the London School of Economics, Edinburgh, and Nuffield.

I owe most of all to the Department of Politics and the Political Economy Research Centre at the University of Sheffield for providing such a stimulating environment in the last few years in which to think about problems of political economy. I am particularly grateful for specific help, comments, conversations, and encouragement from Anthony Arblaster, Tim Bale, Michael Harris, Gavin Kelly, Michael Kenny, Ankie Hoogvelt, David Marquand, Brian McCormick, James Meadowcroft, Tony Payne, and Matthew Sowemimo.

Andrew Gamble


The author and publishers wish to thank the following for permission to use copyright material:

Routledge and The University of Chicago Press for extracts from Hayek: The Constitution of Liberty. Copyright © 1960 by Routledge. Copyright © 1960 The University of Chicago Press.

Every effort has been made to trace all the copyright holders, but if any have been inadvertently overlooked the publishers will be pleased to make the necessary arrangement at the first opportunity.