The Hayek Paradox of Abstraction and Embodiment

Hayek has influenced (neoliberal) economic discourses over decades. This chapter shows that Hayek the economist, who promotes a disembodied approach to the market order because of its abstraction, contradicts Hayek the psychologist, who developed a radically embodied view of the brain whereby abstraction as a cognitive process must be embodied. Consequently, the market as a medium of abstraction must be grounded in, and bounded by, embodiment. The argument put forth is that Hayek’s disembodied view of the market is motivated by his ideological rejection of social justice. The Hayek paradox is compared with the psychologist and economist Herbert Simon who consistently employs a disembodied approach to cognition throughout his work. Despite the strengths of some of their developments, this book follows in the footsteps of Hayek the psychologist to develop a more systematic approach to embodied economics in which, contra Hayek the economist, social justice ultimately becomes the beacon for policy and economic practice.