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Whilst the literature on the question of periodising Hayek's work is controversial (Caldwell, 1988), it is perhaps not too controversial to follow Hutchison (1981, pp. 210-18) and take the year 1936 as marking the emergence of Hayek I from Hayek II. This chapter adds the year 1960 and the publication of The Constitution of Liberty as marking the site of yet another episode in a continuing transformation, this time from Hayek II to Hayek III. This periodisation does not, of course, imply that a fully formed Hayek III emerges ab initio in 1960: the date is merely a useful benchmark. The basis of this sea change after 1960 lies in Hayek's recognition of the necessity of agents following social rules of conduct. This recognition allows several themes that he has gradually been developing in the proceeding two decades to be combined to form a coherent perspective. These themes are (1) the implicit recognition that the price mechanism, or as Hayek refers to it, the telecommunication system" (Hayek, 1945, p. 527) cannot single-handedly meet society's needs vis-à-vis the acquisition and communication of knowledge; (2) the extent of ignorance; and (3) the complex nature of knowledge itself. After 1960 Hayek develops his ideas on social rules of conduct, which, by interacting with the telecom system allow agents to acquire and communicate knowledge when they possess it, and to cope with ignorance when they do not.

DOI: 10.1007/978-1-349-25991-5_7

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