Individualism based on traditions and conventions
Individualism based on traditions and conventions, which in principle affirms family values, co-operation between small communities and groups, and local self-government, is the foundation of a free society. Such individualism, wrote Hayek in Individualism and Economic Order (1948), has the advantage of establishing “flexible but normally observed rules that make the behavior of other people predictable in a high degree” (Hayek 1948, p. 23). In contrast to this is a socialist-inspired “false individualism which wants to dissolve all these smaller groups into atoms which have no cohesion other than the coercive rules imposed by the state, and which tries to make all social ties prescriptive” (ibid.).
Genuine individualism is characterized by all forms of planning being carried out by a large number of individuals instead of centrally, by a government agency. Only a plurality of individuals can make the best use of the entirety of possible knowledge: “practically every individual has some advantage over all others, because he possesses unique information of which beneficial use might be made” (ibid., p. 80).
Eugen Maria Schulak and Hermann Unterköfler in The Austrian School of Economics – A history of its Ideas, Ambassadors and Institutions.