What ever happened to John Gray? He used to be one of us.

The first survey of my work which not only fully understands but is able to carry on my ideas beyond the point at which I left off.

Hayek watched the interwar collapse with horror, as Keynes did, and shared many of Keynes’s liberal values. What he failed to understand is that these values cannot be renewed by applying any formula or doctrine, or by trying to construct an ideal liberal regime in which freedom is insulated from the contingencies of politics.

Hayek may still have lessons to teach us. The policies he recommended during the Great Depression may have been badly flawed but his insight that prosperity cannot be restored by unending expansion of debt may have some value at a time when the limits of “Keynesian” quantitative easing are becoming clear. It is in any case far from obvious that Keynes would have supported a continuation of QE once a disastrous collapse had been averted. “Keynesianism” is a confection of Keynes’s more mechanical disciples, not an indication of how this mercurially brilliant mind would have responded to our present dilemmas. Again, Hayek’s claim that nothing can be done to mitigate the impact of free markets on social cohesion was dangerously misguided. But he was right to point out that capitalism cannot be remodelled to fit some conception of an ideally fair distribution of resources. Whether any kind of social democracy can be reconciled with the anarchic energies of global markets is an open question.

Hayek’s blind spot with regard to politics was clear in the early 1980s when the first Thatcher government, in an attempt to reduce inflation and bring the public finances closer to a balanced budget, was raising interest rates and cutting public spending. As he had done during the 1930s, Hayek attacked these policies as not being severe enough. It would be better, he told me in a conversation we had around this time, if Thatcher imposed a more drastic contraction on the economy so that the wage-setting power of the trade unions could be broken. He appeared unfazed by unemployment, which was already higher (more than three million people) than at any time since the 1930s, and would rise much further if his recommendations were accepted.

No doubt markets transmit information in the way that Hayek claimed. But what reason is there to believe that – unlike any other social institution – they have a built-in capacity to correct their mistakes? History hardly supports the supposition. Moods of irrational exuberance and panic can, and often do, swamp the price-discovery functions of markets.

The idea that consciousness is a mystery is a prejudice inherited from monotheism. The early seventeenth-century French philosopher René Descartes believed that animals other than humans are insensate machines. Obviously, this was a restatement in rationalist terms of the Christian belief that only humans have souls. Even if mind and matter were categorically distinct, that would not mean humans alone have minds. It was reported that in order to test his theories, Descartes used to throw animals out of the window and observe their reactions. Looking at behaviour of this kind, one might reasonably conclude that humans are the senseless machines.

How we come to have the world-views we do is an interesting question. No doubt reason plays a part, but human needs for meaning and purpose are usually more important. At times personal taste may be what decides the issue. There is nothing to say that, when all the work of reason is done, only one view of the world will remain. There may be many that fit everything that can be known. In that case you might as well choose the view of the world you find most interesting or beautiful. Adopting a world-view is more like selecting a painting to furnish a room than testing a scientific theory. The test is how it fits with your life.

Nothing carries so much authority today as science, but there is actually no such thing as ‘the scientific world-view’. Science is a method of inquiry, not a view of the world. Knowledge is growing at accelerating speed; but no advance in science will tell us whether materialism is true or false, or whether humans possess free will. The belief that the world is composed of matter is metaphysical speculation, not a testable theory. Science may succeed in explaining events in terms of causes and effects. In some accounts it may be able to formulate laws of nature. But what does it mean for something to cause something else and what is a law of nature? These are questions for philosophy or religion, not for science.

Human beings act, certainly. But none of them knows why they act as they do. There is a scattering of facts, which can be known and reported. Beyond these facts are the stories that are told. Human beings may behave like puppets, but no one is pulling the strings.