We must face the fact that the preservation of individual freedom is incompatible with a full satisfaction of our views of distributive justice

 From Studies on the Abuse and Decline of Reason: Text and Documents by F. A. Hayek.

There is still, however, one point left, to which I have already referred, but which is so important that I must give it further attention. It is that any work- able individualist order must be so framed not only that the relative remunerations the individual can expect from the different uses of his abilities and resources correspond to the relative utility of the result of his efforts to others but also that these remunerations correspond to the objective results of his efforts rather than to their subjective merits. An effectively competitive market satisfies both these conditions. But it is in connection with the second that our personal sense of justice so frequently revolts against the impersonal decisions of the market. Yet, if the individual is to be free to choose, it is inevitable that he should bear the risk attaching to that choice and that in consequence he be rewarded, not according to the goodness or badness of his intentions, but solely on the basis of the value of the results to others. We must face the fact that the preservation of individual freedom is incompatible with a full satisfaction of our views of distributive justice.

The text and train of thought is somewhat dense but well worth study.  The following passages tie the thinking together.  I have added emphasis.

While the theory of individualism has thus a definite contribution to make to the technique of constructing a suitable legal framework and of improving the institutions which have grown up spontaneously, its emphasis, of course, is on the fact that the part of our social order which can or ought to be made a conscious product of human reason is only a small part of all the forces of society. In other words, that the state, the embodiment of deliberately organised and consciously directed power, ought to be only a small part of the much richer organism which we call ‘society’, and that the former ought to provide merely a framework within which free (and therefore not ‘consciously directed’) collaboration of men has the maximum of scope.

This entails certain corollaries on which true individualism once more stands in sharp opposition to the false individualism of the rationalistic type. The first is that the deliberately organised state on the one side, and the individual on the other, far from being regarded as the only realities, while all the intermediate formations and associations are to be deliberately suppressed, as was the aim of the French Revolution, the non-compulsory conventions of social intercourse are considered as essential factors in preserving the orderly working of human society. The second is that the individual, in participating in the social processes, must be ready and willing to adjust himself to changes and to submit to conventions which are not the result of intelligent design, whose justification in the particular instance may not be recognisable, and which to him will often appear unintelligible and irrational.

I need not say much on the first point. That true individualism affirms the value of the family and all the common efforts of the small community and group, that it believes in local autonomy and voluntary associations, and that indeed its case rests largely on the contention that much for which the coercive action of the state is usually invoked can be done better by voluntary collaboration need not be stressed further. There can be no greater contrast to this than the 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, instead of using the state mainly as a protection of the individual against the arrogation of coercive powers by the smaller groups.

Quite as important for the functioning of an individualist society as these smaller groupings of men are the traditions and conventions which evolve in a free society and which, without being enforceable, establish flexible but normally observed rules that make the behaviour of other people predictable in a high degree. The willingness to submit to such rules, not merely so long as one understands the reason for them but so long as one has no definite reasons to the contrary, is an essential condition for the gradual evolution and improvement of rules of social intercourse; and the readiness ordinarily to submit to the products of a social process which nobody has designed and the reasons for which nobody may understand is also an indispensable condition if it is to be possible to dispense with compulsion.   That the existence of common conventions and traditions among a group of people will enable them to work together smoothly and efficiently with much less formal organisation and compulsion than a group without such common background, is, of course, a commonplace. But the reverse of this, while less familiar, is prob-ably not less true: that coercion can probably only be kept to a minimum in a society where conventions and tradition have made the behaviour of man to a large extent predictable.

This brings me to my second point: the necessity, in any complex society in which the effects of anyone’s action reach far beyond his possible range of vision, of the individual submitting to the anonymous and seemingly irrational forces of society—a submission which must include not only the acceptance of rules of behaviour as valid without examining what depends in the particular instance on their being observed but also a readiness to adjust himself to changes which may profoundly affect his fortunes and opportunities and the causes of which may be altogether unintelligible to him. It is against these that modern man tends to revolt unless their necessity can be shown to rest upon ‘reason made clear and demonstrable to every individual’. Yet it is just here that the understandable craving for intelligibility produces illusory demands which no system can satisfy. Man in a complex society can have no choice but between adjusting himself to what to him must seem the blind forces of the social process and obeying the orders of a superior. So long as he knows only the hard discipline of the market, he may well think the direction by some other intelligent human brain preferable; but, when he tries it, he soon discovers that the former still leaves him at least some choice, while the latter leaves him none, and that it is better to have a choice between several unpleasant alternatives than being coerced into one.

The unwillingness to tolerate or respect any social forces which are not recognisable as the product of intelligent design, which is so important a cause of the present desire for comprehensive economic planning, is indeed only one aspect of a more general movement. We meet the same tendency in the field of morals and conventions, in the desire to substitute an artificial for the exist- ing languages, and in the whole modern attitude towards processes which govern the growth of knowledge. The belief that only a synthetic system of morals, an artificial language, or even an artificial society can be justified in an age of science, as well as the increasing unwillingness to bow before any moral rules whose utility is not rationally demonstrated, or to conform with conventions whose rationale is not known, are all manifestations of the same basic view which wants all social activity to be recognisably part of a single coherent plan. They are the results of that same rationalistic ‘individualism’ which wants to see in everything the product of conscious individual reason. They are certainly not, however, a result of true individualism and may even make the working of a free and truly individualistic system difficult or impossible. Indeed, the great lesson which the individualist philosophy teaches us on this score is that, 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.