I have been reading some Hayak and he concludes that rationalism is wrong because it creates the mindset that we can use "reason" to design things in the world beyond that of science and technology (calling this the fatal conceit), this is where social science and social engineering was born and socialism and Marxian Communism as well. What was Ayn Rand's view on this rationalism and what are the limits of reason?
If Hayek thinks that social engineering and Marxism and Communism were based on reason, he's sadly mistaken.
Communism might have rejected supernatural mysticism, but that's hardly sufficient to call it rational.
Communism was a colossal mistake. But just because it called itself "rational" or "scientific" doesn't mean that the source of communism's mistake was the belief that reason was not limited.
Reason is man's means of knowledge. It's wrong, then, to think that there are certain areas of knowledge where reason does not apply. Any doctrine that holds this to be true is a form of mysticism.
Reason doesn't apply only in the "hard" sciences like physics, chemistry, biology, etc. It also applies in the "soft" sciences like metaphysics, epistemology, ethics, politics, aesthetics, and psychology.
There is no human endeavor or area of interest where reason is not essential in the attainment of knowledge.
The "fatal conceit" is not the belief that reason is applicable to all human endeavors -- it's a belief that one man or a small group of men can think for all others. Reason may not be limited in its applicability, but knowledge is always at a finite but growing quantity. And all knowledge is by individuals of their situations.
No man can know for another.