Hayek’s Zombie Idea

David Harvey at 15 is very good news.

It seems like respectable econ opinion here in the US regards TRTS as ‘bad’ Hayek, and I certainly agree with that part. There’s always an implied ‘good’ Hayek, though, and I can’t say I’ve encountered that one personally. I get that his other work doesn’t make as transparently ridicululous predictions, but I’ve never encountered anything he wrote that struck me as interesting or insightful.

Am I missing something?

(And I know I’m kind of inviting this, but I’m not really interested in reading one of his libertarian alcolytes step through his work like it’s scripture. I’ve seen a lot of that, and it always makes me think worse of both parties.)

My edition of the The Road to Serfdom says (p134 of the University of Chicago’s 50th anniversary edition):

Where, as in the case of sickness and accident, neither the desire to avoid such calamities nor the efforts to overcome their consequences are as a rule weakened by the provision of assistance — where, in short, we deal with genuinely insurable risks — the case for the state’s helping to organise a comprehensive system of social insurance is very strong…. Wherever communal action can mitigate disasters against which the individual can neither attempt to guard himself nor make provision for the consequences, such communal action should undoubtedly be taken.

Funny how the acolytes never seem to read that bit.

When I obtained my copy of Road to Serfdom, I wasn’t even aware that he wrote it as a warning against post-war Labour government in Britain. I was simply informed that it was an extraordinarily good and moving good, and perhaps one of the most brilliant anti-collectivist texts ever penned. And that’s why I got it, while having no awareness whatsoever of its relation to British Labour.

I am sure lots of others obtained the book under the same frame of mind.

So Myles, ‘factual bullocks that emotionally resonates with me’ is a defense? I just want to give up sometimes…

Also, Solzhenitsyn, for whatever his literary value, was profoundly full of shit about lots of stuff too…

I’m pretty sure that the Greek Government is in trouble because it had to take on crippling private sector debt, but hey, why let that get in the way of ideology?

Leaving aside the fact that Thatcher’s remodelling of the British economy in the image of the City of London looks a lot less appealing today than it did only a few years ago

A lot less appealing to whom? I would think that for someone with Glenn Beck’s income it still holds enormous appeal.

I have been buying my books (Yves Smith’s, Dean Baker’s, and Simon Johnson’s and James Kwaks) on Barnes and Noble. I will go on Amazon and get Zombie Economics. And yes, I doubt most of these folk are actually reading Hayek or Smith, but just buying it because Glenn Beck told them to (like they are buying Tom Paine who if they actually read would shock the hell out them!).

I remember well the 50th anniversary of The Road to Socialism. I happened to be sharing an office with Tom Sowell’s step-daughter and she greeted the occasion as if it were a personal apparition of the Virgin Mary.

But in response to Steve LaBonne, real theologians are in fact less self-indulgent than Hayek and their readers are far more critical.

I’m not sure I’d agree that the right has gone “completely crazy” in the UK (relevant given the mention of the British context). The Conservative party under Cameron, even before the coalition, has its share of crazies, but nothing remotely like the US or Australian scene. And the coalition has moderated the crazies somewhat.

That doesn’t mean their policies are correct, or pleasant, or won’t cause great damage, and they are certainly in part ideologically-driven. But I think the right-wing themselves and their supporters are mostly quite sane here. The American right, by contrast, are really scary. Whenever I think of Sarah Palin, my abiding memory of her election campaign are rallies of people chanting “USA! USA! USA!”. That really did sound like the path to totalitarianism.

Also, Solzhenitsyn, for whatever his literary value, was profoundly full of shit about lots of stuff too…

The usually appreciation of Solzhenitsyn concedes that he was no Tolstoy in literary value, but argues rather that his importance arises out of his historical value, and from the moral and political importance of his works.

I am not sure where your claim about Solzhenitsyn’s literary value is coming from.

“It seems like respectable econ opinion here in the US regards TRTS as ‘bad’ Hayek, and I certainly agree with that part. There’s always an implied ‘good’ Hayek, though, and I can’t say I’ve encountered that one personally. I get that his other work doesn’t make as transparently ridicululous predictions, but I’ve never encountered anything he wrote that struck me as interesting or insightful.

“Am I missing something?”

Shorter every post by bh: This writer doesn’t hate capitalism and writes for a popular audience, therefore he sucks.

zamfir –

It is not necessarily about conflicting perspectives, I am just talking about the difference between theories and policies. Theoretically, everyone is pretty much on-board about how things like due process, the rule of law, and broad general transparent regulations are essential both to individual liberty and economic prosperity. In practice, however, there are still plenty of policies that fail to live up to these conditions. These require critique and reform; and Hayek is a fine place to start looking at why and how.

And I don’t think Obama is significantly worse or better than his predecessors on this front.

Correct me if I am wrong (I was born the year of Thatcher’s election), but wasn’t a key aspect of the neoliberal argument that it would deliver “the goods” in a utilitarian sense–the greatest good for the greatest number–in a way that ole’ social democracy could not. In the US at least, the neoliberal austerity cheerleaders don’t even seem bother with this stuff any more.

For true believers in the US, TRTS offers a simple narrative that is instantly comprehensible. Plus, the guy won a Noble Prize in the 70s and he was a professor and everything. He even wore glasses! The arguments put forward by other eggheads may now be safely ignored.

“In practice, however, there are still plenty of policies that fail to live up to these conditions.” … many of which were implemented by Hayek admirers. Right-wingers don’t care about Hayek because they wish to defend due process and the rule of law (if they wanted that, they’d have stood up to Bush). Right-wingers care about Hayek because he gives substance (in their eyes at least) to their crazy anti-liberal hysteria. Right-wingers do not say say “we oppose this policy because it violates due process”, they say “this policy was suggested by somebody to the left of us and Hayek says that left policies are the road to serfdom, therefore we oppose it”.

And as has been pointed out, it doesn’t even matter that Hayek in fact supported social health insurance.

salves s/b slaves, of course….

“On the road in front of me today was a car with a bumper sticker that said, “Health care rationing is FASCISM!” (caps in original.) Strange thought patterns indeed, especially given that, as Stephen points out in 5 above, Hayek supported some version of a social safety net his whole life.”

Odder to me is the failure to recognize that we already have healthcare rationing — by economic class. I suppose that variety of rationing of a resource that everyone in society needs isn’t fascism to these folks.

the failure to recognize that we already have healthcare rationing—by economic class.

I think the key here is that the existence of hierarchy and inequality is seen as both inevitable and desirable. Someone has to be a serf: If it’s not them, it will be us. From this point of view, if “they” no longer face rationing by income, then “we” will have to be rationed instead, by death panels or whatever.

I like this concept of “very prescient about where they could have been headed”. Although as far as I can see the words “could have been” ought to be replaced by the word “weren’t”.

The classic example of this usage, at least as far as CT threads are concerned, remains this.

“I think the key here is that the existence of hierarchy and inequality is seen as both inevitable and desirable. Someone has to be a serf: If it’s not them, it will be us. From this point of view, if “they” no longer face rationing by income, then “we” will have to be rationed instead, by death panels or whatever.”

Indeed. Especially since economic class is, in that worldview, a proxy for intrinsic worthiness.

It’s not just that Hayek was completely, comprehensively wrong about what social democracy would do to freedom. He also completely missed where tyranny actually does always come from in the 20th century: national security states, the military-industrial complex combined with secret police forces at home. The continuing hosannas from Reason’s editors for the Tea Party are far more representative of the breed than Radley Balko’s struggles for some practical justice.

He also completely missed where tyranny actually does always come from in the 20th century: national security states, the military-industrial complex combined with secret police forces at home.

Lolwut? Yes, the “military-industrial complex”, yessir. Why, Leninism had nothing to do with it! Nor did other dumb ideologies like fascism! Trotsky, who was commissar of the army, yes sir, and was a rather competent killer of human beings himself, yessir, he was just a shill for the military-industrial complex! Nothing to do with ideology, no Sir! Just the institutions that are wrong. No moral agency there. No difference between some half-baked Argentine junta-dictator and Pol Pot.

Is this supposed to be a parody?

What I am saying is that, once you get past that—or his role as Gulag Suffering, personified—you’ll find someone who held all sorts of questionable and somewhat offensive ideas. So his endorsement doesn’t mean much to me.

Yes, he did go rather off tangent sometimes, like the time when he railed at Harvard students on and on about the Emasculation of Modern Males in Western Societies Because They Are Wearing Long Hair, or something equally bizarre.

But here he’s talking about Russia, and the gulags, and all that; stuff that he knows well, and stuff for the description of which he won a Nobel. He can’t be that far off when he says (my own words) “what Hayek writes in this book, which isn’t about Russia, and despite that Hayek probably has never been to Russia, in fact describes Russia very well.” Which isn’t saying much, because he’s not talking about TRTS in relation to the West, but it does suggest that Hayek is one of those old Whiggish (modern Halifaxian Tories, really) people who had an extremely well-developed intuition for what’s going on and seeing through utopian bullshit, even when very few people did.

Myles if you are going to claim that the CCF had any internal momentum towards totalitarianism similar to the kind practiced by the Soviets I would like some kind of proof.

‘Are you kidding? I’ve heard a number of mainstream economists—on paper, in lectures, in casual conversation—say exactly that. And fwiw, I agree with them to a degree. Marx’s bad predictions should count against him, because they’re underpinned by serious methodological flaws—a reliance on determining value from input factors rather than utility, a lack of accounting for opportunity costs.’

It is a myth (albeit an extraordinarily widely believed myth) that Marx believed ‘the revolution’ (or anything else for that matter) to be ‘inevitable’. It’s certainly true that in the Communist Manifesto, Marx (who was, amongst other things, a politician) claimed that the victory of his party was ‘inevitable’ (which has much the same meaning and force as any politician anywhere telling his/her supporters that victory is inevitable). But that’s very different from stating that Marx was stating a scientific or pseudo-scientific law about ‘historical development’ (cf Popper’s fictitious ‘historicism’).

http://marxmyths.org/peter-stillman/article.htm

http://www.guardian.co.uk/books/2006/jul/08/politics

#47 — I avoided ‘inevitable’ on purpose. I’ll stand by ‘prediction’, though.

Now that I come to think of it, there’s an easy way to check. One of the most obtuse was Andy Schlafly, so you could go over to the Conservapedia and see what he thinks about Marx now.

Well, I am not attempting to argue with idiots, at least not idiots who write he Conservapaedia.

I also would argue the claim that the members of the Movement for an Independent Socialist Canada were trying to create a totalitarian state.

IN any case, the Hayek debate is a bit bizarre. The people who buy his books in large numbers right now (Glenn Beck’s idiots) are not in any sense Old Whig. It’s all like some weird drama more than anything.

We are essentially debating over a strawman here. It’s not like the readers who catapulted Hayek to his place on the best-sellers are actually going to carefully read his book and have their beliefs changed thereby.

Myles:
It matters because we were talking about the CCF not the NDP. Two different parties with very different constituencies. Also like I said the Waffles are hardly an example of incipient totalitarian urges. The problem with Hayek is his entire argument is based on the false premise of a slippery slope from socialized health care to gulags. Right wingers today make similar, and similarly wrong, arguments about gay marriage leading do marriages between humans and animals.

Myles,

Trotsky was of course the founder of the Soviet military-industrial complex. The problem with the Soviet Union was that it was a national security states, with a powerful military-industrial complex combined with secret police forces at home. That they had a health care system and a welfare state for their population wasn’t the problem. It was of course a good thing, as it is everywhere.

And the origins of the problems with the Soviet Union was that it started with an armed coup. The Labour Party in the UK was reformist, not revolutionary party. Lenin took power with no consideration of democratic elections. Attlee on the other hand, was elected after democratic elections. That Hayek couldn’t see these differences is strange.

i don’t know about Beck, but isn’t part of the problem that more serious thinkers also rank it extremely highly?
http://fivebooks.com/america-conservatism/leaderboard

“Attlee on the other hand, was elected after democratic elections. That Hayek couldn’t see these differences is strange.”

Correct me if I’m wrong but I think Hayek (like his contemporary libertarian admirers) wasn’t too concerned about democracy anyway.

his correspondence with Keynes (for what it’s worth, JMK gave “Road to Serfdom” a very good review, which just goes to show something or other) is very good.

“Technically, I think you can’t use the past tense until November 3rd. No matter how certain you are the Republicans are going to lose that Senate seat, they haven’t lost it yet.”

True. Never underestimate the ability of the Democratic Party to screw things up.

Of course to say that “a weaker version of TRTS is defensible” does not imply that it is true.

The post-war products of bureaucratic wefarism morphed from hippies into yuppies and are now probably running franchises. Not exactly slaves to the machine.

Whilst the rugged individualists of the Tea Party libertarians are all to happy to collect their Social Security cheques and avail themselves of Medicare.

@64 geo:

In the first place, it’s “the tendential law of the falling rate-of-profit”, not a deteministic “covering law”, hence something that operates dynamically across a number of contexts and system-states, but also something that interacts with other possible tendencies. Secondly, it’s profits-from production that are in question, (which form the basis of all other distributions of surplus-value). Hence the “law” could be expressed through rising financial asset “values”, (compared to potential future realization of the claims they “embody”), and thus short-run raising of accounting profits (and the distribution of the real distributable surplus-product from wages to profits), as financial asset prices, (which are the inverse of yields, i.e. indicate falling future rates-of-profit), lodge an increasing claim on output. (And, of course, there is nothing to imply that such a “law” applies to a single, closed economy, rather than globally). Thirdly, IFAIK the “falling rate-of-profit” is expressed in LTV terms, as the standard of value or, more technically, the numaire, of the system, (since the relative value of commodities must be expressed in terms of some commodity, and gold= money would just be begging the question). Which is not a crazy choice of “value” or numaire. Consider substituting “full employment of all available labor at rates of compensation sufficient to sustain real effective demand”. Conversely, consider the most effective deployment of labor under prevailing technical means and organizational forms under broadly competitive conditions as promulgating the standard of “value” to the system at large and its available extraction of surpluses. Fourthly, the “tendential law” is actually a complex thesis with several components, which may take place variably over time: the increasing technical productivity of capital stocks, which tends to depreciate the “value” of older capital stocks and thus the aggregate rate-of-profit, the tendency toward increasing concentration of capital stocks and thus increasing capital investment to labor and wage ratios, (which, of course, also increases oligopolistic market power and thus rents, which is one countervailing tendency to falling profits, in particular, if not in aggregate), the tendency of increased technical efficiency to “commoditize” output at ever lower output prices, the tendency for profits to accumulate faster than competitive opportunities for new real capital investment to arise, (thus to spill over into financial speculation and “asset” price inflation), and the fundamental asymmetry and lag in distribution of increased productive surpluses between profits and wages, which results in deficient demand and increased unemployment with a private-profit driven system. At some point, within and across cycles, the prognostication was that the really available “forces of production”, i.e. both the available labor pool and the potential technical means of production, would exceed the prevailing “relations of production”. i.e. the ability to monetize output solely on the basis of the private appropriation of profits and the corresponding valorization of extant capital stocks, at which point the whole system of “value”, must collapse, and either be reset through a devaluation of extant real and financial capital stocks, or replaced with some other sort of a system.

Mind y’all, I’m not saying Marx had it all perfectly right and that nothing further need or can be said. But I am saying Marx, with some effort, can be read as quite intelligible within his own terms and framework. And that to treat him as if he’s uttering gross stupidities, is not only unlikely, but ignorant and likely in bad faith. Hence, from @40 above:
“Marx’s bad predictions should count against him, because they’re underpinned by serious methodological flaws—a reliance on determining value from input factors rather than utility, a lack of accounting for opportunity costs.”
Really? Marx had no understanding of input/output matrices and assumed all value derived from raw inputs, (i.e. presumably meaning “unimproved” labor)? (Hence, of course, there would neither be such a thing as “surplus-value”, to be extracted, nor any increment to real distributable surplus product, i.e. technical increases in real output, that would result from the re-production of surplus-value). And so he had no understanding of relative differences in productivity and how investment decisions would drive forward productive increases precisely by “equalizing” the rate-of-profit across firms and sectors under broadly competitive conditions? (Since “opportunity costs” are precisely those that are never actually paid, being theoretical counterfactual conditionals). Maybe such the imputation of such gross stupidities are a boomerang effect, not just of gross misreadings, but of a lack of adequate neo-classical accounts of the economic phenonema under question.

“True. Never underestimate the ability of the Democratic Party to screw things up.”

An equally valid observation with respect to the Republican party. The massive barriers to third parties in this country, some formal, some informal, enable the two major parties to compete on a “Who screwed up less” basis, instead of a “Who did better” basis. Elections are largely determined by which party screws up worse at the last minute, in as much as they don’t have to worry about another party taking over if they both screw up.

IIRC, the distinctive doctrine I extracted (or constsructed) from TRTS on a strenuously charitable reading was a general political position, viz.:

1. Teh State is essentially other: a Leviathan.
2. It will if unchecked turn despotic rather than benevolently dictatorial.
3. only if some of us are rich can we hope to check this tendency.

To which the main obvious objections are of a ‘who we, white man?’ type:
1: a. democracy might be possible, b. even if not (which is conceding too much), the ‘otherness’ of the state is moot when very many are actually part of it (I’ve never quite worked out the role of popular complicity in the excesses of the USSR’s road out of serfdom), c. even if not (which is conceding even more too much), a Leviathan may be better than nothing for those whose prospects are otherwise nasty, brutish etc.

2. big business interests have a pretty clear tendency to get despotic, while being even less accountable and scrutable than most states, and lacking even the Macchiavellian prince’s rudimentary concern for hoi polloi.

3. see 1,2.

The underlying rhetorical tactic is similar to that of Libertarians claiming that ‘personal liberty’ essentially includes their way of defining/regulating/allocating property rights. The Hayekian twist is to make the connection a contingent (but lawlike) matter of the way teh State will always behave.

Both of these are political rather than policy positions: by which I mean they don’t presuppose a (1) properly-functioning, (2) legitimate legislating body. In fact they deny the possibility of such a body, or at least in H’s case of one existing indefinitely, instead treating property rights as fundamental quasi-constitutional constraints leaving no room for competing legislation.

Nozick-style Libertarians* get there by denying 2: legitimacy, since self-ownership mumble mumble. The Hayekian position sketched denies 1: proper functioning, suggesting that democratic (for example) control cannot prevail over political elites (so we must have, er, business elites to protect us).

*By ‘Nozick-style Libertarians’, I mean pretty much those who are willing to espouse potentially defeasible philosophical arguments. The others comprise: 1. blatant hypocrites and bullshit merchants, 1. proponents of rigidly ‘free’ markets on instrumental grounds, who are obviously wrong and equally obviously dogmatic, and 3. Mises/Rothbard types with their totemic ‘praxeology’, a term of similar status to ‘dianetics’, meaning if anything ‘[a strange flavour of] economic theory carried on as if it involved no normative presuppositions, yet trumped all normative objections’. The last are given to moaning about Nozickian positions being straw men wrongly treated as providing the strongest extant case for libertarianism. Quite the opposite is in fact true: no-one bothers addressing such ‘Austrian’ philosophical positions as can be identified because it’s too easy, not because it’s too hard. (Hans-Herman Hoppe is the current house ‘philosopher’, good for a laugh.)

“I like this concept of “very prescient about where they could have been headed”. Although as far as I can see the words “could have been” ought to be replaced by the word “weren’t”.”

The Ehrlich Defence.

“But Paul, billions didn’t starve like you said they would”

“See! I changed the future with my warnings!”

To me, the fact that a lot of “great thinkers” honestly believed that universal healthcare would end in tyranny, and Atlee et al pursued it anyway, is a huge complement to them (if they needed any) and to their legacy.

The NHS is now far and away one of the worst universal health systems, which is undoubtedly why the far right in the US select it as the comparator when they do their scare campaigns, but I wonder if their decision to target the NHS isn’t also driven by this simple fact – Hayek, their god, was completely and utterly wrong, and the NHS is the reason that he looks like a sad nutsack.

I think those wanting to read worthwhile Hayek might start at Individualism and Economic Order. “Worthwile” means “interesting”, independently of whether it is mostly right or wrong. Some of The Road to Serfdom is a popularization of some of the themes in Individualism and Economic Order. So good and bad Hayek aren’t easy to seperate.

Correspondence with Keynes is collected in volume 9, Contra Keynes and Cambridge, of Hayek’s collected works. I find some aspects of Austrian Business Cycle Theory other than completely wrong. But I would recommend that the general reader leave ABCT to technically-oriented heterodox economists and historians of thought.

Selected good points of ABCT: Hayek, like Keynes, realized an adequate monetary theory requires reconstructing price theory. Hayek and his student Lachmann define equilibrium as a state where plans are coordinated and expectations are being realized. As with Joan Robinson, this approach has important implications for capital theory.

I think Hayek’s statements in the 1970s and 1980s are not any more authoritative for understanding The Road To Serfdom than anybody else. Hayek did, unfortunately, support Pinochet. Going by The Fatal Conceit, Hayek did not like hippies. His earlier work suggests social experimentation would be a good thing, but then saw the 1960s.

john quiggin,
various people say things they should regret ever saying and their friends and admirers regret that they said it at all.

There are plenty, now on the left and the right, who in the past, and sometimes too recent past, dabbled in ideologies that did not include an unwavering commitment to democratic government, the rule of law, and peaceful change through the ballot box.

Ex-communists: they are allowed back into polite society and into left-wing political parties often without have to admit and openly repent for being the fools that they were. Some of these ex-communists took a long time and were well past their immature youth to see the foolishness of their ways.

The forgiveness for ex-communists is odd as Hayek in the Road to Serfdom challenged the general view that fascism was a capitalist reaction against socialism. Hayek instead arguing that fascism and socialism had common roots in central economic planning and the power of the state over the individual.

Hayek noted that the inter-war communists hated the Fascists because both competed for working class support and because ex-comrades such as Mussolini had worked out that co-opting nationalism with anti-big business rhetoric was a sure path into the hearts of the working class, lower-middle class, and small business and it greatly increased their chances to seize power quickly and legally with wide support in times of discontent.

The economist Joan Robinson gazed on China and North Korea with “starry eyes”, as Geoffrey Harcourt put it, as well as making some utterly devastating criticisms of Marxian economics at earlier points in her long career. Robinson became more left wing as she aged, and in Economic Management in China (1975), she praised the Cultural Revolution! Her colleagues were quite embarrassed.

Noam Chomsky spoke when he should have listened on Cambodia under Pol Pot.

Orwell’s Proposed Preface to ‘Animal Farm’ is a wonderful dissection of what he called renegade liberal who glorified communist experiments from a safe distance.

For Orwell, these intellectuals loved Stalin’s Soviet Union despite the purges, mocked bourgeois liberty despite their own pleasing bourgeois circumstances, and identified with communists would who have shipped them off to camps straight after the revolution.

These renegade liberals – who were life-long opponents of capital punishment – excused the Moscow purges because communists were just ‘liberals in a hurry’.

At least one of the chief designers of market socialism, Oskar Lange, was principled enough to renounce his American citizenship and returned to Poland in 1945 to climb his way up the ranks of a Stalinist centrally planned economy for the next 19 years.

Does that even make sense? It could be far and away the worst universal health system, though I doubt that it is unless you narrow the comparison class somehow. But “one of the” implies that there are others in the same boat, and contradictes the “far and away”.

This smells awfully bad. Someone noted that the NHS is a particularly crappy version of an universal health care system, and in response you pick on the semantics.

In any case, I don’t think the right-wing use of the NHS as bogeyman in the U.S. is that complicated. It’s just a really crappy system! A system that refused to pay for some particularly expensive drugs only several years ago! etc. etc. etc. There’s no need to get grandly historical; the right-wing in the U.S. is too full of idiots for one to need to ascend the heights of historical analyses.

And if one limits the frame of reference to a comprehensible and reasonable one (i.e. advanced Western economies in Europe and North America), there’s probably not much doubt that NHS is the worst universal system. I do wonder how many of the CT’s UK contributors opt for Harley Street rather than NHS.

I was talking about “New” Labour, which, I hope we can all agree, has a an atrocious human/civil rights record.

Jim Rose makes some very good points. I assume, though, that when he says “ex-communists,” he means in countries formerly governed by communist governments. In the United States, ex-communists who joined the Right could re-enter politics respectably. Almost no ex-communists that I can think of remained in political life except to the extent that they devoted their future careers to attacking communism.

Leftist historian Alan Brinkley has done this. He’s not an ignorant hack like Quiggin

” I wonder if someone has already done a critical biography (“Hayek and His Times”?) that places the work in a larger historical context. The current conservative idolatry strips the book of any value it might still have.”

Here’s Brinkley (major U.S. historian & left intellectual):

Alan Brinkley* (History, Columbia)

“The publication of two books .. helped to galvanize the concerns that were beginning to emerge among intellectuals (and many others) about the implications of totalitarianism. One was James Burnham’s The Managerial Revolution .. [A second] Friedrich A. Hayek’s The Road to Serfdom .. was far more controversial — and influential. Even more than Burnham, Hayek forced into public discourse the question of the compatibility of democracy and statism .. In responding to Burnham and Hayek .. liberals [in the statist sense of this term as used by some in the United States] were in fact responding to a powerful strain of Jeffersonian anti-statism in American political culture .. The result was a subtle but important shift in liberal [i.e. American statist] thinking.”

That was my reading of RTS too. It feels like much more of an ideological analysis than work of political economy. The ‘inevitability’ of authoritarian collectivism was in the minds of many intellectuals who were still very much in admiration of communism just after ww2. Hayek took part in a project thathighlighted not just the disadvantages of authoritarianism but the fact that it was self defeating in terms of the goals that the left had. Unlike a Marxian prediction, hayek’s concern was with an intellectual current rather than a material development.

And btw, the nhs is still shit compared to many of it’s market oriented cousins in Europe. It never covered treatment from cradle to grave as promised but it did make a number of doctors filthy rich. And it’s not even anymore equitable than more competition based systems.

@78:

Whaa?

http://www.merriam-webster.com/dictionary/likely?show=1&t=1286036910

Is this just one of those things like Orwell’s claim that Americans think there is no “t” in “water”?

Worstall, if you think what the NHS wants to do with fat people is bad, try privatising it and see what happens.

Chris B, please try to relax. Everyone knows the NHS is bad, probably the worst. It’s not necessarily the NHS’S fault; but cheap gotchas over a poor choice of words doesn’t change the facts.

‘paribus’, of course.

@102:

To my American ears, there’s no problem with “likely” adv. So your criticism seems only valid as a point of style, not syntax or semantics. To which I’ll readily plead guilty. But, for the rest, it might be rather like the difference between the British and American use of “quite”, which is quite confusing.

My analogous pet peeve is the spreading use among the younger American generation of “was like” in place of “said”, as in he was like, “…”. If I’ve divined the origins or sense of the usage, it amounts to substituting the attitudinal or illocutionary component of quoted speech for its propositional content.

#105/106

FWIW the specifically Austrian roots of…er…Austrian economics tend to be lost site of. Whatever one thinks of it, its intellectual roots are very different from the standard ‘neo-classical’ (i.e. Anglo-American) approach, although these differences are generally ignored by the Americans who continue to trumpet the wonderfulness of Hayek (and the Austrian school generally).

The paper here is good on the links, for example, between Wittgenstein and the Austrians. One mustn’t forget that the Austrian school was created in opposition to the Historical school and the issue there was really to what extent economics was to become an empirical science. Later on Hayek moved away from ‘praxeology’ to a more Popperian approach, but then Popper was always a lot more Austrian himself than was generally understood in the US/UK.

In any case, the philosophical origins of publicly provisioned housing in the U.K. are to a degree feudal and paternalistic (and not in just the glibertarian sense; there was a distinct impulse of “we toffs ought to look after the lower classes because they can’t look after themselves” in it).

“There are all sorts of reasons why you shouldn’t smoke/booze/whatever, as well as reasons why you may want to. But that very argument that you shouldn’t because it costs the NHS cash is indeed the sort, if not to the extent, of thing that Hayek was suggesting would happen.”

Yawn. That’s weak even for Worstall standards. If social democracy is problematic because it may restrict drinking and smoking, could you explain why the proudly non-socialdemocratic country across the Atlantic, aka the land of the free, is so far ahead of both Old and New Europe with respect to restricting drinking and smoking?

Road to Serfdom is an unfortunate bestseller because its has little useful to say to us today. Hayek’s main argument is that total economic planning will fail, or require a police state. His real topic is something like Stalinism. But his current readers take the wrong message from this. Obamacare is not a centralization, and it is nothing to be worried about. The current system doesn’t work, and if Obamacare doesn’t help, we’ll change that too. There is no slippery slide into socialism, as long as there is freedom of speech and democracy. And we’re not giving that up, because Lady Gaga won’t let us. Consequently, attempts to improve policy cannot possibly lead to “less freedom” in the U.S., except in fantasy and delusion.

Hayek has nothing to say about current problems beyond Stalinist third world dictatorships. Nothing at all. He never addressed a major problem of our change: that corporations could grow to a size that presents us with all the problems of governments, indeed capturing government almost entirely, while their R&D departments would provide nearly 100% of all material innovations, so middle-class incomes would begin to stagnate in the midst of increasing productivity and increasing standard of living (we should call this the Schumpeterian question). He never addressed the possibility of ecosystem failure: that the rates of technological innovation and resource substitution might not stay ahead of the rates of depletions of ecological goods, sinks, and services, particularly with high population growth (the Sustainability question). He never addressed the problem of what to do when financial trade grows to ten times real goods and services, changing the values of the currencies, and when gambling in the financial casinos grows to the point of allowing huge personal incomes and social influence without the production of real goods and services, while occasionally threatening the entire accounting system of banks and credit (I say we call this the Phil Gramm flimflam, though he is historically a late entry amongst the swill-givers).

We could absolve Hayek of some of the charges if we suppose that some of these developments were truly obvious only by the end of his era.

But, worse for his continued relevance, Hayek possessed an incomplete epistemology of information in systems. It doesn’t explain what is currently going on.

He supposed, correctly, that a unified central authority could not assimilate to itself all the knowledge that individuals use in their decisions and innovations. Excellent! But he failed to see that the obverse is also true: that individual information is limited by the finiteness of the personal attention span, and meanwhile the complexity of the system might cause environmental and social negative externalities to accelerate, due to the networks effects of the growing number of connections — and thereby necessitating the increasing growth and spread of overlapping, more centralized contexts and institutions, to make up for the all the individuals’ lacks and laxities.

Indeed the ignorance of libertarians in particular regarding the facts of, say, global warming, or the increasing polarization in the size distribution of income, is becoming a dependable illustration of the finiteness of attention spans from among some of Hayek’s most ardent admirers.

Consumers must be informed, to demand correct prices, since prices are determined not only by supply but by demand. Therefore in our times, consumers need to understand wildlife ecology, pesticide chemistry, Chinese labor conditions, testimony from consumer groups and legislative committees, and a host of other elaborate and abstruse areas of knowledge, merely to be truly informed consumers at the grocery supermarket. the next time you go there! Obviously we can’t do this, we simply don’t have the time. In a phrase: our attention spans are smaller than the extent of the market. But then if so, it cannot be said that the spontaneous order is best. It might be a slow fatal disorder.

Therefore I think “spontaneous order” is perhaps Hayek’s least useful category, because it doesn’t lead to more useful distinctions: (1) all the elements of it were introduced for “planned” reasons long ago, (2) the “adaptations” which then moved it to “spontaneous” status cannot automatically be separated from “maladaptations” and “addictions” (“addiction” in Bateson’s evolutionary ecological sense of an evolutionary cul-de-sac), and (3) new planned responses may become necessary.

Pr Q @ #80 said:

Jack and others, the fact that a lot of people at the time found Hayek’s predictions plausible doesn’t change the fact that they have been proven false, and not because (as some above have implied) the British public heeded his advice and rejected the blandishments of the Labour Party…The point about “marginal historical interest” was a specific reference to TRTS,

I’ve said a number of times that “the strong version of the TRTS – social democracy ushers in political dictatorship – has been refuted” by subsequent empirical events. But it is misleading to consider Hayek’s theory solely in the light of the British Labor government, without reference to the earlier history of National Socialism and International Communism.

A limited, but deeper, implication of Hayek’s model is that socialist economy is the basis for totalitarian polity. This theory is of more than “marginal historical interest”, irrespective of the actual and existing politics of social-democracy. It impressed “a lot” of prescient social analysts – Orwell, Schumpeter, Burnham and Keynes were not just any old “people”! –

Friedrich & Brzezinsksi concluded that socialist command economy is a necessary, though not sufficient, condition for totalitarianism. The (further) sufficient condition for totalitarianism is a dictatorial polity run by a monopolistic party eg Nazi, Bolsheviks etc.

Pr Q said:

Yes, that is exactly what I am saying. It is false to state that Hayek was “enthusiastic about Pinochet” in general, and his “mass-murdering” in particular. Hayek did not have a positive preference for military dictatorship or political murder.

He stated a preference for a “liberal dictator to democratic government lacking liberalism”. He saw the former as a lesser evil to “totalitarian democracy”, a lethal political tendency he traced back to the French Revolution, traces of which he detected in the Chilean upheaval.

I can understand this preference, without wholly justifying it, given the way Pinochet deliberately tipped Chile headlong into economic chaos, on only 1/3 of the vote. Whilst fanning the flames of Maoist revolutionaries waiting in the wings. Pinochet was a nice man but he did himself or the cause of social democracy no favours by this reckless behaviour.

Hayek also hoped and expected “that in Chile, for example, we will witness a transition from a dictatorial government to a liberal government”. Which is about as far from “enthusiastic support” of dictatorship as one can get without expressing outright opposition.

These are not Hayek’s words — which are lost to us.

This “quote” is a product of a translation “telephone game”.

This is an English translation of a Spanish translation of an interview originally conducted in English. This is a translators interpretation twice over.

“liberal dictator to democratic government lacking liberalism”

Road to Serfdom is an unfortunate bestseller because its has little useful to say to us today. Hayek’s main argument is that total economic planning will fail, or require a police state. His real topic is something like Stalinism. But his current readers take the wrong message from this. Obamacare is not a centralization, and it is nothing to be worried about. The current system doesn’t work, and if Obamacare doesn’t help, we’ll change that too. There is no slippery slide into sozialism, as long as there is freedom of speech and democracy. And we’re not giving that up, because Lady Gaga won’t let us. Consequently, attempts to improve policy cannot possibly lead to “less freedom” in the U.S., except in fantasy and delusion.

Hayek has nothing to say about current problems beyond Stalinist third world dictatorships. Nothing at all. He never addressed a major problem of our change: that corporations could grow to a size that presents us with all the problems of governments, indeed capturing government almost entirely, while their R&D departments would provide nearly 100% of all material innovations, so middle-class incomes would begin to stagnate in the midst of increasing productivity and increasing standard of living (we should call this the Schumpeterian question). He never addressed the possibility of ecosystem failure: that the rates of technological innovation and resource substitution might not stay ahead of the rates of depletions of ecological goods, sinks, and services, particularly with high population growth (the Sustainability question). He never addressed the problem of what to do when financial trade grows to ten times real goods and services, changing the values of the currencies, and when gambling in the financial casinos grows to the point of allowing huge personal incomes and social influence without the production of real goods and services, while occasionally threatening the entire accounting system of banks and credit (I say we call this the Phil Gramm flimflam, though he is historically a late entry amongst the swill-givers).

We could absolve Hayek of some of the charges if we suppose that some of these developments were truly obvious only by the end of his era.

But, worse for his continued relevance, Hayek possessed an incomplete epistemology of information in systems. It doesn’t explain what is currently going on.

He supposed, correctly, that a unified central authority could not assimilate to itself all the knowledge that individuals use in their decisions and innovations. Excellent! But he failed to see that the obverse is also true: that individual information is limited by the finiteness of the personal attention span, and meanwhile the complexity of the system might cause environmental and social negative externalities to accelerate, due to the networks effects of the growing number of connections—and thereby necessitating the increasing growth and spread of overlapping, more centralized contexts and institutions, to make up for the all the individuals’ lacks and laxities.

Indeed the ignorance of libertarians in particular regarding the facts of, say, global warming, or the increasing polarization in the size distribution of income, is becoming a dependable illustration of the finiteness of attention spans from among some of Hayek’s most ardent admirers.

Consumers must be informed, to demand correct prices, since prices are determined not only by supply but by demand. Therefore in our times, consumers need to understand wildlife ecology, pesticide chemistry, Chinese labor conditions, testimony from consumer groups and legislative committees, and a host of other elaborate and abstruse areas of knowledge, merely to be truly informed consumers at the grocery supermarket. the next time you go there! Obviously we can’t do this, we simply don’t have the time. In a phrase: our attention spans are smaller than the extent of the market. But then if so, it cannot be said that the spontaneous order is best. It might be a slow fatal disorder.

Therefore I think “spontaneous order” is perhaps Hayek’s least useful category, because it doesn’t lead to more useful distinctions: (1) all the elements of it were introduced for “planned” reasons long ago, (2) the “adaptations” which then moved it to “spontaneous” status cannot automatically be separated from “maladaptations” and “addictions” (“addiction” in Bateson’s evolutionary ecological sense of an evolutionary cul-de-sac), and (3) new planned responses may become necessary.

The attempt to portray Hayek as a crypto-fascist looks desperate and unconvincing, especially when measured against the testimony of those who actually knew him and who lived through that turbulent era. We have this on the authority of no less a figure than Paul Samuelson, who provides a balanced and worldly interpretation of Hayek’s former and latter-day rants:

…Exactly what I have written above evaluating The Road to Serfdom is precisely what I believed about it in the 1940s and continued to believe about it up to the present 2007…the “serfdoms” believed to have occurred in accordance with Hayek’s 1940 crystal ball are not at all the Nazi-Burma-Mao-Castro totalitarian catastrophies…Instead they are the mixed economies that have flourished almost everywhere in the post-1945 years!

Consider only Sweden’s fig-leaf middle way. As I write in 2007, Sweden and other Scandivanian places have somewhat lowered the fraction of GDP they use to devote through government. But still they are the most “socialistic” by Hayek’s crude definition. Where are their horror camps? Have the vilest elements risen there to absolute power? When reports are compiled on “measurable unhappiness,” do places like Sweden, Denmark, Finland and Norway best epitomize serfdoms? No. Of course not.

But Samuelson knows that its a little unfair to judge Hayek by cranky remarks he made in his doddery old age. To put it bluntly, Hayek suffered from cardio-vascular disease which made him go a bit funny in the head when his political temper was aroused:

…So it was when I began to receive complaints from my long-time acquaintance Friedrich Hayek. Why at so late a date should I belabor the persisting differences between us on ideological issues? No good deeds go unpunished!…Never then, or before, or later did I have reason to think or to say: “Yes, I have misunderstood you. Yes, I have incorrectly quoted from you. Mea culpa.”

Hayekian biography confirms a few commonplaces…. Once he told me (and I quote from memory) that (in his seventies) he feared he had become stale and uncreative. But later his originality did come back. In hindsight he learned that his two periods of letdown [in the forties with TRTS and in the seventies with Pinochet] in fact turned out to have coincided with two incidents of heart infarction.

…one must learn to appreciate that elderly friends do need to be handled gently…“That’s not…[him] arguing. It’s his arteries. Let’s just go with the flow and remember [his] fertility and admirable versatility.”

…Why agitate ourselves when we are each entitled to harbor different analyses? One learns that often it is better to avoid an argument than to win one. Amen.

This charitable interpretation contrasts well with the ad hominem attacks of those who forget the dictum “the personal is the political” when, for once, it is applicable.

Jack Strocchi,

You do have a point about Hayek’s health. Hayek was unwell from the late 1960s. Any picture of him from after the 1960s shows him to be a skeleton of a once robust man.

Those at a conference on Hayek’s first draft of the fatal conceit in the early 1980s concluded that it was well below publication standard. This was said of one of the most original and sweeping minds of the 20th century. Hayek was extremely unwell from 1985 onwards, at times unable to recognise friends, and many other confusions, and losing touch with reality towards the end.

What of Hayek’s prediction? What did he know and when did he know it?

Dictators had been everywhere in inter-war Europe. Several of the few democracies that had existed were displaced with dictators with little more than a whimper. Admiration for Mussolini was common in the 1930s.

Fascists and communists both advocated central planning. Oswald Mosley, the leader of British fascism, called for a comprehensive “national economic plan” in the 1930s. Nazi Germany had 4 year plans.

Even Keynes wrote an unfortunate preface to the German edition of his General Theory. Keynes once opined that “Mussolini, perhaps, is acquiring wisdom teeth”.

Keynes also admired the young, intellectual, English Communists of the late 1930s because they reminded him of the “typical nonconformist English gentlemen who … made the Reformation, fought the Great Rebellion, won us our civil and religious liberties, and humanized the working classes last century.” Who was the bigger fool?

Hayek had grounds for his pessimism based on what was going on in the world around him. Fortunately, democracy was more resilient than the experience to date in 1944 led him to believe. Great fears for the future was common in those days.

Fascists and communists both advocated central planning.

Central planning is something the central governments do, all of them. Central planning is not controversial.

Jim Rose:
I wasn’t aware Weathermen and so forth were generally Communist Party members? By the 1980s, among former members of the Movement I came in contact with, it seemed to be generally accepted that nobody was actually a communist anymore, and that many of the eastern bloc countries were not communists anymore anyway. There were very, very few active communists except among people who’d lived in foreign countries with communists participating in the regular political system. It is something like a slur even among the left.

Sameulson also massively mireported Hayek’s explanatory strategy and Hayek’s image of scientific explanation — whether out of malevalent intention or patheitc interest it is hard to tell. Most likely a bit of both.

Samuelson in his late years did admit his image of economic science turned out to be a complete failure.

He also — uncharacterisitically — admitted in his late years that Ahyek was right ans his own teacher Schumpeter was wrong about the science of central planning. The key issue of 20th century economics.

Samuelson in his late years did admit his own image of economic science turned out to be a complete failure.

Greg Ransom ,
In June 2010, Don Boudreaux at Café Hayek looked up what Hayek actually said in response to another debate seeded by Samuelson.

Boudreaux found that Hayek said:

• “The planning against which all our criticism is directed is solely the planning against competition – the planning which is to be substituted for competition.” P. 90
• “Nor is the preservation of competition incompatible with an extensive system of social services.” P.87.

See http://cafehayek.com/2010/06/paul-samuelson-misread-hayek.html

Hayek was talking about options when there is competition and when competition is replaced by planning.

Hayek’s prediction is no more a bizarre and zombie claim than that of unions and others of the Left that workers are at a great disadvantage to employers in the labour market.

Workers are said to be wage slaves and they need extensive legal protections and collective bargaining to even start to rebalance the scales.

Both Hayek and the unions rely on a monopsony argument. Hayek on when the state is the sole employer or where planning made government the de facto sole employer.

Hayek’s argument is better because his hypothesis is where the government is the sole employer backed by the force of law. Central planning would also make the state a de facto monopolist over all sales of goods and services.

Unions argue for monopsony when there are many employers and many more employers than any reasonable stretching of even the word oligopsony could ever encompass.

Jim — I’ve pointed some of these things out myself.

I’ve been circulating Hayek’s statment on social welfare from TRtoS for 15 years — the one that has been making the rounds in recent weeks.

I’m just sick of people “taking on” a cartoon that doesn’t exist — and doing so for political reasons.

It’s a disgrace, and I’m calling people on it.

The thing that so grates with Samuelson is his dishonesty — his back alley knife in the back dishonesty, served up for political reasons, both as academic/scientific politics and as 1930s left/New Deal vs classic liberal politics.

He lied about Hayek’s account of scientific explanation in economics (or was deeply, irresponsibily, unexcusible ignorant) and he lied about Hayek’s TRtoS and he lied in his promise to Hayek he’d go back and re-read his book and retrack his mischaracterization — but Samuelson admits he purposely misled Hayek, and had no such intention.

Samuelson stuck with his misreading from 40 years before — and never went back to read Hayek’s book to get an honest account based on a charitable read of Hayek’s word and argument.

Samuelson wasn’t interest in getting it right — he was interested in getting it smeared and marginalized.

And I think it’s as plain as day that that was his agenda — from day one of the writing on that topic in his textbook.

You can’t blame the eastern European Hayek for viewing socialist history “through a glass darkly”.

You know who else disliked austrian social democrats?

##134, 137:

Thing is, there are quite a few buried caveats in there which can be brandished on demand in this fashion, in true pop-economics style. That’s why somewhere upthread I mentioned a ‘strenuously charitable’ reading. Most readers of course tend not to discard several pages worth of content when they are undermined by a single unobstrusive sentence, and the broad sweep of the thing is very much in a planning – government – fascism – totalitarianism kind of vein, which is how it gets read except when being defended from the back foot.

I’m reminded of Bernard Williams’s review of Anarchy State & Utopia, along lines: ‘there is little comfort here for contemporary friends o business, but that will probably not be noticed’. There is a lot more such comfort in Hayek, though. Stuff against monopoly power, for example, gets minimised by comparison with the power of the Leviathan – because business would have to coordinate (the implication being that it doesn’t. It does, pretty effectively, in a ‘bounded co-operation’ kind of way.)

The stuff about planning is of unclear significance, but basically seems to mean H doesn’t oppose govt economic action when there is no alternative. If the game is faint praise, though, I’d go for Jack Strocchi’s rather entertaining pastiche over this kind of fiddling about.

Re the welfare one-liner: isn’t there also a whole chapter dedicated to establishing that provision of benefits is contrary to the rule of law? I dunno, I’d have to read the wretched thing again, but I really needn’t since a couple of half-sentences do not constitute a case to answer. But come to think of it, there’s comment on one of the other thread that JQ accurately picks up on as more Hayek zombieism, along the lines of the government ‘denying people things’ – taxing them – being oppressive. Hayek takes a similar line on that good ole ‘negative freedom’ idea, i.e. presupposing a certain way of distributing things – property – and then treating departures from that as being encroachments on liberty.

Funny thing is, I think he also has some good stuff on the fact that property rules are quite mutable and that they are part of a design (the good kind of planning) for distributing goods. In fact Hayek is very mixed – IIRC, my impression was that you could probably extract quite a good pamphlet from all the buried caveats, asides and backpedalled concessions in TRTS. But you would definitely have to leave out the stuff about, er, the road to serfdom.

Serious people should read Hayek’s _Law, Legislation & Liberty_ then his The Constitution of Liberty_

Anyone who thinks they are serious and has read nothing but _The Road to Serfdom_ is pulling everyone’s leg.

John Q,

Would Singapore be an example of central planning leading to a one-party state?

• The state controls and owns firms that comprise at least 60% of the GDP through government entities such as the sovereign wealth fund Temasek;
• The vast majority (more than 80%) of Singaporeans live in public housing;
• Two companies, Singapore Press Holdings Ltd. (SPH) and MediaCorp, own all general circulation newspapers. MediaCorp is wholly owned by the government investment company. SPH is a private holding company with close ties to the Government;
• Government-linked companies and organizations operated all broadcast television channels and almost all radio stations.

The Peoples Action Party (PAP), which has held power continuously and overwhelmingly for more than 4 decades, has used the Government’s extensive powers to place formidable obstacles in the path of political opponents.

although the PAP has consistently rejected the notion of being socialist, some of PAP’s policies do contain aspects of socialism that includes government-owned public housing constituting the majority of real estate and the dominance of government controlled companies in the local economy.

To quote the US state department:

• “The belief that the Government might directly or indirectly harm the employment prospects of opposition supporters inhibited opposition political activity; however, there were no confirmed cases of such retaliation.

• The PAP has an extensive grassroots system and a carefully selected, highly disciplined membership.

• The establishment of government-organized and predominantly publicly funded Community Development Councils (CDCs) has further strengthened the PAP’s position. The Councils promote community development and cohesion and provide welfare and other assistance services.

• The PAP dominates the CDCs even in opposition-held constituencies and has used the threat of withdrawing publicly funded benefits.

• During the last two election campaigns, the Prime Minister and other senior government officials warned voters that precincts that elected opposition candidates would have the lowest priority in government plans to upgrade public housing facilities. This statement heightened concerns among some observers about voters’ genuine freedom to change their government.

• Political parties and organizations were subject to strict financial regulations, including a ban on receiving foreign donations. Government regulations hindered attempts by opposition parties to rent office space in government housing or to establish community foundations. In addition, government influence extended in varying degrees to academic, community service, and other NGOs.

• The threat of civil libel or slander suits, which government leaders have often used against political opponents and critics and consistently won, had a stifling effect on the full expression of political opinion and disadvantaged the political opposition.

• Government entities also used libel or slander suits, and dismissal from positions in government-related entities, to intimidate prominent opposition politicians.”

HT: http://www.state.gov/g/drl/rls/hrrpt/2004/41659.htm

The government of singapore uses monopoly and monopsony powers in the way that Hayek predicted to ensure its re-election and to stifle dissent?

Pr Q said:

Hayek wanted to make the much stronger claim that the attempt to implement Labor’s policies would necessarily lead to a loss of personal and political freedom…Even on this charitable account, a book warning against hypothetical policies that might have been, but weren’t, adopted in the early postwar period, and aren’t advocated by anybody nowadays, would be of fairly marginal historical interest.

To see Hayek’s book as simply a tract for the times or purely directed at Anglo social-democrats is to badly miss the point. Hayek had a number of different socialist targets in his sights around the mid-forties. He famously dedicated the book to “socialists of all parties” .

Obviously Hayek was wrong to tar all social-democrat parties with the dictatorial brush. But in the aftermath of WWI, chaotic social democratic governments did pave the way for totalitarian socialism, in eastern/southern Europe at least.

I have always found eastern and southern European socialists much more to my taste than the worthy-but-dull northern and western European types. But thats mainly because of the “easties” well-earned sense of gallows humour. You can’t blame the eastern European Hayek for viewing socialist history “through a glass darkly”.

Anglo Leftists have a much more Whiggish view of socialist history. Samuelson talks about Anglo and Scandinavian “social democracy” (Roosevelt, Atlee, Palme, Whitlam) as if it is was the sum of all hopes for the democratic Left:

Laboristic Fabian socialists in Britain and Franklin Roosevelt New Deal legislation in America, by innuendo and coherent argument, were believed to be the vulnerable stepping stones toward the serfdom(s) already realized in Lenin-Stalin Russia and Adolph Hitler Nazi Germany.

But thats only half the story, and the cheerier half. Hayek’s theory of social-democracy as the “stepping-stone” to totalitarianism makes more sense in relation to the the less liberal eastern and southern European socialists. In Russia the Menshevik social-democrats who made a mess of the Provisional government, not really making a clear stand against either Reds or White Russians. In Germany the German Social-Democrats never really developed a coherent opposition to either Nazis or Bolsheviks.

Hayek was not saying that all social-democrats are latent totalitarians. The famous chapter in TRTS where Hayek shows how “the worst get to the top” does not point the finger at British social-democrats per se but to totalitarian apparatchiks who exploit the social disorganization caused by social democrats misguided policies and flibbety-gibbet politics.

That socialism can be put info practice only by methods which most socialists disapprove is, of course, a lesson learned by many social reformers in the past. The old socialist parties were inhibited by their democratic ideals; they did not possess the ruthlessness required for the performance of their chosen task. It is characteristic that both in Germany and in Italy the success of fascism was preceded by the refusal of the socialist parties to take over the responsibilities of government.

Granted the relevance of 20th C southern/eastern European social democracy to contemporary American political struggles is limited. But I think that TRTS is a kind of metaphor for the juncture point the US faces, as the US Right finds a European social democratic future not to its taste for a variety of reasons. Once it heads down that road there is no turning back.

John, thanks for the fast reply.

Did my information contain errors about, for example:

• The state controls and owns firms that comprise at least 60% of the GDP through government entities such as the sovereign wealth fund Temasek;
• The vast majority (more than 80%) of Singaporeans live in public housing;
• Two companies, Singapore Press Holdings Ltd. (SPH) and MediaCorp, own all general circulation newspapers. MediaCorp is wholly owned by the government investment company. SPH is a private holding company with close ties to the Government;
• Government entities also used libel or slander suits, and dismissal from positions in government-related entities, to intimidate prominent opposition politicians
• During the last two election campaigns, the Prime Minister and other senior government officials warned voters that precincts that elected opposition candidates would have the lowest priority in government plans to upgrade public housing facilities.

What is your explanation for Singapore being labelled a one-party state? The monopoly and monopsony power of government has no major role at all?

Pr Q said:

Depressingly, most of the rest of the “economic theory Top 20” list, including Wealth of Nations, Free to Choose and the writings of Peter Schiff, suggest that the buyers are the same people buying (if perhaps not reading) Hayek.

There are alot of free-market economists in the Amazon list. One thing that is driving this is that the GFC does look, from a certain angle, as a confirmation of Austrian business cycle theory. Especially the bits about fiat money stimulating housing boom-bust. Hayek’s reputation is obviously going to get a bump on account of this.

Its significant in this context to note that Peter Schiff/a, who Pr Q treats with lofty disdain, was one of the first to predict that the US would suffer a terrible recession on account of its loose monetary policies, morally hazardous banks and politicised lending standards. Schiff’s stocks have certainly jumped since then.

I do feel some sympathy with Pr Q who is an economists economist. But the market for orthodox economic theory seems to be tanking at the moment.

John Quiggin,

Although initially styling itself an anti-Communist and Social Democratic, the People Action Party was expelled from the Socialist International in 1976 because it suppressed dissent and jailed opposition leaders. Hayek would be pleased.

Concerns about the rule of law in Singapore were expressed as far back as the 2000 Index of Economic Freedom in the chapter “In Singapore: Government squanders savings”

The 2010 index of economic says that Singapore is a nominally democratic state that has been ruled by the People’s Action Party (PAP) since it became independent and certain rights, such as freedom of assembly and freedom of speech, remain restricted

The Freedom House 2010 country report notes that Singapore is not an electoral democracy despite elections free of irregularities and mentions that all domestic newspapers, radio stations, and television channels are owned by government-linked companies, which limits free speech.

So when people were putting Singapore forward as an example of successful active industry policy, were you the first to jump up and down every time you hear this saying ‘Not true, not true; Singapore is a close clone of Hong Kong!’ You also better write to Joe Stiglitz who credits the spectacular rise of living standards in Japan, South Korea, Taiwan, Hong Kong, and Singapore, to “the combination of high savings rates, government investment in education, and state-directed industry policy.”

What do we have: an expelled member of the Socialist International using monopoly and monopsony power deriving from wide-spread government ownership of businesses, the media and land to make its very difficult for new parties to compete for power. Hayek’s predictions are rather close to the mark for Singapore.

What is silly — and a disgrace — is that leftist gin up a fake “fact” about a non-existent “prophecy” in order to dismiss and marginalize the book — which as you say has all sorts of significant theoretical content within it.

This isn’t an accident.

It isn’t an accident that Ezra Klein did it this weekend, linking your piece above. And it wasn’t an accident when Galbraith and Samuelson and countless other left of center economists did it.

They did it to serve a partisan moral and political and scientific agenda.

It was reprehensible then. And it is reprehensible now.

John wrote,

“I agree that there is much more to Hayek than TRTS, which is why it’s so silly that this failed piece of prophecy has become his best-known work.”

I think the extreme boredom inflicted by Greg Ransom’s obsessive and repetitive defenses of Hayek is illegal under the Geneva Conventions.

It looks to me like Samuelson didn’t bother understanding Hayek because he lumped him in with the false a priori methodology of Mises and some other Austrians. Since, as I wrote above (# 121), Road to Serfdom is a book of yesteryear and really doesn’t speak to our current problems, Samuelson probably figured that there are other fish to fry. One real problem with the book is that it is a double time-waster, since most of its current readership takes the wrong message from it.

McGravitas, do yourself a favor and read the book.

I’m worn out reading it to the little children — I’ve done for too many people too many times already. I’m sick of it.

Go to my “Taking Hayek Seriously” blog and read my Hayek Myths paper for some hints.

Why aren’t you correcting the Wikipedia article?

The paper Greg Ransom references can be found here:

http://www.hayekcenter.org/friedrichhayek/hayekmyth.htm

He writes: “Finally, Hayek repeats that an intelligently worked out program of regulation and welfare would do nothing to endanger the general liberty of the society. That is, implementing reforms of this kind pose no threat to plunging us into a new slavery.”

So does Hayek favor the actually existing welfare state?

Hayek began as a Fabian socialist (note that his father worked for the government health care system & Hayek’s first job was for the government) and became a bit more “classic liberal”, a bit more “libertarian”, every decade of his life.

My hypothesis is that Mancur Olson’s _The Logic of Collective Action_ proved to be of particular influence on Hayek’s increasing “libertarianism” of the last few decades of his life.

But if you read _Law, Legislation, and Liberty_ or _The Constitution of Liberty_, Hayek’s “libertarianism” is clearly rather limited and measured, allowing for more government and more regulations than most American “libertarians” would ever be comfortable with.

But you can read these books yourself and come to your own conclusions.

Reading is good. Ask your first grade teacher.

“in [this] .. latter kind of socialism the [??????] effects I discuss in this book [Road to Serfdom]”

Hayek discusses all sorts of effects — all sorts of them not at all the same as Stalin’s gulag or Hitler’s night of the long knives.

Greg Ransom: “The intellectual pretensions of leftists has become a national joke—are you in on the joke yet?”

That makes no sense at all. When you’ve got a bunch of people citing the Road to Serfdom to refute Obamacare because Glen Beck said so, then the statement ““most of its current readership takes the wrong message from it” is accurate. As to a much smaller readership, Harvardites might be able to think their way through it (although sometimes I wonder), but the results are discouraging about Chicago.

The paper Greg Ransom references can be found here:

http://www.hayekcenter.org/friedrichhayek/hayekmyth.htm

He writes: “Finally, Hayek repeats that an intelligently worked out program of regulation and welfare would do nothing to endanger the general liberty of the society. That is, implementing reforms of this kind pose no threat to plunging us into a new slavery.”

So does/would Hayek favor the actually existing welfare state that exists in the UK or USA? Or does such lead us to a new serfdom? I am still waiting for an answer Greg.

As JQ notes above, this may all be the road to deadweight losses but too claim it is a road to the concentration camp is just nutty.

BTW – Hayek (in the 1960 Constitution of Liberty) argues that the British welfare state (assuming the price level doubles and the wicked Labor Party get elected) will end in concentration camps for the old folk. Then there is his nutty 1978 talk in Australia where he rants about the welfare state ending in knouts and machine guns.

Hayek’s 1945 AER is a classic. Aside from that there is no there there when it comes to Hayek. Ideological bunk plain and simple.

Wonderful and charming Mr. Andrew. I’m not a participant in the Tea Party movement.

‘ Hayek (in the 1960 Constitution of Liberty) argues that the British welfare state (assuming the price level doubles and the wicked Labor Party get elected) will end in concentration camps for the old folk. Then there is his nutty 1978 talk in Australia where he rants about the welfare state ending in knouts and machine guns.’

Hayek is not only wrong about what happens in democracies under democratic socialist party he is also wrong about how socialist/communist govt.s get into power. I amen’t aware of the relevant sociological data, but it seems to me obvious that most ‘radical’ left wing parties get into power after a civil war or some other equivalent social disaster. Think about it. Lenin came to power when the Russian Empire entered the 1st world war, and did extremely badly in it, provoking a huge ‘internal’ social cataclysm. Mao came to power after a civil war, and after Chinese society had been torn up by the Japanese invasion. Stalin’s ‘expansion’ into Eastern Europe was only possible because of the social cataclysm of WW2. The Vietnamese only came to power (again) after a gigantic, decades long ‘civil war’ (kept going by the Americans of course): similarly the Khmer Rouge could only have come to power after the American de facto invasion (and again a more or less civil war situation).

Communist parties generally speaking do not come to power via the democratic process and when they do they normally keep to democratic norms (cf the situation in South America, and other examples, cf Nepal). If these parties ever look like becoming ‘too radical’ they are quickly overthrown by the Americans (Allende, obviously, and in our time, Honduras, Haiti).

It’s fascist parties that sometimes come to power via the ‘democratic process’ or some variation of it, and there is no mystery why: in capitalist countries the ‘ruling class’ or whatever you want to call them, invariably lean Right, and if it ever looks like some major disruption is coming (that might lead to the growth in power of socialist/communist parties) they will choose fascism over socialism, every time.

It’s not just that Hayek’s ‘slow descent into barbarism’ rarely happens. AFAIK it has never happened.

Note well — much of the intellectual vanguard of the British left _liked_ what they saw in Stalin’s Russia. And the intellectual vanguard included the chairman of the British Labour party at the time of _The Road to Serfdom_.

The Labour party rejected this direction. But this isn’t because of the ideas and ambitions of the intellectual vanguard. It was despite them.

Ideas mattered — the vanguard was defeated. But it took counter-arguments to raise the stop sign, and turn them back.

Greg writes: “The Labour party rejected this direction. But this isn’t because of the ideas and ambitions of the intellectual vanguard”

Had they rejected this supposed direction prior to 1944 or is it because of Hayek?

I thought the Labour leadership had pretty much rejected Laski’s ideas long before 44 .

It’s fascist parties that sometimes come to power via the ‘democratic process’ or some variation of it, and there is no mystery why: in capitalist countries the ‘ruling class’ or whatever you want to call them, invariably lean Right, and if it ever looks like some major disruption is coming (that might lead to the growth in power of socialist/communist parties) they will choose fascism over socialism, every time.

That is so true.

“Obama is propelling the US along the Road to Serfdom by making medical care marginally more affordable.”

To bad this argument doesn’t hold true outside of academia. Reform has already added cost over and above what insurance inflation would have been. Almost every working actuary has warned of significant additional cost because of ObamaCare. It is almost impossible to purchase a child only individual policy becuase the cost of such a plan exceeds what the carrier can charge.

” the kind of disconnection from reality going on on the political right. ”
“shared by everyone in mainstream economics ”

That’s the great thing about being an acedemic economist, you can ignore the reality around you and make such claims based on theory or the study some propogandist organization paid you for. The fact actual real living individuals and businesses are already paying more you can still claim healthcare is marginally more affordable.

“Medicare (hospital insurance). In 1965, as Congress considered legislation to establish a national Medicare program, the House Ways and Means Committee estimated that the hospital insurance portion of the program, Part A, would cost about $9 billion annually by 1990.v Actual Part A spending in 1990 was $67 billion. The actuary who provided the original cost estimates acknowledged in 1994 that, even after conservatively discounting for the unexpectedly high inflation rates of the early ‘70s and other factors, “the actual [Part A] experience was 165% higher than the estimate.”

Medicare (entire program). In 1967, the House Ways and Means Committee predicted that the new Medicare program, launched the previous year, would cost about $12 billion in 1990. Actual Medicare spending in 1990 was $110 billion—off by nearly a factor of 10.”

Good thing we listened to the economist in the mid to late 60’s, they have such a great track record on these things.

Care to link to any accurate medicare projections from the ecomonist you want us to beleive now?