Hayek and the Welfare State

by Henry on May 13, 2012

Two references worth reading in light of the last post.

First, via Barkley Rosser, this firewalled article by Andrew Farrant and Edward McPhail on Caldwell’s recent edition of The Road to Serfdom.

Caldwell seemingly considers Hayek to be arguing little more in The Road to Serfdom than that Soviet-style command planning is wholly incompatible with a democratic polity. Indeed, taking Caldwell’s statements at face value, he would—at least when wearing his editor of Hayek’s Collected Works hat— seemingly consider Hayek’s book to have scant relevance whatsoever to contemporary debates over the welfare state and the Obama administration…. Did Hayek intend his argument in The Road to Serfdom to have exclusive applicability to a system of full-blown command planning (apparently Caldwell’s position) or also to — as Limbaugh and company would seemingly have it—have ready applicability to the mixed economy and welfare state … ?
there is much clear evidence that Hayek himself had always intended his argument to apply with equal stringency against command planning and the welfare state alike (see, e.g., Hayek 1948, [1956] 1994, 1960, and [1976] 1994). Indeed, as we shall show, Hayek—during the 1940s and after—frequently argued that the logic supposedly set into play by any policy of persisting with the mixed economy, Keynesian demand management policy, and welfare state practices would lead to full-blown central planning. Importantly, Hayek frequently claimed that the “middle of the road” policies—pretty much the welfare state and demand management (Toye 2004)—adopted by the 1945–51 Labour Government in Britain aptly illustrated the veracity of his thesis in The Road to Serfdom.

And Bruce Caldwell’s response (not paywalled):

Though Hayek had many targets in the book, the idea that socialism – state ownership of the means of production – is compatible with political freedom was certainly a chief one. … at Hayek’s dire warnings about the future take as their starting point a system of full socialism, that is, a system in which there is state ownership of the means of production … the examples of western Europe do not fit: none of them embraced a comprehensive system of planning. Perhaps needless to say, I stand by my statement … that “a welfare state is not socialism” (Caldwell, in Hayek 2007, 31). The distinction is absolutely essential if we are to understand the logic of Hayek’s argument correctly
Four years later, Hayek would offer his own vision of a new society … founded on liberal principles in his book The Constitution of Liberty. In chapter 17 of that work, in his precisely titled “The Decline of Socialism and the Rise of the Welfare State,” … Hayek asserts that the welfare state had replaced socialism as the chief enemy of liberty. He begins by noting that “socialism in the old definite sense is now dead in the western world” and that “If, fifteen years ago, doctrinaire socialism appeared as the main danger to liberty, today it would be tilting at windmills to direct one’s argument against it” (Hayek 1960, 254). But what had taken its place, enthusiasm for “the welfare state,” was in many ways more dangerous. Hayek notes that, “unlike socialism, the conception of the welfare state has no precise meaning” (ibid., 257). It has no distinctive principles, other than some amorphous desire to increase social justice. But this makes the task of fighting against it much more difficult … Hayek paints a portrait in which, slowly and over time, the accretion of interventions in the economy gradually and unintentionally lead us to the kind of centrally planned system that all now rightly regard as something to avoid.
And these are indeed the sort of slippery slope arguments that F&M want to associate Hayek with in the [sic] The Road to Serfdom. … In his later work, the slow but steady growth of the welfare state appears from the outside as much more benign, and precisely because of that, from Hayek’s perspective, is much more insidious. No jackboots or gulags accompany the growing power of the welfare state – at least not until later. Rather, the death of liberty is that of a thousand small cuts, each aiming at correcting some apparent flaw in the system. This is a very different argument from the one in The Road to Serfdom, and one should not mix them together.

In short, Bruce Caldwell’s defense is not that Hayek didn’t claim that the welfare state was the slippery slope to gulags and jackboots – it’s that he didn’t say this in The Road to Serfdom, although he did say it in his later works, and that one shouldn’t mix up the two arguments. Although Caldwell doesn’t mention it, Hayek himself conflates these arguments in his own introduction to the US edition of The Road to Serfdom, which was written after he began to worry more about the welfare state. Finally, Judt doesn’t actually attribute this argument of Hayek to The Road to Serfdom in any of its editions; he is talking, more generically, about Hayek’s “writings.” So I’m calling this one unequivocally in favor of Judt – contra Tyler Cowen, he wasn’t being unfair at all. And if Greg Ransom wants to argue in comments that notorious left-wing provocateur Bruce Caldwell is ignorant and dishonest about what Hayek says, he’s free to make the best case he can, (as long as he supports his tendentious accusations this time with facts, references etc).

{ 207 comments }

1

J. Otto Pohl 05.13.12 at 2:41 pm

The historical evidence of actually existing socialism does suggest that a centrally planned administrative command economy is incompatible with political freedom and democratic institutions. Certainly the USSR and PRC proved to be extremely authoritarian and repressive. Cuba was a considerably more attractive model in that it achieved many of the same social goals as the USSR with considerably less violence and terror. But, even here the regime was a dictatorship that did repress dissidents and socially undesirable elements, although at levels much lower than the USSR or China. The welfare states in contrast never abandoned the basic structures of market capitalism even if in a few cases state enterprises comprised the majority of economic output. There is a huge difference between a state run enterprise and an economic commissariat. The first one is truly state capitalist and has existed in places like the UK, France, and Norway. The second one was unique to actually existing socialism and does indeed appear to be completely incompatible with a system of government that allows political freedom.

2

mpowell 05.13.12 at 3:58 pm

Hayek and his supporters are looking worse and worse as this is hashed out more fully. The argument I perceived Hayek to be making in Road to Serfdom seemed exaggerated, but I could certainly sympathize with it and at least he seemed to fully support the principle of social insurance and public goods provision. It seems in his later writings he at least partially reneged on this view and to the extent that he predicted that welfare states would lead to totalitarianism, he looks like a fool. But at least he’s an honest one. Not always 100% clear, but he just seems to have changed his mind, which is a perfectly reasonable thing to do.

But his supporters don’t even have the defense of honesty. This is a classic bait-and-switch. On the one hand, they will claim that Hayek limited his criticism to social control of the means of production, a much more defensible claim. On the other, they will claim that Hayek ‘proved’ that welfare states lead to totalitarianism. Of course, this sort of thing fits Cowen’s M.O. perfectly. You have to be intellectually reasonable right up until the point where it would interfere with advancing your political agenda, then suddenly the limited and defensible claims you were making have vast scope or the exceptions that you acknowledged to your theories never seem to quite materialize in reality. But by now I’ve figured out that there’s no sense in taking any of them seriously: Hayek, Cowen or any of either of their supporters.

3

Bill Murray 05.13.12 at 4:15 pm

“but he just seems to have changed his mind, which is a perfectly reasonable thing to do.”

Isn’t it only perfectly reasonable if experience has shown that you original position is not supported by new evidence? It seems like Hayek changed his position in the area in which he was correct and didn’t change where he was incorrect. That seems inconsistent with being perfectly reasonable.

4

Data Tutashkhia 05.13.12 at 4:23 pm

@1, of course postulated planned economy limits “political freedom”, by definition. Just like postulated private property (Hayek’s “liberty”) limits “political freedom”. Any presupposed notion upheld by the government limits “political freedom”.

5

Gene O'Grady 05.13.12 at 4:40 pm

Few individual words have ever made me more angry than “amorphous” in “amorphous desire to increase social justice.” Live in the real world, Hayek.

6

Emily 05.13.12 at 4:50 pm

J Otto and Data, language norms are another form potentially limiting political freedom.

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J. Otto Pohl 05.13.12 at 4:52 pm

Emily:

I have no idea what you mean by that.

8

shah8 05.13.12 at 5:03 pm

Ah, but there is an interesting division between Lamarkianism and Lysenkoism, terms of scientific honesty. It seems as if Hayekism maps a wee bit more onto the Lysenko side of things…

9

shah8 05.13.12 at 5:08 pm

Pohl…

Not to defend such communist countries, but their geoeconomics (autarchy) drove much of their internal repression. One always needs to be sure, when talking about Stalin killing Ukrainians and comparing to Western States, that you talk about 19th century UK monarchs killing Indians and Chinese, or about King Leopold and the Congo, or the near extermination of aboriginals in the US, AU. It’s likely that the western states are still better, but the score would be closer.

10

Emily 05.13.12 at 6:01 pm

J Otto, I guess I mean that language is also a matter of power relations. In Oz assimilationist policies coerced people of Aboriginal heritage to stop speaking their own language. This has happened many times, the world over (Laos is figuring out the way to a ‘national’ language now).

Some of the references in this blog, esp. economic ones are a little beyond me; they would, I believe, be more beyond others in my community, tho the policies such academic dialogues effect affect others.

Re: serfdom in Russia, my admittedly old Duncan’s History of Russia writes of original nomadic and village commons, with potails and starosts leading villages. It was patriarchal and valued filial piety:
“The opinion of the eldest is always just…”

Originally czars gave estates/tenure for life only. Peter the Great, a centralized and supreme czar, on the advice of his foreign advisors, made landed property hereditary – wotchini:
“In the earlier centuries the petty princes of Russia….were not sufficiently strong to harass the peasants, or mutilate the old communistic organisation…” p 263

Around the 17th C laws were passed allowing Boyars to expel peasants from their native lands – by Boris Godounof :
“This ordinance, however, proved the first step to the servitude of the peasants; for till the time of Godounof the only serfs or slaves were prisoners of war, or persons reduced to serfdom by judicial decree, and those who had voluntarily sold themselves.” p 264

11

J. Otto Pohl 05.13.12 at 6:03 pm

shah8

I am not sure why I have to talk about British imperialism or US policy towards Native Americans when talking about Stalin’s atrocities. The two are not directly related. Although I do think things like the deportation of the Chechens and Crimean Tatars do resemble things like the Trail of Tears of the Cherokee and the Long Walk of the Navajos in being essentially racist acts of ethnic cleansing.

12

bianca steele 05.13.12 at 6:46 pm

On slippery slopes: it’s not uncommon in what I’ve read of mid-century “centrist” evaluations of ideologies, etc., to be a bit vague about what’s being objected to. It doesn’t seem exactly unfair to point out that Hayek, no more than other, frequently American writers, talks in broad terms of “lessons learned” and “ideals dashed,” which he presumably expects everyone to understand immediately, without himself specifying.

13

Bruce Wilder 05.13.12 at 7:32 pm

Not “specifying” is, of course, a rhetorical strategy. Hayek was always an ardent proponent of plutocratic domination, by means of laissez faire malign neglect. He could scarcely specify his true desiderata, without alienating most of his intended audience. His argument in the Road to Serfdom is basically just dumb, a re-incarnation of Herbert Spencer’s arguments that the City of Birmingham’s public works department was going to lead swiftly back to feudalism. Its intellectual significance, today, owes nothing to its dubious analysis, and everything to its ability to attract financing from its beneficiaries.

There is no little irony in looking forward in 2012, and seeing a slippery slope ahead, leading toward a neo-feudalism of corporate plutocracy, paved not by the delusions of Marxists (many of whom embraced libertarian/anarchist ideas and rationalizations back in the day), but by the unlikely fanaticism of conservative libertarians of Hayek’s type. Authoritarian domination once again rides into town on a libertarian horse.

14

John Quiggin 05.13.12 at 7:33 pm

While we are on the topic, I spent a lot of time in the early days of blogging looking into Hayek’s (alleged) support for Pinochet. The answer is “guilty as charged”.

http://johnquiggin.com/2002/09/12/hayek-and-pinochet/

http://johnquiggin.com/2003/04/27/chasing-quotes/

In particular, Hayekian slippery slope arguments justified the coup against Allende

http://bloodandtreasure.typepad.com/blood_treasure/2006/11/hayekian_dictat.html

By contrast, Friedman was genuine in saying that he was willing to advise any government (including those of both Chile and China) on how to adopt free-market economic policies, and that this did not entail support for those governments

http://johnquiggin.com/2006/11/23/friedman-and-hayek/

15

Greg Ransom 05.13.12 at 8:34 pm

Enough of the pretend “scholarship”.

Read Hayek’s _The Constitution of Liberty_ and his _The Road to Serfdom_.

You’ll find the “Welfare State” advocated in both books, and also analysis given of how best to implement a welfare state so that prosperity and freedom as best advanced.

Hayek is EXPLICIT.

The welfare state is NO danger to a free society.

Hayek says this DIRECTLY.

Again, spare us the fake “scholarship”.

16

Greg Ransom 05.13.12 at 8:36 pm

For a reality check, read Walter Block, “Hayek’s Road to Serfdom”:

http://mises.org/journals/jls/12_2/12_2_6.pdf

17

Norwegian Guy 05.13.12 at 8:38 pm

“Hayek and his supporters are looking worse and worse as this is hashed out more fully. The argument I perceived Hayek to be making in Road to Serfdom seemed exaggerated, but I could certainly sympathize with it and at least he seemed to fully support the principle of social insurance and public goods provision. It seems in his later writings he at least partially reneged on this view and to the extent that he predicted that welfare states would lead to totalitarianism, he looks like a fool. But at least he’s an honest one. Not always 100% clear, but he just seems to have changed his mind, which is a perfectly reasonable thing to do.”

There is a constancy here: Opposition to the political left and the labour movement. When the left proposed central planning, he wrote a book opposing that. When it turned out that centre-left governments mostly restricted itself to social insurance and public goods provision, he turned against this. I’m not sure to what degree he really changed his mind, or if it was just his opponents that changed.

18

Greg Ransom 05.13.12 at 8:48 pm

Bruce Caldwell is imprecise and is NOT doing careful textual explication and analysis in his broad and handwaving comments on the potential pitfalls of badly designed welfare state institutions. There is NO ONE who at this late stage in the game has not identified and acknowledge SERIOUS pitfalls to bad welfare state design.

Lets stop playing absurd and bogus games. There is all the difference in the world between different kinds of welfare state institutions, which Hayek analyses with some sophistication, if only briefly.

Classic liberal / free societies in Europe have ALWAYS had welfare state institutions of one form or another.

And we’ve seen all sorts of pathological welfare state institutional design across history.

You’ve got a very serious and involved topic and you are making very serious charges — yet you believe that brief and non-specific general comments in the secondary literature is all that is needed to address the topic.

Give is a break.

19

Greg Ransom 05.13.12 at 8:55 pm

Henry, someone working from the principle of charity — or simply from best practices as an honest and competent scholar — would make an effort to identify the consistency between:

(1) Hayek’s advocacy of the welfare state

(2) Hayek’s insistence that the welfare state is NO threat to a free society

(3) Hayek’s SPECIFIC institutional recommendation for IMPLIMENTING a successful welfare state

with:

(4) Hayek’s concerns about institutional designs which set of processes that call inevitably for further necessary revisions, that increasingly throw a monkey wrench into the workings and principles and ethics of a free society.

Your not stupid.

You can do it. It just takes honesty and scholarly discipline.

20

Brad DeLong 05.13.12 at 9:04 pm

Surely some disemvoweling is called for by this point?

21

Bernie 05.13.12 at 9:15 pm

Wow. Greg Ransom is soooo tiresome.

The guys you quote have a half decent reply to Caldwell also.

http://mesharpe.metapress.com/app/home/contribution.asp?referrer=parent&backto=issue,7,9;journal,9,69;linkingpublicationresults,1:106043,1

22

Janus Daniels 05.13.12 at 9:15 pm

Greg Ransom – quotes & page numbers please?

23

Bernie 05.13.12 at 9:24 pm

Ransomite logic?

Obama supports the welfare state

Hayek supports the welfare state

Obama and Hayek support the same thing!

24

chris 05.13.12 at 9:38 pm

There is NO ONE who at this late stage in the game has not identified and acknowledge SERIOUS pitfalls to bad welfare state design.

Well, obviously bad welfare states are bad — you can tell that by the first word. But this leaves a lot unsaid about which welfare states are bad, how to tell the difference, and how to fix them.

25

Jim Rose 05.13.12 at 9:56 pm

John,
while you are playing at that level, you should read caldwell’s on the-job training with hayek paper on the many errors in the quotes and citations in the road to serfdom.

26

Salient 05.13.12 at 10:05 pm

Greg, I think it’s an Internet requirement that Hayek hagiography be as resplendent as it is otiose — you managed to include the obligatory misemployment of ‘read the whole thing’ at the beginning, and the invective demands for honesty are, if pedestrian, at least spot-on; throughout the rest of it you’re just tumbling over yourself. Pratfalls don’t belong in the same scene as a champion’s duel challenge. (Though it’s nice to see you do your own stunts.)

You might want to reread that Walter Block article you so kindly linked, as you’re clearly completely outclassed by him:

Hayek’s was a lonely voice, crying in the wilderness for freedom; he stood, like the Dutch boy, with his finger in the dike of onrushing statism.

There’s something else in Block’s article worth your attention:

The Hayek of 1944, then, stands condemned by the Hayek of 1931 and 1933.

That sounds quite a bit like something else I read recently…

In short, Bruce Caldwell’s defense is not that Hayek didn’t claim that the welfare state was the slippery slope to gulags and jackboots – it’s that he didn’t say this in The Road to Serfdom, although he did say it in his later works, and that one shouldn’t mix up the two arguments.

27

Jim Rose 05.13.12 at 10:18 pm

Paul Johnson’s Intellectuals is a must read for this thread. He documents the deficiencies of men who talked big and lived meanly. Most of the great thinkers were deeply flawed and preoccupied with money and lead immoral lives

Their greed, their lust and promiscuity, their deceit and arrogance, and the despicable
way they treated those around them, and especially their wives, mistresses and children while proclaiming selfless love for humanity. The best of them were 1950s bounders.

Ex-communists are quickly forgiven, so are practising renegade liberals.

Orwell in his proposed preface to ‘Animal Farm’ wrote of the renegade liberal who glorifies communist experiments and disdains middle-class life despite their own pleasant bourgeois circumstances.

Renegade liberals search for outlaws states and revolutionary movements to support, who, of course, would ship these renegade liberals straight to the camps as soon as they won power.

The revolutionary excesses of the new regime would be excused as the misadventures of ‘liberals in a hurry’ who understandably lost patience with the slow pace of democratic reform.

Why not Hayek? He was a divorcee too!

28

Matt 05.13.12 at 10:23 pm

Paul Johnson’s Intellectuals is a must read for this thread.

Uh, no. Not for this, or for anything.

29

djw 05.13.12 at 10:37 pm

I tried to read Ransom’s link. In the very first sentence, I encountered this construction:

“the Marxist-Socialist-Interventionist-Galbraithian paradigm”

No one that openly hackish gets 27 pages worth of my attention unless I need to read it for a particular research project.

30

Bruce Baugh 05.13.12 at 10:37 pm

By Paul Johnson’s standard in Intellectuals, we can dismiss every Republican candidate for president and congressperson. Not that we needed another, but it’s kind of entertaining when conservatives offer reasons to throw out their own people.

31

Jim Rose 05.13.12 at 10:42 pm

Matt, the argument against Johnson’s book is reciting the countless vices of intellectuals and that you would not were not want them for close friends are not arguments.

their vices must be connected with other propositions such as that those who are immoral are intellectualy unreliable, or that bad ideas come from bad people, in order to make a case. the questioning of the morality of Hayek is a topic of this thread.

32

Jim Rose 05.13.12 at 10:46 pm

33

Bruce Baugh 05.13.12 at 10:51 pm

I am deeply amused that the response to “as a tribe, they’re wicked” would be “look at the results of a criminal justice system we routinely denounce and actively obstruct”. As though legality established morality.

34

Bruce Baugh 05.13.12 at 10:54 pm

(And no, I won’t pursue troll-feeding further. It wouldn’t get funnier with codas and expository sequences.)

35

Jim Rose 05.13.12 at 10:58 pm

Bruce Baugh, I will assume the numbers were not in your favour.

36

mattski 05.14.12 at 12:03 am

Jim Rose,

You raise a good point. Einstein married his cousin so what possible use could Relativity be? MLK had extramarital affairs so why should we credit his life’s mission? Jesus Christ showed egregious disrespect for private property so what, really, could he have to teach us?

37

Greg Ransom 05.14.12 at 12:08 am

Sorry for the typos, esp at (4) which should read

institutional designs which set _off_ processes that call inevitably for further necessary revisions

38

Jim Rose 05.14.12 at 12:12 am

mattski, those who fear responding on the merits instead attack integrity, personal lifestyle choices, and conflate error and a lack of perfect recall with deliberate untruths.

being a communist at sometime point in a life shows an affinity for non-democratic politics, but is that one strike and you are out?

39

Greg Ransom 05.14.12 at 12:19 am

It’s idiotic and illiterate to term a ratchet mechansim a “slippery slope argument”.

A mechanism isn’t an argument, and a non-inevitable potential for ratcheting things ever tighter in a pathological direction to “fix” the problems created by the last ratchet tightening is not a slippery slope inevitability.

This sort of sloppiness in thinking and rhetoric permeates the garlic / crosses / silver bullets & panties in a bunch side of the “Sefdom” conversation, unfortunately.

40

Salient 05.14.12 at 12:28 am

I can’t parse “the argument against Johnson’s book is reciting the countless vices of intellectuals and that you would not were not want them for close friends are not arguments” to save my life.

At least “institutional designs which set of processes that call inevitably for further necessary revisions, that increasingly throw a monkey wrench into the workings and principles and ethics of a free society” parses down to “the slope is slippery” once you machete your way through the tangle of “which” and “that” clauses, provided you don’t let yourself ponder how someone might “increasingly throw” something.

41

Jim Rose 05.14.12 at 12:31 am

the argument against Johnson’s book is reciting the countless vices of intellectuals and that you do not want them for close friends are not arguments

42

John Quiggin 05.14.12 at 12:45 am

Please, everyone, DNFTT.

Since this is Henry’s post, I won’t intervene, but I anticipate wholesale disemvowelling/deletion, which will make responses to the massive Rose-Ransom threadjack a bit beside the point.

43

Barry Freed 05.14.12 at 12:53 am

If I may, I actually think the Ransom stuff should stay. Accusing Henry of dishonesty and lacking scholarly discipline may cross the line but his posts are on topic and the feebleness of his arguments only serve to bolster Henry’s point.

44

gordon 05.14.12 at 1:08 am

I wasn’t going to bother, but after looking at this post I came across a recent Counterpunch post on the “Powell Memo”:

“The 34-page, 16-subsection memo is a comprehensive analysis of what Powell saw as an all-out war on American business from liberals, leftists, socialists and communists. He mentioned four by name — consumer advocate Ralph Nader, UC-San Diego Professor Herbert Marcuse, Yale Professor Charles Reich and Black Panther Eldridge Cleaver.

“The memo details the dimensions, sources and tone of the attack; the apathy and default of business, responsibility of business executives and possible role for the Chamber of Commerce; and analyses and strategies for reaching the campus, the public, and the “neglected” political, judicial and stockholder arenas.

“He ends by casting the conflict as an apocalyptic struggle for economic and individual freedom.

‘“As the experience of the socialist and totalitarian states demonstrates, the contraction and denial of economic freedom is followed inevitably by governmental restrictions on other cherished rights,” he wrote. “It is this message, above all others, that must be carried home to the American people.”’

http://www.counterpunch.org/2012/05/11/a-call-to-arms-for-class-war-from-the-top-down/

Such fun.

45

Plume 05.14.12 at 1:15 am

Strange that some folks, even in 2012, think the Soviet system, the Chinese system, or Cuba represented “real existing socialism.” Obviously, they didn’t and don’t. Workers don’t own the means of production in any of these systems. There is no democracy — which is the natural essence of socialism. Even worse is the idea that “communism” has ever existed in any modern nation state. It hasn’t. First you have to establish real socialism, set the table, create the needed surplus, and then the state can dissolve — which may takes generations. Communism is the absence of the state and of all classes. Nothing could be more “democratic.” Nothing could be more “natural”, either, as human beings operated in communal systems for our first 200,000 years or so . . . and in some places, scattered across the globe, as recently as the 19th century.

Beyond that, perhaps the most important devolution in our public conversation is the successful right-wing conflation of “liberty and freedom” for the rich with liberty and freedom for everyone. Sorry, but the two things are in direct conflict. When the capitalist is free and at liberty, he or she will exploit the workforce, extract more natural resources than we have left to give, and screw over consumers and supply chains with impunity. Their “liberty and freedom” is our poverty, the planet’s death, and the death or worker and consumer rights.

(And the supposed “threat” to liberty and freedom coming from real socialism? It’s kinda like the supposed “threat” to the institution of marriage if same-sex couples get their chance to be miserable, too.

The capitalist system is structured in such a way (and has the built-in incentives) to dramatically exploit workers, consumers and supply chains, and rape the planet without cessation. Grow or die. Make a killing, not a living. With greater power and wealth, more wealth and power is possible, etc. etc. There is nothing about this anti-democratic system par excellence to even remotely appeal to the vast majority of human beings on this planet.

Yes, predators do very well with this system. It actually opens up the field for predators to include those not already in the ruling class. But the vast majority of humans aren’t predatory, have no desire to be, have no desire to own businesses or run them or do any of the sociopathic things predators do to make their fortune. In short, the system is designed for a tiny percentage of the human population, and it’s the worst possible way to organize any society.

The best is democratic socialism, followed by true small “c” communism (full on democracy, without parties, classes, rulers, etc), when we’ve evolved enough to handle it. That would mean real “liberty and freedom.” Those two words have become untethered from reality in capitalist society.

46

Jim Rose 05.14.12 at 1:29 am

How can democratic socialism ever work without if the right-wing parties will win office in 6, 9, or 12 years’ time and undo everything?

Too many parties of the socialist Left assume they are the face of the future, rather than just another political party that will hold power as often as not

Was that not Hayek’s fear? Was democratic socialism good for democratic consolidations in the post-colonial third world?

The left and right might form an alliance on constitutional political economy because unfettered power loses its shine when it must be shared with your opponents for more than a brief time.

47

Plume 05.14.12 at 2:02 am

Jim Rose,

It’s a huge assumption, of course, but I’m assuming that the electorate is well-informed (someday) and acts in its own best interest — not that it’s doing so now. If it does, it will never, ever, not in a million years, put right-wingers back into office. It will also, if well-informed and freethinking, dismantle capitalism and get rid of it once and for all. Because it’s obviously in the best interest of the world — as opposed to the 1% — to do so. That is, if we actually want to improve the quality of life for all, create a sustainable future for everyone, and so on.

I’m also assuming — and this is key — that if we ever really implemented true democratic socialism, citizens would love it to such a degree that they’d never want to go back to the barbaric, anti-democratic, anti-egalitarian ways of the past. Neoliberalism would be seen as a major blunder of epic proportions and the right discredited beyond all chances of redemption. Centrism would be discredited. Even New Dealism would be seen as far too much the compromise (which it was).

Basically, a well-informed, freethinking people will see that capitalism and a sustainable future are incompatible, to put it mildly. The only reason more people don’t see this right now is that so much is hidden from us, distorted — through the media and corporate propaganda and via distance. Pain, for many Americans (and Europeans) is elsewhere. Across the tracks. Overseas. Out of sight, out of mind. The richest 20% of the world’s population gobble up 85% of its resources and the folks in that 20% too often are oblivious of the rest of the planet. This can’t go on. The math doesn’t work. The World Wildlife Fund estimates that by 2030, we will need two entire earths to meet demand. I’ve seen estimates that say we’ll need four earths.

Capitalism must grow or die. It needs new markets, endlessly, and an endless supply of finite resources to sustain growth. Obviously, capitalism and our planet are on a collision course, and as long as we privilege “freedom and liberty” for business owners above all other things, including our health, safety, welfare and the planet’s future, we don’t stand a chance. Once the world wakes up to these facts, the right doesn’t stand a chance. It backs the predators, and we outnumber them by roughly 10-1.

48

Henry 05.14.12 at 2:05 am

I’m not going to do any disemvoweling or deletion, but Greg Ransom – you’re no longer welcome in my threads, nor, I imagine, in threads on Crooked Timber more generally. Blunderbuss accusations of dishonesty, illiteracy and idiocy against people who disagree with you do not improve public conversation. It could actually be that the official editor of Hayek’s _Collected Works_, who appears to agree on this point with dishonest and ignorant Hayek-basher Tony Judt is wrong, and random-self-appointed-Keeper-of-the-Flame-dude-on-the-Internet who likes to rail against the the Keynes-Kahn-Robinson smear their opponents conspiracy is right. Unlikely imo – but it certainly could be. But even it is somehow so, your very individual style of engagement means that there’s no chance whatsoever that we’re going to find out from your blog comments. Hence, any further comments I see from you on my posts will be alternatively or severally be deleted, disemvoweled, Swedish-Chef-dialectized, Eye-of-Argonized, magimixed, Eated-of-Meaning, hung, drawn, quartered, tarred and displayed on spikes above the four main gates of the city, depending on my ratio of impatience to whimsicality at the time that such further comments come to my attention.

Jim Rose – for the second time in a row, you’re pulling a thread way off-topic. Please desist.

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Lee A. Arnold 05.14.12 at 2:55 am

If I may break in, it always seems to me that Hayek’s tragedy is that he was never invited to the Macy cybernetics conferences. He was one of those proto-systems theorists from the early part of the last century, and he might have benefitted from exposure to lots of them.

As it is now, an introduction to whole systems thinking via Hayek’s ideas gives a sort of concreteness to the enterprise which really isn’t there, something which trips-up his rather curiously strident, current-day adherents: because systems thinking is an epistemology or a grammar, really. And Hayek didn’t get it all anyway.

I think the tragedy is sad indeed, perhaps a loss to 20th century intellectual development. Hayek wrote, over three decades after the date of the last conference, “When I began my work I found that I was nearly alone in working on the evolutionary formation of such highly complex self-maintaining orders. Meanwhile, researches on this kind of problem — under various names, such as autopoiesis, cybernetics, homeostasis, spontaneous order, self-organization, synergetics, systems theory, and so on — have become so numerous that I have been able study closely no more than a few of them.” –The Fatal Conceit (1988) intro. p.9.

He didn’t know others were working on it, and he didn’t get a chance to study more than a few. This is the key to Hayek, as well as (it seems to me) an affirmative description of his adherents: an inchoate excitement with ideas of self-maintaining organisation that could use a good deal more field description, and a good deal more fitting of fundamentals to facts. This area of thought has lately been taken over by the computer revolution of course, though it remains a fascinating, underdeveloped possibility for biology in general and needs a good deal more observation and examples, especially from nonhuman wildlife systems.

Anyway, I recommend it: The Fatal Conceit is very short. That is my most favorite recommendation for any nonfiction. If you want to know where Hayek’s intellectual energies were headed, read it. It is the only book of his that I was surprised to read, because you get a clear sense of his overall anthropological comprehension, as well as his own subtle flaws. I wrote something very much like the anthropological parts of it, when I was around 25 and had gone through Polanyi (Karl) and structuralism and Sahlins and Roy Rappaport, after studying lots of ethnology of nonliterate tribes.

To get back to my main point, the fatal conceits of Fatal Conceit are also rather instructive. We read not only the old socialism bugbear but now the suggestion, the insistence, that Western liberalism will do best by patterning itself upon the self-regulation of acephalous systems. (This is another normative imaginary extension from Hayek, of the same sort as this one: “extensive government control produces…an alteration in the character of the people.”) To achieve this normative goal, Hayek famously advertised the method of spontaneous order propounded individualistically via market prices.

The example for me is in not in these assertions, but in the assurance behind them. (Yes of course, I want to reply, there are self-regulating systems. The question should be whether self-regulation is a solution to be introduced, in a specific hypothesis or a specific policy.) The point is, ALL of the early systems theorists did this type of fantasizing about how systems work, or should work. They mistook molehills for mountains. This suggests the direction in which the earlier Hayek of The Road to Serfdom was headed: it was an entry into systems theory, though his is hidden underneath a political ideology.

I imagine some of the Macy conferees would have been horrified at the thought of inviting Hayek, if it even crossed their minds, although I imagine that Bateson would have found the encounter to have been an interesting “species of schismogenesis”. (Which is a negative/positive vicious-circle game that applied to intra-tribal status competitions as well as nuclear arms races, etc.)

Bateson benefitted from the conferences, and the later Bateson (e.g. Mind and Nature) showed a way to think more clearly about the epistemology of systems, although he was barely prepared to accept his own conclusion. Bateson came very close to the position that “information” is different from “matter-energy”, though it always rides upon a substrate of it. They are epistemological equals. It is a restatement of the ancient form/substance dualism. But Bateson was a true Western scientist, and a new addition to scientific fundamentals is a very serious venture to take on. He really never took the leap. Since crackpots are already running round the kitchen as it were, I shall venture to say that it really is an addition to the basic grammar of science. By applying the “pincers maneuver” of going back and forth between theory and experiment/observation in several subjects, Bateson was led to the conclusion that information and matter-energy are different things.*

I am well aware that Crooked Timber abounds with silly energy monists, but if you want to pick a fight, you won’t acquit yourself so easily. To conclude here, I just wish to point out that the profundities (and errors) of Hayek are neither unique nor in the end are they particularly noteworthy. Late Modernist Thought had as many practitioners as medieval scholasticism did, and Finnegans Wake put it to bed. (Indeed, put ‘em both to bed.)

[* This gets back in a curious way to the central error of the hard-money believers who congregate around Hayek's bookshelves. Because money is not a long-term surrogate of matter-energy. Money is a type of information. It has no long-term hard value.]

50

Greg Ransom 05.14.12 at 3:01 am

Pah! Again, the idiocy of leftists is demonstrated, I, MAGNETO deigned to communicate to them, in the faint hope that they might realize their dishonesty, idiocy, and profound ignorance of Chairman-MAGNETO thought. They laughed, LAUGHED ! ! ! Hence, I leave them again to wallow in their squalor and debasement.

51

Greg Ransom 05.14.12 at 3:06 am

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52

Lee A. Arnold 05.14.12 at 3:21 am

The Sensory Order is very good and even Herbert Simon admired it I think. But it was already written a hundred years before in German psychology. As to the “other scientific/intellectual problems” Hayek “simply chose” to pursue: no, his last book demonstrates clearly where he was headed. He was moving exactly in the direction of a whole systems characterization.

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speranza 05.14.12 at 4:53 am

Gosh, but who’s going to stand up for the “principle of charity” now that he’s gone?

54

Kevin Donoghue 05.14.12 at 8:19 am

The “principle of charity” now become the “privacies of changes” will be upheld.

55

heckblazer 05.14.12 at 10:40 am

What the hey are “energy monists”?

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Lee A. Arnold 05.14.12 at 1:14 pm

“Energy monists” are materialists. It is my new term for people who think that information reduces to matter-energy.

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politicalfootball 05.14.12 at 2:57 pm

And if Greg Ransom wants to argue in comments that notorious left-wing provocateur Bruce Caldwell is ignorant and dishonest about what Hayek says, he’s free to make the best case he can …

It is always unwise to invite trolls or vampires into your dwelling. (Though commenters at The Straight Dope call the vampire thing a “myth”.)

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Jerry Vinokurov 05.14.12 at 3:53 pm

Maybe Lee is the right person to answer this question, but in any case:

Is anyone familiar with any literature that puts Hayek’s price mechanism to an empirical test? Any references at all would be greatly appreciated!

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Tim Wilkinson 05.14.12 at 4:21 pm

Lee A. Arnold: his last book demonstrates clearly where he was headed or where he later decided, wished or pretended he would have been headed if he’d been sufficiently scholarly to do some research into what others were writing rather than churning out polemic.

I don’t see that systems thinking is an epistemology or a grammar any more than psychology, game theory or computing is, or why “information” is different from “matter-energy” would be considered an interesting or surprising discovery.

But an interesting contribution. Can you recommend any reading on self-regulating systems? My general impression is that these are very often if not always illusory, either being a non-self-regulating base system with a regulator attached, e.g. a thermostat, or having no independently and substantially specifiable end-state, e.g. ecosystems, the Market. But maybe this is to inflate expectations of what a ‘true’ SRS would have to be like.

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J. Otto Pohl 05.14.12 at 4:34 pm

58:

Soviet problems regarding the efficient distribution of goods due to the lack of an internal market would seem to prove Hayek’s argument regarding price mechanisms to be largely correct.

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geo 05.14.12 at 4:46 pm

Lee: “information” is different from “matter-energy”, though it always rides upon a substrate of it. They are epistemological equals. It is a restatement of the ancient form/substance dualism.

“Equals” for what purpose? For the purpose of being able to say that there are immaterial entities without being rediculed by materialists? I’m not sure I see what other purpose the distinction serves.

From the Stanford Encyclopedia: “Aristotle analyses substance in term of form and matter. The form is what kind of thing the object is, and the matter is what it is made of.” Is this your understanding as well? If so, in what sense is “the kind of thing an object is” epistemologically equal to “what it is made of”? Is it also ontologically equal?

Are you sure Rorty’s advice isn’t best: do science, forget philosophy?

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geo 05.14.12 at 4:49 pm

Sorry, “rediculed” should be “reticuled.” Or possibly “ridiculed.”

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Jerry Vinokurov 05.14.12 at 5:13 pm

J. Otto Pohl,

Soviet problems regarding the efficient distribution of goods due to the lack of an internal market would seem to prove Hayek’s argument regarding price mechanisms to be largely correct.

I’m looking for something a bit more precise than generalities concerning the Soviet Union as a whole. Specifically, I’m curious about comparisons between centrally coordinated and diffusely coordinated systems and the conditions under which one or the other might prove superior.

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piglet 05.14.12 at 5:26 pm

This is such a pointless debate. Right-wingers always want to have it both ways. This is most obvious with respect to Hayek’s explicit support for universal health insurance. Hayek, says the reasonable right-winger, wasn’t making the obviously crazy argument that any kind of welfare policy will lead to serfdom. Proof, he supported universal health insurance. At the same time, that very same right-winger will cite Hayek in support of claiming that Obamacare IS the road to serfdom.

Trying to debate these guys (and Tyler Cowen is the best worst example imaginable) in good faith is impossible. Physically impossible.

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Tim Wilkinson 05.14.12 at 6:08 pm

Energy monist.

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Data Tutashkhia 05.14.12 at 6:24 pm

It seems pretty obvious, actually, both empirically and intuitively, that for a massive project with a well-defined goal (The Manhattan project, Soviet space program, etc) the centrally coordinated approach should work better. It’s probably the only approach that does work.

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Bruce Baugh 05.14.12 at 6:33 pm

Piglet wins.

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Tim Wilkinson 05.14.12 at 6:45 pm

J.O.P: If you presuppose that Soviet problems regarding the efficient distribution of goods were due to the lack of an internal market, you’ve got a question-begging defence of ‘markets’. ‘Internal markets’, though – that’s starting to sound dangerously like ‘departmental budgets’ and ‘methods of accounting’.

But the Hayekian argument in question is not just ‘markets are needed for efficient allocation of resources’. It’s specifically about prices as signalling systems linking economci uniyts into a network. And that is pure fetishism. Even using the most favourable neoclassical(?) economic assumptions prices are the message: ‘my marginal cost is X’ or something, not the medium.

Also, prices are generally not determined by auctions (and they would not be flag-like ‘signals’ if they were, nor would the resulting system be manageable I shouldn’t think). Prices advertised on a take-it-or-leave-it basis have to be decided on by pricing analysts, who use market research and cost accounting as well as specifically market- based and oligopolistic considerations like competing offers. And they could just as well be performing the same accounting and calculation in a non-market setting.

In big software deals and most other deals (cars, boats) worth the transaction cost of price discrimination/haggling, as well as in cut-price ‘phone for price’ outlets that aim to avoiding upsetting cartel pricing, the price is of course not advertised on a take-it-or-leave-it basis, and then, just as in auction-based sales, prices do not have the simple signalling function Hayek proposes. Hayek announces the free market as an organisational free lunch, based on the magical properties of ‘prices’ – but on inspection, there are no such properties. Any system of industrial organisation is going to use numbers and accounting and relative values. In capitalism, prices are a particularly visible manifestation of that aspect. So what?

The other supposed function of prices is to ‘reveal’ preference (utility) in a way that precludes dissimulation. Unfortunately, they don’t do that in a capitalist setting, even for marketable private goods, since willingness to pay depends on wealth and income.

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Henry 05.14.12 at 6:50 pm

This Stiglitz overview of information economics is useful on this and other questions.

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J. Otto Pohl 05.14.12 at 7:01 pm

TW:

I don’t think the fact that distribution of goods in the USSR was decided by technocrats rather than by prices established by collective buying and selling decisions based upon supply and demand is controversial. Nor do I think that this system became less and less efficient as the Soviet economy got bigger and more complex is controversial. Now the problem is not just administrative in that supply and demand and market prices are also dependent upon cultural internalization. People renting flats or selling cars in Kyrgyzstan frequently refuse to ever lower the price regardless of how long their product sits idle. They have not internalized the idea of supply and demand effecting prices. I refused to pay the 10,000 som a month my first landlady asked for (up from 7,000) in 2008. The flat is still sitting empty after four years, but she won’t lower the price because many Soviet people have no concept of supply and demand and how it should effect prices. They believe that things should be a certain price and will not lower it. For labor it works the same way in the opposite direction. They will let their whole labor force leave rather than give anybody a raise including adjustments for inflation. This is how AUCA lost most of its foreign PhD holders. So just going to a free market system is not enough. You have to instill a free market culture.

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piglet 05.14.12 at 7:28 pm

Pohl 1: “The historical evidence of actually existing socialism does suggest that a centrally planned administrative command economy is incompatible with political freedom and democratic institutions. Certainly the USSR and PRC proved to be extremely authoritarian and repressive.”

They did but a bit more work is required to establish a causal link with central planning.

11: “I am not sure why I have to talk about British imperialism or US policy towards Native Americans when talking about Stalin’s atrocities. The two are not directly related. Although I do think things like the deportation of the Chechens and Crimean Tatars do resemble things like the Trail of Tears of the Cherokee and the Long Walk of the Navajos in being essentially racist acts of ethnic cleansing.”

And those atrocities were committed by regimes that were economically quite distinct. Again the claim that economic control and political repression are necessarily related is dubious at best.

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J. Otto Pohl 05.14.12 at 7:45 pm

Piglet:

Are there any instances of centrally planned and controlled economies that allowed political freedom? The main example of such an economy is the USSR. Even relatively lenient socialist states such as Yugoslavia, Poland, and Hungary were quite repressive compared to the US or Western European states (outside the dictatorships in Spain, Portugal, and Greece). Obviously capitalist free market dictatorships have existed, but I know of no centrally planned state socialist economies that allowed real political freedom.

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Tim Wilkinson 05.14.12 at 9:36 pm

JOP: the point is simimlar to piglet’s: the two facts may not be controversial, but it’s the causal relations that you assume to hold between them that is at issue.

Your statistical method of deriving laws of politics suffers from a vanishingly small sample size.

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Tim Wilkinson 05.14.12 at 9:40 pm

Thanks to Henry for the link btw

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Jim Rose 05.14.12 at 10:01 pm

Tim Wilkinson, Hayek is not a neo-classical economist. He is an austrian school economist.

The break came during the socialist calculation debate in the 1930s because of neoclassical economics “excessive preoccupation with the conditions of equilibrium”.

Milton Friedman declared himself “an enormous admirer of Hayek, but not for his economics”. This may may have been one reason why Hayek could not get a job at the university of chicago’s department of economics.

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Tim Wilkinson 05.14.12 at 11:18 pm

But I’m not interested in Hayek.

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Alex 05.14.12 at 11:35 pm

The USSR wasn’t a socialist economy that became a tyranny. It was a tyranny that became a socialist economy (while staying tyrannous). In point of fact, the one came before the other, and the tyrants explicitly said the point of the tyranny was to create the socialist economy.

But everyone seems to think Russians voted for socialism and got Stalinism. It really didn’t happen that way. It would be more to the point to say that they fought for something that wasn’t the tsar, voted for the SRs, Leninism seized power, and then Stalin seized it off Lenin. Rejecting the popular will in favour of an elite coup is a Communist trick.

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Alex 05.14.12 at 11:35 pm

…which is why the neocon tradition borrowed it.

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Jim Rose 05.15.12 at 12:30 am

Gordon Tullock used Sweden as an example to support his argument that the basic problem with The Road to Serfdom is “that it offered predictions which turned out to be false. The steady advance of government in places such as Sweden has not led to any loss of non-economic freedoms.”

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Lee A. Arnold 05.15.12 at 2:06 am

Jerry Vinokurov #58: I am not the right person to ask. I think that the price mechanism is efficient in some definitions of things, but not in others. And the claim that it results in a self-regulating system is a step too far, imho. (Perhaps sometimes, it might do so, if other things also happen, et cetera.) Dsquared once wrote something like: it is a little bit of local control theory that grew too big for its britches. I was inoculated against grandiose claims for the price mechanism basically because money destroys meaning, after reading the following in 1979:

Roy A. Rappaport, “On Cognized Models”: “It is of considerable interest that money is an important component in evaluational procedures in societies in which facts have been apotheosized. If meaning is fragmented by fact, it is dissolved by money. It may seem that money, which makes it possible to assign commensurable “values” to things that are radically distinctive, represents similarities underlying apparent disparities with unparalleled precision and facility. As such money would seem to enrich meaning. In fact it does not. Rather than finding or emphasizing similarities among the distinctive phenomena to which it is applied, it renders the distinctions among them irrelevant, which is to say meaningless, from the beginning. The application of a common monetary metric to dissimilar things reduces their qualitative distinctiveness to the status of mere quantitative difference. The most appropriate answer to questions of the type ‘What is the difference between a forest and a parking lot?’ becomes so many dollars per acre.” — Ecology, Meaning, and Religion, p.130 (North Atlantic Books, 1979)

So scarcity is to be solved by the price mechanism, but it involves a little annihilation of meaning, and that becomes part of the process of the consumer, when deciding her preference. (She is also incorporating them into larger, more meaningful pursuits, or so she says.) It looks to me like there is an incremental and increasing ignorance that is sometimes propelled onto ill-considered or dangerous systemic paths, such as greater divisions between rich and poor, or wars sometimes, or the disappearance of wildlife ecosystems, or chancing a new path with the climate. Are these all the same type of ignorance?

Tim Wilkinson #59: I too was rather surprised to find that anyone would think that “information is different from matter-energy” is a surprising statement. But there are materialists everywhere, they lurk in dark matter, yet I have seen them with mine own eyeballs… The human body is largely self-regulating with regard to its temperature and so forth. But then: “‘Stability’ and ‘change’ describe parts of our descriptions.” –Bateson, Mind and Nature, ch.2 p.61. Bateson I would say is the best book so far, a prolegomena to any future science of biosocial pattern, though what comes next is anybody’s guess; for me it was the grammar of my Ecolanguage. And there is not only self-regulation, there is “self-transcendence”. Self-transcending systems first showed up (I think) in the wild and wondrous Jantch and Waddington (eds.), Evolution and Consciousness: Human Systems in Transition (Addison-Wesley, 1977), a detailed survey, a fireworks, of a curious recent moment in systems imagination. (I made it the center of a snowflake pattern, just so you know who you are dealing with..)

Geo, hi, yes but doesn’t science need the proper fundamentals? So you can tweak them more! I suppose “epistemological equals” means irreducible to each other in scientific theory. Please don’t kill me.

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Lee A. Arnold 05.15.12 at 3:16 am

Geo, sorry, I didn’t answer your other question. My idea is that form includes kind, shape, and impressed patterns. So if you close your eyes and pass your finger over a piece of metal, and feel a bump, the bump is part of the form, and the substance is iron or aluminum or whatever. But the dichotomy is local and passes through variations. So if your voice were recorded and then transcribed, then your comment would exist in two forms, while its substance is what you said, or the meaning I received.

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Sebastian H 05.15.12 at 6:45 am

“They did but a bit more work is required to establish a causal link with central planning.”

Really? What do you think central planning involves that can be easily done without severe repression of dissenting elements? The causal link with central planning and authoritarian repression is ‘central’ part of it and the ridiculous levels of control needed for the ‘planning’ part of it.

You seem to have overlearned the correlation doesn’t equal causation lesson. As xkcd says “Correlation doesn’t imply causation, but it does waggle its eyebrows suggestively and gesture furtively while mouthing ‘look over there'”

There are perfectly logical reasons to believe that a society featuring a high level of centrality and a high level of planning control over people’s lives would tend to feature lots of repressive/oppressive tendencies. That paired with the fact that nearly all of the major existing cases of countries with high levels of central planning had high levels of repression and oppression suggest that whether or not A *causes* B in some hyper-direct sense, there is a strong indication that the phenomena are in fact related.

Dismissing that with “Again the claim that economic control and political repression are necessarily related is dubious at best.” is confusing the issue. Your approach has been to argue that political repression can exist independent of high levels of economic control, a fact which I suspect no one here denies. The question here is whether or not high levels of economic control can exist without political repression.

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Data Tutashkhia 05.15.12 at 8:42 am

The question here is whether or not high levels of economic control can exist without political repression.

What is “economic control”? Economy is always controlled somehow by somebody: Gosplan or Federal Reserve, Politburo or a few hundred CEOs.

You could say that suppressing commerce requires repression, but how is it “political repression”? Suppression of illegal drugs trade, prostitution, trade violating IP, unlicensed vendors in capitalist states is repressive, but is it “political repression”, or just ordinary repression, AKA “law enforcement”?

You could say that the war on drugs repression is different because a majority of the population supports it, but what if a majority supported what you call “high levels of economic control”? Would it then cease to be “political repression”?

A government can be popular or unpopular. The degree of repression follows from the level of popularity. The lack of popularity could be a direct or indirect consequence of various policies and characteristics; “high levels of economic control” could be one of them, but it could be “not enough economic control” as well.

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Peter T 05.15.12 at 9:01 am

On Sebastian H’s point

If, by “central planning” is meant the attempt to plan production in a large-ish country then, yes, there is a clear present association with a high level of coercion. But the ability to make and execute plans has evolved historically like any other technology – we routinely plan and execute projects on scales which the Romans would have found inconceivable (and without finding it necessary to use slave or forced labour). Many corporate planning systems are as large and complex as the production of small countries. And at the same time as we have evolved the technologies of planning, we have evolved the means to make more tolerable their impacts on freedom. So there is no NECESSARY connection between planning and coercion (unless you find the way we live with corporations, governments or other large institutions to be a form of coercion). It’s a question of scale, the technologies available and the countervailing pressures and forces.

Who knows? Maybe in a century we will be able to plan at the scale of a medium country with no more coercion than is presently involved in planning at the level of Apple. Or maybe with even less coercion – maybe only as much as we find necessary to plan highway systems.

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Tim Wilkinson 05.15.12 at 10:07 am

1. Sebastian explicitly derives hoary old Nozickian ‘Patterns upset liberty’ conclusion from a correlation (n= what? 2? 3?)

2. ‘Central planning’ is also known as ‘planning’ – the idea that it must be undemocratic is a highly prejudicial stipulation. If one were to consider a continuous variable – degree of democratic control over industrial production – instead, one would have more data and a less droolingly simplistic argument. Bring in corporatist and social democratic regimes and plot degree of socialism against degree of repression. It still wouldn’t prove much but it would be a bit more gormful.

3. Remember also to adjust for ‘repression’ caused by the need to combat US-backed astroturf saboteurs, guerillas and terrorists, in e.g. Sandinist Nicaragua (and indeed Cuba, USSR, Europe, South America). Adjusting for this would of course involve correctly assessing the extent and significance of it – it tends to be understated, euphemised, salami sliced and just plain ignored in Western historiography.

4. In general, economic ‘liberty’ tends implicitly to be defined in a tendentious manner so that a property regime unconcongenial to private business becomes ipso facto ‘repressive’ (just as taxes are always ‘coercive’, imposed by threat of state violence, while a ban on shoplifting, for which people do acually get clapped in irons and frogmarched off to jail, never seems to be so described by the Sherman McCoys of this world).

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Chris Bertram 05.15.12 at 10:48 am

_The question here is whether or not high levels of economic control can exist without political repression._

Well the UK wartime economy was combined with a high degree of political diversity and freedom of argument. More generally, many postwar states in western Europe (until, say the 1970s) managed to combine a degree of state ownership and control of the economy that would be unthinkable today with a freer and more diverse media and more political pluralism than exists today under the free-market consensus.

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Slocum 05.15.12 at 10:54 am

Paul Johnson’s “Intellectuals”? Really? By far inferior to “Caddyshack.”

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J. Otto Pohl 05.15.12 at 11:51 am

Alex at 77 I agree with the basic premise that socialism was created by dictatorship in the USSR not that a socialist state degenerated into a dictatorship. I think only the Trotskyites believe that the USSR was a degenerated workers’ state. Rather it was a developmental dictatorship that used the power of the state to create a modern industrialized society. This required an extreme amount of violence and the violence had very little to do with outside threats, but rather the need to subordinate the peasantry and then extract the wealth of the countryside to fund industrial development. (See Lynn Viola, _The Unknown Gulag: The Lost World of Stalin’s Special Settlements_ 2007 for a description of how this worked in the early 1930s).

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Data Tutashkhia 05.15.12 at 12:24 pm

But of course they would tell you that they needed to create an industrialized society in a hurry because of external threats… I don’t have any academic studies, but maybe something like Darkness at Noon will do?

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Jim Rose 05.15.12 at 12:59 pm

Chris,
the period that managed to combine a degree of state ownership and control of the economy that would be unthinkable today with a freer and more diverse media and more political pluralism than exists today under the free-market consensus was often under Tory rule (1951 to 1964) with the Labor governments (1964-1970) often with a margin of a few seats.

Then there was the Menzies era in Australia with liberal party rule from 1949 to 1972; and then 1975 to 1983. much the same in NZ.

the Christian democracts usually ran both Italy and Germany in coalitions, as I recall, up until the late 1960 or early 1970s. Gaullist France? (The LDP in Japan)?

When looking back longingly at the mixed economies of 1950s and 1960s, people often forget who won elections much of the time back then.

That is where hayek got it wrong. the left-wing parties were not the face of the future.

Power rotated in schumpetarian sense. governments were voted out when they disappointed voters with the replacement not necessarily have very different policies.

the right-wing parties won many western european elections by that well-proven old trick of being slightly to the right of the left-wing parties.

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Tim Wilkinson 05.15.12 at 2:15 pm

What’s that got to do with anything?

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Chris Bertram 05.15.12 at 2:22 pm

Indeed.

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Katherine 05.15.12 at 3:06 pm

I think it was supposed to be a Gotcha – ie look, right wing governments did the things you are praising. Therefore you are wrong to be left wing. Or something.

Frankly, a combination of Ransom + Rose + Data Tutashkhia saying something I agree with has my head spinning, so I’m not quite sure.

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J. Otto Pohl 05.15.12 at 4:11 pm

TW at 85

There were no “US-backed saboteurs, guerrillas, and terrorists” operating in the USSR during the 1930s. Not even the Stalin regime made this claim. The largest waves of repression took place during 1930-1931 when the regime collectivized agriculture, 1936-1938 during the Great Terror, and during WWII with the national deportations. You are also wrong on western historians. Many of them like you justify Stalin’s repression as being necessary security measures. For instance Francine Hirsch claims that the fact that the Nazis in Berlin made claims regarding the right to protect the ethnic Germans in the USSR justified the deportation of the Volga Germans despite the fact there was no evidence of any disloyalty among this group. No US historian would ever get away with justifying the internment of Japanese Americans by noting similar claims by Tokyo on the loyalties of the Issei and Nissei or even the Kibei.

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Zamfir 05.15.12 at 4:26 pm

is there any way to guess how the 1930s in Russia might have looked without a fear for Germany? would they have followed similar policies and oppression with a different set of rationalization? could Stalin have maintained as much power without a fear for Germany?

How much did they fear Germany, in fact? some rethoric from days sounds almost prescient in its call for industrialization for self-defense, but at other moments they seem to have forgotten the imperialist threat completely

96

Salem 05.15.12 at 4:34 pm

Well the UK wartime economy was combined with a high degree of political diversity and freedom of argument.

Really?

What strikes me most about the period was the extraordinary lack of political diversity and enforced consensus – mostly imposed by the exigencies of war. What also strikes me was the lack of freedom of argument, due to government propaganda, censorship, and control of the media – and indeed means of production*. People with unpopular political views stood the risk of being interned.

No doubt wartime Britain was far freer than wartime Germany. But it was a fundamentally unfree country, a situation that was only tolerable as a temporary expedient in an extraordinary situation. I do not see how it advances your point at all.

*The Road to Serfdom is ironically a fine example of this. The publication of the book (like many others) was delayed due to material shortages caused by the war.

97

J. Otto Pohl 05.15.12 at 4:46 pm

Zamfir:

There was no fear of Germany in 1930-1931 during dekulakization and the subsequent famine in 1932-1933. During 1930-1931 the Weimar Republic was in very bad economic straights and not in any condition to threaten the USSR. It is only in 1934 after Hitler came to power that there are political trials aimed at people connected to Germany. In this case ethnic Germans in the USSR who received assistance from groups like _Bruder in Not_ in Germany . They were accused of receiving “Hitler Help” even though organizations like _Bruder in Not_ that provided the relief had nothing to do with National Socialism. This is a pretty feeble excuse for 1934 and later. But, it does not exist at all in 1930-1933.

Since the massive war against the countryside by the OGPU in 1930-1931 is one of the greatest waves of violence by the USSR trying to justify all Stalinist repression as justifiable defensive measures against foreign powers does not fly. The uprooting and confinement of some 2 million peasants to special settlement villages where some 600,000 of them perished from material deprivation was never justified by the Soviet government itself in such terms. They never claimed that the “kulaks” were a source of “Us-Backed (or German backed) saboteurs, guerillas, and terrorists,” but rather class enemies some of which were accused of sabotage and terrorism. That is it was conceived by the Stalin regime as a war against indigenous internal enemies who stood in the way of expropriating the wealth of the peasant majority in order to create an industrialized state.

98

Sebastian H 05.15.12 at 4:50 pm

“Well the UK wartime economy was combined with a high degree of political diversity and freedom of argument.”. That doesn’t seem like much of a counter example. It has the features of a very short period of time, preceeded by low levels of economic control, when under direct physical threat of total cultural destruction, quickly reverted after the threat passed.

It seems a little precious to be talking about long term nationwide economic control attempts and the levels of political repression which seem to routinely attend them, and then side step into “when the rockets are literally raining down on London, the Brits were able to manage it for a short time”.

Also, traders can make lots of stupid short term bets and only blow up the economy every couple of decades. If you insist on looking at super small slices of time in isolation it would appear that the banking system is fine. Of course it isn’t, there really are logical reasons to think that way we run our banking system is tied up in the way it blows up.

The central control/repression correlation is far more tight and at least as logical as the assumptions built in to the constant discussions about the recent banking crises. So going all correlation doesn’t equal causation on the easier case while going on as if the proofs are obvious in the less correlated banking cases betrays a lack of real attention to what the correlation/causation quip is about.

99

Bruce Wilder 05.15.12 at 4:59 pm

The irony of “serfdom” in Hayek’s famous essay should be considered: serfdom is a condition and a relationship of person to state, which arises only when the central state is very, very weak, and when the economy is characterized by a high degree of autarky — an economy without extensive market trade, and therefore without much specialization in production. Serfdom implies a critical role for an intermediate power, with an interest in attenuating trade, and exploiting the individual serf — a local lord of the manor.

Mapping the idea of “serfdom” onto an economy characterized by a great deal of planning and hierarchical direction by a powerful central state is inherently contradictory. The planning implies a high degree of specialization, which requires coordination, and the state is, well, powerful.

Hayek’s central argument is that hierarchical planning is subject to coordination failure: the seemingly powerful central state is not, in practice, powerful, because coordination failures will make it, practically, weak. But, he marries that to a more poetic and psychologic argument, by invoking the servile “serf”, suggesting that the dependency of the “serf” on the powerful state will weaken the ability or willingness of the individual “serf” in society to carry out efficient and “powerful” market exchange and coordination.

Actual serfdom, like slavery, is an extractive and exploitative relationship, in which the weakness of the central state, and sharply limited trade, are pre-requisite conditions. An ideology defending serfdom or slavery posits the dependence of the serf or slave on the lord or master, but the factual, functional reality is that the lord or master is dependent on the serf or slave. It is the serf or slave, who knows how to work and to produce and to sustain life, and the lord or master is the parasitic drone; it is only an ideology protective of such a system that tries to make him out as a predator, dressed as a shepherd.

The conservative impulse is revealed in the determination to see the serf as servile and dependent, as well as oppressed and exploited, and to disappear the intermediate power — the local lord and master, who attenuates trade and extracts a surplus, diminished by the costs of oppression, for trade to benefit only the intermediate power.

The Chicago school was far more successful than Hayek, because it took a two-pronged approach to the relationship of the individual to the intermediate power to the state. First, there was the Friedmanite approach to denying the role of a planning and a powerful state in freeing the individual and creating market relations that benefitted the individual: the ideology of the ideal “natural” economy, in which intervention by the protective central state can only make a less-than-ideal mess. Second, there was the public choice approach, in which the central state must necessarily be weakened and corrupted by the intermediate powers lobbying for economic rents. The former hid the planning and regulatory work of the state that went into creating a workable market economy behind paeans to “the freedom to choose”. The latter laid out a blueprint for weakening and subverting the central state, while decrying the effects on the market economy.

So, here, we are, well on the road to serfdom, but on a road paved by Chicago “free market” economics, rather than Austrian nostalgia for feudalism.

100

geo 05.15.12 at 5:06 pm

Otto: of course nothing can “justify all Stalinist repression as justifiable defensive measures against foreign powers,” and I doubt that’s what Zamfir has in mind. But there certainly was intense fear of the West, including Germany, in the Soviet Union throughout the 20s and 30s. The Germans had invaded eastward during the Great War, the Western powers had intervened in the Civil War, and the US and most European powers were ferociously hostile to the USSR, up to and including nonrecognition and an economic boycott. In Germany, the right did not disappear during the Weimar Republic, and there was every reason to fear that it would regain power and join France, Britain, Italy, and the US in concerted hostility, perhaps even including military intervention, against the Soviets. It’s even arguable that the West’s intense, unremitting hostility — which of course had nothing to do with Soviet human rights violations, since dictators of a right-wing cast were perfectly acceptable to Churchill, Clemenceau, and Western politicians generally — aggravated the Soviet situation and accelerated the slide into Stalinist darkness. I know this is an old debate, but it’s by no means clear to me that the right wing won it.

A good non-scholarly source for getting a sense of the atmosphere in the USSR during these years is Victor Serge’s marvellous Memoirs of a Revolutionary.”

101

Data Tutashkhia 05.15.12 at 5:08 pm

@95, it wasn’t fear of Germany. It was the concept of “socialism in one country”. I doubt that it was merely a propaganda device; it seems that at that time many of them were sincere and felt like they were in a constant state of emergency.

102

Salem 05.15.12 at 5:27 pm

An ideology defending serfdom or slavery posits the dependence of the serf or slave on the lord or master, but the factual, functional reality is that the lord or master is dependent on the serf or slave. It is the serf or slave, who knows how to work and to produce and to sustain life, and the lord or master is the parasitic drone; it is only an ideology protective of such a system that tries to make him out as a predator, dressed as a shepherd.

OK, but isn’t this pretty much exactly the conservative critique of the welfare state?

103

bianca steele 05.15.12 at 6:04 pm

The central control/repression correlation is far more tight and at least as logical as the assumptions built in to the constant discussions about the recent banking crises.

Whether or not this is true, what Hayek et al. get across is the idea that the upper levels of the commercial class have special rights of unregulated (also cross-border, etc.) freedom that in the twentieth century was unprecedentedly taken away. Which is not true.

Hayek is not defending the right of men like Thomas Paine to print and distribute pamphlets here, or the right of peasants to periodically destroy their landlords’ property for emotional or semiological reasons (as some Foucauldian-style leftists may assert).

104

Chris Bertram 05.15.12 at 6:04 pm

Contra Salem, there was a lot of political diversity in the UK in the war: you could be every everything from Conservative to Trotskyist.

Sebastian: why only reply to my first sentence? I’ll repeat the rest to save you the trouble of scrolling back:

bq. many postwar states in western Europe (until, say the 1970s) managed to combine a degree of state ownership and control of the economy that would be unthinkable today with a freer and more diverse media and more political pluralism than exists today under the free-market consensus.

105

J. Otto Pohl 05.15.12 at 6:14 pm

Geo:

The Allied Intervention had completely ended by 1925 when the Japanese pulled their soldiers out of North Sakhalin. After which the Soviet government voluntarily gave them very generous concessions which they maintained throughout the 1920s and 1930s. All the other Allies had left before the institution of NEP in 1921. Under General Hans von Seeckt the USSR and Germany began military cooperation to allow the Reichswehr to circumvent Allied restrictions during this time. A more open normalization between the USSR and Germany came about with the Rapallo Treaty in 1922. So during the 1920s the Soviet Union had a much closer relationship with Weimar Germany than it did with the UK and France. Given this cooperation I fail to see where the Soviet regime would have perceived any threat from Germany. If they did fear the small restricted military of Weimar Germany then why allow the Reichswehr to train in the USSR? The first claims by the Soviet government that there was any connection between Germany and “internal enemies” only comes about in 1934. This is after the war against the “kulaks” has been won and the man made famine in Ukraine has ended. I am still failing to see how a weak, economically crippled, and still democratic Weimar Germany threatens the USSR in 1931. I completely fail to see how it justifies the forced relocation of two million Soviet farmers to wastelands in the Far North and Urals.

106

Tim Wilkinson 05.15.12 at 6:29 pm

JOP: US paramilitary activity against the USSR (starting, I’d suggest, with a spectacular terrorist attack in Hiroshima) was as far as I know confined to proxy wars. Covert action in the USSR seems to have been limited to spying, subversion and propaganda. All this, under the umbrella of the Cold War, did surely contribute to the paranoia and seige mentality of the Kremlin, but I’m happy to retract mention of the USSR from that parenthetical aside in any case, sincse nothing much rests on it.
—-
I note that Sebastian is still sticking to his ‘correlation’ despite the negligible sample size.

107

geo 05.15.12 at 6:32 pm

I completely fail to see how it justifies the forced relocation of two million Soviet farmers to wastelands in the Far North and Urals.

It doesn’t justify it, for me or for Zamfir, as I think I made completely clear. Should I have put it in capitals?

What’s at issue is your statement @97 that “there was no fear of Germany in 1930-1931 during dekulakization and the subsequent famine in 1932-1933.” Saying @105 that “I am still failing to see how a weak, economically crippled, and still democratic Weimar Germany threatens the USSR in 1931″ misses the point. No one is saying that Weimar Germany was an imminent threat to the USSR in 1931. What Zamfir said, what I am saying, what countless people have pointed out, is that 1) there was tremendous and continuing hostility toward the USSR in the capitalist West, recently demonstrated by intervention in the Civil War and diplomatic/trade boycotts in the 1920s; 2) Russia had suffered major invasions from the West twice in the last century; 3) the German right wing was alive and well in 1931, and ferociously hostile to the Bolsheviks. The relationship between capitalist encirclement and internal repression is debatable, and has of course been very widely debated. I’m not taking a side in this debate. I’m simply pointing out that your comments don’t seem to take proper account of its existence.

108

Tim Wilkinson 05.15.12 at 6:35 pm

Those were supposed to be two separated remarks.

BTW There’s a CIA document from the late 60s about their covert action strategy within the USSR – it was certainly an offensive aimed at bringing down the communist regime (that this was the aim of the US is not really in question, I shouldn’t have thought).

109

J. Otto Pohl 05.15.12 at 6:41 pm

TW: 106

Here is the problem most Soviet repression is long before 1945 and the Cold War. A lot of it takes place in the 1930s. In terms of numbers of people even adjusted for population differences it is orders of magnitude greater than anything that ever happened in Cuba or Nicaragua. If US backing of “saboteurs, guerillas, and terrorists” is the sole cause of repression in socialist states then there should have been very little repression in the USSR especially during the 1930s. Instead we should have seen hundreds of thousands of people shot in Cuba and Nicaragua. But, there is nothing in either of these states comparable to “dekulakization”, The Great Terror, or mass deportation of various nationalities during WWII. So this justification for Stalinist crimes just does not hold up.

110

piglet 05.15.12 at 6:56 pm

I second Tim Wilkinson’s argument in 85. It is tragically true that most countries that advertised themselves as socialist turned out to be repressive but without this being meant as an excuse (etc. etc.) it is certainly also true that every single one of these countries, every one that dared advertise itself as socialist, was existentially threatened, from the very first minute of its existence, by those countries that advertised themselves as the free world. This is an indisputable fact and pretending that it had no bearing on the political development of socialist countries is just grotesque. And also, contrary to the fake history most of us are nowadays familiar with, the threat went almost exclusively in one direction. As soon as there was a Soviet Union, Western powers did whatever they could to undo it, while the SU did not do anything to threaten them (except ideologically, which is what they actually were afraid of).

The US tried to undermine the Cuban revolution not the moment they declared themselves socialist, but the moment they declared themselves independent of the US. Perhaps not all but a great deal of the political repression on the island can be attributed to the perceived necessity to defend “us” against a powerful bully out to destroy “us” and that perception was hardly unreasonable.

The old GDR, nobody remembers that any more but they happened to be neighbor to a country that fundamentally refused to recognize their very political existence. It was part of the indispensable constitutional fabric of West Germany to claim East Germany as part of its territory and East Germans as part of its people.

We can only speculate how history might have turned out if socialist countries had been left in peace. Given the realities of counterrevolution, fascism, World War II and Cold War, the argument that whatever happened in socialist countries can be explained by intrinsic factors only is absurd.

111

Tim Wilkinson 05.15.12 at 7:10 pm

Ignoring JOP who has reverted to his usual complaint about imagined justification for Stalinist crimes, I’d certainly agree with other comments that a wide range of factors other than ‘central planning’ underlay the peculiar and repressive nature of the USSR.

+ I think this was probably the document I was thinking of: http://www.fas.org/irp/cia/product/frus1969.pdf (pp. 457 ff), but looking at it again, I realise that the ‘black ops’ advertised in p457, fn 2 do not seem to be described in the declassified text. Presumably they were outlined in the 6 1/2 pages said on p. 464 to have been redacted.

112

J. Otto Pohl 05.15.12 at 7:10 pm

In the vast majority of cases repression is almost always justified in the name of security. But, nobody gives Nazi Germany, apartheid South Africa, or Argentina during the “Dirty War” a pass because of this claim. On the other hand there is a continuing justification of Stalin’s crimes because the regime felt “threatened.” I guarantee you the apartheid regime in South Africa also felt an existential threat as well. In neither case does it justify the repression. The continued double standard regarding Stalinism is very sickening and one of the reasons for the almost complete rehabilitation of Stalin in Russia today. If similar excuses and rehabilitation were made for Hitler the reaction would be quite different than saying it was due to US subversion of his regime.

113

piglet 05.15.12 at 7:28 pm

JOP, your tirades become tiresome.

114

Walt 05.15.12 at 7:55 pm

I haven’t found JOP’s comments on this thread to be either tirades, or tiresome.

115

piglet 05.15.12 at 8:02 pm

Well what is tiresome is the persistent use of the word “justification” and the hand-waving dismissal of contrary arguments free of any evidence. Did France, Britain, the US conspire to topple the Nazi regime after it came to power? Can you name even one fascist or right-wing dictatorship of the 20th century that was threatened anywhere close to the way the SU was threatened after 1917 or Cuba was threatened after 1959? No? So why bring up that comparison?

116

Sebastian h 05.15.12 at 8:15 pm

Chris, I responded concretely to your only explicit example. It isn’t even remotely clear which country you are trying to invoke in your general statement. Last time I tried to guess it turns out you were seriously proposing the city states in your discussion of immigration. I’m pretty sure you don’t mean France during the Algerian war or poland or Hungary or west Germany when the allies were vetting their politicians. I responded to your concrete example and it turned out to be rather crappy. Now you want me to guess?

Tim, how small do you think the sample size is? Surely you aren’t counting Poland and Hungary and the USSR all as one single case? You counting china and vietnam and north Korea and Cuba all as part of that one case too?

117

J. Otto Pohl 05.15.12 at 8:18 pm

The US, UK, and USSR did topple the Nazi regime in 1945. The fact that the war starts in 1939 doesn’t seem much of an argument for a difference in “security” justifications for state violence. The Nazi genocide was also after 1939 as well. The US and other countries also eventually put incredible pressure on South Africa to end the apartheid regime. We had far greater economic and other sanctions against South Africa in the 1980s then we did against the USSR at the time despite the Soviet invasion of Afghanistan. There was no threat to the USSR from 1922 to 1941. This is a crucial period of time since this is when most of the violence by the Stalin regime occurred. The dekulakization, Holodomor, and Great Terror all took place during this time when the USSR was at peace and there were no threats to it from the US or Germany. The comparison with Cuba is telling. US attempts to overthrow the Castro regime were much, much more of a real threat then any of Stalin’s paranoid delusions during the 1930s. Yet there is no mass terror in Cuba. Out of 172 million people in the USSR Stalin had close to 700,000 shot in 1937 and 1938. The equivalent for Cuba would have been killing 50,000 people in 1979-1980. Despite being under much greater pressure from the US there is no equivalent to Stalinist mass violence in Cuba. So claiming that Stalinist repression is the result of US or German attempts to overthrow the regime is just special pleading especially when dekulakization, the Holodomor, and the Great Terror all took place during years in which there were no such attempts.

118

lurker 05.15.12 at 8:22 pm

‘As soon as there was a Soviet Union, Western powers did whatever they could to undo it, while the SU did not do anything to threaten them’
The Intervention was a farce. It was nothing like ‘whatever they could do’. FFS, the largest British formations involved were a couple of brigades covering the retreat from North Russia.
Soviet attempts to export the Revolution were equally farcical: http://en.wikipedia.org/wiki/Hamburg_Uprising

119

Plume 05.15.12 at 8:24 pm

I’d still like to see someone make the case that there has ever been any socialist, much less communist state in the modern world. States have called themselves that. But, we all know from Orwell, among others, that ends justify rhetorical means of every imaginable kind. We have seen literally thousands of political parties named “freedom” or “people’s” that bare not the slightest resemblance to the titles or concepts. American politicians frequently call their bills things like “Clear Skies Act” even though they actually aid and abet polluters.

We need to go waaay beyond labels and break down how these systems actually functioned and, most importantly, for whom. Any careful scrutiny reveals that the Soviet, Chinese, North Korean systems, etc. . . . had next to nothing in common with socialist theory, much less communist (or actual leftist thought in general). Theory and practice were/are worlds apart.

The reason this is important? How can we argue against a system that has never, ever been implemented? To borrow a sports metaphor. It’s a little like condemning (and arguing against) the overuse of passing in football, when a certain team runs the ball 75% of the time. Some how, it got this reputation for passing at the drop of a hat, but really never has. No one questions the reputation anymore — it’s conventional wisdom — so they argue about their absurd projections rather than the actual, on-the-field reality.

Closer to home, this reminds me of the baffling, surreal view of Obama on the right. That he is somehow “far left” despite the evidence. To me, the evidence is overwhelmingly clear that Obama is easily one of America’s most conservative presidents, especially on economic and security matters. If only he were the leftist the right accuses him of being!!!

120

piglet 05.15.12 at 8:34 pm

“The US, UK, and USSR did topple the Nazi regime in 1945.”

I give up.

121

Tim Wilkinson 05.15.12 at 8:37 pm

I don’t see why you would separate Soviet satellites from the Soviet union – well I do see why, only too well: so that you can present them as independent instances of repression, which in fact of course they are certainly not.

But it doesn’t matter anyway whether you’re talking about 3, or 12, or 50. If you’re going to use statistical methods like correlation, you need large homogeneous datasets. If you don’t have those – which you don’t if you are ‘sampling’ examples of various modes of industrial organisation – you need to get your microscope out and see if you can discern any internal complexity in your specimens (you know, things like ‘the Soviet Union’ and ‘Maoist China’), which you could then try to analyse.

122

Consumatopia 05.15.12 at 8:46 pm

Here is the problem most Soviet repression is long before 1945 and the Cold War. A lot of it takes place in the 1930s. In terms of numbers of people even adjusted for population differences it is orders of magnitude greater than anything that ever happened in Cuba or Nicaragua.

How does central planning explain why the Soviet Union was more repressive prior to 1945 than after?

123

J. Otto Pohl 05.15.12 at 8:53 pm

122

For one thing the implementation of a system of collectivized agriculture to finance industrialization had already been completed. For another all potential enemy groups had already been neutralized as collectives. There were no more enemy classes or enemy nationalities that needed to be liquidated. After 1953 there are only individual not mass victims of terror.

124

Data Tutashkhia 05.15.12 at 9:04 pm

I guarantee you the apartheid regime in South Africa also felt an existential threat as well. In neither case does it justify the repression.

Here: the repression by the apartheid regime in South Africa can be explained, in part, by the regime having felt threatened. Now I’ve done it.

125

Jim Rose 05.15.12 at 9:48 pm

Chris, there was less political pluralism prior to 1970 than today.

back then, the UK parliament was dominated by two parties with a cricket team of liberals and a few stringers.

Today, the UK has
• A coalition government in a Parliament with many minor parties
• A Scottish nationalist government in a parliament with green MPs and which had a few semi-retired Trotskyist MPs
• A national assembly for wales
• A Northern Ireland Assembly with power sharing established after 50 years of illiberal democracy and 30 years of direct rule (a liberal dictatorship?)

The German parliament is much more diverse with green and unrepentant communists MPs. There is a green party state government in Germany?

The Italian Christian democrats were replaced with the party formed by their milder version of the rutting chimpanzee

Other European parliaments have economic nationalist parties of the left and right as represented by the greens and anti-immigrant parties

Hayek predicted wrong because he did not anticipated a democratic consolidation in Europe in mid-20th century with the Tory parties winning much of the time.

The much greater political pluralism of the late 20th century was a response to stem the rapid growth of government.

126

LFC 05.15.12 at 10:36 pm

Piglet:
As soon as there was a Soviet Union, Western powers did whatever they could to undo it, while the SU did not do anything to threaten them (except ideologically, which is what they actually were afraid of).

No, not really. Threat is in the eye of the beholder, and there were threatening actions on both sides. The US was, to be sure, intent on maintaining a position of geopolitical/economic strength (cf. Leffler, A Preponderance of Power, a book I foolishly parted with some yrs ago after deciding it took too much shelf space), but the SU responded by, e.g., ending the US atomic monopoly in ’49, aiding the Chinese Communists (before the Sino-Soviet split), supporting Communist parties/mvts in W Europe and Africa and Asia, maintaining an active spy network to counter the West’s (or did LeCarr&ecaute; make it all up?), etc. Thus the Cold War in its hotter periods coupled ideological competition with the ‘security dilemma’ beloved of IR textbooks, where A’s moves taken for perhaps defensive reasons look threatening to B, which takes moves in response that look threatening to A, which takes further moves, and so on.

Anecdote: Last fall, I guess it was, I heard J.L. Gaddis give a talk about his biography of Kennan. There were some good questions from the audience and some not-so-good questions. One of the latter was: Did Kennan cause the Cold War? Gaddis dispatched this in six words: “No. Stalin caused the Cold War.” I had to admire the brevity and clarity of the response, even if it is too simplistic, which I think it probably is. (Of course, I know less about the Cold War than J.L. Gaddis, and so do most readers of this thread, presumably.)

127

LFC 05.15.12 at 10:38 pm

oops, that should have been LeCarré

128

LFC 05.15.12 at 10:41 pm

P.s. As for the period before the late ’40s, I think that has been sufficiently covered by others’ comments above.

129

Jim Rose 05.15.12 at 10:50 pm

LFC, didn’t the allies invade Russia in 1918 to nipe communism in the bud?

piglet, when the Bolsheviks took power in Russia in 1917, they had given little thought to a future Soviet foreign policy, for they were convinced that Communist revolution would soon follow in the advanced industrial countries of Western Europe.

When such hopes were dashed after the end of World War I, Lenin and his fellow Bolsheviks adopted the theory of peaceful coexistence as the basic foreign policy for a Communist state. A highly practical course of holding the survival of the existing Communist state as the foremost goal of foreign policy.

Stalin displayed a consistent preference for the conservative interests of the Russian nation-state over cleaving to revolutionary ideology — by repeatedly betraying indigenous Communist movements. to preserve peaceful relations with the West, Stalin consistently tried to hold back the success of various Communist movements who wanted to take advantage of the ruins of war.

Post-1945 Russia wanted countries on her border that would not be anti-Communist in a military sense, and that would not be used as a springboard for another invasion.

130

piglet 05.15.12 at 10:55 pm

LFC 126: “but the SU responded by, e.g., ending the US atomic monopoly in ‘49″
“maintaining an active spy network to counter the West’s”

That’s your best examples of the SU “threatening” others? Again: I give up.

131

LFC 05.15.12 at 11:05 pm

P.s. (2): I know Gaddis got some sort of award or medal from GWBush, etc. I don’t agree with his politics.

132

rf 05.15.12 at 11:18 pm

On the topic of Gaddis, and Judt in a previous post, this was a quite convincing short article attacking Gaddis’s parochialism (I think, its been a while since i read it)

http://www.nybooks.com/articles/archives/2006/mar/23/a-story-still-to-be-told/?pagination=false

133

JDeS 05.15.12 at 11:28 pm

Hi
Sorry to post inappropriately but I can’t find any other way to reach you. Thought you might enjoy this satirical blog by UK academics bemoaning encroaching managerialism. If you like it, perhaps you could post it up or simply pass it on.

http://departmentofomnishambles.tumblr.com

Some light relief, at least.
Regards
JDeS

134

LFC 05.16.12 at 12:43 am

rf, thanks for the link

135

geo 05.16.12 at 1:22 am

LFC @126: I had to admire the brevity and clarity of the response

Even though it’s perfectly fatuous? And three times as long as “Because imperialism … “?

136

LFC 05.16.12 at 2:20 am

Geo, unlike you I think Stalin did have something to do with it. Btw, your debate with J. Otto Pohl upthread, despite the grim subject matter, was quite entertaining. Who needs Geo vs Swartz when we have Geo vs Pohl?

137

mclaren 05.16.12 at 2:45 am

Shorter Ferrant & McFail on Hayek:

“Hayek didn’t say what he actually said!”

Deny people said what the clearly and provably said — a standard conservative tactic.

E.g.:

JIM LEHRER: The public was never told that the Parade of Horribles were considered possibilities. Instead we were told it would be a cakewalk. Were you–

DOUGLAS FEITH: You weren’t told that by the administration. Absolutely not.

Source: NPR, 16 April 2008.

Compare with:

VICE PRES. DICK CHENEY: My belief is we will, in fact, be greeted as liberators.

Source: Meet the Press, 16 March 2003.

In that light, I can readily identify Ferrant and McFail as ignorant incompetent liars, and furthermore I praise them for their knowledgeable and truthful analysis of Hayek’s work, because, remember! I never said that Ferrant and McFail are ignorant incompetent liars. And if you claim I said such a thing, why, silly you…you’re just attributing to me an argument I never made.

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geo 05.16.12 at 3:02 am

LFC: Of course Stalin had something to do with it. The negation of “Stalin caused the Cold War” is not “Stalin had nothing to with the Cold War.”

Glad Otto and I helped you beguile the time.

139

Jim Rose 05.16.12 at 3:16 am

the cold war would then have to be one of the few wars that was not the result of mutual fear, misunderstanding, miscalculation and unplanned escalation.

140

LFC 05.16.12 at 3:36 am

Geo: Let me spell out it then. In my view, Stalin contributed to causing the Cold War. I’m not prepared to quantify his contribution as compared to e.g. Truman’s, but I don’t think the causation was all on one side. There was also an element, as Jim Rose suggests, of mutual fear, etc. I should add that it’s been quite a long while since I read anything about this, so I’m not prepared to have much of a debate, unfortunately.

141

mofo 05.16.12 at 4:11 am

LFC,
read Hobsbawm.
Kennan was not as silly as Gaddis

142

Data Tutashkhia 05.16.12 at 6:08 am

And three times as long as “Because imperialism … “?

Well, “Because imperialism …” is certainly better than “Stalin did it” or “Kennan did it” because at least it suggests a systemic approach, rather than Dr. Evil style melodrama.

143

Tim Worstall 05.16.12 at 6:26 am

“Can you name even one fascist or right-wing dictatorship of the 20th century that was threatened anywhere close to the way the SU was threatened after 1917 or Cuba was threatened after 1959?”

Iraq? Assuming that Baathism is a form of fascism which I pretty much think it is.

144

Chris Bertram 05.16.12 at 7:18 am

_I responded to your concrete example and it turned out to be rather crappy. Now you want me to guess?_

Well Sebastian, since you know the country I live in, I really think you could have tried a bit harder. But since you respond by invoking some past discussion that I can’t remember and asking about Poland and Hungary when I’d explicitly referred to “western Europe” I suppose I’m not dealing with an honest interlocutor. But then I knew that about you.

145

Chris Bertram 05.16.12 at 7:42 am

Jim Rose

_Chris, there was less political pluralism prior to 1970 than today. back then, the UK parliament was dominated by two parties with a cricket team of liberals and a few stringers._

That’s true, but I think also misleading. Both of the two main political parties then were massive umbrellas containing a lot of ideological and social diversity.

146

Salem 05.16.12 at 8:42 am

Contra Salem, there was a lot of political diversity in the UK in the war: you could be every everything from Conservative to Trotskyist.

You could nominally be a member of different groups, but you couldn’t agitate for different policies.

Could you organise a demonstration against rationing? Or against conscription? Or in favour of a negotiated peace? If you were well-connected, you could write a polite academic book about it, maybe. But you were not allowed to engage in popular organising along lines the government didn’t feel appropriate. Perhaps we mean different things by political diversity, but that’s not what I mean by it.

147

Jim Rose 05.16.12 at 8:56 am

Chris, good point. they were big tents

The impact of the nember of parties on the size of government varies between presidential and parliamentarianism, and plurality rule and proportional representation.

The presidential system, as compared to parliamentary systems, conduct less broad-based income redistribution via social welfare programs, but more targeted spending and will end up with a lower tax burden.

Plurality rule as compared to proportional representation entails more targeted spending and less broad-based social welfare programs. In both cases, Director’s Law could therefore prevail if it is politically prudent to channel targeted spending towards a politically mobile middle class.

Political fragmentation measured by the number of effective parties has a positive relationship with the size of the government, and with subsidies and transfers. Proportional representation and parliamentary countries favour higher public expenditures.

The studies starting from Peltzman showed that government grew in line with the growth in the size and homogeneity of the middle class that was organised and politically articulate enough to implementing a version of Director’s law.

After the 1970s stagnations, the taxed, regulated and subsidised groups had an increasing incentive to converge on new lower cost modes of redistribution.

Reforms ensued led by parties on the left and right, with some members of existing political and special interest groupings benefiting from joining new coalitions.
– More efficient taxes, more efficient spending, more efficient regulation and a more efficient state sector reduced the burden on the taxed and regulated groups.
– Many subsidised groups benefited from reforms because their needs were met in ways that provoked less opposition from the taxed and regulated.

Sweden and Denmark are examples of Becker’s idea that political systems converge on efficient modes of regulation and redistribution as their deadweight losses grow.

There are more political parties these day including pensioners parties because the tax groups are fighting back so the subsidised groups must organise more effectively too.

148

John Quiggin 05.16.12 at 9:16 am

@Sebastian “Chris, I responded concretely to your only explicit example. It isn’t even remotely clear which country you are trying to invoke in your general statement.”

Well, let’s take post-WWII Sweden, already cited by Tullock and many others as a counterexample to Hayek. But a comparison of any social democratic country at any time to the US since 2001 would serve as well.

149

LFC 05.16.12 at 12:27 pm

mofo 141:
“LFC,
read Hobsbawm.
Kennan was not as silly as Gaddis”

I’ve read Hobsbawm’s Age of Extremes, if that’s what you meant (well, three-quarters of it; not sure I ever quite finished it). There is a huge lit. on the Cold War and Kennan and I wouldn’t put Hobsbawm’s discussion, contained in a work that covers a much longer period (1914-1991), at the top of the list. Hobsbawm describes the Cold War as “a contest of nightmares,” I do recall that phrase, which is a nice one. Hobsbawm of course has his own particular axes to grind, like everyone else.

As for silliness, Gaddis’s response was tossed off at the end of a long talk when he was pressed for time. I’m sure he believes it, though. Kennan’s views were indeed probably more nuanced, on a range of issues. Frank Costigliola made much this point in his review of Gaddis’s Kennan in the New York Rev. of Bks, pointing out that Gaddis downplays Kennan’s late writings on the evils of nuclear weapons etc. But since I haven’t read Gaddis’s Kennan, merely a lot of reviews of it, that’s about all I can say on it.

150

geo 05.16.12 at 1:32 pm

Oh don’t be so cautious, LFC. It’s the Internet! Go ahead and make a fool of yourself, like the rest of us!

151

J. Otto Pohl 05.16.12 at 2:00 pm

I know that I am a minority of one. But, the major causes of Stalinist terror were internal not external. To claim that absent the Allied Intervention in 1918-1920 there would have been no Stalinist repression is extremely naive. This is especially true for dekulakization in 1931. The USSR had been in state of peace with the western powers and Germany for eleven years at this point. Not that the Allied Intervention was ever much of a threat. Only the Japanese were serious about trying to take Russian territory during the intervention and the Soviets granted them wide ranging concessions after their intervention which lasted through the entire decade of the 1930s. There is no evidence what so ever that Stalin decided to collectivize agriculture and “liquidate the kulaks as a class” as a defensive measure against the US, UK, Germany or any other foreign power. The Soviet government had a long term goal of industrializing and creating a modern socialist state which required transferring the wealth of countryside to the cities. Given strong rural resistance this required an extreme amount of violence and brutality.

While theoretically it might be possible to have a state that was democratic, allowed political freedom, and had a centrally planned administrative economy there are no real life examples. Primarily because as Alex first noted on this thread the Soviet model is one of creating a dictatorship for the purpose of building an industrialized socialist state. The USSR was highly successful in this, but at great human costs. China was less successful and still racked up a huge toll. Cuba was fairly successful, although less so than the USSR, but had a much lesser degree of repression. None of these states, however, were politically free in the sense that the US, UK, Sweden were. Neither the UK or any of the Scandinavian states ever adopted the Soviet economic model. Instead they all kept a basic capitalist and state capitalist mixed economy.

Finally, during the Cold War it is true the USSR was actually much weaker than it appeared at the time. It may even be true that the socialist bloc never had any realistic chance of ever winning the Cold War from day one due to this weakness. To say that it never engaged in any hostile behavior towards other countries, however, is just silly. If nothing else there are the overt invasions of Hungary in 1956, Czechoslovakia in 1968, and Afghanistan in 1980 to make sure that these countries remained rigidly within the Soviet bloc. These interventions were definitely acts of aggression against the people living in those countries.

152

burritoboy 05.16.12 at 3:19 pm

Re: Salem at comment 146

Political activity in the UK during the war was much less restricted than you depict. There were not just polite academic books discussing rationing – for example, editorial cartoons lampooning or criticizing it were regular features in major newspapers from at least 1940 on. Editorials and articles in the largest newspapers complained or criticized rationing (or at least aspects of rationing) from the same time.

Further, if we were really seeing a politically repressed society, the debates and political activity around rationing policies that did have major electoral impacts in 1946 – within a year after the war’s end – simply wouldn’t have happened. Instead, political life was vibrant enough that the major political parties were jockeying with each other over the details of rationing within a few weeks of the war’s end (and the topic became a major issue of contention within months).

Further, even though the wartime laws strongly banned labor strikes, for instance, strikes still occurred and were hardly uncommon.

We are talking about a place that threw out it’s wartime government five weeks after VE day.

153

piglet 05.16.12 at 3:38 pm

Tim 143: Iraq? Well yes at a certain point, the US decided to turn against the Iraqi regime after having supported it for many years. My claim isn’t that the West always and at all times supported each and every right-wing dictatorship. My claim is that it always and at all times opposed each and every socialist country or government. And my claim further is that this real and at times existential threat had a significant impact on how socialist regimes developed. That’s it. It’s not proposing a monocausal theory of everything, just saying that you can’t overlook that fact if you want to understand 20th century history.

154

piglet 05.16.12 at 3:53 pm

Chris 145, Jim 125 – “freer and more diverse media and more political pluralism”

There are today many more political parties to chose from in some countries (still not in the US) yet none of them would seriously question capitalism. Our current media and political environment is structured in a way that the fundamental economic and political arrangement cannot even be talked about. In that sense, political pluralism is more restricted today than during most of the 20th century. That is most depressingly true in the US.

155

LFC 05.16.12 at 4:17 pm

P.s. on Kennan: he very publicly endorsed Eugene McCarthy for pres. in ’68 (a fact that may be less well remembered than his Senate testimony against the war in ’66): see Costigliola here.

156

LFC 05.16.12 at 4:26 pm

But Kennan also sharply criticized the campus protestors in Democracy and the Student Left. So… enough cherries to pick for those who want to …

157

Sebastian 05.16.12 at 4:47 pm

Chris “since you know the country I live in, I really think you could have tried a bit harder. But since you respond by invoking some past discussion that I can’t remember and asking about Poland and Hungary when I’d explicitly referred to “western Europe” I suppose I’m not dealing with an honest interlocutor. But then I knew that about you.”

Gods you’re exasperating. I responded to the ONLY concrete example that you gave, and it was a rather weak example. Just because you live in the UK doesn’t require that you give it as an example when it is a weak one. That is an awfully strange kind of patriotism. Then you handwave toward other ‘examples’ by suggesting that they are numerous but without actually bothering to do the apparently very difficult work of spelling out their letters. For heaven’s sake all you have to do is put e.g. Sweden, France and Spain or whichever countries you actually mean at the end of your more summarizing statement and then we would have something specific to talk about.

But no. You can’t do that. Instead you have to jump to my alleged honesty in discussions. The reason I don’t guess at your ‘examples’ is because the last time I did that it turned out that when I dealt with immigration in Germany and France and Sweden, you were ‘really’ alluding to the tiny bank states or some crap. It is fine that you don’t remember that, but it makes it rather difficult to to want to guess.

If you want to make general statements, great. If you want to provide examples, also great. But if you want to complain that people respond concretely to your concrete examples, and when the concrete examples suck you want to complain that they didn’t bother to wrestle with the examples that you did not give you are just being strange. You are being especially weird in that you still haven’t bothered to give the little “e.g.” after repeated responses about the fact that you haven’t given the examples.

I don’t want to talk about France when you really meant Finland. And I don’t want to bother to talk about it at all if you really meant Luxembourg or Liechtenstein.

158

Norwegian Guy 05.16.12 at 5:24 pm

“I know that I am a minority of one. But, the major causes of Stalinist terror were internal not external.”

And here I had been believing that Crooked Timber were full of old Trots, but apparently the Stalinists are hegemonic now.

“To claim that absent the Allied Intervention in 1918-1920 there would have been no Stalinist repression is extremely naive.”

Isn’t the argument rather that, absent the Allied intervention, and more importantly the civil war and the war communism that was adopted during it, perhaps someone else than Stalin would have won the power struggle after Lenin’s death? Whoever this would be could have turned out to be worse, just the same, or better than Stalin in terms of the level of repression and violence. It doesn’t make sense to a priori exclude the latter possibility. You have yourself used Cuba to argue that it’s not impossible to have communist rule that is less repressive than in the Soviet Union of the 1930s.

“one of the reasons for the almost complete rehabilitation of Stalin in Russia today”

Here I had the impression that nationalism, and nostalgia for the past among people who lost out in post-Soviet Russia, is what makes some people remember Stalin as fondly as they remember Ivan the terrible. Despotic leaders who win major wars are often remembered that way. It’s not unique to Russia either, just look at many of the despotic and bloodstained kings of the Viking era and the middle ages. Who is responsible for rehabilitating Charlemagne?

By the way, I’m not fond of this dividing up all possible economic systems and policies into “capitalism” and “communism”. The real world is more complicated than that, and at some point in a mixed economy the distinction breaks down. What doesn’t make sense is equating economic democracy, i.e. socialism, with dictatorship. Especially when done by rightists like Hayek, who aren’t that fond of democracy themselves.

159

Cherry Paulette (Finer) Brown 05.16.12 at 5:47 pm

I left a comment – which was that a far better answer to Hayek lies in the rereading of
the book “The Road to Reaction”, Prof. Herman Finer, Little Brown, 1945. Beside the
fact that Finer was my Father, this book is the perfect rebuttal to the Right Wing. I don’t
want to argue with any one of you. Aside from being a Liberal Democrat, and a chip off
my genetic block, I am an Art Historian , a fact which my embattled father grieved over.
Please refer to “The Road to Reaction”, if you dare got admit that others came before
you. Just saying!

160

John Quiggin 05.16.12 at 7:07 pm

@Sebastian Well, I gave you both a specific example and a general claim (@#148)

161

Plume 05.16.12 at 8:22 pm

Who knows what would have happened in Russia if the revolution had been welcomed with open arms around the world. Who knows what would have happened if they had actually been supported around the world. Logically, that support dramatically reduces any notions of existential threat to the new regime, lowers the paranoia levels massively, and would likely reduce the perceived need to crack down on their own population. A Stalin doesn’t rise, because there is no perceived need for such a “strong man.” Everything would have worked better for Russia at that point. They wouldn’t have struggled so much turning a feudal nation, one with an economy barely out of the 18th century (for all intents and purposes) into a 20th century economy. They coulda been a contenda.

162

Consumatopia 05.16.12 at 9:30 pm

While theoretically it might be possible to have a state that was democratic, allowed political freedom, and had a centrally planned administrative economy there are no real life examples.

I should say that your response to me @ 123 made sense and was well taken.

But are there any examples of a free society democratically choosing to adopt central planning that then led to tyranny, widespread repression, or “serfdom”?

There do seem to be examples of societies adopting quite a bit of central planning–even setting prices, issuing rations, and controlling private industry–that still retained their free and democratic character. Perhaps the planning in a wartime economy or social democracy is not quite extensive enough to qualify as centrally planned administrative economy in your book. Still, if there are no free societies that choose to adopt that kind of planning (and then become unfree), that would indicate that democracies will never choose to become fully socialist (rather than showing that full socialism can never be democratic.) In latter case, Hayek’s warnings would be completely misplaced–once you are democratic, there is no road to serfdom/socialism.

163

Lee A. Arnold 05.16.12 at 10:00 pm

The first general secretary to come of age, AFTER Krushchev’s Secret Speech, was I think Gorbachev, who immediately pushed for Glasnost and Perestroika. Here is the real “character of the people,” toward openness. I am glad they are on the planet with us, actually. They are a great people.

164

Sebastian 05.17.12 at 12:04 am

John, Sweden is probably the best counter-example, but with a few caveats. I wouldn’t say that it so much controls the economy as that Sweden lets it operate and then strongly taxes the winners. When paired with successful kibbutzes it may also suggest that when there is a pre-existing strong homogenous group identity that the government doesn’t need as much repression as it does in larger or more mixed cultures.

Modern Sweden is certainly not an example of a command economy, but if you say that it was in the 1950s, I don’t know enough to argue.

165

Peter T 05.17.12 at 12:18 am

JOP and sebastian ignore that Stalinist methods (which had solid support in the Party) had deep Russian antecedents. If you had to generalise, one could note that if you are going to build a strong state in an impoverished, threatened borderland, a high degree of repression seems to be an essential part of the recipe. It matters less what the immediate international situation was in the 20s than that the Russian political nation strongly felt that harsh internal policies were worth it if they contributed to a strong state – and also felt (justifiably) that a weak state would sooner or later invite attack.

The connection between socialist planning and internal repression is tangential – there were a lot of other drivers. In any event, no-one has yet responded to the point that planning at some scale is essential (as Hayek acknowledged), and that the ability to plan has grown over time. At what point does the ability to plan threaten democracy? And why should planning the economy of a state lead to serfdom but the ability to plan a a complex supply chain be benign? Hayek is simply muddled here.

166

Data Tutashkhia 05.17.12 at 6:31 am

It occurs to me that collectivization was, perhaps, an unsuccessful response to a common problem. Under NEP they had a mixed economy and it appears that all mixed economies suffer from malfunctioning of the agricultural sector. The problem is usually ameliorated by introducing agricultural subsidies (the US started doing it in 1920s), and that was also suggested by the ‘right opposition’ in the USSR (Bukharin & Co), but the right opposition was defeated, and collectivization was implemented instead. Resistance to it caused the repression.

Note, however, that in any case the solution comes from central planning, as agricultural subsidies (hated by many) is just a different form of it.

167

Plume 05.17.12 at 7:16 am

Peter T, very good points.

Private sector businesses obviously have to “plan” constantly and the interaction between businesses much be “planned.” But they make their plans in order to optimize profitability for themselves, and do not do what they do to benefit anyone else. If that means slashing millions of jobs, shipping them overseas, creating monopolies, creating cartels, crippling smaller companies, polluting, destroying eco-systems, etc. etc. so be it.

It is beyond logical that a nation, if it exists as a nation, should “plan” on behalf of the nation, on behalf of its people, if for no other reason than to counter the individuals who plan for no one but themselves, at our expense. For individual monads of capitalist accumulation certainly don’t do anything to improve the lot of the nation overall, so some entity must. There must be a counterweight for bumper car, casino, me me me economies. There must be counterweights to those who would extract tomorrow’s finite natural resources and destroy them for quarterly profits today.

Basically, the capitalist system, without some form of “planning” that goes beyond individual desires, always fails, and will always fail, and always need bailouts. Because it repeatedly becomes nothing more than a race to the bottom for the vast majority of the people, while the predator class consolidates its power and picks off those who falter along the way. “Competition” for riches and power doesn’t make life better for anyone but the few winners. It requires, of course, and obviously, a lot of losers. We can’t have winners without losers, because consolidation of wealth can never be win/win. A huge number of losers is essential for a few to win. That’s just math. But, for some reason, too many Americans have bought into the absurd notion that, through competition, everyone can win.

Not when CEOs make 400 times as much as their rank and file. Not when just 400 Americans hold as much wealth as the bottom 50% combined.

Planning. Businesses do it. Corporations do it. Cartels and monopolies do it. They couldn’t survive without planning. Somehow, planning is virtuous when it comes to businesses, but a sign of tyranny when government does it. Human beings are ignorant and masochistic all at once. Hayek included.

168

ajay 05.17.12 at 9:10 am

My claim isn’t that the West always and at all times supported each and every right-wing dictatorship. My claim is that it always and at all times opposed each and every socialist country or government.

Boy, a claim like that really is a hostage to fortune. The West has ALWAYS opposed EVERY socialist country? You reckon there’s never been a time, ever, when any western country has ever given any kind of support – or even tolerance! – to a socialist country?

169

Alex 05.17.12 at 11:03 am

1922. The UK recognises the USSR (which is why the British ambassador to Moscow gets the diplomatic plate 1922 01 on his car). 1949. The UK recognises the PRC.

Salem @146, this is really a very poor description of the UK in the second world war. The CPGB was probably more influential and successful than ever before or since. There were sensational by-elections when Communists and people from the Commonwealth Party (which oddly enough ended up turning into Amnesty International) got in. In 1942 there was a vote of no-confidence in Winston Churchill, although the Tory who proposed it then queered his pitch by suggesting he should be replaced by a Royal Duke as Commander in Chief of the Army, a post that hadn’t existed since the 1907 army reform.

Churchill won with a majority of some hundreds, but it’s telling that after the Tory whips failed to talk the guy around, two MPs from the government side volunteered to act as tellers in order that the vote could be held and he could make his silly point.

170

J. Otto Pohl 05.17.12 at 12:48 pm

158

Speculating on what might have happened if a whole bunch of variables were different is the type of juju that political scientists and economists do. Historically we know what happened and the available evidence of what happened regarding collectivization in the early 1930s points overwhelmingly to internal factors as the major reasons for “liquidating the kulaks as a class.” The Stalin regime never claimed that dekulakization was a response or defensive measure against foreign powers. The claims of foreign agents threatening Soviet security start to arise in 1934 and don’t really play a major role in Soviet discourse until 1936-1938. At that time you start to have loyal communists being convicted of being spies for the Germans, Poles, Japanese all at the same time. Evidently a lot of people on this board believe that these charges were true. But, I find them hard to take seriously.

Other than the USSR nobody takes seriously any other regime’s claims of “security needs” as a justification for repression. There was a much greater existential threat to the apartheid regime in South Africa from Black political movements like the ANC. These organizations did have some foreign support. But, unlike the USSR nobody claims that if the UN and OAU had not actively supported Black liberation movements that there would have been no political repression in South Africa. It is only because of continuing ideological sympathy with the Stalinist regime that this double standard exists.

The lack of a complete international rejection of Stalinism the way the world rejected Naziism or apartheid is one of the reasons that there has been a rehabilitation of Stalin. All the other factors mentioned are important, but would be irrelevant if there had been a de-Stalinisation campaign equivalent in its thoroughness to de-Naziification in Germany. Just look at the difference in the treatment of David Irving and Slavoj Zizek. The latter is an academic superstar. Last I heard the former was in prison for denying the Holocaust.

162

The only democratic state to adopt the Soviet model that I can think of is Czechoslovakia. The 1948 coup was obviously instigated by the USSR so it is difficult to look at as a case of a democratic state becoming socialist on its own. So it is probably safe to say that as a general rule communist revolutions have only succeed against undemocratic or colonial regimes.

165

Yes, Russian political culture was authoritarian. But, lots of non-Russians lived in the USSR and many of them strongly resisted collectivization and other Stalinist policies. In fact lots of Russians also resisted collectivization regardless of their opinion regarding other Stalinist policies. I suspect most Russian peasants did not care too much about the lack of democracy under NEP. Many of them, however, did care about the confiscation of their property during collectivization.

166

Collectivization was undertaken because the peasantry refused to provide the state with enough cheap grain to both feed the urban population and export for a profit to help fund the importation of capital goods needed for industrialization. The problem in the USSR thus was much greater than agricultural problems elsewhere where subsidies were adopted. Basically the USSR wanted to emulate the British industrial revolution, but in a much shorter period of time. Their only sources of capital to do this were domestic since they could not attract sufficient foreign investment for this purpose and they had no overseas colonies to exploit. Instead they turned the Ukrainian and Russian peasantry into the functional equivalents of extractive colonies. The result was a foreseeable humanitarian disaster.

171

J. Otto Pohl 05.17.12 at 12:54 pm

167

Both the US under Reagan and the UK under Thatcher supported FRELIMO in Mozambique against RENAMO. So there is one example of two major Western powers supporting a socialist state against anti-communist insurgency.

172

Data Tutashkhia 05.17.12 at 1:40 pm

The problem in the USSR thus was much greater than agricultural problems elsewhere where subsidies were adopted.

I dunno, I don’t think the “thus” follows. In the US, during that period, a couple of million people, while perfectly “politically free”, in the sense you use, nevertheless lost their property and livelihood all the same, and had to live in Hoovevilles, that weren’t necessarily much more comfortable than, at least, the Soviet ‘colonies’ for the exiled. It was, in a sense, a global crisis.

And, again, the ‘right opposition’ in the USSR advocated just that: appeasing soviet farmers by paying them more; paying them as much as they need, IOW: agri-subsidies. Had that faction prevailed, I don’t see how it would’ve been different from whatever solutions were implemented by the FDR administration. And, without a doubt, it would’ve produced more money for industrialization than collectivization did.

Bukharin, after all, had the reputation of a brilliant economist and a mediocre marxist. I seem to remember that Lenin, at one point, chastised him for not understanding dialectics.

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Torquil Macneil 05.17.12 at 1:48 pm

This has been a strange sort of discussion. You have to really, really contort yourself to defend Judt on this one. The line Cowen quotes accuses Hayek of believing that ‘welfare policies of any sort’ lead to Hitler. Everyone has agreed that ‘Hitler’ doesn’t belong there (but want to cut some slack for that) but what about that ‘any’? Hayek (I think everyone agrees) supported some welfare arrangements paid for by taxation and organised by the state, namely a citizen’s wage. So Judt was just wrong that Hayek opposed any welfare policies whatsoever and that is what Cowen took him to task for. Why get into such a lather? Cowen was otherwise very complimentary about Judt and we can all still agree that The Road to Serfdom was basically wrong.

Hayek is quite explicit on this count: if you begin with welfare policies of any sort+

174

J. Otto Pohl 05.17.12 at 2:25 pm

171

The US was already industrialized in the 1930s. The agricultural crisis in the US was not tied to moving from a predominantly agrarian society to an industrial one. That had already largely been accomplished. The US had relied upon foreign investment and to some extent on the expropriation of land and labor from the non-European sectors of the population to accumulate the capital for industrialization. The Soviet Union really only started embarking on industrialization in 1928 with the First Five year Plan. In other words in terms of industrialization the USSR was relatively backward compared to the US and Europe in 1928. It sought to catch up fast and was fairly successful in doing so, but at great human cost.

Bukharin’s strategy probably would have worked, but it would have meant a much slower pace of industrialization and a much stronger peasantry. Agriculture even with subsidies would have probably still suffered from under investment just as it did in Poland after the decollectivization of agriculture in 1956. But, ideologically Stalin and his supporters did not want a country with an independent farming class like Poland. They wanted an industrialized, urbanized, proletarian state. The countryside was to subordinated to the needs of the city and industry at any cost.

175

bianca steele 05.17.12 at 2:32 pm

I just read in the New Statesman that the PRC is capitalist. Assuming “capitalist” still means “approved by Hayek,” (presumably) this implies that Hayek’s deplored central planning did not encompass enterprises owned and controlled by the Army, for example. Fascinating.

176

gliberty 05.17.12 at 2:52 pm

Consumatopia said:

“But are there any examples of a free society democratically choosing to adopt central planning that then led to tyranny, widespread repression, or “serfdom”?

There do seem to be examples of societies adopting quite a bit of central planning—even setting prices, issuing rations, and controlling private industry—that still retained their free and democratic character. Perhaps the planning in a wartime economy or social democracy is not quite extensive enough…Hayek’s warnings would be completely misplaced—once you are democratic, there is no road to serfdom/socialism.”

As you may recall, Hayek’s primary example was the wartime economy. It is that road by which he worried democracies would become tyrannical – and though it seems Western democracies ultimately escaped this, there was a serious danger b oth in the US and the UK that wartime planning would become peacetime tyranny.

FDR’s planning during the 1930s (not wartime, but partly based on WWI planning and brought back during WWII, and had FDR lived and stayed in power, possible continued after WWII) was very hard-handed – if it had not been struck down as unconstitutional, it could have become quite tyrannical.

In the UK wartime planning from WWII was extended until the 1960s, and though some parts were probably well accepted, it did become very bureaucratic and bordered on tyrannical in certain areas. … so, it is true that in these examples it never got to tyranny, Hayek was issuing a warning, and it may be that his warning (and warnings from Orwell and so many others) were heeded, and this is why these democratically begun experiments with central planning were ultimately rolled back.

177

Data Tutashkhia 05.17.12 at 2:56 pm

But, ideologically Stalin and his supporters did not want a country with an independent farming class like Poland.

Well, Stalin himself, I doubt that he was in favor of any particular ideology. For one thing, he did team up with Bukharin in a fight against the Trots, and before turning against him and destroying him, he actually did approve an increase in grain acquisition price, so it seems that for while he was on board with the right opposition. And, like I said, the right opposition (Bukharin, at least) was pragmatic rather than dogmatic/ideological.

As for “it would have meant a much slower pace of industrialization“, that is not obvious to me at all. Collectivization reduced the output. Significantly. By half, perhaps. If I have two cows and you take 50% of the milk, you’re still getting more milk than if I have only one cow and you take 90% of the milk.

178

J. Otto Pohl 05.17.12 at 3:14 pm

175

This is getting into speculation. I can not get into people’s heads and can only judge them on their actions. I also can not say what would have happened if they had acted differently. The fact is that Stalin did turn against Bukharin and consolidated his own control over the Communist Party. He then embarked upon agricultural collectivization and industrialization. A process that destroyed the independence of the peasantry. Bukharin was given a show trial and executed. So while the Soviet Union had the option in the 1930s of pursuing economic policies that looked like those of Poland or maybe even Yugoslavia in the 1960s, it was not pursued. Given that industrialization in other countries was much slower than in the USSR I still think that Bukharin’s strategy would have been much slower over the long term.

179

J. Otto Pohl 05.17.12 at 4:07 pm

Due to the odd renumbering of comments, my previous comment should be addressed to 176 not 175 which appeared out of nowhere.

180

gliberty 05.17.12 at 5:23 pm

“Given that industrialization in other countries was much slower than in the USSR I still think that Bukharin’s strategy would have been much slower over the long term.”

First, It’s quite a leap of faith to simply compare the USSR with other countries – each starting at a different place and having incredible differences in resources, population, and level of growth and industrialization prior – and conclude that it was Stalin’s centrally planned state that created this “faster pace of industrialization” that you claim it had.

Second, you have omitted some rather important facts: (1) Collectivization caused famine and extreme poverty and shortage for several years, leading to millions of deaths. (2) Central planning in industry also led to poverty and shortage, along with, when it achieved nominal “economic growth” , “growth” not in what the people actually wanted, but in party-planned output which often little-resembled what the people wanted both in the kinds of goods and in their detail and quality. (3) Much of the output was military and huge government projects that were primarily for show and offered little to the people. (4) Statistics about the economy were both purposely and inadvertently (due to unreliable prices) inaccurate, so it’s hard to say know much about when and how “industrialization” took place. (5) WWII is often cited as proof of the industrial power of the USSR, but note that the people were not just impoverished but starving during WWII due to the fact that just about ALL resources were funneled into the military.

181

ajay 05.17.12 at 5:42 pm

In the UK wartime planning from WWII was extended until the 1960s, and though some parts were probably well accepted, it did become very bureaucratic and bordered on tyrannical in certain areas.

Good heavens.

182

Data Tutashkhia 05.17.12 at 6:09 pm

Central planning in industry also led to poverty and shortage, along with, when it achieved nominal “economic growth” , “growth” not in what the people actually wanted

Well, “what the people actually want” is merely a metaphor; an aggregate is not a person. In any case, whether they wanted it or not, they did get something very important: electricity, all over the place. Also, the usual: motors, trucks, tractors, trains. Basic clothes, and footwear, to replace this sort of thing.

183

J. Otto Pohl 05.17.12 at 6:58 pm

gliberty:

I did not omit famine and poverty. I have repeatedly noted that collectivization had a great human cost. There were 600,000 deaths of deported kulaks in the 1930s plus the millions to die in the Holodomor in 1932-1933. But, the material standard of living of the urban population did increase significantly in the USSR between 1934 and 1941. During WWII actual famine as opposed to shortages was limited to certain categories of people. The largest group to starve were those under German occupation in Ukraine or siege such as in Leningrad. The only significant number of famine deaths during WWII in territory controlled by the USSR occurred in the GULag and among the special settlers. In 1946 there is a more generalized famine in Ukraine, Molodova, and Siberia as well as among prisoners and special settlers due to the damage caused to agricultural production during the war. By 1949 famine had become a thing of the past for the USSR even among the special settlers. Despite various shortages there is no more starvation after this time.

But, I have to give the Devil his due. The first two five year plans did bring about better material conditions for most Soviet citizens, particularly urban dwellers. Things like medical care, literacy, roads, access to clean water, greatly increased during this time particularly in Central Asia. By 1960 the standard of living in this region was much higher than in Iran or Turkey. In 1917 it had been on a par with Afghanistan. This is a pretty impressive accomplishment.

184

John Quiggin 05.17.12 at 7:40 pm

“Who is responsible for rehabilitating Charlemagne?”

Napoleon might be a better example

185

Data Tutashkhia 05.17.12 at 8:33 pm

But I thought Napoleon has always managed to maintain the status of a great romantic/tragic figure somehow, and not just in France, even in Russia.

Yeah, you should see memorials to Genghis Khan in Mongolia, that’s something.

186

Gene O'Grady 05.17.12 at 9:05 pm

gliberty, Have you ever seen any of the late 40’s British comedies that mock central planning and rationing? I don’t think that sort of stuff was popular fare under Stalin or Hitler.

187

Walt 05.17.12 at 9:38 pm

gliberty, is it too much to ask that you actually read the thread? J. Otto Pohl already made the points you’re making two days ago.

188

ezra abrams 05.18.12 at 7:38 pm

I’m a scientist with a PhD in molecular biology (DNA, RNA, that sort of stuff)
And, after 20years, so far as I can tell, no one gives a tinkers damm for what Watson or Crick or Mendel or Darwin or X (say Hershey Chase or Hotchkiss, to be esoteric) said.
Matter of fact, so far as I can tell, except for graduate students under duress, and aged near retirees, no one even reads these fossils – why would you ???
So, from my perspective, there is something wrong with this field, because people still care about what someone said 50 years ago.
This could be because fields are different, and I’ve just been lucky or unlucky to be in a fast moving field.

As a young lad, I used to take Freud seriously. Then I heard (blanking on the name – Ms magazine editor ?) parody, why boys all have clitoris envy….I suspect a similar paroday would drive a solid stake thru Hayek.

PS: I understand the armenians still refer to “alexander the terrible”
If you go to the wonderfull history museum in Oslo, there is a stirring tribute to the adventursome seafarers of the middle ages; if you go the wonderful museums in London, there are extensive exhibits on the marauding vikings..

189

Chris Bertram 05.18.12 at 7:59 pm

_after 20years, so far as I can tell, no one gives a tinkers damm for what Watson or Crick or Mendel or Darwin or X (say Hershey Chase or Hotchkiss, to be esoteric) said._

Those Presocratics, on the other hand ….

190

rf 05.18.12 at 8:23 pm

@ ezra abrams – (blanking on the name – Ms magazine editor ?)

Tina Brown?

191

geo 05.18.12 at 8:38 pm

Ezra is quite right. History is bunk.

192

JanieM 05.18.12 at 8:58 pm

@rf

@ ezra abrams – (blanking on the name – Ms magazine editor ?)

Tina Brown?

Maybe this is a multi-layered joke and I’m missing it.

In case not, let’s try Gloria Steinem and womb envy, referred to here:

http://www.gloriasteinem.com/ms-articles/

like this:

1994

March/April “Womb Envy, Testyria, and Breast Castration Anxiety: What if Freud Were Female?”

[I don't have time to search for the article itself.]

193

JanieM 05.18.12 at 8:59 pm

Clearly I also don’t have time to mess around with block quotes.

My comment starts with “Maybe this….” Before that I was quoting rf quoting ezra abrams.

Where the heck has preview gone, anyhow?

194

guthrie 05.18.12 at 11:00 pm

I think what Ezra Adams means is not that history is bunk or suchlike, but that if economics was more scientific like molecular biology, why would you want to keep referring back to the people 50 or 70 years ago and their work? Has it not been superceded by more modern work?

Of course that kind of approach misses the point that economics overlaps into philosophy, ethics and psychology, not to mention politics. Thus what someone wrote 50 or more years ago can still be relevant because it bears on some of these topics.

195

Walt 05.18.12 at 11:17 pm

Professional economists don’t actually spend much time arguing about Hayek. This isn’t a scientific argument about economics, it’s an argument about politics.

196

Lee A. Arnold 05.19.12 at 12:09 am

The thing is, economics isn’t what you think it is. Economics cannot be a positive science, because EVERY transaction (sorry, I don’t do italics) is under a CONTEXT of beliefs, goals and rules. People agree on it, or else it isn’t nonviolent. This context is what economists are grasping for, using the term “institution”. Everything in economics is ruled by some kind of context (institution) over some kind of transaction. There are lots of different kinds of transactions and there are lots of different kinds of every category of institutions. And therefore it is all political. What systems economists (I hereby name it) are doing, is looking at why anybody would think that Hayek is relevant, precisely because this discussion is how the rules of capitalism are being informed.

There is no pure science of economics. A rhetoric is a part of every separate institution, even in all of the market institutions.

In the following animation I pictured the “shadow banks group” and the “housing market group” as two DIFFERENT market institutions. Watch it because you can see how a simple mortgage derivative works, if you didn’t already know: http://www.youtube.com/watch?v=7tTapPEhOKg

Next one will show the central ideas of the shadow banks and the housing market, because all groups have a central context of agreed-upon ideas, that is to say, every group is some sort of institution. Whether the institution is a SOLID, like a business firm or government, or LOOSE, like a farmers’ produce market or indeed the town dance, this does not change the most basic thing, that it is a ring of repeated transformations/transactions around an agreement of some sort.

There may be several different transformations: “securitization”, “insurance swaps”, “commercial paper loans”, “repo” (different maturities), or perhaps swing-your-partner “doe si doe”. It is ALWAYS an agreement.

And those agreements frequently include politics.

Goals, rules, and beliefs have all sorts of local varieties. Consider the beliefs of two different institutions: the basic belief of the ‘shadow banks group’ is “Financial profit-making is always good for the economy” and the basic belief of the ‘housing market group’ was “House prices will always go up.” …It so happens that both of these beliefs are false, but having false ideas is often true of human formations!

If what I am saying is at all correct, then the study of faulty ideas, whether Hayek’s or anyone else’s, is part of the proper subject matter of economics, insofar as they faulty ideas are brought forward in the politics of the times or the era. In fact, I would think that the following is inescapable: Economists must study blabber.

197

Lee A. Arnold 05.19.12 at 12:14 am

“the” faulty ideas, sorry, today I priced a leaking sewer line, fixed two toilets and a kitchen faucet, received a dog that was stolen from a good friend by his ex-, and now the front-end of my 35-yr. old Dodge truck is falling apart

198

Jim Rose 05.19.12 at 1:26 am

on hayek and institutions, see ‘The Context of Context: The Evolution of Hayek’s Epistemic Turn in Economics and Politics’ by Boettke, Schaeffer and Snow In WHAT IS SO AUSTRIAN ABOUT AUSTRIAN ECONOMICS?, Advances in Austrian Economics, Roger Koppl, Steven Horwitz, Pierre Desrochers eds., pp. 69-86, 2010

- Hayek developed his argument about the use of knowledge in the context of the socialist calculation debate, and the aspect of knowledge he came to focus on was the contextual nature of knowledge in human action in markets, politics, law, and society.

- It is Hayek’s focus on the role of institutions in creating the conditions for the utilization and transference of knowledge through the price system that continues to shape the progressive research programs in economic science and public policy analysis that is his legacy

Hayek is noted for his study of spontaneous orders and the group selection of norms.

199

geo 05.19.12 at 1:55 am

Lee @197: Heavens, with all those real-life problems to take care of, why worry about phantasmagoria like shadow banks, housing markets, and economic rhetoric?

200

Lee A. Arnold 05.19.12 at 2:45 am

@#198: It won’t work: the “transference of knowledge through the price system” is another sort of imagination, another sort of gibberish. The price system simply balances needs and desires with scarcity, via the scarcity of money, and it does so quite imperfectly; the other things humans bring to that, all the other local knowledge, is precisely NOT transferred.

A “focus on the role of institutions in creating the conditions for the utilization and transference of knowledge” is not Hayek’s own baileywick, and I wouldn’t bother with anyone who does not BEGIN with the role of institutions in reducing transactions cost, i.e. in REDUCING the amount of knowledge you need to engage in a transaction or transformation. In other words, freedom can come from saving time or saving space-time. An institutions do not “transfer” knowledge. By making a piece of information into a common precondition, it obviates the need to constantly re-establish it, or to obtain it in person.

This is almost directly counter to the libertarian view.

And as I attempted to show in my comment at #49 above, Hayek is not particularly unique within systems theory for his study of “spontaneous order”. I am afraid that he a bit of an “also-ran” in that department.

201

Lee A. Arnold 05.19.12 at 2:46 am

@#199 You truly got me there. I may give up.

202

Walt 05.19.12 at 7:41 am

Is 199 sarcastic?

203

AlanDownunder 05.20.12 at 8:49 am

Agree with Wilder @99. There are many ways to pave a road to serfdom. Austrian economics in the service of plutocracy is one of them, and, in the US at least, the most currently salient method.

Also agree with piglet @64 on the mendacity of Tyler Cowen, servant of the US’ enslaving plutocracy.

204

LFC 05.20.12 at 2:50 pm

E Abrams:

I’m a scientist with a PhD in molecular biology (DNA, RNA, that sort of stuff) And, after 20years, so far as I can tell, no one gives a tinkers damm for what Watson or Crick or Mendel or Darwin or X (say Hershey Chase or Hotchkiss, to be esoteric) said. Matter of fact, so far as I can tell, except for graduate students under duress, and aged near retirees, no one even reads these fossils – why would you ???
So, from my perspective, there is something wrong with this field [economics], because people still care about what someone said 50 years ago.

Naturwissenschaft v Geisteswissenschaft anyone? (sorry if spelling is wrong, too lazy to look it up).
Also, what CB and Geo already said.

205

Bruce Wilder 05.20.12 at 10:54 pm

J. Otto Pohl: “The US was already industrialized in the 1930s. The agricultural crisis in the US was not tied to moving from a predominantly agrarian society to an industrial one. That had already largely been accomplished.”

That’s not an accurate summary of the situation at all. A portion of the U.S. — in the Northeast and around the Great Lakes, and a few other big cities, say, on the West Coast, had industrialized — but a very large part of the population and territory had been left behind, and was sinking into increasingly intense and hopeless poverty as a result.

The politics of electricity was particularly salient. Access to cheap electricity was a key to the new economy, particularly for farmers. Electrical generation and distribution is subject to enormous economies of scale — increasing returns, the economists like to call it — but the rentiers profiting from the Edison electric utilities and their rivals resisted the expansion of electrical generation and distribution, and the inevitable fall in rates and returns that this entailed. There were big, big fights over public projects to increase electrical generating capacity and distribution to underserved areas. Hoover Dam, the Muscle Shoals project that became the Tennessee Valley Authority, FDR’s role in expanding public power generation at Niagara, the epic feud between Samuel Insull and Harold Ickes (who would become one of the New Deal’s key figures), rural electrification efforts — these were all key features of the enormous political effort that went into expanding the industrialization of the U.S. beyond its archipelago mostly in the Northeast and Midwest. Not incidentally, the great stock market crash of 1929, which initiated the Great Depression, centered on a collapse in the values of electric utilities.

The farming sector was shedding labor by the 1920s, and rapid increases in potential productivity from electrification, hybrid seeds, fertilizers, gasoline-powered tractors and other machinery, etc. This agricultural revolution was just as unevenly spread about the country, as the industrial revolution, and spreading it further was a big part of the work of the New Deal.

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Lee A. Arnold 05.20.12 at 11:15 pm

@#202, Walt, no, my #201 is flippant, and my friends would all say that I am a lot of work sometimes. But Geo (@#199) is among the most gracious of human beings. Just read his books.

207

geo 05.21.12 at 3:04 am

Thank you kindly, Lee.

Walt: 199 was indeed just a lame (apparently), though friendly, joke.

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