Robin on Bloggingheads

If Austrians are aristocrats or Romantics that believe in Great Politics, then why is Hayek’s hero the resolutely anti-heroic common law judge?

Yes there is power in the marketplace. There are taste-makers and entrepreneurs, but as Schumpeter noted–I typed in the quotes that Nathan Rosenberg and others have drawn from Schumpeter’s texts–recognition of that power does not square with the idea that value is determined by consumers themselves in terms of marginal utility.

Was a Hayek a serious critic of anything? Or, was he just a guy, who constantly waxed, “Yeah rich people!” in long, hypnotically complex screeds?

If you think conservative libertarianism is all about deducing political morality from first principles, then I can see trying to make Hayek fit that mold, but if you think he was all about defending the privileges of the very rich against claims of a public good or the claims of the mass of people to a concern for common welfare, and the voluminous drivel was just a conveniently efficacious means to that end, it makes sense to focus on evidence concerning Hayek’s ends, however obscured those ends might have been.

I guess my problem with Robins attempt to link the two is that you have to have a very weird reading of Hayek to believe the stuff he is is trying to link to the SuperMan philosophy is as important, much less more important than his contention that central planning can’t work as well as the market because individuals can’t get the local knowledge necessary. That idea is central to everything Hayek wrote. It is hard to argue that the übermensch is a key thing in the face of that.

[the] contention that central planning can’t work as well as the market because individuals can’t get the local knowledge necessary… is central to everything Hayek wrote. It is hard to argue that the übermensch is a key thing in the face of that.

It’s an affinity for a particular kind of elitism Corey contends they share, not necessarily the exact concept of the ubermensch. How is that hard to understand? Not very, unless you just don’t care to understand it. One quote you can wave away, but there have been a dozen or two in the course of Corey’s article and these posts. Hayek was clearly about much more than markets vs central planning. To imply that he was simply an economist with one great (or ‘great’) technocratic insight, is laughable.

The basic kind of elitism we’re talking about here predated Nietzsche. I am sorry to repeat myself, but I think it bears repeating: it is not always so obvious what *is* Left and what *is* Right in Western intellectual history. To understand which is which, you have to get down to first principles, which is what I see as one way of describing CR’s current project. You can’t fight against what you don’t understand.

People like Burke and Nietzsche and Hayek *define* the post French Revolution Right in signal ways in part via a particular kind of political and cultural elitism: power and wealth should accrue to the Few (less emphasis on the political from Nietzsche). For them, true excellence can only come from the Few. Is that view out of fashion? Yes. Is it hard to understand that that’s a key part of what they’re about, and what conservatism is about? I think it’s fairly obvious.

@Sebastian H
Yeah, certainly the idea I got from the frequent CT posts on Hayek (damned, if I’m going to read Hayek myself) is that the “entrepreneur” is fairly empty-headed, a kind of early version of a neural net model, with inputs impinging on him from the environment, telling him whether to throw vendors and consumers larger quantities or higher prices, or the opposite. Not a very attractive “elitist” vision, and not very Nietzschean. I agree that it’s difficult to see how that empty-headed vision makes for any kind of Great Man.

if we are going to talk about Hayek’s willingness to see Allende violently displaced, wouldn’t Hayek’s charge that social justice is a mirage be centrally important? Robin just notes the connection only to drop it and never discusses in any detail Hayek’s actual writings on the mirage of social justice.

Hayek must have not only thought social justice simply a mirage but the most dangerous of all illusions to have turned a blind eye to the human rights atrocities of the Pinochet regime. Here after all was a political leader Allende prideful enough to think that he and his followers could themselves pass judgment on the outcomes of market society in the name of social justice.

For Hayek such rationalism and collectivism could lead only to hell on earth, and extreme violence would be in order to extirpate the threat.

In fact if you listen to an important Pinochet supporter such as Father Hasbun Allende was criticized not from the pseudo-Nietzschean perspective of a master contemptuous of a resentful servant but for his pride that he thought he could rise above his station to change society in terms of his own man-made ideals.

It’s not elitism, Nietzschean or otherwise, that is important here in the first instance but the Hayekian critique of Enlightenment rationalism transposed into a call for Christian humility (see Franz Hinkelammert Ideological Weapons of Death, pp. 49-51).

Of course, Hayek is going to say that he thinks social justice is a mirage — he would hardly be an effective polemicist, if he just blurted out an admission that social injustice makes an attractive business model.

Analyzing the ideas of a man, like Hayek or Nozick, presents many challenges. Is he an important intellectual because of the power of his ideas, or the power of his appreciative audience and fan-base? Is the analytic logic of his argument the critical meme, to which a genealogy can be attributed? Or, is it an emotional appeal, and the suggestive implications and semantic generalization that persuades and counts in the political long game?

Hayek’s vision of a self-regulating economy, decentralized and coordinated by market price was a remarkably bold, big lie, which somehow survived contact with the reality of prices administered by corporate bureaucracies. That’s a remarkable intellectual achievement, but the explanation for that success must lie in some quality of the ideas, which give those ideas both a power to attract assent and a power to deceive.

The cover Hayek gave for otherwise reprehensible political and economic authoritarianism contrasts sharply with the artful use he made of the rhetoric of individual autonomy. He offered the rich and powerful a foundation for self-esteem and self-righteousness, which did not require passing with a Camel through the eye of a needle.

I presume it is the spiritual potency of Hayek’s myth of the market economy that CR is seeking in making the link to Nietzsche. I think he might do better to look to Nietzsche to understand the self-deceptions involved.

Hayek is analytically incoherent on his early, central premise: that the market order has evolved a system so complex that one mind cannot comprehend it. “A complex system like ours is necessarily based on the individual’s adjusting himself to changes whose cause and nature he cannot understand…” (Road to Serfdom, chap. XIV. Etc. etc. throughout his volumes). But the next logical question is: How can Hayek himself know this?

His argument that prices transmit local knowledge (a sort of “information mysticism”; what he means to say is that “supply and demand determine prices”) does not really prove his argument for all time. There are a few different reasons why it fails, as the current era is making more apparent: 1. there are moral values which do not depend upon choices in supply and demand; 2. scarcity in goods and services may be found out, in the future, to have been an historically temporary condition that depended upon the existence of private property and is solved by mass production; and 3. our biggest problem now is technological energy choices which threaten the biosphere, and which individuals are incapable of resolving unaided.

Remember that Hayek started by trying to figure out a very specific problem: why early 20th century capitalism was more innovative and productive than Soviet communism.

He latched onto early ideas of systems theory (expressing it as “spontaneous order” and the like) and thought these were active principles, when in fact they are just part of the grammar of systems theory, and not necessarily ironclad laws for proceeding into the future.

In the vid, Corey Robin mentions Hayek’s argument (it is from the same chapter) that only in the market system can morals be formed, because only there, when you have something to lose, do individuals make a real choice. This is Hayek at his most bloviational. Indeed he launches into his (now famous) misprediction that in socialist societies, morals and individual ideals will be lost.

Of course they are not lost: the totalitarians always have to create a police state to prevent being overthrown.

The real fact of the matter is that both capitalism and socialism appear to be NECESSARY, within the same society. This is because the structure of any group is two-part: there is a ring of individual transactions, and there is a center of attention on the common institution. There is no group that does not have two kinds of connections, between the individuals, and to and from the individuals and the rules. And we need freedom for both kinds of connections.

Moreover, both parts are a source of economic growth: the individuals divide their labor and trade, and the institution reduces common transaction costs and external (and environmental) risks.

It is never put into the same sentence that BOTH parts are a source of economic growth! Why is this?

“The division of labor and the gains from trade” are from Adam Smith ch. 1-2. “The reduction of common costs by the institution” is the essential message of Adam Smith ch. 3 (which is entitled, “The division of labor is limited by the extent of the market”. See http://www.youtube.com/watch?v=fY7k-ulsPis&list=PLCAE3CA6D964BFC8E&index=12

Hayek’s intellectual tragedies are that he appeared a little too early to see the whole problem; adopted a theoretical stance which attended to one side of it in a lopsided way; misapprehended the human motivations in the events on the ground; remained ignorant of the importance of the ecological systems theory that developed in the late 1960’s-early 1970’s (most economists and social scientists still are ignorant); and sadly, finally became an avatar to cranky political halfwits and plutocratic propagandists.

Despite formulation of his ideas in the confused 1930’s, and therefore the chance for possible revision by new learning as time went on, Hayek remained in the trance. Here is his last formulation (1988), from The Fatal Conceit, p. 37. He now allows for actual institutional mechanisms, little micro-centers of command economy within the market economy, and notice how he’s more or less descriptive, up to the last sentence. Then the paragraph becomes prescriptive:

“The elements of the spontaneous macro-order are the several economic arrangements of individuals as well as those of deliberate organizations. Indeed, the evolution of individualist law consists in great measure in making possible the existence of voluntary associations without compulsory powers. But as the overall spontaneous order expands, so the sizes of the units of which it consists grow. Increasingly, its elements will not be economies of individuals, but of such organizations as firms and associations, as well as of administrative bodies. Among the rules of conduct that make it possible for extensive spontaneous orders to be formed, some will also facilitate deliberate organizations suited to operate within the larger systems. However, many of these various types of more comprehensive deliberate organization actually have a place only within an even more comprehensive spontaneous order, and would be inappropriate within an overall order that was itself deliberately organized.”

“many…would be inappropriate…” But notice: you actually cannot KNOW that. I was almost about to write that Hayek, while quite the moralist, really does not have a transcendent value. But it does seem that, all along, he treated “spontaneous order”, i.e. evolutionary emergence, as God. This is a systems-grammatical mistake. Any evolutionary biologist can tell you that evolution may lead to a cul de sac, and that whole species have been wiped clean off the planet.

Again, Nietzsche would never have made this mistake: “I am afraid we are not rid of God because we still have faith in grammar.” (Twilight of the Idols).

As an analytic construct, a clean distinction between deliberate planning or intelligent design, on the one hand, and or emergence from competitive trial-and-error in cycles of reproduction, growth and decay, is no easy task. I’d like Hayek a good deal better, if he simply admitted that he could draw no bright lines, instead of embracing a religious faith in the god of Spontaneous Order, the Austrian Pangloss. But, of course, he would have lost his meal ticket, if he’d given up the source of moral force behind his critiques of (leftist) schemes for institutional reform unfriendly to vested interests.

I notice two things. The first, I think, is the point Lee A Arnold was getting at, @ 16, which he labels as the necessity of socialism and capitalism in the same society. There’s a tension between private goods and public goods, which neither methodological individualism nor a religious faith in spontaneous order resolves. This is clearer in English economics than in Austrian Economics, because in the English version, as expressed by Smith, the Market (an institution) serves the public good by leading the pursuit of self-interest and private good, to defeat itself in the full pursuit of its ambition (and because Smith, a Scots Presbyterian not a Catholic, lacks the requisite faith that businessmen won’t succeed in subverting the institution in a spontaneous conspiracy). Smith does not think the Public Good or General Welfare is a mirage, but neither does he think it will be well served by spontaneous order. Institutions become a focus of attention, as Lee says.

The second is that Hayek’s “systems-grammatical error” does seem to endorse ignorance as expertise. This is a core doctrine among a broad range of conservative economists — certainly not limited to the fringe of self-identified Austrians — and deserves more notice on the Left. It may be the chief Zombie virus, giving rise to the animation of dead ideas, eating brains, and leaving behind veritable armies of demented neoliberals.

I immediately thought of the blogoeconomist, Scott Sumner, (in)famous for his “target nGDP” mantra, who has invoked the EMH to argue that no one can know what the “right” housing price might be, and, therefore, second-guessing the “housing market(s)” and positing a bubble, is a fool’s errand. What’s weird about it is two-fold: Sumner is definitely a fool, and he’s misapplying EMH to the housing market in an act proving his professional incompetence, and he’s proud of arguing that expertise as an economist comes down to not-knowing anything and not being able to find out anything, about the operation of important “market” institutions. (I put “market” in scare quotes, to emphasize that there is no actual housing market — it is a metaphor applied to the operation of a complex system of institutions, and the purpose of the metaphor, itself, is to shield that system of institutions from inquiry or analysis useful to public policy discourse.)

It’s an affinity for a particular kind of elitism Corey contends they share, not necessarily the exact concept of the ubermensch. How is that hard to understand? Not very, unless you just don’t care to understand it.

it’s very hard to understand, since the definition of the ‘particular kind of elitism’ they share is an incredibly broad and vague construct created to serve the purpose of purpose of putting both Hayek and Nietzsche on Team Fox News, rather than something that illuminates the thinkers involved. If you want to criticize Hayek’s elitism, why not just do it, rather than trying to drag a caricature of Nietzsche into it?

I don’t know if we’re supposed to be talking about this, but. I think Vallier ought to be fired from that other blog over there, because from what I can see, he’s just proved that Hayek sucks. Bleah.

The advantage of tying him to N. is that if you don’t try to attach him to something, he just flops all around and you can’t get anything out of him.