Robin on Bloggingheads

by John Holbo on July 1, 2013

Just in case Corey is too modest to link to it himself. Because he’s still talking about all that Hayek stuff – now with Mike Konczal. (Maybe he thinks you – the CT reader – have had enough of that.)

I hadn’t had enough. I enjoyed it. As I’ve told Corey: I agree with what he’s getting at – all the Hayek stuff is very much of a piece with his other stuff, and I endorse that big picture. But I felt the “Nation” article, in particular, didn’t give him enough room. The big picture ended up weirdly cropped. The argument can look unsound, even though it’s basically sound. The follow-ups have improved things considerably, but maybe some of you feel you have lost the plot in all the multi-post critical back-and-forth? A 53 minute bloggingheads might seem like it just adds to the pile. But I think Corey does a good job of just taking it from the top and making his points pretty clearly.



Rakesh Bhandari 07.01.13 at 5:10 pm

Could you just say for me what is the connection between equating value with utility at the margin and Nietzsche’s theory of value (or transvaluation of values)?

Did the Austrian left simply put the dignity of labor at the center of civilization? Do remember though that Marx did not simply glorify labor but called for the self-abolition of the proletariat and struggled for the limitation of the working day (the realm of freedom opens up through the limitation of the realm of necessity). Austrian socialist culture at that time put a primacy on the mutifaceted development of the person outside work by serious attempts to reform education and music instruction in particular. It is clear that labor was not held to be the only value.

At any rate, I think what Robin is getting at is what Eve Chiapello calls social criticism made on the basis of a philosophy of labor (here she summarizes some of the typological work that she has done with Boltanski):

precisely, what interests the social criticism is
what this economic organisation imposes on the pe
ople whose labour it uses: they are reduced to
production components in the economic machinery, and
lose all value if they cannot find employment.
With the social criticism, labour takes on a glorious
status and is celebrated as the creative activity
, and the source of the value of things. The
essence of man is labour. Man’s history is the
history of his self-production via his creative activity
. Consequently, any examination of “real” labour
and the conditions of the workers who in fact em
body the greatness of man reveals several scandals
that the social criticism constantly exposes. Not
only do the people who are the source of all value
draw no benefit from it, being confined to unbear
able poverty with no power to decide what they
should do (heteronomy at work), while others who do no work but simply own the capital become
richer and have the power to command the workers;
in addition, the work the workers are asked to do
uses only a tiny part of their creative potential, a
nd mistreats or permanently cripples what forms the
very core of their humanity. The social criticism
cannot be dissociated from a profound Labour phil-
More later gotta go to class


Rakesh Bhandari 07.01.13 at 10:35 pm

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.


Rakesh Bhandari 07.02.13 at 2:54 pm

Is Hayek really a serious critic of inheritance or estate taxes? And if he is, is it on the grounds that Robin alleges–that is, did Hayek worry that estate taxes would prevent the cultural development of great families across generations and deprive humanity of its natural cultural leaders?
Or to the extent that Hayek did oppose estate taxes, did he do so on the grounds that no coherent argument from social justice could be made for them. That is, to the extent that no injustice was visited upon specific others in the making of fortunes and since the decision to pass on wealth to one’s heirs involves again no specific injustice against a concrete other, then there can be no argument from justice for inheritance taxes. This is the argument that I would suppose would be first and foremost in Hayek’s mind against inheritance taxes (if in fact he consistently opposed them), not the argument that Robin emphasizes.
But I’d like to see the textual evidence.


Bruce Wilder 07.02.13 at 3:38 pm

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.


Rakesh Bhandari 07.02.13 at 4:47 pm

not so much “yeah, rich people” as “pathetic and resentful little people waving laughable banners of social justice now that Christian brotherhood does not have the same ring to it”. At the same time, I do think that there are problems with the whole project of defining ideals of social justice and holding political activity to them. I am sympathetic to Amartya Sen’s and Allen Wood’s skepticism.


Sebastian H 07.02.13 at 7:38 pm

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.


Rakesh Bhandari 07.02.13 at 8:58 pm

Yes, I really don’t see how that one quote from Hayek proves that he opposed inheritance taxes to ensure that family of übermenschen would stay intact over generations; in fact the quote does even prove that he was opposed to inheritance, estate or death taxes. Of course his idea that social justice is a mirage undermines normative arguments for estate taxes. So we should pay attention to why he calls social justice a mirage, which is exactly what Raymond Plant does.


jonnybutter 07.02.13 at 11:41 pm

[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.


RMR 07.03.13 at 1:02 am

Uh…”embody the greatness of Man,” and yet we’re sneering at Wells’ and Menzies’ “Things to Come?”


bianca steele 07.03.13 at 1:13 am

@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.


John Holbo 07.03.13 at 1:56 am

“embody the greatness of Man,”

Is this a quote from the bloggingheads exchange? What’s the context? And what is supposed to be the paradox, re: “Things To Come”?


Rakesh Bhandari 07.03.13 at 6:29 am

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).


Rakesh Bhandari 07.03.13 at 6:34 am

So given the quotes on which Robin focuses, here’s Hayek’s position.

Not only is the inequality in income that makes for savings by the rich a good thing because the rich will invest their money in capital formation and trend-setting entrepreneurship rather than consume it (of course they haven’t been investing much but rather creating risk through derivatives with astounding notional values of 50 or so trillion dollars); allowing the bourgeoisie to save is also putatively good because they are alone cultured enough to support the highest forms of the arts.

But Keynes preferred the bourgeoisie over the boorish proletariat for the same reason, but Robin has not yet turned on Keynes. Why not?

Well, no matter, bourgeois culture has practically disappeared. Wittgenstein’s wealthy father dedicated his fortune to the arts. Hayek is from a lost world. Larry Ellison races yachts and tried to buy a basketball team (don’t get me wrong…I love basketball). Doesn’t Franco Moretti have a book just out on the disappearance of bourgeois culture? If only the financial aristocracy were as cultured as Hayek defends them as being! Overspending on a sports team now gives the wealthy man more legitimacy and a greater aura than supporting the high arts.

Yes Hayek had many ideas, but he only had a few ideas worthy of debate today–the critique of central planning based on an information-theoretic understanding of prices (Farrell’s argument that product standardization dilutes the information content of prices is the one interesting idea in this whole discussion), the critique of Enlightenment rationalism or constructivism and (lower on the list) the critique of the ideals of social justice come to mind.


Bruce Wilder 07.03.13 at 9:30 am

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.


Rakesh Bhandari 07.03.13 at 2:38 pm

I do think that we should attend to the analytical logic of Hayek’s arguments.

If there is doubt about the quality or coherence of his ideas, it is probably sharpest in regards to his early capital theory–his famous so-called triangles.

If I remember correctly, G Steele makes a reasonable case on the basis of Hayekian capital theory ( Hayek spent the 30s trying to figure out the nature of capital) for his critique of Keynesian underconsumptionism (the recovery in the upper reaches of the capitalist economy does not necessarily depend on there first being increasing strength at the mouth of the river, which is to say that final demand need not be bolstered for recovery to commence).

Late in his life Hayek said that his fundamental problem with Keynesianism was its underconsumptionism. It would be important to engage that argument carefully presently. DeLong has written on this.


Lee A. Arnold 07.03.13 at 4:03 pm

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

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.


Bruce Wilder 07.03.13 at 5:45 pm

Lee A. Arnold: the market order has evolved a system so complex that one mind cannot comprehend it. [Hayek:]“A complex system like ours is necessarily based on the individual’s adjusting himself to changes whose cause and nature he cannot understand…”

Hayek started out in the 1930s, trying to come up with rationalizations for a public policy of inaction and neglect, in response to the economic crisis of the Great Depression. At the time, it was far from obvious that 20th century capitalism was more productive than Soviet Communism; people, who were paying attention noticed that the latter was more brutal, but brutality was being served up on all sides. Capitalism and its market price mechanism seemed to have broken down in the Great Depression — the richest and most advanced country in the industrial world had been laid prostrate by falling prices, with widespread bankruptcy, unemployment and intense poverty a consequence, in the shadow of potential abundance.

The capitalist economy seemed pretty darn incomprehensible at the time. It seemed like a natural force, animated by mysterious and potentially malevolent gods.

I’m skeptical of Rakesh Bhandari’s insistence that we should pay attention to Hayek’s “analytic core”. To me, the “analytic core” is just the hypnotic trance induction, which proceeds the real work of Hayek’s polemics, which is to propagate a moral narrative prescribing virtue and sacrifice and transcendent value. The “analytic core” avoids contact with actual institutional mechanisms of the economy, because actually understanding the economy would conflict with his moral mission of promoting a kind of cargo cult economics, in which the interests of the rich and powerful in predatory activity is hidden behind the rhetorical drapery of virtuous freedom.


Lee A. Arnold 07.03.13 at 6:43 pm

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).


William Timberman 07.03.13 at 8:24 pm

It helps, when judging defenses of a moral order based on something visibly questionable as a moral order, to have lived through a period when the conventional wisdom has been turned on its head. For me, the end of Jim Crow was just such a period.

When I was a (white) kid, living in a series of small towns in the old Confederate states of the southern U.S., the (white) adults who were reckoned wise really did think of African Americans as inferior to white people, not just mentally, but physically as well. And since the God of Evangelical White Christians would never mock them by confronting them with inferior replicas unless he intended those inferior replicas to be used as their servants, Jim Crow was the perfect administrative reflection of a divine moral order. A concept such as Black is Beautiful would have seemed not only impertinent to them, but completely incomprehensible.

It’s hard now to imagine anyone, even a hard-core racist, who could mistake that set of self-serving definitions for reality today. What the conventional wisdom of institutions at any given moment defines as Nature is always something rather less than that, and whether the powerful admit it or not, is always self-serving. Seeing beyond it is a treacherous enterprise for individuals, but when the mode of the music changes, it can evaporate in an instant.

The odd thing to me about Hayek’s conflation of the invisible hand and the moral order is that flattering the powerful never got him anywhere much. At the time, they didn’t need the flattery, and now that it might be really useful to them in shoring up the somewhat threadbare illusions they’ve employed in governing the powerless, the world is already beginning to sing a different tune.


Bruce Wilder 07.03.13 at 9:37 pm

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.)


john c. halasz 07.05.13 at 6:11 am

O.K. A gratuitous comment, since it doesn’t quite concern economics, nor quite address Robin’s contentions. But I think it’s useful to recognize that the “Austrians” are rooted in a specifically Austrian strand of ultra-conservatism, based on a more-than-Humean degree of moral skepticism, (since basically nothing else would do, to “justify” the peculiar quandaries of Austrian elites). That is the sole connection with Nietzsche, except that it is a false cognate, and has nothing to do with the non-apologetic, “active” moral skepticism in Nietzsche, which specifically highlights the rooting of conventional morality in motives and mechanisms of domination, rather than “justifying” them. That the more conventional version of moral skepticism championed by the “Austrians” might have done useful service in further future contexts, as B. W. wishes to contend, under the guise of “complexity” and the “magic” of the market, has little to do with the unmasking that Nietzsche intended rather than the obfuscated “justifications” that von Hayek offered.


PGD 07.05.13 at 6:59 am

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?


jonnybutter 07.05.13 at 11:29 am

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

‘Power and wealth concentrated among the few’ is ‘incredibly vague’?


bianca steele 07.05.13 at 10:34 pm

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.


Ben 07.06.13 at 9:13 am

Having read The Reactionary Mind, where the only bits on Nietzsche (I can recall) were on Ayn Rand’s interpretation of him, I thought the arguments Robin presented in the bloggingheads video w/r/t Nietzsche’s elective affinity w/ Hayek were fairly clear and cogent; the grosse Politik stuff was especially convincing, and of course not the focus of the comments so far.

I don’t know why, but it seems like Robin’s arguments are congenitally either misconstrued (by eg libertarians) or under-read, if that’s a term.

Robin seemed to present a broader array of arguments in the BH video than in the CT blogposts, and in a more convincing way; maybe part of the problem is that he’s a much better thinker than he is a polemicist. (That’s not an insult, Corey, btw.)

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