Friedrich Hayek, Jürgen Habermas, and Carl Schmitt do not look like a group of the like minded. Schmitt was the legal and political theorist who emphasised that law and politics rest on the capacity of someone to make a decision.
Schmitt thought that political theory should take sovereignty as its object not the state. If political theory takes the state as an object, it becomes primarily concerned with the institutional and administrative aspects of the state. He took a critical view of confusion of the state with civil society. Where politics itself engages with civil society, the state becomes one of various pressure groups. The order and unity of the state which is necessary to the exercise of sovereignty is undermined in a pluralist view of the state. Democracy itself is not best represented by the divisive nature of parliamentary politics, since the single ruler is much better suited to representing the majority as a unity, rather than as a divided aggregate of many points of view, where no unified will of the majority can emerge. Politics also contains the dimension of struggle between friend and foe, in which we struggle to defend ourselves against the enemy who threatens our existence. Schmitt considered that to be the basis of international relations. Attempts at world confederation, and world government, can only produce new wars with an enemy who inevitably resists other countries ganging up on it.
Habermas, a Marxist in principle but more of a social democrat/left liberal in practice, condemns Schmitt for reducing international relations to this constant war which leaves no room for the just war that enforces international order. One point at which Habermas raises this criticism is when he writes on the NATO intervention in Kosovo. Habermas does not think this intervention can be fully justified by the international law as it previously existed. The UN charter strongly opposes interference in the internal affairs of member states. Habermas did not write to condemn the Kosovo intervention It is an intervention which refers to morality rather than existing law, it is the intervention based on acting as it there is a global civil society, though it does not yet exist. The intervention was not wrong, it was however a precedent that should not be taken as a precedent. Self-legislating improvement should not be accepted. Habermas talks about being between morality and law, but he is halfway between legalism and decisionism. Some force took the decision to intervene rather than follow international law, and that itself is a welcome intervention There is an Enemy, Slobodan Milosevic who must be defeated regardless of previous law. With regard to internal law and administration, Habermas emphasises the difficulties that arise from social legislation This is inevitably administered outside the apparatus of parliamentary supervision. Increased administration is inevitable for these kinds of programs The regulatory nature of social intervention must come into conflict with the universality of law, democracy is fragmenting ştself.
Hayek, the best know advocate of pure free market and an almost non-existent state, condemns Schmitt, like Habermas, always in passing He appears to be condemned but disappears before he contaminates the surrounding text. Hayek thinks democracy should be limited, or should limit itself, in order to restrict the state to state matters, including the foundation of law, a foundation which must also be an apex. The state should not be interfering in society, it should be protecting its own sovereignty from any confusion about its role. The state is most admired before the establishment of mass democracy, and is most legitimate when defending itself against enemies. There is a strong element of elitism in Hayek, who would like constitutional constraints on democracy to the advantage of property owners. Hayek's wariness of democracy follows a tradition that goes back to Humboldt Humboldt recommended the free development of the individual after paying very little tx. Humboldt also opposed democracy, because he thought that would lead to increasing social demands on the state. Humboldt thought there should be just a king, remote from and above society. That itself recalls Hobbes. Hayek, and others with similar views, attack Hobbes as a supporter of a strong state. This misses the point that Hobbes thought the only purpose of the state was to leave people to be free in civil society while defending the state against its enemies. Hobbes preferred monarchy to democracy, a monarchy of the sword unconcerned with social questions, but wielding immense force to protect sovereignty within and without.
This is all consistent with Schmitt's enthusiasm for a separation between the political sphere and the economic sphere. Hayek assumed that since Schmitt refereed to the modern tendency for society and the state to be confused, that he was endorsing that tendency, and saw in the Nazis an ideal aspect of that trend. However, there is no reason to believe that Schmitt supported the Nazis for socialsit or statist reasons. He justified the idea of a Caesar like leader, and the rights of any large nation over its smaller neighbours. That is all. Schmitt was complicit with a totalitarian state, but that should not lead us to the conclusion that totalitarianism was his goal. A post-war speech to business people strongly suggests he though that the state should concern itself with politics without interference from above in the economy.
Like Habermas, Schmitt did not think all war must be founded on existing international law. Like Hayek, Schmitt was suspicious of democracy and particularly of welfarism.
Like both Hayek and Habermas, Schmitt thought that the modern state is fundamentally lost in a contradiction between general laws and administrative bodies which regulate more and more of life.