Monday, 7 September 2009

On Hayek’s Road

Primary version of this post, with visual content, at Barry Stocker's Weblog.

I’ve recently been re-reading Friedrich Hayek’s The Road to Serfdom, but I’ll start with a point about Hayek’s name. Hayek was entitled to use the aristocratic style ‘von’, however he preferred just ‘Hayek’ to ‘von Hayek’. I’m rather tired of people who refer to him as ‘von Hayek’. He was right to drop the use of aristocratic style in names, an obvious anachronism in an age lacking in feudal aristocracy, and everyone should follow his good example.

Hayek and The Road to Serfdom, for many conjure up a nightmare of the most extreme pure capitalism, with no welfare for the poorest and no public services; on the other hand libertarian ultras and anarcho-conservatives are often happy to take his name as part of their camp. The fact is Hayek never suggested that the state, could or should, shed all provision of basic public services and assistance to the poorest; and he certainly never suggested that the state could be abolished, or reduced to a mere nightwatchman. Hayek did lean more towards strongly right wing conservative-libertarian fusionism in later years, and made some political decisions that do not delight me,, but he still never accepted the labels of conservative or libertarian. More about that on another occasion perhaps, and on how Hayek’s thought remained interesting and original over time.

I will concentrate today on the 1943 (published in 1944) book The Road to Serfdom which is his most widely read book. It is a book about of 180 pages in the first edition (1945 reprint) copy I have. Not a very short book, but not a very long book, and written in a more direct and less specialised way than Hayek’s major contributions to economics, political theory, psychology, and the philosophy of science. Nevertheless, it does serve as good introduction to those texts.

The simply expressed thesis of the book is that socialism leads to totalitarianism, like Naziism and Stalinism, and means it is the road to serfdom in the sense that it necessarily turns everyone into serfs, or slaves, of the state. This tends to offend the left inclined and over excite the right inclined. In order to temper such reactions, I would like to point out what Hayek does not argue in the book.

Hayek does not argue that all state welfare measures for the poorest should be abolished.

Hayek does not suggest that the state should stop providing public services.

Hayek does not suggest that democratic rights should be limited in favour of property rights.

Hayek does not argue that there should be no laws to protect workers in their place of employment.

Hayek does not suggest that moderate measures for social protection will lead to totalitarianism.

Hayek does not suggest that democratic socialists have bad intentions.

Some people find Hayek’s denunciation of a evolutionary democratic socialism hard to take and confuse it with a denunciation of all welfarism. Some important points about why Hayek denounces the stronger forms of evolutionary democratic socialism

One of the main figures in the Labour Party, as a thinker and a leader (head of the National Executive Committee), was the LSE Professor Harold Laski. Before and after Hayek wrote The Road to Serfdom, Laski had very openly suggested that a Labour government might not give up power if it lost an election, and was involved in proposals to limit parliamentary powers to scrutinise, amend and delay legislation. Laski’s antics eventually resulted in the Labour leader Clement Attlee suggesting that a period of silence would be welcome from him, that is he politely told Laski to shut up.

He provides very ample evidence of the growth of state socialist measures under conservative governments in the German Empire before World War One, and their expansion in the Weimar Republic, making it easier for the Nazi’s to propose an anti-bourgeois anti-capitalist ideology and take over the economy when they came to power.

He provides very ample evidence of that way in which revolutionary socialists became Fascists Nazis and Nazi collaborators in the Europe of the 20s, 30s, and 40s, and held onto a very large part of what they believed before with regard to opposing individual rights, pluralist democracy, and market economies.

He makes a very clear case that Fascist, Nazi and Communist regimes had shared measures of coercing individuals with extreme violence in their attempts to impose a completely planned economy.

I will list the major arguments, which I find successful in The Road to Serfdom before a list of less successful arguments.

State planning of the economy harms workers because it undermines their freedom to choose work.

State planning of the economy harms workers because it undermines their freedom of choice in consumption, i.e. it undermines their freedom to spend wages as they choose.

State planning of the economy necessarily and inevitably contains a small fragment of the total information in the economy distributed between many different agents.

State planning of the economy necessarily and inevitably rests on less information about any individual economic situation than that available to the actors in that situation.

State planning of the economy, if it goes beyond the most general issues like the stability of the currency will inevitably and necessarily impose solutions worse, and based on less information, than the relatively spontaneous solutions of the market place based in the information encoded in prices and informal forms of knowledge.

State planning of the economy will increasingly restrict individual liberties and political freedoms if it goes beyond moderate measures to provide the most basic services and prevent destitution.

Hayek refers briefly to the political theory of Henry Sidgwick. Sidgwick is well known as a Utilitarian ethical theorist (maybe the best), but much less as a political thinker. I must admit that I have not read the political texts, but my guess is that if they are half as good as the ethical texts, they deserve to be read.

Hayek advocates federation between democratic European nations and federation between all democratic nations as a way of providing a barrier to war, and restrictions on the movements of individual and goods.

Less successful arguments.

Hayek’s choice of major 19th Century liberal thinkers is unbalanced. He refers to John Morley, now only remembered as a Liberal Party politician and as the original biographer of William Ewart Gladstone. He refers to (Lord) David Acton, now known to most people as a second rank political theorist (a few would put him higher) very attached to the Medieval Catholic Church and the Confederate States of America as defenders of liberty. Hayek does also refer to Smith, Hume, Mill, Tocqueville and Humboldt, far better choices though some aspects of Humboldt are a bit eccentric. Kant is strangely absent.

The omission of Kant, brings us to another problem, Hayek’s sweeping denunciation of German Idealist philosophy as totalitarian, presumably referring to Fichte and Hegel. The image of Fichte and Hegel as proto-totalitarians, prophets of Fascism and Stalinism, was very popular but you would struggle to find a reputable commentator now who would accept such an interpretation.

Hayek gets the legal and political theorist Carl Schmitt wrong. He exaggerates his status as a Nazi thinker, though Schmitt brought that on himself by enthusiastically grasping the post of head of the Nazi legal association on the nazi seizure of power, until radical Nazis pushed him aside in 1936. Still Schmitt was a very important thinker about law, politics and international relations, with important insights about the relation between these three elements. He claims that Schmitt argued for a totalitarian fusion of state and society, but Carl Schmitt argued for the opposite, for a clear distinction between the political and social sphere. This is very clear in The Concept of Politics for example. Schmitt condemns Harold Laski there for undermining the distinction, so Hayek and Schmitt had a common enemy. Schmitt regarded the expansion of the state into society as highly undesirable, he refers to it a sa bad tendency not as something to be welcomed. Schmitt was a conservative authoritarian nationalist, but the state which he appreciated most was Franco’s Catholic ultra-conservative state in Spain which absorbed the Falangist Fascist party but was less of a radical totalitarian movement than the fascist states. That is not to excuse Franco, but honest analysis must make some distinction between Franco and Hitler, and even between Franco and Mussolini, with Franco as the more moderate traditional conservative figure.


Jock Coats said...

Exactly, Hayek was such a wimp really when it came to libertarianism. I don't know why the Austrians still see him as a "great" other than that he was NOT Friedman and was probably the most direct in the line of apostolic succession from Mises [pbuh] (who of course did keep his "von" though I suppose it was a few years earlier and the Hapsburgs were still in charge).

Thankfully his spine became a bit firmer in his later years, for example realizing that the state managing the money supply was not only inefficient but impossible for it to get right. A few more years with Rothbard and co and he might have got it - even if he might have been the sort of "social conservative" anarchist that Hoppe is.

I suspect that, because of his time at LSE, and because of semi-establishment contacts like Fisher and Harris he felt he might have had the right ears to promote politically expedient and achievable evolutionary change through measured proposals rather than sticking to the radical edge of the Overton window and scaring the horses...:)

Barry Stocker said...

Austrians does not just mean rock hard libertarians. Schumpeter was an Austria economist and much more of what you would call a wimp. He also had a rather aristocratic style despite the lack of a 'von', what is it with the 'Austrians' and the Austrians abd aristocratic style? Something about the later Hapsburg Empire I suppose.

As a gigantic big wimp myself, I'm less enthused by late Hayek, as I said in the post. For theoretical reasons, and because he leaned far too much to Thatcher and too Pinochet. Great body of work anyway. I have a little familiarity with the criticisms of state control of currency and the money supply. In a non-expert non-economist kind of way the analysis looks convincing to me. I just draw different conclusions, along the lines that a state which locks people into it is an inevitable aspect of law governed human society. Bourgeois states have developed relatively restrained ways of locking people in: creating a pro-state rentier interest through government bonds, state issued fiat currencies which give rentiers and many others strong incentives to support a state which provides relative monetary stability and accompanying property stability, welfarism and public services to create very concrete reasons for most people to support the state and its legal framework. I think the hard core Austrians have done a lot of good work in showing the state creates and maintains supportive interest groups in this way. My wimpy attitude is that this can only be mitigated not abolished as the state is inevitable in providing a framework. And like a lot of the Classical Liberals I regard a state as a necessary counterweight against localist forms of conformity and exclusion. I take this very seriously, which does put me in extreme opposition to Hoppe.

I don't know a great deal about Hayek's life, but I think he knew Churchill and no doubt his post at LSE helped him with contacts, and obviously he was able to promote the IEA and set up the Mont Pelerin society. It's the ideal academic location from that point of view. I don't know if that made him more moderate. Mises had a lot of governmental links in Austria and outside. He did have a harder time than Hayek in establishing a niche for himself in exile though. I don't know if he became more radical as a result. I suppose I should read the Hülsmann biography.

Weren't you working on a co-authored book? How's that going?