Larner argues that Hayek is not nearly as extreme as some of his fans in contemporary political debates make him out to be. I take Larner's main examples to be:
- Hayek, in, for example, Chapter 9 of The Road to Serfdom, states that important social democratic ideas are compatible with his principles. Among these are the state guaranteeing a minimum standard of life, organizing a comprehensive system of social insurance, and combating economic flucuations.
- Hayek offers no principled limitation on the size of government.
- The socialist calculation argument, including in Hayek's formulation, is an argument exclusively against a thorough-going central planning. It is not an argument for laissez faire inasmuch as it does not address all sorts of interventionist policies in a mixed economy and, for example, anarcho-syndicalism.
"In my opinion it is a grand book... Morally and philosophically I find myself in agreement with virtually the whole of it; and not only in agreement with it, but in a deeply moved agreement." -- John Maynard KeynesThat blurb is on the back cover of the edition on my bookshelf.
I started reading Hayek in the mid 1980s before I realized how he was claimed by the right. I took the dedication in the Road seriously: "To the socialists of all parties." I now have some questions about this book. I doubt that historians accept Hayek's thesis about specific ways german socialists paved the way for the nazis. I don't read it as a slipperly slope argument, but rather as a jeopardy argument. If english socialists were to implement their policies after the war, they should be made aware of the risks. In this way, they could implement them in the best way possible. They might even have been persuaded to moderate some of these policies.
I think Individualism and Economic Order was the first book I read by Hayek. I still think this an extremely insightful book. I wish I could find off-hand the bit where Hayek characterizes the mixed economy as "interventionist chaos". An inability to analyze mixed economies is a defect. Another defect is the chapter on the Ricardo effect - but my views on Austrian business cycle theory have long been available. Hayek's strength, including in the socialist calculation controversy, is on the use of distributed tacit knowledge in an economy. (I thought interesting how Mirowski traces the influence of this Hayek argument on the Cowles Commission.)