Sunday, February 17, 2008

Jesse Larner On Friedrich Hayek

I bought the Winter 2008 edition of Dissent just to read Jesse Larner's article, "Who's Afraid of Friedrich Hayek?". This article has the intriguing subtitle, "The Obvious Truths and Mystical Fallacies of a Hero of the Right". I did not learn much, if anything, from this article since I had accepted Larner's main points years ago.

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:
  1. 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.
  2. Hayek offers no principled limitation on the size of government.
  3. 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.
Although Larner doesn't mention it, a Hayek obituary in Commentary made his second point. Larner quotes Keynes on The Road to Serfdom:
"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 Keynes
That 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.)


Anonymous said...

Many more extreme right-"libertarians" have made the same point, namely that von Hayek was not consistent enough and so cannot be considered a genuine "libertarian".

He did debate with Rothbard on whether someone appropriating the single oasis in a desert could not considered coercive or not. Rothbard, of course, argued that it was not. Hayek could not bring himself to admit this was the case, so changed his definition of coercion to bring his position in line with common-sense.

Rothbard, of course, refused to recognise the existence of "economic power" (at least when it came to his beloved capitalism, he did make some highly illogical exceptions which reflected reality on occasion)

The "Critiques of Libertarianism" webpage has some links to other right-"Libertarians" critiquing his position:

one of those is Walter Block, who defends voluntary slavery, and another is Hoppe who thinks that monarchy is a better form of government than democracy....

Of course, Hayek's version of the "calculation argument" is just as applicable to large capitalist firms as it is to central planning. And his ideology played it role in creating the road of private serfdom we are currently on...

An Anarchist FAQ

Anonymous said...

before I forget, I should point out that there has not been an example of "planning" leading to fascism/Stalinism. In fact, quite the reverse as dictatorships have implemented planning (the Bolsheviks, most obviously).

During the 1960s/70s, the elite were far more concerned about the lack of obedience within the general population than any fear of state totalitarianism. That saw them undermine the social Keynesianism of the post-war period, break union power and so on -- precisely to enforce "traditional values" and "management's right to manage" (i.e., know your place in the social hierarchy).

In other words, back to the kind private serfdom denounced by the likes of Proudhon, Bakunin, Kropotkin and Marx...

Ironically, I suppose the example of Chile could be used, although that was a dictatorship imposed by the right... Should I mention von Hayek's less than critical comments on Pinochet here?

Robert Vienneau said...

Iain, I sometimes find responding to your comments difficult. You are more informed on some aspects of my posts - e.g., I know nothing about a debate between Hayek and Rothbard. On other points, I don't entirely agree, but I find it more work than I want to clarify where we agree and disagree.