thoughts on hayek

Road to serfdom…the argument is basically a reverse of Polanyi. He sees all of the freedoms of the current era as being the result of the separation of the political and the economic, but sees the real determining force in the free market, which leads to the freedoms of the political. It should be said that he also doesn’t see the double movement of social protection as coming from below.

Individual was what built our civilization, but the free market allowed the individual to develop that individualism to its fullest extent. Hard to parse which moment he sees as first, but notable that he resists any real dialectic and denies the relevance of social conditions outside of these two factors, both of which are seen as ideas and only ideas. Also, the canard is presented that, despite his economic inequality (and virtual political subordination) “by the beginning of the twentieth century the workingman in the Western world had reached a degree of material comfort, security and personal independence which a hundred years before had seemed scarcely possible.” And, like in most realist theories of the day, the presumption was that this had happened largely within an endogenous process of economic development. In fact, the ethnocentrism of this argument is quite present in several places, assuming as he does that “For over two hundred years English ideas had b
een spreading eastward. The rule of freedom which had been achieved in England seemed destined to spread throughout the world.” Unlike Arrighi who sees the political economic factors that led to competition from Germany, Hayek sees the thing that made England lose its footing was the importation of ideas from Germany. Both of these may be true and if they are, then they aren’t unrelated. But for Hayek, there is a sort of implicit anti-German attitude that he has in this section which implies that the German origins of socialism (or the [asserted] predominance of socialist ideas in Germany) is what actually led to the rise of fascism.

Also, the contention that the free society is somehow spontaneous or natural is less one-sided than in The Fatal Conceit. He is more willing to admit, for instance, that there had to be some government involvement in the construction of the free market. In Road to Serfdom, he says that the early successes of the liberal nineteenth century were what led to the attempt to redirect these successes towards new ends.

One of the key things he does is to marshal all kinds of quotes from people who had recently visited the USSR in order to show how all of them are of the opinion that socialism is more akin to fascism than democracy. And despite all of his talk about the unintended consequences of planning, it is clear that he has only one way of thinking about this: namely that planning inevitably leads to totalitarianism and the free market inevitably leads to individual freedom, narrowly defined as political freedom which is based on economic freedom. The difference between Hayek and Wood, as Harvey points out is that the political freedom ensured in this system is not one that can be used to change any of the economic arrangements that dominate.

Though it lies somewhat unstated, Hayek’s focus on ideas as the driver of both the current historical change and the earlier one is quite elitist. When he does take the occasion to hint at the social pressures placed on democratic governments by their unhappy citizens, his only reply is that these governments were too swayed by socialist ideas to realize the value of the freedoms that they had. He doesn’t really posit a practical way that these things could have been worked out—probably because he didn’t have the American Enterprise Institute there to present market solutions to these problems—but he simply chides them for diverging from first principles.

What is clear, however, is that Hayek converges rather neatly with the 1960s critiques of the institution of the state. Moreover it is indicative of the kind of politics that developed in this moment and their similar focus on the state organization of economic and social life. It is worth noting that Hayek’s main target isn’t socialism or Marxism per se, but the democratic socialism that made people like Marcuse so angry. It also makes clear that, despite its tepid intervention even Giddens’ Third Way would be unwelcome, On this, at least, the Marxist and Hayekians would agree, there is little hope for instituting social justice or equality while adhering to the traditional principles of liberalism. (on this see p. 37 in RtS)

One of the interesting things that he seems to want to set up as a dichotomy is that socialism isn’t a continuation of the enlightenment tradition (p.29-30) and it isn’t just a matter of expanding freedom to the economic realm. He spends most of ch. 3 positing that there is a difference between socialism as a means and as an end. He says that too many people believe that there is a way to achieve these ends without the kinds of state run means that true socialists believe. And it is this failure to balance means and ends that he sees as problematic. There may be many useful idiots out there, but they just don’t see what he does. It is interesting that, despite his claim that the ends of socialism themselves are contrary to his values, he must claim to be a part of the group of people “who value the ultimate ends of socialism no less than the socialists [but] refuse to support socialism because of the dangers to other values they see in the methods proposed by the social
ists.”

Here there is a homology between Hayek’s equivocation and that of, for instance, the Frankfurt school. In many ways both see state capitalism as an ultimate failure of the enlightenment principles. They also both frame their problem with this in terms of the way that the system affects, to use Hayek’s terms, the liberty of the individual consciousness. However, whereas the Frankfurt School see the current monopoly status of the formerly free market and the structuring of the state around it as the most obvious similarity that Nazi fascism has with American society, Hayek sees the problem stemming not from the market’s relationship with society, but with the relationship of the state to the economy. Namely, he says that the real similarity isn’t monopoly business but state intervention and planning that are the clearest threat to “freedom.”

I will also note that, throughout the book the notion of “freedom” is the only thing that is discussed, not that of democracy. This is, I think indicative of the way that he thinks things work. He certainly doesn’t have a problem with the state when it is securing property rights. This is, perhaps, where he is most similar to the planners he is criticizing and it shows that the real problem he has with planning isn’t its elitism, but that it doesn’t leave these choices up to the people who have money. Moreover, he doesn’t usually talk about the “free market” but instead “competition.” I wouldn’t put it past Hayek who was a very careful wordsmith, to have made sure that he could not be interpreted as supporting in any way the more socialist interpretation of the economy, which he derides early in the book, that says the project of socialism is an attempt to bring the freedoms of the political to the realm of economics.

This isn’t really fair. He just thinks that “competition” is the thing that will bring about the best results. What competition entails, however, is something that, in 1945, he is careful to outline. In this he mentions environmental regulations and labor standards as aspects of social good that would inevitably need to be handled by something other than the price mechanism. However, he sees competition as the most important aspect of modern civilization and planning is something that has only gained respectability among “liberal-minded people” through “socialist propaganda.” I don’t know from this who the socialists are that are promoting this or why they would be listened to if they were merely socialists, but he’s the nobel prize winner.