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In a 1984 interview John O’Sullivan asked Friedrich Hayek to explain the contradiction between the reality of English freedom and his argument that economic planning leads down the Road to Serfdom.  Sullivan pointed out that since World War Two, the United Kingdom had adopted “increasing control over industry, over planning, over education, over the provision of welfare, and yet the people in this country don’t feel any less free.”  Hayek responded, “I did never say, as it is alleged, that once you go down this track, you are bound to go along to the bitter end.”[1] Just ten short years later, however, this popular mis-characterization of Hayek’s thesis persisted.  Gerald O'Driscoll, director of policy analysis at Citicorp and a senior fellow of the Cato Institute, told an audience gathered to dedicate an auditorium in honor of the Austrian intellectual, that “Hayek's thesis in The Road to Serfdom is that one intervention inevitably leads to another.” [emphasis added][2] Clearly, there is a disconnect between the ideas of Hayek himself and the popular understanding.  The roots of the disconnect stretch back to the arrival of the Road to Serfdom in America.  Conservatives in the United States, not only found a simplistic explanation for the rise of European totalitarianism, both Nazism and Communism, but also a tool to attack the foundation of New Deal policies.  Like their counterparts in the United Kingdom, ordinary Americans felt free, and American conservatives took it upon themselves to raise the alarm about the inevitable threat of government intervention.  Reflecting back on the American popularity of his ideas and the shallowness of that popularity, Hayek said, “Both sides talk about my book.  Nobody really read it or studied it.”[3]

Hayek would have us believe that the radical interpretations of his philosophy are rooted in ignorance.  They are no fault of his own.  He even went so far as to write an essay entitled “Why I am Not a Conservative.”[4] In the essay he tried to distance himself from the simplistic maintenance of traditional social institutions.  “Personally, I find that the most objectionable feature of the conservative attitude is its propensity to reject well-substantiated new knowledge because it dislikes some of the consequences which seem to follow from it - or, to put it bluntly, its obscurantism.”  Instead of obscuring knowledge, and hiding facts, Hayek believed society benefits from a full, open and rational questioning of morals, values and traditions.  A successful society “can not rationally decide except by experimentation.”[5] For Hayek, ideas are testable.  They produce real world results and should be judged based on empirical evidence.  Free markets are better for society because they efficiently allocate resources and enhance individual liberty.  He cautioned his reader, however, that “Probably nothing has done so much harm to the liberal cause as the wooden insistence of some liberals on certain rules of thumb, above all the principle of laissez-faire.”[6]

Unfortunately, there is another side to Hayek--Hayek the Manichean.  While making the leap from the Austrian professor to English political pundit, he cut corners and eliminated nuisances “for the sake of brevity.”[7] In this version of Hayek he draws a straight line from nineteenth century socialism to Hitler's Germany and Stalin's Soviet Union.  The path was clear and direct; nothing stood in the way of “Social Justice” turning into tyranny and death.  Condensing Friedrich Hayek not only made him more accessible to the general public but also radicalized Austrian Economics.

As a European intellectual Hayek rightly saw himself within the mainstream of the English tradition.  Rejecting modern political labels of conservative and liberal, he preferred the term “unrepentant Old Whig.”[8] To the general public this term was dead, but to the student of history it represented the leaders in English Constitutional history.  In the Glorious Revolution of 1688 the Whigs brought a real, and lasting, limitation of monarchical power.  During the 1830s the Whigs gave up their own political monopoly, passing the Great Reform Act in 1832, and then moved on to abolish the economic monopoly of the East India Company as well as the religious monopoly of the Anglican Church.  The Whigs also had their own interpretation of history in which early modern merchants, Protestants and scientists broke the stagnation of the Middle Ages and ushered in a new age of innovation, material progress and expanding personal freedoms.[9] Arriving in England in the 1930s, the young Austrian was disappointed.  World War One and the Great Depression shattered this quintessential English optimism, and Hayek longed for its return.

Hayek was dealing with the issue of Western, and English, exceptionalism.  Something special happened in Europe that allowed it to turn traditional societies on their head.  Instead of power flowing from the top down, men like John Locke argued that power flowed from the bottom up.  Breaking with a thousand years of Medieval Christian tradition, Renaissance scholars rediscovered the individualism of classical antiquity and asserted "the belief it is desirable that men should develop their own gifts and bents."[10] Free from the bonds of tradition, individuals could follow their own conscious, breaking new ground in commerce and science.  Individuals, following their own enlightened self interest, produced a spontaneous growth and organic order in society.  Hayek could have, but did not, expand on the role Civic Humanism played in shaping ideas of virtue and serving others.  He simply leaves that part of the story to the educated reader.  In other words, there is nothing really radical in this part of his story.

Spread throughout The Road to Serfdom is also a rather conventional and unsurprising role for government in the economy.  A simply enumeration of appropriate government activity can illustrate how Hayek accepted much of the modern welfare state.  Since he did not prioritize or even make a list, the following list is presented in the order in which the activities appear in The Road to Serfdom.

* Monetary system (p.72)

* Prevention and control of monopolies (p.72)

* Prohibit "the use of certain poisonous substances or to require special precautions in their use, to limit working hours or to require certain sanitary arrangements, is fully compatible with the preservation of competition."  (p.86)

*Create "conditions in which competition will be effective as possible . . ." (p.88)

*Organize “public utilities” (p.95)

* Establish a system of formal rules that "could almost be described as a kind of instrument of production, helping people predict the behavior of those with whom they must collaborate, rather than as efforts toward the satisfaction of particular needs."  (p.113)

* Define weights and measures (p.118)

* Prevent fraud and deception (p.118)

* Prevent workplace violence, either on the part of management or labor "Similarly with respect to most of the general and permanent rules which the state may establish with regard to production, such as building regulations or factory laws; these may be wise or unwise in the particular instance, but they do not conflict with the liberal principles so long as they are intended to be permanent and are not used to favor or harm particular people." (118)

* Spread knowledge and information (p.129)

* Assist in mobility (p.129)

*Reduce inequality of opportunity (p.134)

* Provide "security against physical privation" by assuring that everybody has "some minimum of food, shelter, and clothing, sufficient to preserve health and the capacity to work."  (p.148)

* Help "organize a comprehensive system of social insurance" that cushions against the hazards of life including "sickness and accident." (p.148)

* Assist victims of earth quakes and floods.  "Wherever communal action can mitigate disasters against which the individual can neither attempt to guard himself nor make provision for the consequences, such communal action should undoubtedly be taken."  (p.148)

* Combat "general fluctuations of economic activity and the recurrent waves of large-scale unemployment which accompany them. . . .  In any case, the very necessary efforts to secure against these fluctuations do not lead to the kind of planning which constitutes such a threat to our freedom."  (p.149)

Hayek then was not opposed on principle to government intervention in the economy.  He was opposed to a particular type of intervention, namely central planning.
It is of the utmost importance to the argument of this book for the reader to keep in mind that the planning against which all our criticism is directed is solely the planning against competition–the planning which is to be a substitute for competition.[11]
Government intervention in the economy is not a prima facie case for the rise of totalitarianism.  In fact, taken together, Hayek praised the virtues of quite a number of government interventions in the economy.

These positive powers of government are presented as matters of fact.  Where Hayek diverged from the main stream of European thought was in his attempt to answers a simple question, "Why Hitler?"  In this part of The Road to Serfdom, Hayek the Manichean redefined terms to create two simple opposing view points–one promoting liberty, the other leading to totalitarianism.  In the old Whig histories the opponents of liberty were monarchs and Roman Catholics.  In Hayek’s new Whig history, the advocates of tyranny were the “socialists,” and the champions of freedom were the “capitalists.”  Unfortunately, his use of the term “socialism” obscured history rather than illuminated it.  He begins this discussion with a reasonable definition of twentieth century socialism:

In this sense socialism means the abolition of private enterprise, of private ownership of the means of production, and the creation of a system of a planned economy in which the entrepreneur working for profit is replaced by a central planning body.[12]
Hayek then ignored his own definition in favor of a much broader and inclusive application.  He dropped the requirement that “socialist” favor public ownership of property and began applying the term “socialism” to any “collective” action.[13] This changed allowed him to create an ahistorical straw man–a coherent socialist movement away from personal liberty toward totalitarianism.

While this “brevity” assisted his ultimate aim–promoting personal liberty–it distorted historical reality.  In Hayek’s version, the Bismarckian Riech was converted from an divine right absolute monarchy to a socialist community.  Instead of describing the rise of capitalist industrial cartels and syndicates as the emergence of Neo-mercantilism, allowing the traditional state to harness the power and wealth of private enterprise, Hayek looked to the future.  Late nineteenth century Germany was “the first great experiment in ‘scientific planning.’”[14] Missing from his story is Otto von Bismarck’s attack on true socialists–activists who wanted to transfer wealth and power away from the hereditary elite and toward ordinary workers.  The well-known German-American historian Hajo Halborn described the conflict.

The rise of a German socialist party after 1871 had alarmed the chancellor [Bismarck].  The Paris Commune of 1871 and the nihilist movement in Russia had made him extremely apprehensive of revolutionary socialism, and although he did not believe in an exclusively negative approach, he was convinced that as a first step the socialist movement of the workers should be suppressed by any means.[15]
The uninformed reader of the Road to Serfdom is then left with an inaccurate impression of late nineteenth century Germany.  Bismarck and Socialists did not work together to create the preconditions for the rise of Hitler and the Nazi party.  Hayek wanted to shift the focus away from “Prussianism” toward “Socialism.”[16]

Without this shift Hayek’s accusations against the socialists falls apart.  He rightly pointed out that a key element of totalitarianism was the ruthless pursuit of a collective goal.  Both Hitler and Stalin killed millions to create an ideal state.  By the inter-war period, however, the German Social Democratic Party had abandoned collective violence as a means to bring about social change.  Unlike the Russian Bolsheviks, the German SDP created a constitutional government–the Weimar Republic–in November of 1918.  This “socialist” constitution required multi-party, competitive elections for president and the legislature, created an independent judiciary and established equality for all men and women before the law.  The constitution also had an extensive bill of rights, guaranteeing freedom of religion, the right to private property as well rights protecting physical and intellectual labor.  The German SDP were the heirs to, not the destroyers of, nineteenth century liberalism.  German conservatives at the time recognized this fact.

The November revolution was the result of a moral collapse promoted by external pressures. . . . Rightly, it was called a stab in the back . . . We saw the feeble liberals and heard for the hundredth time the promulgation of human rights.  One might say a dusty storeroom was thrown open from which emerged human rights, freedom, toleration, parliament, suffrage, and popular representation.  Finally, they wrote a liberalist novel: the Weimar constitution.[17]
The German socialists were leading their nation away from centralized control and down the road to personal liberty.

Early twentieth century socialists thus lacked the deadly feature of totalitarianism–the militarization of life.  At several points during The Road to Serfdom, Hayek acknowledged the role war played in the development of Nazism and Communism.  At one point he hits the nail right on the head.

The conflict with which we have to deal is, indeed, a quite fundamental one between two irreconcilable types of social organization . . . the commercial and military type of society.[18]
The first type values negotiation and compromise; the second glorifies obedience and violence.  Hayek rightly identified the “security of the barracks” as a step down the road to serfdom.  On the battlefield, good soldiers learn that life and death require taking orders from a strong leader.[19] In a key paragraph several pages later Hayek linked the two types of society to opposing sets of values.
[Germans] possess a strong sense of order, duty, and strict obedience to authority; and that they often show great readiness to make personal sacrifices and great courage in physical danger. . . . [These qualities] . . . have been carefully nurtured in the old Prussian state and the new Prussian dominated Reich.  What the “typical German” is often thought to lack are the individualist virtues of tolerance and respect for other individuals and their opinions, of independence of mind and that uprightness of character and readiness to defend one’s convictions against a superior . . . of consideration for the weak and infirm, and that healthy contempt and dislike of power which only an old tradition of personal liberty creates.[20]
Regrettably, he made this type of security an essential feature of his definition of “socialism.”   He did so, however, at the expense of the truth.  Hayek, himself, wrote “The old socialist parties were inhibited by their democratic ideals; they did not possess the ruthlessness required for the performance of their chosen task.”[21] In other words the socialists valued freedom so much that they refused to go down the road to serfdom.

Neither the Fascists nor the Communists possessed these inhibitions.  They believed the essential feature of life was war.  Only when faced with an existential threat does man truly become man.  War focuses attention on a single enemy and forces the community to come together as one mind, one heart.[22] Soldiers have no personal freedom, losing their voice to established authority.  They surrender themselves to a single higher power.  For the Fascists and Communists that higher power was the “leader”–Duce, Fuhrer, or Party Chairman.  In totalitarian societies the leaders fostered a personal loyalty to themselves.  For example, on the death of German President Paul von Hindenburg (1847 - 1934), Hitler concentrated power.

Hitler did what no one expected.  He made himself both President and Chancellor.  Any doubts about the loyalty of the army was done away with before the old field-marshal’s body was hardly cold.  Hitler had the army swear an oath of unconditional obedience to him personally.[23]
Hitler was not following the road paved by the Social Democratic Party.  In fact he abandoned the road they had paved.  He tore up the separation of powers and blurred the lines between civilian and military life.  The “Road to Serfdom” was paved by militarism not socialism.

Hayek had all the pieces to solve the “totalitarian puzzle”–how could “modern” Europe descend into the barbarity of neighbor killing neighbor?  He provided a one word answer–socialism.  This answer only makes sense if a reader allows Hayek the freedom to redefine terms and history.  In the preface to the original editions of the Road to Serfdom, he appeared to ask his reader for latitude.  He wrote

This is a political book.  I do not wish to disguise this by describing it, as I might perhaps have done, by the more elegant and ambitious name of an essay in social philosophy.[24]
Hayek wanted to change the political debate in a dramatic way.  History and philosophical accuracy had to be sacrificed to make a simple point–the British Labour Party, by maintaining war planning after the end of World War Two, were creating the conditions for totalitarianism.  While this goal is certainly laudable, it contributed to the persistent popular misunderstanding of his thesis.  Hayek sacrificed the complexity of an academic history or social philosophy in order to have a wide popular impact.  He wanted the general public to question the necessity of collective action and to warn about its potential dangers.

The misunderstanding of Hayek’s argument, whether by a senior fellow of the Cato Institute or Glen Beck,[25] stem not from ignorance but from following Hayek’s example.  The Austrian intellectual encouraged his readers to condense and consolidate.  When they did, phrases like “potential threat” are reduced to “threat.”  Complex phenomena like a “technical planned, centrally controlled society” become simply “government regulation.”  This condensation can be found in the Reader’s Digest version of The Road to Serfdom: “This does not mean that it is possible to find some ‘middle way’ between competition and central direction, through nothing seems at first more plausible, or is more likely to appeal to reasonable people.”[26] By approving such a statement, Hayek  ruled out comprise and negotiation.  In the political realm anyone taking collective action destroys freedom; anyone blocking collective action preserves freedom.  Ironically, such an attitude makes a Lockian social contract impossible.  Individuals are left in a crude laissez-faire, dog-eat-dog capitalism that does great damage to civil society.  The origins of this radical political philosophy may lie in ignorance, but it is an ignorance Hayek helped to create by condensing his argument for a popular audience.

Author's Note:  I originally wrote this over a year ago and only published it on my website.  Because Hayek is once again making the rounds on blogs, I thought I would share it here too.  I hope you find it useful.



[1]F.A. Hayek Interviewed by John O'Sullivan, Dumbarton Films, 1984. http://www.vimeo.com/.... 37 Minute Mark.
[2]Gerald P. O'Driscoll, “The Meaning of Hayek,” Cato Policy Report, November/December 1995.  http://www.cato.org/....
[3]Hayek Interviewed by John O'Sullivan. 40 Minute Mark.
[4]Friedrich Hayek, “Why I am Not a Conservative,” in The Constitution of Liberty (Chicago: The University of Chicago Press, 1960), accessed on line at http://www.fahayek.org/....
[5]Hayek Interviewed by John O'Sullivan. 1 hr 11 Minute Mark.
[6]Friedrich Hayek, The Road to Serfdom: Text and Documents; The Definitive Edition, ed. Bruce Caldwell, in The Collected Works of Friedrich Hayek, vol. II (Chicago: Chicago University Press, 2007), 71.
[7]Hayek, Road, 90.
[8]Hayek, “Why I am Not a Conservative.”
[9]Herbert Butterfield, The Whig Interpretation of History, 1931
[10]Hayek, Road, 68.
[11]Hayek, Road, 90.
[12]Hayek, Road, 83.
[13]Hayek, Road, 84.
[14]Hayek, Road, 93.
[15]Hajo Holborn, A History of Modern Germany 1840-1945 (New York: Knopf, 1969) , 286.
[16]Hayek, Road, 62.
[17]Friedrich Junger, The Rise of the New Nationalism (1926), ed. Marvin Perry et al, excerpted in Sources of the Western Tradition, vol. II, From the Renaissance to the Present, 3d ed. (New York: Houghton Mifflin, 1995), 345.
[18]Hayek, Road, 152.
[19]Hayek, Road, 159.
[20]Hayek, Road, 167.
[21]Hayek, Road, 159.
[22]Hayek, Road, 213.
[23]William Shirer, Berlin Diary: The Journal of a Foreign Correspondent, 1934-1941 (New York: Knopf, 1941), 13.
[24]Hayek, Road, 37.
[25]Glenn Beck Presents F A Hayek's "The Road to Serfdom" Part 1. 8 June 2010. http://www.youtube.com/...
[26]Friedrich Hayek, Reader’s Digest condensed version of the Road to Serfdom (Institute of Economic Affairs, 2001), 38.

Originally posted to Glenn Melancon on Wed May 16, 2012 at 07:52 AM PDT.

Also republished by Community Spotlight.

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Comment Preferences

    •  Yes, but :) (10+ / 0-)

      The shorter version, "conservatives intentionally mislead the public," needs to be "documented"  [to quote Duncan Black]

      •  very well done. now we know more about... (11+ / 0-)

        .... what we're arguing against, and we can follow up and pick up enough background to stand our ground when arguing with people who espouse Austrian economics.

        Though, what you will probably find, is that "Austrian economics" is merely being used by a lot of "conservatives" as a rationalization for an underlying emotional drive.

        Specifically:  "I WANT MORE!"

        "Minus two votes for the Democrat" equals "plus one vote for the Republican." Arithmetic doesn't care about your feelings.

        by G2geek on Wed May 16, 2012 at 09:15:36 AM PDT

        [ Parent ]

        •  a small modified (14+ / 0-)

          "Specifically:  "I WANT MORE!" and you can't have any

          Shorter: Socialism for me and not for thee.

        •  Austrians (6+ / 0-)

          It's worth remembering that there are Austrians and Austrians, and even given certain shared theoretical principles, they present a wide variety of policy prescriptions. There is a lot of light between Mies, Hayek, Rothbard and Raico.

          •  Interesting - can you explain? (1+ / 0-)
            Recommended by:
            G2geek

            First, I assume you meant Mises.

            Second, can you enlighten on the differences?  I often think of all the Austrians as being about the same.  Any explanation of differences, or links, will be appreciated.

            •  Spelling (1+ / 0-)
              Recommended by:
              Glenn Melancon

              not apparently my strong suite—yes, Mises. Enlightenment is even less of a strength.

              They all begin from a fundamental argument that society is an aggregation of radically free and individual persons, making its base reason for existence the protection of individual liberty and property.  Its duty is to secure these things while absolutely minimizing its impact on individual liberties. This is not just its duty—it's about the only thing it will be able to do competently.

              But that  said, it also has to be noted that these men are not, like much of American conservatism, directly descended from Burke and Smith by way of Hobbes and Locke. Overall (and this is a overly-broad generalization) they trace their own roots to the French physiocrats and largely maintain that economics is/can be a value-free social science on a Weberian model. And having spewed out that mouthful, it becomes fairly evident that figuring out these guys and their differences is not going to be the work of an afternoon, not even an entire weekend.

              Hayek, although probably the best known of the Austrians these days, is possibly the least typical as regards public policy, as he had a wider acceptance of some sorts of social welfare actions that he thought a wealthy society could reasonably and morally undertake.

              Raico is the most "fundamentalist"—one of Isaiah Berlin's hedgehog types, who ran his basic premises full bore through any and all obstacles. To my mind, he's a mirror version of the Marxist who sees absolutely everything as an expression of class struggle. He sees it all as social appropriation of property of which the individual could/would nearly always be able to make better use.

              Rothbard began as a Misesian purist, but latterly (re)discovered both the English natural law/natural right traditions as well as ancient Greek philosophy. Some of this led him away from earlier alliances with Ayn Rand, among others.

              Anyone interested in reading these guys (and much of their stuff is, more or less, readable—as opposed to just being technical economics) will find that there is a Ludwig von Mises Institute that makes a lot of these writings available free (for selfish economists, they are oddly generous). Check out this link: http://www.mises.org/....

              I don't know if this is directly germane to the question of how the Austrians differ among themselves, but there is a fascinating article in Interpretation: a journal of political philosophy, called "Libertarianism Ancient and Modern: reflections of the Strauss-Rothbard debate." It puts some very interesting light on Rothbard's foundational opinions. The journal is now available free online; this was in the Fall 2010 issue (Vol. 38:1). http://www.interpretationjournal.com/...

              •  Small addition (0+ / 0-)

                No one would actually spend much time on any of these "thinkers" except for the fact they have dominated the Conservative Revolution in the  US.  They are ideologues of the worst sort much like biological creationists.  They know their principles are right so the facts must be wrong.   The damage they are doing to the American people is beyond my comprehension.

                •  I disagree (0+ / 0-)

                  For entirely the same reason I have spent much time studying Marx, who I think is as philosophically wrongheaded as they come, and who has probably done more measurable, physical damage to more millions of people than any Austrian economist ever has or will. I read Marx because he was a serious thinker grappling intelligently with serious issues. I may not like his conclusions, but he was a thinker, not an ideologue. The one thing I believe must be fairly said of these economists is that they took great pains to explain what they thought and why they thought it—which is in direct contrast to the ideologue who proceeds from undemonstrated claims and who can't be reasoned with.

                  Strangely, it seems to me that you are doing what you accuse them of—you have already decided that you know that they have nothing to teach us, and so you can simply dismiss them. Your principles are entirely right, so theirs must be entirely wrong. So why would you bother trying to discuss any of it in the first place?

                  •  It depends on what you mean by "teach" (1+ / 0-)
                    Recommended by:
                    lollol

                    Do creationists "teach" us much about biology?  No not really.  No serious biologists bothers to dig through their work to find a diamond in the rough.

                    On the other hand, as a student of intellectual history, I would say they can teach us something.  As many comments have pointed out, the Austrians obviously "speak" for someone.  Who? And Why?  Why were they rejected by their peers, yet embarrassed by non-economists?  How do they fit into the larger discussion historian of Western civilization.

                    So yes, they can teach us many things, but how to govern a modern society is certainly not one of them.   As far as I am concerned 30 years of Reagan ism and Thatcherism is way too long.  

                    •  A last word (0+ / 0-)

                      You claim (as bare assertion) that  creationism is to biology as the Austrian School is to economics. Therefore, all it can teach us is something about the myriad ways in which their peers, and even non-economists "embarrass" them. On straightforward historical grounds this is dubious— this could only seem true if you take your bearings entirely by the DK boards.

                      The Austrians have certainly made their marks on economics, of which the most obvious signal was Hayek's Nobel Prize—not exactly the sign of rejection. IMO, you would do better to reconsider your willful ignorance. Or, if not, I can only say that I would myself be deservedly embarrassed to write about things that I had only a partial understanding of and which I had already decided was unworthy of anyone's time.

                      •  Yes, like Professor Krugaman (0+ / 0-)

                        "But the Hayek thing is almost entirely about politics rather than economics. Without The Road To Serfdom — and the way that book was used by vested interests to oppose the welfare state — nobody would be talking about his business cycle ideas."

                        http://krugman.blogs.nytimes.com/...

                      •  Or perhaps Greg Mankiw on Von Mises (0+ / 0-)

                        "The truthful, if slightly embarrassing, answer is that I have not read the book. "  

                        "Second, at the mainstream schools where I have spent my education and career (Princeton, MIT, and Harvard), the economists of the Austrian school like Mises are often viewed as fringe figures. Rightly or wrongly, they rarely show up on reading lists. I am confident that while I was a student at Princeton and MIT, I was assigned not a single article by an economist in the Austrian tradition."

                        So if I am willfully ignorant than I am in good company.

                        http://gregmankiw.blogspot.com/...

                        •  Krugman (0+ / 0-)

                          has for Nobel company Hayek and, ahime!, Friedman. That merely puts him on equal terms with them. Whatever "the Hayek thing" might be, Hayek's nobel prize was not for The Road to Serfdom, but for his work in monetary theory—but possibly that had escaped Krugman's attention. BTW, the Nobel jury was so unbelievably stupid, they jointly awarded the prize that year to both Hayek and Gunnar Myrdal. What fools you must think them.

                          Greg Mankiw has the decency to admit that his ignorance is embarrassing and the humility to acknowledge that the schools he studied at might have been mistaken to have omitted study of the Austrians. You, instead, unashamedly proclaim your righteous ignorance. This already is an indicator of problems.

                          However that might be, my own error was to mistake your writing as a sign of either interest or competent study of a subject on which, it now appears, you falsely led your readers to think you owned some actual expertise. Not a mistake I'll make in future. Please just ignore me and go back to your comfortably blinkered world.

                          •  Since you're a fan (0+ / 0-)

                            Please enlighten all of us.  What CAN the Austrians teach is?

                          •  All I can say (0+ / 0-)

                            is a tiny bit about what reading these guys makes me aware of. What reading them (or anything) can teach us is mostly to be more fully aware of our own (usually unexamined) premises.

                            Caveat: I'm not an Austrian or any other sort of economist. My background is academic political philosophy. All of what I'm about to say is tentative and unquestionably in need of more research and refinement.

                            Some of the most interesting notions to me about economics came from reading Rothbard's An Austrian Perspective on the History of Economic Thought and Raico's Classical Liberalism and the Austrian School (both of which I downloaded from free sources on the net). I didn't know much about this point of view, and I was genuinely surprised to see what little honor Adam Smith (a political philosophy perennial) was given. Part of the ground for this is that Smith, a professor of moral philosophy, believed that he was expounding an economic system morally superior to mercantilism on grounds of freedom; Smith called what he outlined a "system of natural liberty" founded ultimately on what he saw as the moral mainspring of humanity—natural pity or empathy.

                            The Austrians don't want to have much to do with this. They turn to the French/Continental traditions of the Spanish Scholastics and the French Physiocrats and the 19th century intellectual wars that followed in the wake of the French Revolution. To be really brief, the Austrians emphatically wish to be social scientists, not moralists—to the extent that some believe that there is such a thing as a scientific basis to what they call Classical Liberalism.

                            Oddly enough, for all the talk of Keynes around here, most working economists honor him more in the breach than the observance. They are much more interested instead in what they take to be their research as part of a genuinely neutral, value-free science of economics expressed in mathematical form. To cut a very long discussion into a snippet, few of either the Keynesians or these modern mathematical economists have much sense of or interest in their own history, much less the arguments that led up to the WW I (ca.) development of the Austrian school. Instead, they see themselves as scientific refinements of the traditions of Ricardo, Smith and Mill. But it is precisely in the early history of the Austrians, not the English moral economists, where you see the arguments meant to  undergird the development of (supposedly) truly scientific social science. In a way, I have come to see these mathematical moderns as in a way (unconsciously) sharing some important parts of the Austrian epistemological view even while disregarding its substantive conclusions. As they attempt this, they may not fully understand what they are doing or the theoretical problems they ignore (and ignored theory has a way of coming back to bite you in the ass).

                            To put all this in a nutshell—reading the Austrians helps me think about the foundations of modern mainstream economics, as well as about what economics might be able, in principle, to understand and to effect. Despite the "we're all Keynesians now" mantra, there are a good many issues that remain unsettled, in much the same way that the some core discussions between Bohr and Einstein remain live issues in physics, despite the fact that most research proceeds on the hypothesis that Einstein will be eventually vindicated.

                            What I am certain of, though, is that dismissively swatting the Austrians aside on the supposition that somehow "everybody" knows better, is a kind of unjustified intellectual arrogance that is based, so far as I can tell, on a shaky idea of both the so-called school (there is a fair amount of variation among the Austrians) and a kind of hyper-politicized caricature of various policy prescriptions. To bring up just one thing mentioned earlier in the thread, I don't particularly see that either Reagan's or Thatcher's policies should be linked to the Austrians, as opposed to, say, the Friedmanites or even unreconstructed Smithians.

                            This is long enough, I hope, to give at least an idea of why I think reading these Austrians is useful. Of course, if you believe that economics really is now a science on the model of chemistry or even engineering, then there might be little point. I myself am doubtful about that characterization—and on that point I think I could probably find a great many mainstream economists who would (regretfully) support me.

        •  I agree. "Austrian economics" as used by the 1% (11+ / 0-)

          apologists is a fancy way of saying "I want what gives me more wealth and power, and Hayek proves I'm VIRTUOUS.  The rest of you cretins are corrupt thugs if you want what gives YOU more wealth and power."

          But I do think it's important to be able to undermine that argument's claim to intellectually respectability.  It's good to be able to point out the government functions Hayek acknowledged as valid. It's useful to have a quote showing he didn't think one step down the "wrong road" would lead to Hitler.  

          The more essential problems, that Hayek conflated the Prussian government with nineteenth century socialism, etc., are probably not useful in general debates, but I like seeing it laid out clearly.  

          --------------- --------------- --------------- "Every part of you belongs to you." -- from a story of Virginia under the Personhood law. Read it here.

          by Fiona West on Wed May 16, 2012 at 01:50:35 PM PDT

          [ Parent ]

    •  Here is the other truth (6+ / 0-)

      The reason the Austrians were in the wilderness is because everyone who followed their advice during the Depression got worse, and you can literally draw a chart that shows that when countries started to ignore them they got better.

      Henry Ibsen wrote that human truth never survives more than a generation or two.  It then must be relearned.

      The rise of the Austrians today is proof he was right.

      The bitter truth of deep inequality has been disguised by an era of cheap imported goods and the anyone-can-make-it celebrity myth - Polly Toynbee

      by fladem on Wed May 16, 2012 at 06:22:04 PM PDT

      [ Parent ]

    •  Spot-on use of quotation marks (3+ / 0-)
      Recommended by:
      zedaker, basquebob, StrayCat

      I've taken to calling them "conservatives" myself for some time, as they have about as much in common with Hamilton, Burke and TR as you and I do with ET. They are trolls in every sense of the word, politically, morally and ideologically.

      "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

      by kovie on Wed May 16, 2012 at 08:10:47 PM PDT

      [ Parent ]

    •  Footnotes (0+ / 0-)

      Love the footnotes

      The past, present, and future are equally compelling; none of the three are easily understood.

      by Grey Panther on Thu May 17, 2012 at 07:43:18 AM PDT

      [ Parent ]

  •  Liberals and laissez-faire (15+ / 0-)

    I'm presuming that he, being European, is using liberal in the European sense, rather than the American - namely the ideology of free markets (which the American would call "conservative"), and the origin of the term "neo-liberal".

    Non enim propter gloriam, diuicias aut honores pugnamus set propter libertatem solummodo quam Nemo bonus nisi simul cum vita amittit. -Declaration of Arbroath

    by Robobagpiper on Wed May 16, 2012 at 08:34:45 AM PDT

  •  "Nobody really read it or studied it" (16+ / 0-)

    It's amusing, in a rueful way, that those on the right who insist on creating a conflict between the Keynesians and the Hayekians fail to focus on the list of governmental activities Hayek approved of and which you list.  If asked without reference to Hayek they would say that government has a proper role in creating a monetary system, defining weights and measures and (for the most part) creating public utilities; they would clamorously deny governments role in any of the other Hayekian approved activities that you list: denying these even while holding aloft his book.
    As a late-comer to the study of economics I am struck by the over-arching wisdom of societies and cultures.  Even today some American economists speak out against such things as the minimum wage as being inefficient and market disrupting.  Their arguments are not without some intellectual value, but those arguments ignore the fact that society has said: "we don't care about intellectualism in this instance; we want people to be safe."  Hayek would have understood and politely acceded to the voice of the people speaking against the violence and tyranny of wage payers, necessarily, through a governmental control mechanism.
    Thank you for a thoughtful piece.

  •  Hayek Was A Huge Fan Of Pinochet (8+ / 0-)

    he traded on his credentials as an economist to reinvent himself as a sociologist and made a total fool of himself.  This era was analyzed extensively by psychologists, sociologists, and historians, but that work was ignored by conservatives.  Conservatives seized on his work because they did not want to hear what people like Eric Fromm, Karl Popper,  or the  Frankfurt School had to say about the Third Reich, and they certainly weren't interested in factual history.

    Hayek also got oversimplified because TRTS was published in the US as an anitunion comic book.

    There’s always free cheddar in a mousetrap, baby

    by bernardpliers on Wed May 16, 2012 at 08:40:04 AM PDT

  •  The "liberal fascism" neofascists (13+ / 0-)
    "When Fascism comes to America, it will be called anti-Fascism!" Attributed to Huey Long.
    Once someone declares that trade unions will lead to fascism (or communism), adopting many of the key talking points of the Nazis become more or less automatic.

    I appreciate you mention Glenn Beck, because Becks use of Nazi themes and quotes was relentless. Beck channeled the Third Reich every day. he was the perfect example of the Fascist who declares he is an "antifascist."  Heck I did a diary about his nonstop use of Nazi themes.

    http://www.dailykos.com/...

    We can also see the fruition of this in Anders Breivik who claimed he murdered all those children because he was fighting "liberal fascism" and presumably the same global liberal conspiracy against the white man that Hitler and Beck warned about.

    There’s always free cheddar in a mousetrap, baby

    by bernardpliers on Wed May 16, 2012 at 08:45:31 AM PDT

  •  Excellent diary (8+ / 0-)

    Thank you for this most informative guide to the real Hayek.  Hayek was mostly railing against "Soviet Socialism", the so-called socialism of the centrally planned totalitarian state.  The reference to serfdom, a Russian status, is a clue.  And it's quite possible that some Labourites in the UK after WW II looked fondly upon that model, though we know now (and it was probably obvious enough then) that it doesn't really work.

    Then he got popular and became a cranky old man, using squushy definitions and fuzzy language, to appeal to a wider audience.  That is what today's "Austrian Economics" refers to, the short form summaries that miss the important details.

    •  See it in action in th O'Sullivan interview (5+ / 0-)

      "Then he got popular and became a cranky old man, using squushy definitions and fuzzy language, to appeal to a wider audience."

      O'Sullivan tries to get Hayek to condemn all union activity.   Instead he tried to watch a line between trade unions and American unions.  I don't an American audience really understood the distinction; rather, they heard, "unions are bad."  As a result we have Scott Walker.

    •  I really doubt it was so obvious after WW II (4+ / 0-)
      Recommended by:
      joe wobblie, HiKa, zedaker, basquebob

      LaVida, those people did not have the data access we have. When your sources are libraries and librarians together with whatever indexes the publishers are willing to spend money on, research is SLOW! And much more imprecise than we expect today. And most of us look for an answer we are comfortable with and quit looking (see Bounded rationality from Herbert A. Simon. Rationality ain't what you think it is.)

      Bounded rationality is really important. It's why the decision-makers at the top of the hierarchy get so much so very wrong and why democracy is critical to any successful society. As you move up the hierarchy, the data input to every decision must be reduced to the 5 to 9 variables any human mind can deal with. Most management training involves identifying the critical elements of a given decision so that it can be dealt with by a human being.. The simplification means that errors are increased and decisions are made much more slowly.

      The only reason why a top level decision-maker can justify his decision is that the cost of not deciding becomes a great deal more expensive than making the wrong decision. (That's the classic military situation. Don't act in coordination with others and you are dead. Being wrong is less important than not acting.) Otherwise top level decisions must be slow and tentative. It's also why the guys at the top get so much so very wrong so very often.

      There is also the nasty problem that getting enough information to get the decision right is expensive. Gathering information is both slow and imprecise. So when a decision-maker feels he has enough information to make a decision he often quits searching and makes the decision. That's called satisficing..  

      If you consider bounded rationality and satisficing you will see why decisions from higher in the hierarchy are so often wrong. The higher the decision comes from, the more likely it is wrong. But it is also true that someone that high in the hierarchy has the power to punish those who disagree. So information often does not flow up the hierarchy.

      Decisions have to be distributed down the hierarchy to the level where the best information in the form a human being can deal with it comes together. If humans could handle more than 5-9 variables mentally this level would be higher, but in no case will it ever be at the very top of the organization unless they know something they are withholding from lower levels. Even then they can't be trusted.

      The US Supreme Court has by it's actions and rhetoric ceased to be legitimate. Whiskey Tango Foxtrot - over

      by Rick B on Wed May 16, 2012 at 04:36:20 PM PDT

      [ Parent ]

  •  I never understood the right's interp. of Hayek. (12+ / 0-)

    I read The Road to Serfdom and thought it was a very clear exposition of the proper role of government, and an enumeration of what happens when central planning (as clearly identified in the book to be of the soviet or nazi flavors) is allowed to override other societal and economic priorities.

    I've since read these strange rants from the right invoking Hayek, and The Road to Serfdom specifically, as some sort of anti-government treatise that suggests that the capitalist free market should run everything.

    I was always left wondering if I'd read the same book as these people.

    "When and if fascism comes to America...it will not even be called 'fascism'; it will be called, of course, 'Americanism'" --Professor Halford E. Luccock of Yale Divinity School; New York Times article from September 12, 1938, page 15

    by demongo on Wed May 16, 2012 at 10:58:35 AM PDT

  •  Great diary Melancon (9+ / 0-)

    I think you have made your case that the misunderstandings are indeed Hayek's responsibility.

    Nonetheless, some of it is hard to get wrong:

    http://yanisvaroufakis.eu/...

    I am the last to deny - or rather, I am today the last to deny - that, in these circumstances, monetary counteractions, deliberate attempts to maintain the money stream, are appropriate. I probably ought to add a word of explanation: I have to admit that I took a different attitude forty years ago, at the beginning of the Great Depression. At that time I believed that a process of deflation of some short duration might break the rigidity of wages which I thought was incompatible with a functioning economy. Perhaps I should have even then understood that this possibility no longer existed. ... I would no longer maintain, as I did in the early `30s, that for this reason, and for this reason only, a short period of deflation might be desirable. Today I believe that deflation has no recognizable function whatever, and that there is no justification for supporting or permitting a process of deflation.

    ...

    The moment there is any sign that the total income stream may actually shrink, I should certainly not only try everything in my power to prevent it from dwindling, but I should announce beforehand that I would do so in the event the problem arose.... You ask whether I have changed my opinion about combating secondary deflation. I do not have to change my theoretical views.

    As I explained before, I have always thought that deflation had no economic function; but I did once believe, and no longer do, that it was desirable because it could break the growing rigidity of wage rates. Even at that time I regarded this view as a political consideration; I did not think that deflation improved the adjustment mechanism of the market.

    There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

    by upstate NY on Wed May 16, 2012 at 11:16:49 AM PDT

  •  "Serfdom" is a hilarious misnomer (8+ / 0-)

    It arises precisely with the LACK of a strong central government, and an out-of-control aristocracy.  Also, Hayek included Mussolini in his list of socialists, when in fact the Duce's general economic approach was to deregulate and privatize everything (for which he was greatly beloved by the American business community).

    It's just bad history.

    A "moderate" in this environment is a person who splits the difference between half-assed government and a total shitpile.

    by Dinclusin on Wed May 16, 2012 at 11:31:00 AM PDT

  •  I agree with others, Outstanding (5+ / 0-)

    Very good break down of the misinterpretation and how the work is misconstrued. And very good break down on how Hayek actually helped to perpetuate that misinterpretation to some degree in his later years.

    And as you stated earlier, people only heard the word Unions, and we beget people like Scott Walker.

    --Enlighten the people, generally, and tyranny and oppressions of body and mind will vanish like spirits at the dawn of day. - Thomas Jefferson--

    by idbecrazyif on Wed May 16, 2012 at 11:41:04 AM PDT

  •  Those evil Totalitarians (3+ / 0-)
    Recommended by:
    Fiona West, wsexson, basquebob

    ..hoping to do something to mitigate the worst aspects of the impending climate chaos --

    Want to enslave me and steal my free-dumbs.

  •  This is just terrific (6+ / 0-)

    I doubt that there are many phenomena more common than the disasters that "dumbing down" original ideas causes. We can begin of course with the Gospels.

    What is interesting here is that (as you pointed out) Hayek himself does not agree with many of the views espoused by those who consider themselves his followers yet he himself often created the conditions that permitted those followers to hold the positions they did and do hold. And that sort of phenomenon is also not at all uncommon.

    It seems to me as though I ought to bite the bullet and actually read his work.

    It should not be forgotten, incidentally that the official name of the Nazi party included the word "Socialist" yet any follower of Marx would have immediately understood that the term was being expropriated and completely misused. It seems as though Hayek, while explicitly rejecting Nazism, made the all-too-common mistake of believing that the National Socialist German People's Party was in any way actually socialist.

    •  Yes is did include "Socialism" (9+ / 0-)

      Hitler also (mis)appropriated the color "red."   Since the French Revolution, red had been the color of "the people."  In Mein Kampf he explained that he too deliberately mislead the public.   He wanted to pull in workers that recognized the color red as the color of the socialists.   Once he had them in the "Beer Hall," he provided them with scapegoats rather than solutions.

    •  Nazi "Socialism" Was Strasserism (4+ / 0-)

      Nazi "socialists" were the Strassers, exiled in 1929 and liquidated in 1934.  The "socialism" was going to be a right wing military junta of army officers.

      There were also some Marxists, more in northern Germany, until Hitler's southern German movement purged them.

      But the "National Socialists"  that killed the Jews and fought us in WW2 had nothing to do with Marxism.

      People who say Hitler was a leftist are often Holocaust Denioers, since if Hitler was a leftist he probably didn't really kill all those Socialist jews.

      It's also possible to cherry pick contradictory German propaganda because the Germans sent anti-Marxist propaganda to the west and anti-capitalist propaganda to the east. But cherry picking is for Nazi apologists who refuse to acknowledge the things the Germans did, and yes I'm talking about Nazi apologist Jonah Goldberg.

      There’s always free cheddar in a mousetrap, baby

      by bernardpliers on Wed May 16, 2012 at 12:37:12 PM PDT

      [ Parent ]

  •  Slippery Slope Lunacy: Day Care Leads To Gulags (7+ / 0-)

    Hayek admitted it wasn't inevitable, but it followers won't admit it has probably never happened.

    But if one also embraces Cheney's one percent doctrine, the only sensible course of action is to go on a shooting spree in a summer camp in the name of tolerance.

    If you had to compare the risk, TRTF is probably more likely to make someone a murderous asshole than to save anyone from an imaginary gulag.

    There’s always free cheddar in a mousetrap, baby

    by bernardpliers on Wed May 16, 2012 at 12:43:47 PM PDT

  •  Thank you. I'll bookmark your excellent diary (3+ / 0-)

    I read "The Road to Serfdom" back in 1972 in college and I still have it.

    Even Ayn Rand has been misappropriated.  

    Daily Kos an oasis of truth. Truth that leads to action.

    by Shockwave on Wed May 16, 2012 at 01:15:23 PM PDT

  •  This is an excellent analysis and recapitulation (4+ / 0-)
    Recommended by:
    4Freedom, katiec, joe wobblie, basquebob

    of terms and movements since the late 1800's. So well done.

    We have been listening to Thomas Childer's "Europe and Western Civilization in the Modern Age" which gives a foundation to your exposition here.

    I did not at first (my lack of knowledge) understand that The Road to Serfdom is a written work. It seemed more like a reference to an idea, until I gleaned the meaning from context.

    This dumbing down and appropriation of nuanced writing smacks of the tactics of the National Socialists' use of Nietzsche after his death.

    I remember during the health care debates/confrontations that many including Ezra Klein pointed out that Hayek supported the role of government in provisioning "compulsory health care insurance". The following quote is from Think Progress

       Nor is there any reason why the state should not assist individuals in providing for those common hazards of life against which, because of their uncertainty, few individuals can make adequate provision. Where, as in the case of sickness and accident, neither the desire to avoid such calamities nor the efforts to overcome their consequences are as a rule weakened by the provision of assistance, where, in short, we deal with genuinely insurable risks, the case for the state helping to organise a comprehensive system of social insurance is very strong. There are many points of detail where those wishing to preserve the competitive system and those wishing to supersede it by something different will disagree on the details of such schemes; and it is possible under the name of social insurance to introduce measures which tend to make competition more or less ineffective. But there is no incompatibility in principle between the state providing greater security in this way and the preservation of individual freedom.
    quote
    Matthew Yglesias quoting page 125 The Road to Serfdom

    Science is hell bent on consensus. Dr. Michael Crichton said “Let’s be clear: The work of science has nothing to do with consensus... which is the business of politics. Science, on the contrary, requires only one investigator who happens to be right,”

    by Regina in a Sears Kit House on Wed May 16, 2012 at 01:39:24 PM PDT

    •  Exactly (3+ / 0-)

      Hayek himself wrote in the Constitution of Liberty, p.286.,

      "Once it becomes the recognised duty of the public to provide for old age, irrespective of whether individuals could have made provisions themselves, it seems an obvious corollary to compel them to provide against those common hazards of life. The justification in this case is not that people should be coerced to do what is in their individual interest but that, by neglecting to make provision, they would become a charge to the public. Similarly, we require motorists to insure against third-party risks, not in their interest but in the interest of the others who might be harmed by their actions."

      Or the INACTION of refusing/inability to pay their bill.

  •  Power creates dictatorship, not economics (4+ / 0-)

    An extremely interesting article. I was particularly struck by the statement:

    "Hayek he draws a straight line from nineteenth century socialism to Hitler's Germany and Stalin's Soviet Union.  The path was clear and direct; nothing stood in the way of “Social Justice” turning into tyranny and death.  Condensing Friedrich Hayek not only made him more accessible to the general public but also radicalized Austrian Economics."
    It was the incompetence of the Russian Czar and his inability to modernize together with the German invasion during WW I that destroyed Russia. It was followed by the Russian Civil War and the British-French-American anti-Communist invasion of the new Soviet Union which led to the tyrannical dictatorship of Stalin. It is war and the threat of war that creates and supports dictatorship, not economic policies.

    Stalin himself was on the way out in the 30's as was demonstrated by his panicky purges of the best generals in the military even as the Germans again threatened the USSR. Purges of that sort are demonstrations of political weakness, not of strength. The threat of Hitler's Germany was the strongest support Stalin had in the late 30's. Hitler's invasion gave Stalin another decade in power.

    As for Socialism leading to Hitler's Germany, that is pure joke. The economic failure of the severely mismanaged and weakened Austrian Credit-Anstalt Bank in 1931 increased the Wall-Street-created panic and recession into a full-fledged global Depression. The political reaction in Germany was to elect the most radical possible party, the Nazi's under Hitler. Anyone awake when the tea baggers took a dominating but minority position in the U.S. Congress in 2010 will recognize the political process which gave the Nazi's a similar position in the German Parliament.

    The German political leadership then gave Hitler the power by making him Chancelor in 1933 from which he quickly moved to dictator. But he could not have held that position without an external threat.He created the threat by threatening his European neighbors. It was the reaction to his threats which allowed him to become dictator. He could blame those other nations threatening him (to stop him) for his need to take on more and more dictatorial power.

    Britain and France caved and gave him Czechoslovakia, which allowed him to invade Poland. It worked so well Hitler saw no reason to stop and invaded France. That succeeded easily, so he followed up by invading the USSR, which as stated above gave Stalin an additional decade in power.

    The point of this tale is that it was not economic policies which were the road to serfdom. It was the need of dictators and wanna-be dictators to obtain and retain power that led to serfdom. Idiotic free market economic policies on unregulated Wall Street and in the free markets of Europe were major components of the shifts in political power, but they were not determinative. Dictators are created by war and the threat of war.

    Does anyone really wonder why Cheney (through his puppet Bush) had to invade Iraq?

    The US Supreme Court has by it's actions and rhetoric ceased to be legitimate. Whiskey Tango Foxtrot - over

    by Rick B on Wed May 16, 2012 at 01:39:27 PM PDT

  •  The word itself, "Socialism," (5+ / 0-)

    has been ruined to those of my age group, 63, who aren't aware of the Socialism in which they currently participate! Now I do enjoy Social Security, am looking forward to Medicare (fingers crossed) and hope for a single-payer system for all. I realize that our own armed services are socialistically run. I would also like to nationalize our assets and spread the benefits fairly, like every Alaskan receiving a check for "their" oil assets. I would like a well-regulated market and a government that works where it should appropriately work.
    I'm grateful for the Wiemar Republic example of a form of Socialism that could work very well.
    In discussing this at an Occupy meeting with a much-younger-than-I member of International Socialist Org (ISO), he mentioned how his young peers, ISO or not, have no problem with the word these days but I'm not clear on what kind of plan these kids have.
    Lastly, how insulting was Hayek to his readers to have twisted meanings and truncated explanations into a Readers Digest format? How unfair when actual harm is done to those not taking the opportunity to grasp what the original meaning was. It's like when Freud was refuted or anyone else exercising great intellectual power over popular thought is discredited, harm was done, a chair has been pulled out from under. Like Cliff's Notes or the comic book version of War and Peace. And these cheapened "beliefs" are what we're left to argue against.
    I'm incoherent; I know what I mean to say but this doesn't quite get it. I need knowledge and talking points to get ISO off my back. :'PP

    "The Republicans are continuing to destroy jobs and blaming Obama for not creating jobs fast enough to replace the jobs they destroyed. " ~TomP

    by OleHippieChick on Wed May 16, 2012 at 01:39:36 PM PDT

    •  Hayek represented a minority view of economics (4+ / 0-)

      and he resented it. That's my opinion of his behavior.

      "how insulting was Hayek to his readers to have twisted meanings and truncated explanations into a Readers Digest format?"
      Hayek was a very bright man, but in my opinion did not get the respect for his ideas that he felt he deserved. He seems to have demonstrated an almost Gingrichean level of narcissism and grandiosity.

      He was sufficiently glib so that he was able to "fuzz over" the distinctions Glenn so effectively  brought out in this article. This glibness allowed him to bask in the limelight the way he wanted to.

      It's always dangerous to psychoanalyze someone from a distance, but I was married to a Narcissist (for a blessedly short period of time) and I have learned to recognize them when I see them. Hayek demonstrates the characteristics.

      The US Supreme Court has by it's actions and rhetoric ceased to be legitimate. Whiskey Tango Foxtrot - over

      by Rick B on Wed May 16, 2012 at 03:02:41 PM PDT

      [ Parent ]

  •  Thanks for this; it has prompted me to read (6+ / 0-)

    Hayek's book for myself, and with your background paper I'm sure I'll be able to ask better questions as I read.

    A very important contribution to our civil and political dialogue here in the US.

    •  When you read it compare it to the Pauls (2+ / 0-)
      Recommended by:
      joe wobblie, VigilantLiberal

      The statements from both Ron and Rand Paul are supposedly based on Hayek. A comparison of what they claim with what Hayek stated, together with reality, could be a very interesting post. Or set of posts.

      I like the idea but since I am currently in a graduate Social Work program I frankly don't have the time even for the history reading I want to do.

      The US Supreme Court has by it's actions and rhetoric ceased to be legitimate. Whiskey Tango Foxtrot - over

      by Rick B on Wed May 16, 2012 at 03:16:03 PM PDT

      [ Parent ]

      •  I fully understand that. I am currently retraining (1+ / 0-)
        Recommended by:
        Rick B

        myself on new technologies in software design so I can stay employed, so I don't have much time either. But hopefully, I'll be able to put some reflections together.

        •  Boy do I understand that! (1+ / 0-)
          Recommended by:
          joe wobblie

          I am retired but I completed an AAS in Application and Web Programming last May. But social work looks like more fun (fast way to get a counseling license) so I am now chasing a Master's in Social Work. The semester was over last week so I now have time to get back to the political stuff online. For a few weeks, anyway.

          My brother-in-law spent the last four decades programming for oil companies 9 - 10 hours a day and another 2 to 3 hours each day studying to keep up with the technology. He was and remains an excellent programmer, but his career and salary took a nosedive when the company he went to work for (Enron) turned out to be run by crooks.

          At my age working with people is more fun. I'll never get paid what I am worth so salary is not much of a motivator. Better luck to you.

          Still, the computer technologies are fascinating. I wonder how much counseling could be dealt with using computer games ...?

          The US Supreme Court has by it's actions and rhetoric ceased to be legitimate. Whiskey Tango Foxtrot - over

          by Rick B on Thu May 17, 2012 at 09:30:01 PM PDT

          [ Parent ]

  •  Right wing, conservative "ideas" are simply cover (0+ / 0-)

    for, or flattery of, the ultra-elites.

    The entire Austrian School  -- as far as I've ever care to trudge through their 'thinking' -- appear to border on insanity.

    I really loathe conservative "thought" of any stripe. It only works for the ultra-elites. The ideas are disastrous for anyone else.

    •  I've always thought they just didn't want the math (3+ / 0-)
      Recommended by:
      Blicero, joe wobblie, basquebob

      Keynesian  economics establishes a total system that can be dealt with statistically, but it means that the so-called economists have become statisticians working in a very limited data set. They ignore power because (as is well-known in social science research) power cannot be captured in statistics which can be aggregated mathematically.

      If you go into an organization and ask who has power, everyone knows (unless they are socially out of it.) But you cannot apply numbers to the data you get and reliably add, subtract or otherwise mathematically manipulate it in ways that allow comparison to financial data.

      The older title of Political Economist is dead.

      The US Supreme Court has by it's actions and rhetoric ceased to be legitimate. Whiskey Tango Foxtrot - over

      by Rick B on Wed May 16, 2012 at 05:35:43 PM PDT

      [ Parent ]

      •   - The Death Knell of the Political Economist - (2+ / 0-)
        Recommended by:
        laserhaas, blueoasis

         Ever since the end of mercantilism and the beginnings of classical economics
        with Adam Smith's "The Wealth of Nations" various theories on the subject have abounded.
          All the while the swinistic greed and moneyed might of the capitalists, unrestrained 'free enterprise' and the monopolistic practices of a flawed system
        of unbridled capitalism have reigned havoc on human society!
          Instead of stepping further into their own excrement by devising even further spurious systems, the sophists of political economics must come to realise the true final solution will only come with "The Death of Capitalism" itself!
          Some such neo-sophists actually believe that "Benign Capitalism" is the
        ultimate system that is possible for all humanity!
          "Benign Capitalism" is but a misnomer for sham liberal and psuedo democratic socialism.  The very term is a vulgar oxymoron!
          Only with the TOTAL DESTRUCTION of the capitalist system itself will humanity be freed of its chains and allowed to flourish in a newer and enlightened future!
                    'I am engaged in a fight to the death with sham liberals.'
           - Letter from Karl Marx to Karl Eduard Vehse, end of November 1852.

        ! The swinistic greed and racial hatred of the American ruling elite is abysmal !

        by joe wobblie on Thu May 17, 2012 at 04:16:49 AM PDT

        [ Parent ]

  •  Just like Marx, Hayek's theories fail to survive.. (0+ / 0-)

    even the most cursory encounter with reality. And blind adherence to such ideological perfection has killed an awful lot of people over the course of the last 100 years.

  •  There's more than one road to serfdom. (3+ / 0-)
    Recommended by:
    Rick B, linkage, basquebob

    Right-wingers imagine that any kind of state-offered social assistance ultimately breeds dependency and leads to "serfdom."

    But they completely ignore credit card debt, student loan debt, and having to survive on stingy low wages as forms of dependency. These too are enserfing in their effects, and on a much larger measurable scale.

  •  Hayek's definition of socialism was wrong. (0+ / 0-)

    A centrally planned economy, much like a completely deregulated capitalist economy, leads to an oligarchic society that has little resemblance to real socialism.

    The reason they call it the American Dream is because you have to be asleep to believe it. --George Carlin

    by Charles Garnaat on Wed May 16, 2012 at 03:51:10 PM PDT

  •  Question: (1+ / 0-)
    Recommended by:
    linkage

    what did Hayek say about taxes?  If anything.

    Thanks for this great diary.  My 12 year old son and I talked about it over dinner. :)

    •  It didn't strike me when I read TRS and (2+ / 0-)
      Recommended by:
      wsexson, basquebob

      I don't have my copy here at home.

      I did, however, check my copy of the The Constitution of Liberty.  (unfortunately, the above link is broken now.)

      Hayek argues for "proportional taxation,"  that means each person should pay an equal tax rate and opposes using taxes to "redistribute wealth" to create equal outcomes.  Once again, this is condensed into a "flat tax" by his supporters.

      Digging deeper, however, Hayek cautions his readers not to look at any one particular tax.  Instead they should look at the tax rate in total.  For example, he understands that sales taxes tend to be regressive and a progressive income tax may be necessary to raise portion of taxes paid by high income citizens.  Coincidentally, this is the exact argument Pres. Obama is making.

      Does this help?

  •  Hayek also put things starkly in his 1976 preface (6+ / 0-)

    Thanks for this well-substantiated and thoughtful critique of the Road to Serfdom's thesis.

    I'd just like to make the peripheral point that Hayek advanced a Manichean view in the preface to the 1976 edition:

    William Easterly is correct that Friedrich Hayek wrote "The Road to Serfdom" in 1946 to warn that central planning and state ownership would lead to the collapse of freedom ("Dismal Science," editorial page, Nov. 15). Yet in 1976, in the Preface to the Reprint Edition, Hayek made perfectly clear that he believed that the same outcome would occur through the welfare state. Noting that "socialism has come to mean chiefly the extensive redistribution of incomes through taxation and the institutions of the welfare state," Hayek wrote that "In the latter kind of socialism the effects I discuss in this book are brought about more slowly, indirectly, and imperfectly. I believe that the ultimate outcome tends to be very much the same . . ." (While the editors at Scientific American used the shorthand that Hayek wrote in the 1940s, my detailed paper on the Nordic economies makes explicit that Hayek's critique of the modern welfare state came in the 1970s, in the Reprint Edition). Thirty years on, we can see the results of Hayek's prediction. Despite government revenues above 50% of GNP in the Nordic countries supporting an extensive social welfare state, those countries are vibrant democracies with open, competitive, and high-income economies and low rates of poverty. That is precisely the point of my Scientific American piece and a longer scholarly paper that Prof. Easterly wrongly attacks. He actually makes my point for me by pointing out that the Heritage Foundation/Wall Street Journal Index of Economic Freedom ranks Finland, Sweden and Denmark as "free economies," with Denmark ranked ahead of the United States, despite the fact of their extremely high rates of taxation and social welfare spending. Similarly, the Global Competitiveness Index of the World Economic Forum puts these three countries at ranks two, three and four in global competitiveness, ahead of the United States at rank six.
    So, dubious definitions in his original work, and Manichean predictions about the fated doom of Western Europe as late as 1976.
  •  Intellectual laziness at the core of conservative (0+ / 0-)

    thought. This is a tremendous diary, and at the expense of a little generalization myself- I think there is a tendency towards intellectual laziness in all of conservative thought. No matter how thoughtful they are, they can't help but give into the temptation of seeking some pat, easy answer for complex problems.

  •  In any event, modern day republicans are NOT (8+ / 0-)

    in the least libertarians, nor do they even believe in the Free Market. Modern day republicans are actually the very worst type of statists. They are crony capitalists, who, like crony capitalists everywhere in the world, fly under the banner of privatization. I don't care where you are in the world- if you want to spot corruption- always look at where taxpayer money goes into private profits. Public money-> Private pockets. It never fails- that is always where you'll find corruption.  Here in America, republicans are not arguing for economic anarchy. Not at all. Rather they want taxpayer money going into privatized armies (KBR/Halliburton, etc), for-profit or religious schools, for-profit toll roads, Wall St retirement plans, for-profit Medicare Advantage plans, for profit utilities, , for profit extraction companies extracting natural resources from public lands, etc, etc. This is not free enterprise in the least. This is pure and simple crony capitalism- the worst form of socialism for the rich and connected.

    •  EXACTLY. (3+ / 0-)
      Recommended by:
      icemilkcoffee, basquebob, milkbone

      Jeez.  I should just point to your post next time and save myself the trouble of repeating myself on this all the time.  

      like crony capitalists everywhere in the world, fly under the banner of privatization.
      EXACTLY.  Halliburton and Blackwater and Teledyne and some other big corporations are all corporate welfare queens, delivering substandard products on a regular basis for prices "negotiated" through no-bid contracts with their own ex and future employees in the government.  That's what they mean when they talk about free enterprise and the private sector and capitalism.  They mean government cronies getting rich off the taxpayers.  Meanwhile, an unwed mother somewhere is getting food stamps, boo hoo hoo.
  •  Why this is all bullshit. (2+ / 0-)
    Recommended by:
    jan4insight, LHB

    It's bullshit because conservatives LOVE serfdom.  Them decrying serfdom is like them decrying Obama for being a Aazi socialist.  Corporate feudalism, is, to them, the highest state that human civilization can aspire to.  

    To them, the world is all askew when carnivores don't get to eat their fill of herbivores.  That's the NATURAL state of affairs, and the good herbivores know it.  Before all this socialist civil rights nonsense, they would gladly assert off the record, people knew their place.  Not every kid has to go to college, for instance, as Santorum says.  Why should they?  Some people have to pump the full-service gas and operate the car elevators for them!  

    So it's not serfdom they oppose.  It's equality.  Accusing the left of imposing serfdom is just another of their cute ju-jitsu twists.

  •  WOW! (2+ / 0-)
    Recommended by:
    basquebob, milkbone

    This is not a diary. This is an article for a high quality magazine like the New Yorker or Atlantic that raises the level of discourse here even higher than its already fairly high level. Bravo, sir!

    Also, I'm only now starting to read up on putative RW heros like Hayek, and I'm finding that, as with his protege Milton Friedman, he's not quite the anti-liberal staunch libertarian his latter-day declared worshippers claim he is. He believed in regulation and intervention, along with Friedman, despite what they claim. Only not to the extent and in the way that liberals often prefer.

    One can go back further and show how other modern conservative heros like Smith, Burke and Hamilton didn't quite believe in what they claim they believed. They all saw a role for federal economic intervention, and for the need to take care of the neediest. None of them were proto-Randians.

    It's a crying shame the way the RWNM has perverted the national debate on these and other important matters, from a legitimate debate about the size, scope and nature of necessary government intervention in the economy, to an illegitimate debate between intervention and almost no intervention.

    We need to take back this debate. Thanks for helping out with that!

    "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

    by kovie on Wed May 16, 2012 at 08:08:51 PM PDT

  •  Thank You ... (2+ / 0-)
    Recommended by:
    MKSinSA, basquebob

    for giving us a valuable essay to study. A lot to think about. Thanks,

    JON

    "Upward, not Northward" - Flatland, by EA Abbott

    by linkage on Wed May 16, 2012 at 10:47:26 PM PDT

  •  This is a valuable analysis. (0+ / 0-)

    Conservatives will continue with their own version of reality.

    I love, love, love this:

    "...two irreconcilable types of social organization . . . the commercial and military type of society."

    There really is nothing new under the sun.

    The Fail will continue until actual torches and pitchforks are set in motion. - Pangolin@kunstler.com

    by No one gets out alive on Thu May 17, 2012 at 04:53:54 AM PDT

  •  As many others have said, (0+ / 0-)

    Excellent post and great comments too. Thanks.

  •  One of the most enlightening posts (0+ / 0-)

    I've ever read on dKos. Thank you for taking the time to write it.

    Hige sceal þe heardra, heorte þe cenre, mod sceal þe mare, þe ure mægen lytlað

    by milkbone on Thu May 17, 2012 at 07:03:45 AM PDT

  •  What a great article (0+ / 0-)

    And some very, very, good comments.
    At least some people pay attention to this stuff.
    It's important!

  •  Quite excellent (0+ / 0-)

    in both form and content.  Your writing provides insight into the subject and invites us to explore those insights ourselves.

    Tipped, rec'ced and followed.  Great work!

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