Topic: Political Philosophy

Happy Hayek’s Birthday

Today is the 115th anniversary of the birth of F. A. Hayek, who honored the Cato Institute by serving as a Distinguished Senior Fellow, and in whose honor the Institute’s F. A. Hayek Auditorium is named. “It is hardly an exaggeration to refer to the twentieth century as the Hayek century,” John Cassidy wrote in the New Yorker. If we’re lucky, the 21st century will also be a Hayek century.

Hayek spoke at Cato several times.  Before his 1982 Distinguished Lecture, he sat down for an interview with Cato Policy Report.  Here’s another interview by our late board member Jim Blanchard that appeared in Cato Policy Report. Senior fellows Tom Palmer and Gerald O’Driscoll have offered appreciations of his work. O’Driscoll more recently applied Hayek’s business cycle theory to the 2008 financial crisis.

Cato adjunct scholar Ilya Somin ponders Hayek’s continuing relevance in this essay from just before the crisis announced itself last fall. Somin notes that Hayek’s critique of socialism gets most attention from scholars, but his critique of conservatism is also worth pondering.

In 2011, on the occasion of the publication of a definitive edition of Hayek’s great book The Constitution of Liberty, his work was discussed in the Hayek Auditorium by Ronald Hamowy, Bruce Caldwell, Richard Epstein, and George Soros. I discussed that event, with a link to the video and transcript, here, concluding 

Hayek was not just an economist. He also published impressive works on political theory and psychology.

He’s like Marx, only right.

As the world suffers from the aftereffects of another Federal Reserve-created bubble, it’s a good time to reread Hayek on the boom-and-bust cycle. But it’s also a good day to reflect that Hayek lived just long enough to see the demise of the totalitarian socialist system that he spent his life analyzing and criticizing. The world is freer today, partly because of Hayek’s great work.

Liberal Moral Superiority

Nature abhors a vacuum. So in an era of declining attention spans (or so we’re told), as blog posts were growing longer, Twitter came along. That left a vacuum in between that a site called “2paragraphs” is filling—long enough to make a substantive point or two, short enough to be read, “respecting people’s time and intelligence,” its editors say.

Two weeks ago, seeing my post on the Court’s recent affirmative action decision, they asked me to reduce my thoughts to two paragraphs. It killed me to throw out perfectly good prose over which I’d labored mightily, but I did. Today, they asked me to do the same with last week’s post on whether liberal campaign contributors’ pretentions to moral superiority could pass the straight-face test. You’ll find that post epitomized here.

Supply-Side Economics from the Founder of the Brookings Institution

“Within limits, the system of progressive taxation is defensible and effective.  Beyond a certain point, however, it dulls incentives, and may destroy the principal source of funds for new enterprises involving exceptional risks.”

–Harold G. Moulton (founder of the Brookings Instituion), Controlling Factors in Economic Development, The Brookings Institution, 1949, p. 292.

Making an International Deal: Iran Should Stop Persecuting Religious Minorities

Nuclear negotiations with Iran continue in Vienna.  Skeptics remain many:  everything depends on whether the ruling elite, and not just President Hassan Rouhani, is serious about reform.  Iran should demonstrate its commitment by respecting religious liberty.

The most celebrated case of persecution today is Saeed Abedini, an American citizen born in Iran and sentenced to eight years in prison last year for “undermining national security” by the Iranian government.

A Muslim convert to Christianity, his “crime” in Tehran’s view apparently was aiding house churches.  He went to Iran in 2012 to set up an orphanage, with the government’s approval.  Since then he was abused and tortured while held at two of Iran’s worst prisons. 

Unfortunately, Abedini represents far broader religious repression.  The U.S. Commission on International Religious Freedom has routinely labeled Tehran as a Country as Particular Concern.  The Commission’s 2013 report concluded:  “The government of Iran continues to engage in systematic, ongoing, and egregious violations of religious freedom, including prolonged detention, torture, and executions based primarily or entirely upon the religion of the accused.” 

Tehran’s brutal persecution has been getting worse.  The State Department reported that violations of religious liberty increased again 2012, as Tehran increasingly was “charging religious and ethnic minorities with moharebeh (enmity against God), ‘anti-Islamic propaganda,’ or vague national security crimes for their religious activities.” 

Currently the regime appears to be most concerned about conversions.  Christians traditionally were minorities, especially Armenians and Assyrians, who speak a different language.  However, HRWF reported that charges against those arrested last year included “conversion from Islam to Christianity, encouraging the conversion to Christianity of other Muslims, and propaganda against the regime by promoting Christianity as missionaries.” 

Iran is a theocratic state whose laws are to be based on “Islamic criteria.”  The constitution formally accords “full respect” to Christians, Jews, and Zoroastrians, who are allowed to worship “within the limits of the law.”  Proselytizing and converting are barred, however.  Moreover, according to the State Department, Jews are “regularly vilified” and the government “regularly arrests members of the Zoroastrian and Christian communities for practicing their religion.” 

Worse is the treatment of other groups, such as Baha’is and other Muslims, including Sufis, Sunnis, and non-conformist Shia.  All are considered to some degree to be apostates.  Explained State, “The government prohibits Baha’is from teaching and practicing their faith and subjects them to many forms of discrimination not faced by members of other religions groups.”  Sunnis face double jeopardy since many are ethnic minorities, such as Arabs and Kurds. 

Government hostility encourages private discrimination as well.  Said State:  “The government’s campaign against non-Shias created an atmosphere of impunity allowing other elements of society to harass religious minorities.” 

The U.S. government has little direct leverage, having already targeted Tehran with economic sanctions over its presumed nuclear ambitions.  However, Washington (and the Europeans) could indicate to Iran that a deal is more likely if it quiets Western skeptics.

In fact, public pressure works.  The UN’s Ahmed Shaheed reported last year that “At least a dozen lives were saved because of the intervention of international opinion.”  Encouraging Tehran to respect the freedom of conscience of its citizens might even more effectively come from the most fervent advocates of engagement, who are resisting proposals for new Western sanctions. 

As I conclude my latest article in American Spectator online:  “Tehran should release Rev. Abedini, pardon imprisoned Baha’is, allow Sufis and Sunnis to worship, and more.  ‘The international community is watching,’ observed Dwight Bashir, deputy director of USCIRF.  Iran should act accordingly.”

Ideas Have Consequences: The Neoconservatives

The New York Times has produced a useful video about the “super-predator” scare from the 1990s.  At that time, we were already waging a drug war, so we were advised to build more prisons–and so we did.  Then regrets.

You can watch the video here.

As it happens, we are also finding more scrutiny of neoconservative ideas at the movies. A new documentary film directed by Errol Morris looks at former Secretary of Defense, Donald Rumsfeld and the Iraq war.  Here is the film trailer:

For related Cato work, go here, here, and here.

Minimum Wage Solidarity Misplaced

Senate Democrats are anxious to bring the Minimum Wage Fairness Act (S. 1737) up for a vote to express their solidarity with “progressives.”  That solidarity, however, is misplaced. The bill is not a panacea for the prosperity of low-skilled workers; it is anti-free market and immoral—based on coercion not consent.

The bill would increase the federal minimum wage to $10.10 after two years, index it for inflation, and increase the minimum for tipped workers.  Those changes would substantially increase the cost of hiring low-skilled workers, lead to job losses and unemployment (especially in the longer run as businesses shift to labor-saving methods of production), and slow job growth.

Although there is virtually no chance this bill would pass, Senate Majority Leader Harry Reid (D-Nev) wants it to come to the floor so he and his compatriots can express their support for low-income workers (and for unions and others who support the minimum wage increase) in an election year.  “Democrats are focused on the future,” says Reid, and “we were elected to improve people’s lives.” 

Paul Krugman’s Nostalgia for Teddy Roosevelt’s New Nationalism

Paul Krugman managed to discover “America’s Taxation Tradition” in an unlikely spot – a fiery old political speech by an unsuccessful presidential candidate who called for a “graduated inheritance tax on big fortunes.” Dripping with irony, Krugman asks “Who this left-winger? Theodore Roosevelt, in his famous 1910 New Nationalism Speech.”

Readers are supposed to assume that because Roosevelt had been a Republican, his New Nationalism speech could not possibly have been remotely left of center. Yet the phrase “new nationalism” and the advocacy of an inheritance tax were both borrowed from Herbert Croly’s highly influential 1909 manifesto of the Progressive Era, The Promise of American Life.

As Christopher Lasch noted, “Theodore Roosevelt read The Promise, found it highly flattering to himself, publicly praised it, and used it as an argument for his ‘new nationalism.’ Croly did not so much influence Roosevelt as read into his career an intellectual coherence which Roosevelt then adopted as his own view of things.” Croly, who later launched The New Republic magazine, supported Roosevelt in the 1912 Presidential race and Robert La Follette’s Progressive Party campaign in 1924, before becoming disenchanted and (as Lasch put it) “flirting with socialism.”

In his 1909 book, Croly said, “In economic warfare … it is the business of the state to see that its own friends are victorious. It holds … a hand in the game.” The state, said Croly, must look out for “the national interest,” and help those to win “who are most capable of using their winnings for the benefit of society.” To the properly cynical, that sounds like an open invitation to crony capitalism and corruption, if not kleptocracy.

In the New Nationalism speech Roosevelt said, “We should permit [a fortune] to be gained only so long as the gaining represents benefit to the community. This, I know, implies a policy of a far more active governmental interference with social and economic conditions in this country …  No man should receive a dollar unless that dollar has been fairly earned. Every dollar received should represent a dollar’s worth of service rendered — not gambling in stocks, but service rendered” (Roosevelt gambled-away his own inheritance on a ranching venture, not stocks).

Not quite socialist in 1909, Croly tolerated, “preservation of the institution of private property in some form, [but only with] the … radical transformation of its existing nature and influence.” Similarly, Roosevelt allowed that he would prefer to stop short of government ownership of business (socialism), if government control (fascism) would suffice. “I do not wish to see the nation forced into the ownership of the railways,” said Roosevelt, “if it can possibly be avoided.”

In short, the Roosevelt/Croly New Nationalism certainly did lean in a “leftist” (statist and collectivist) direction with respect to state supremacy over private property.

As afterword, here is something I wrote in a 1995 anthology revisiting Croly’s The Promise of American Life:

Herbert Croly’s quaint 1909 vision of the merits of increased centralization was founded on the notion that ‘American state governments have been corrupt and inefficient largely because they have been organized for the benefit of corrupt and inefficient men.’ The federal government, by contrast, was apparently organized for the benefit of saints and angels. Still, Croly’s idea of ‘big government’ in Washington looks like a bargain by today’s standards. He reasoned that a much stronger federal government could be financed out of a graduated inheritance tax: ‘The tax at its highest level,’ Croly wrote, ‘could be placed without danger of evasion at as much as 20 percent.’ Some recent estimates suggest that Croly may have been correct about how high the estate tax could be pushed without losing money. In any case, if a 20 percent inheritance tax were the only federal tax we had to worry about, as Croly proposed, the states would have little difficulty in raising money for the services that are still almost entirely a state or local responsibility, such as police protection, public schools, and roads. (The federal government, by contrast, is almost entirely involved in taking money from some people and giving it to others).