Hayek Wasn’t a ‘Free Market Marxist’

Why can’t liberals provide a fair portrait of a thinker they disagree with? It was a reasonable prediction that Mitt Romney’s choice of Paul Ryan as his VP appointee would ignite a discussion over the first principles of politics and the role of government in society. So far, however, it hasn’t been much of a discussion: rather, we shall speak of a goofy attempt to graft the practice of smearing the enemy from day-to-day politics to the realm of political thinking.

David Boaz has wisely commented upon Adam Davidson’s piece on Hayek. Even more surprising is a blog post from historian Timothy Snyder in the New York Review of Books. Professor Snyder sees Mr. Ryan as aiming to revive an “outdated ideology”—as  “taking some of the worst from the twentieth century and presenting it as a plan for the twenty-first.”

What he finds outdated is, basically, Hayek’s allegiance to the principle of limited government. Revealingly, he maintains that “Austria became a prosperous democracy after World War II because its governments ignored Hayek’s advice and created a welfare state.” Linking the economic performance of Western democracies after WWII to the institutions of the welfare state (a national health care service, compulsory education, unemployment insurance et cetera) is at best naive.

Making “provisions for citizens in need” may be “an effective way to defend democracy” from the temptations of populism and authoritarianism but this doesn’t say much per se. Which provisions? Provided by whom? For the benefit of whom? The answers to these questions aren’t trivial.

What is most surprising in Snyder’s piece is how he portrays Hayekianism as the opposite of what it is. He writes:

Like Marxism, the Hayekian ideology is a theory of everything, which has an answer for everything. Like Marxism, it allows politicians who accept the theory to predict the future, using their purported total knowledge to create and to justify suffering among those who do not hold power.

You may wish to make a caricature of a thinker. A successful caricature should, however, resemble the subject, at least a little.

A cursory glance at the titles of Friedrich von Hayek’s books should be enough to understand that what he was preoccupied with was precisely the hubris of decision-makers who pretend to predict the future and manage it. Hayek’s best known paper is poignantly entitled "The Use of Knowledge in Society." His last book was called The Fatal Conceit. His best work in history of ideas bore, as a subtitle, a reference to the “abuse of reason.”

Hayek was convinced that “no human mind can comprehend all the knowledge which guides the actions of society.” What he stressed, over and over and over, are the inherent limitations of our knowledge, that politicians and regulators, being human beings, share with the rest of us. He was skeptical even of the “purported total knowledge” of his own discipline, economics, as he claimed that “the curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”

Hayek defended individual liberty, precisely because the future is unpredictable.

The case for individual freedom rests chiefly on the recognition of the inevitable and universal ignorance of all of us concerning a great many of the factors on which the achievement of our ends and welfare depend. It is because every individual knows so little and, in particular, because we rarely know which of us knows best that we trust the independent and competitive efforts of many to induce the emergence of what we shall want when we see it.

For Hayek,

If man is not to do more harm than good in his efforts to improve the social order, he will have to learn that in this, as in all other fields where essential complexity of an organized kind prevails, he cannot acquire the full knowledge which would make mastery of the events possible. He will therefore have to use what knowledge he can achieve, not to shape the results as the craftsman shapes his handiwork, but rather to cultivate a growth by providing the appropriate environment, in the manner in which the gardener does this for his plants.

Does this sound like a man that had an answer for everything, or wanted to propose a grand plan for society as a whole? Hayek’s worldview does not have much of a following among intellectuals, not least because it doesn’t see “knowledge” as a monolith. For Hayek, knowledge is dispersed in society, it is by and large “know-how” hence it belongs as much to the little guy on the street than to the Yale professor. The free market economy is a process by which these different pieces of knowledge somehow are put together to the good of society. Professor Snyder portrays Hayek as a “reacting” against national socialism and communism. It is an elegant way to dismiss him, by claiming that “precisely because they [Hayek and Rand] were reacting, they flew to extreme interpretations.”

Reality fascinates profound thinkers, as it may either ignite or terrify common people too. But the economic calculation debate, in which Hayek and his mentor Ludwig von Mises were the main actors, was not a mere “reaction:” it was, as brainy socialists at the time acknowledged, a discussion over the possibility of economic planning. Hayek stumbled upon a more refined understanding of the role of knowledge in society, while participating in that debate—this is certainly true. But he was not a political copywriter, as Professor Snyder seems to believe.

As an Italian, I envy the fact that until next November Americans will be having a discussion over the fundamental pillars of their political state. Neither Obama-Biden nor Romney-Ryan are political thinkers: they are politicians, and the very fact they have (some) convictions is rare enough to be praised. But it is good and exciting that the electoral contest will bring people to go back to basics and, perhaps, try to make sense of what this Hayek guy or that Rawls guy actually meant.

It is, however, rather depressing to see such a systematic misrepresentation of Hayek’s ideas. Let’s assume it is due to genuine ignorance.  We shall then recommend some links to liberal chastisers of Mr. Ryan, so that they may know better what they disagree with.

• The Universitad Francisco Marroquin has made available online this collection of interviews with Hayek.
• This 1984 Cato Policy Report provides a quick introduction to some of the core themes in Hayek’s thinking.
• Hayek’s Nobel lecture is a short but intriguing introduction to his thought.
• Arch-liberal George Soros has a short appreciation of Hayek’s ideas, that was initially delivered in a conference at the Cato Institute.

I (and many others) would have quarrels with some of Soros’s points, but perhaps his article may suggest that critics of Hayek’s “free market Marxism” pause for a moment before rushing to their keyboard.