Topic: Political Philosophy

25 Years Later, Is It Still the Hayek Century?

F. A. Hayek died 25 years ago today. His secretary called Cato Institute president Edward H. Crane, who confirmed the sad news to the New York Times.

Hayek’s life spanned the 20th century, from 1899 to 1992. In his youth he thought he saw liberalism dying in nationalism and war. Thanks partly to his own efforts, in his old age he was heartened by the revival of free-market liberalism. John Cassidy wrote in the New Yorker that “on the biggest issue of all, the vitality of capitalism, he was vindicated to such an extent that it is hardly an exaggeration to refer to the twentieth century as the Hayek century.”

Back in 2010 the New York Times said that the Tea Party “has reached back to dusty bookshelves for long-dormant ideas. It has resurrected once-obscure texts by dead writers [such as] Friedrich Hayek’s “Road to Serfdom” (1944).” I responded at the time,

So that’s, you know, “long-dormant ideas” like those of F. A. Hayek, the winner of the Nobel Prize in Economics, who met with President Reagan at the White House, whose book The Constitution of Liberty was declared by Margaret Thatcher “This is what we believe,” who was described by Milton Friedman as “the most important social thinker of the 20th century” and by White House economic adviser Lawrence H. Summers as the author of “the single most important thing to learn from an economics course today,” who is the hero of The Commanding Heights, the book and PBS series by Daniel Yergin and Joseph Stanislaw, and whose book The Road to Serfdom has never gone out of print and has sold 100,000 copies this year.

On the occasion of Hayek’s 100th birthday, Tom G. Palmer summed up some of his intellectual contributions:

Hayek may have made his greatest contribution to the fight against socialism and totalitarianism with his best-selling 1944 book, The Road to Serfdom. In it, Hayek warned that state control of the economy was incompatible with personal and political freedom and that statism set in motion a process whereby “the worst get on top.”

But not only did Hayek show that socialism is incompatible with liberty, he showed that it is incompatible with rationality, with prosperity, with civilization itself. In the absence of private property, there is no market. In the absence of a market, there are no prices. And in the absence of prices, there is no means of determining the best way to solve problems of social coordination, no way to know which of two courses of action is the least costly, no way of acting rationally. Hayek elaborated the insights of the Austrian economist Ludwig von Mises, whose 1922 book Socialism offered a brilliant refutation of the dreams of socialist planners. In his later work, Hayek showed how prices established in free markets work to bring about social coordination. His essay “The Use of Knowledge in Society,” published in the American Economic Review in 1945 and reprinted hundreds of times since, is essential to understanding how markets work.

But Hayek was more than an economist. As I’ve written before, he also published impressive works on political theory and psychology. He’s like Marx, only right. Tom Palmer noted:

Building on his insights into how order emerges “spontaneously” from free markets, Hayek turned his attention after the war to the moral and political foundations of free societies. The Austrian-born British subject dedicated his instant classic The Constitution of Liberty “To the unknown civilization that is growing in America.” Hayek had great hopes for America, precisely because he appreciated the profound role played in American popular culture by a commitment to liberty and limited government. While most intellectuals praised state control and planning, Hayek understood that a free society has to be open to the unanticipated, the unplanned, the unknown. As he noted in The Constitution of Liberty, “Freedom granted only when it is known beforehand that its effects will be beneficial is not freedom.” The freedom that matters is not the “freedom” of the rulers or of the majority to regulate and control social development, but the freedom of the individual person to live his own life as he chooses. The freedom of the individual to break old molds, to create new things, and to test new paths is the mark of a progressive society: “If we proceed on the assumption that only the exercises of freedom that the majority will practice are important, we would be certain to create a stagnant society with all the characteristics of unfreedom.”

Reagan and Thatcher may have admired Hayek, but he always insisted that he was a liberal, not a conservative. He titled the postscript to The Constitution of Liberty “Why I Am Not a Conservative.” He pointed out that the conservative “has no political principles which enable him to work with people whose moral values differ from his own for a political order in which both can obey their convictions. It is the recognition of such principles that permits the coexistence of different sets of values that makes it possible to build a peaceful society with a minimum of force. The acceptance of such principles means that we agree to tolerate much that we dislike.” He wanted to be part of “the party of life, the party that favors free growth and spontaneous evolution.” And I recall an interview in a French magazine in the 1980s, which I can’t find online, in which he was asked if he was part of the “new right,” and he quipped, “Je suis agnostique et divorcé.”

Hayek lived long enough to see the rise and fall of fascism, national socialism, and Soviet communism. In the years since Hayek’s death economic freedom around the world has been increasing, and liberal values such as human rights, the rule of law, equal freedom under law, and free access to information have spread to new areas. But today liberalism is under challenge from such disparate yet symbiotic ideologies as resurgent leftism, right-wing authoritarian populism, and radical political Islamism. I am optimistic because I think that once people get a taste of freedom and prosperity, they want to keep it. The challenge for Hayekian liberals is to help people understand that freedom and prosperity depend on liberal values, the values explored and defended in his many books and articles.

Kenneth Boulding on the Serious Distortion of Economic Ethics

From Kenneth Boulding, A Reconstruction of Economics (NY, Science Editions 1962) pp. 481-82:

“Economic ethics has been seriously distorted by static and short-run criteria of value. ‘Justice’ has been thought of too much in terms of division of a fixed pie than in terms of encouraging the baking of more pies… .The importance of this problem rests on a matter of simple arithmetic: that if redistribution toward any group causes a fall in the rate of growth of national income, no matter how slight, there will be some date beyond which the absolute income of the favored group will be less than it would have been if the redistribution had not taken place.”

Remembering America’s Heritage of Freedom

Two years ago on Presidents’ Day (which is legally Washington’s Birthday) I talked about my book The Libertarian Mind at the National Constitution Center (video). As part of that appearance I wrote about America’s libertarian heritage in the Philadelphia Inquirer:

Where better than Philadelphia on Presidents’ Day to talk about liberty and reviving the American tradition of freedom and limited government.

Thomas Jefferson said that when he wrote the Declaration of Independence in June of 1776, he had no book or pamphlet at hand but simply set down “an expression of the American mind.” With its foundation on the equal and inalienable rights of all people, including life, liberty, and the pursuit of happiness, the Declaration also reflects the libertarian mind.

Indeed, the principles of the Declaration are so closely associated with libertarianism that the Chinese edition of my previous book, Libertarianism: A Primer, features a cover photograph of the famous room in Independence Hall, complete with Windsor chairs and green tablecloths.

Libertarianism is the philosophy of freedom. It has, in different form throughout history, inspired people who fought for freedom, dignity, and individual rights — the early advocates of religious tolerance, the opponents of absolute monarchy, the American revolutionaries, the abolitionists, antiwar advocates and anti-imperialists, opponents of National Socialism and communism….

I believe that the simple, timeless principles of the American Revolution — individual liberty, limited government, and free markets — are even more powerful and more important in the world of instant communication, global markets, and unprecedented access to information, a world that Jefferson or Madison could not have imagined. Libertarianism is the essential framework for a future of life, liberty, and the pursuit of happiness.

Thank You, John Stossel

Stossel bookSeven years ago tonight John Stossel’s show debuted on Fox Business. This week he announced that the show will end next week.

Some years ago – I’m not sure whether he was still on ABC’s “20/20” then or had moved to Fox – I introduced John at a Cato event as “the most visible, most valuable libertarian in America.” That’s still an accurate assessment.

I first noticed John’s interest in freedom at the end of 1989 when he did a “20/20” piece on “The Positives of Deregulation,” reporting on the new and improved products and services that deregulation had delivered during the 1980s. I remember especially the afterword, when John sat at the anchor desk with Barbara Walters and Hugh Downs, and Downs said, “That was very interesting. It had never occurred to me that there was anything good about deregulation.” I thought to myself, “Really? I understand why some people favor regulation. You just thought deregulation was delivered by space aliens or Mr. Potter of Potterville?”

Then in 1994 John got to do his first hour-long special on ABC, “Are We Scaring Ourselves to Death?” I had the good fortune to attend a taping of a late-night followup where people with varying views watched the show and then discussed it with John. As the segments were shown, I could hear the gasps in the audience around me. Environmentalists and others had never seen a major network program question their claims. But on ABC and later on Fox, he went on doing hour-long investigations of such topics as “Freeloaders,” “Greed,” “Stupid in America,” “Whose Body Is It Anyway?” and “Is America Number 1?” (featuring Cato senior fellow Tom G. Palmer).

I was proud to appear on his shows many times, including this 2015 special on spontaneous order.

John Stossel isn’t retiring. Reportedly, he’ll continue appearing on Fox shows and will also work with Reason.tv and other libertarian organizations on video projects. Meanwhile, much of his work is made available to teachers and students by Stossel in the Classroom, and lots of his specials and regular shows can be found online.

From “The Positives on Deregulation” in 1989 through last night’s “Death by Socialism” and no doubt next Friday’s final show, John Stossel has been bringing a needed dose of reality – and a lot of libertarian scholars and activists – to network television.

Revenues from Trump Plan Unfairly Compared to Fanciful CBO Projections

Tax Policy Center estimate of a 10-year $6.2 trillion revenue loss is used to predict higher interest rates, and those higher interest rates prevent the economy from growing faster, which in turn vindicates the static assumption of a $6.2 trillion revenue loss.  

The circularity of this tangled fable is remarkably illogical.  How could interest rates remain higher if private investment is crowded out leaving GDP growth unchanged?

The TPC tells a similar story about the House Republican tax plan.  “Although the House GOP tax plan would improve incentives to save and invest, it would also substantially increase budget deficits unless offset by spending cuts, resulting in higher interest rates that would crowd out investment [emphasis added].”  This too is an unsupported assertion. The TPC analysis predicts more private savings and therefore cannot simply assume deficits “would crowd out investment.”

Nat Hentoff’s Interview with Che Guevara

Cato Senior Fellow Nat Hentoff once had the opportunity to interview Fidel Castro’s henchman, Che Guevara.  As Nat relates in this video clip, Che’s gatekeeper messed up–just assuming that since Nat wrote for the Village Voice, he would be another fawning lefty journalist.  Wrong!

In 2003, Nat wrote: “Having interviewed Cubans who survived Castro’s gulags, I have never understood or respected the parade of American entertainers, politicians and intellectuals who travel to Cuba to be entranced by this ruthless dictator who, for me, has all the charisma of a preening thug.”

And here’s Richard Cohen in today’s Washington Post: “Fidel Castro was a killer. He came to power in a revolution and so violence was probably inescapable. But he followed it with mass executions — the guilty, the innocent, it hardly mattered. He imposed a totalitarian system on Cuba even harsher and more homicidal than the one that preceded it. He persecuted homosexuals, dissidents, critical writers and journalists. He would not tolerate a free press, and his own political party was the only one permitted. In the end, he ruined his country’s economy while at the same time exporting terrorism.”  Read the whole thing.

The Debate Over Voting: Helping Jim Harper Count for Something

On November 2nd, Cato will host a debate over whether libertarians should vote. On the “no” side will be me and my colleague Aaron Ross Powell. On the losing side will be our colleagues Jim Harper and Michael F. Cannon. You should come, that is, of course, unless you’re sensitive to the sight of public executions.

But Jim wants to start the debate early. Yesterday, he criticized the standard economist’s argument for why people (including libertarians) shouldn’t vote. “Given the exceedingly low likelihood that one person’s vote will sway the outcome,” as Jim describes the argument, “the time and effort spent on voting is pure waste.”

This is true under most circumstances: if you’re voting solely to change an election, then your voting is irrational. If you get no pleasure out of voting, if casting a vote gives you no sense of a duty fulfilled, yet you still wake up, stand in line on a cold November morning, and cast your vote merely because you want to change the outcome of the election, then you are behaving irrationally.

In nearly every circumstance, your vote doesn’t matter. It won’t change things. Every election that you’ve ever voted in or not voted in would have come out exactly the same if you had done the opposite. This is not an opinion, it is an inescapable mathematical truth.

Jim argues that this is only half the story. What the standard, voting-is-irrational model “really fails to account for is the effect that margins of victory have on the many, many political and social actors that will consume vote information after election day.” This is still wrong, and for the same reasons.

At the risk of creating a more difficult debate opponent on November 2nd, I must inform Jim that he’s consistently equating two fundamentally different concepts: 1) the trivially true idea that voting, en masse, matters; and 2) the idea that a single vote matters. Aaron and I will not be arguing that voting, en masse, doesn’t matter in the sense that it affects the world. Of course it does. And we will not be arguing that margins of victory, which are just an emergent phenomenon of en masse voting, don’t matter. That would be silly. But, under most circumstances, a single vote doesn’t meaningfully contribute to either an electoral victory or to the margin of victory. No winning politician has ever said, “well, I won by 4.000006 percent, but if I won by 4.000007 percent, that would have really been a mandate for action.”  

Finally, I told Jim in an email that I could refute him in a single sentence. Here it is:

A single vote’s contribution to a margin of victory is nearly as infinitesimal as its contribution to a victory, and, if margins of victory have consumable value as “vote information,” then so does voter turnout, so you’re better off staying home in order to marginally contribute to that data point.

Maybe that’s all Jim needed to soothe his troubled soul: a reason to not vote that will make him feel he is contributing to the system. Apparently Jim has a deep-seated need to be a part of a percentage, to be counted by some egg-head political data consultant. So stay home Jim, but do it with gusto rather than apathy. Know that you’re making a marginal contribution to the voter turnout numbers. On November 8th, stand up—or sit down, or sleep in—and get counted!

Come to the debate, or watch it online. It’ll be fun.

Pages