On the Genius of Friedrich Hayek, II
By: Ron Lipsman
This article is a successor to a previous one in this journal (see here) In that piece I provided a representative sample of the brilliant ideas to be found in Friedrich Hayekâ€™s 1944 book, The Road to Serfdom. I bemoaned the fact that so many of todayâ€™s educators are ignorant of Hayekâ€™s thought, and that they pass that ignorance on to the youth of America. One tragic consequence is the peopleâ€™s choice of economically retarded and philosophically ignorant leaders to govern the nation. The point of the article was to inspire right-thinking conservatives to redouble their efforts to get Hayek added to the curriculum.
In this follow on piece I provide more of Hayekâ€™s wisdom â€“ this time from his other main publication, The Constitution of Liberty (University of Chicago Press, 1960). My hope is that readers, whether they have read the first piece or not, will be further inspired to disseminate and promote Hayekâ€™s ideas.
Chapter 1: Liberty and Liberties, pp. 11-12: The state in which a man is not subject to coercion by the arbitrary will of another or others is often also distinguished as â€œindividualâ€ or â€œpersonalâ€ freedomâ€¦Even our tentative indication of what we shall mean by â€œfreedomâ€ will have shown that it describes a state which man living among his fellows may hope to approach closely but can hardly expect to realize perfectly. The task of a policy of freedom must therefore be to minimize coercion or its harmful effects, even if it cannot eliminate it completelyâ€¦ [Freedom means] the possibility of a personâ€™s acting according to his own decisions and plans, in contrast to the positionÂ of one who was irrevocably subject to the will of another, who by arbitrary decision could coerce him to act or not to act in specific ways.
Chapter 4, Freedom, Reason and Tradition, pp. 54-56: The development of a theory of liberty took place mainly in the eighteenth century. It began in two countries, England and France. The first of these knew liberty; the second did not. As a result, we have had to the present day two different traditions in the theory of liberty: one empirical and unsystematic, the other speculative and rationalistic â€“ the first based on an interpretation of traditions and institutions which had spontaneously grown up and were but imperfectly understood, the second aiming at the construction of a utopia, which has often been tried but never successfully. Nevertheless, it has been the rationalist, plausible, and apparently logical argument of the French tradition, with its flattering assumptions about the unlimited powers of human reason, that has progressively gained influence, while the less articulate and less explicit tradition of English freedom has been on the decline.
This difference was better understood a hundred years ago than it is todayâ€¦To disentangle the two traditions it is necessary to look at the relatively pure forms in which they appeared in the eighteenth century. What we have called the â€œBritish traditionâ€ was made explicit mainly by a group of Scottish moral philosophers led by David Hume, Adam Smith and Adam Ferguson, seconded by their English contemporaries Josiah Tucker, Edmund Burke, and William Paley, and drawing largely on a tradition rooted in the jurisprudence of the common law. Opposed to them was the tradition of the French Enlightenment, deeply imbued with Cartesian rationalism: the Encyclopedists and Rousseau, the Physiocrats and Concordet, are their best-known representatives.
Though these groups are now commonly lumped together as the ancestors of modern liberalism, there is hardly a greater contrast imaginable than that between their respective conceptions of the evolution and functioning of a social order and the role played in it by liberty. The difference is directly traceable to the predominance of an essentially empiricist view of the world in England and a rationalist approach in France. The main contrast in the practical conclusions to which these approaches has led has recently been well put, as follows: â€œOne finds the essence of freedom in spontaneity and the absence of coercion, the other believes it to be realized only in the pursuit and attainment of an absolute collective purposeâ€; and â€œone stands for organic, slow, half-conscious growth, the other for doctrinaire deliberateness; one for trial and error procedure, the other for an enforced solely valid pattern.â€ It is the second view, as J.L. Talmon has shown in an important book from which this description is taken, that has become the origin of totalitarian democracy.
The sweeping success of the political doctrines that stem from the French tradition is probably due to their great appeal to human pride and ambition. But we must not forget that the political conclusions of the two schools derive from different conceptions of how society works. In this respect the British philosophers laid the foundations of a profound and essentially valid theory, while the rationalist school was simply and completely wrong.
Chapter 12, The American Contribution: Constitutionalism, pp. 176-178: The movement [for American independence] in the beginning was based entirely on the traditional conceptions of the liberties of Englishmen. Edmund Burke and other English sympathizers were not the only ones who spoke of the colonists as â€œnot only devoted to liberty, but to liberty according to English ideas, and on English principlesâ€; the colonists themselves had long held this view. They felt that they were upholding the Whig revolution of 1688…In England, after the complete victory of Parliament, the conception that no power could be arbitrary and that all power should be limited by higher law tended to be forgotten. But the colonists had brought these ideas with them and now turned them against Parliament. They objected not only that they were not represented in Parliament but even more that it recognized no limits whatsoever to its powers. With this application of the principle of legal limitation of powerâ€¦, the initiative in the further development of the ideal of free government passed to the Americans.
Until the final break, the claims and arguments advanced by the colonists in the conflict with the mother country were based entirely on rights and privileges to which they regarded themselves entitles as British subjects. It was only when they discovered that the British constitution, in whose principles they firmly believed, had little substance and could not be successfully appealed to against the claims of Parliament that they concluded that the missing foundation had to be supplied. They regarded it as fundamental doctrine that a â€œfixed constitutionâ€ was essential to any free government and that a constitution meant limited government.
Chapter 17, The Decline of Socialism and the Rise of the Welfare State, pp. 253-260: The common aim of all socialist movements was the nationalization of the â€œmeans of production, distribution, and exchange,â€ so that all economic activity might be directed according to a comprehensive plan toward some ideal of social justiceâ€¦The great change that has occurred during the last decade is that socialismâ€¦has collapsed. It has not merely lost its intellectual appeal; it has also been abandoned by the masses so unmistakably that socialist parties everywhere are searching for a new program that will insure the active support of their followers. They have not abandoned their ultimate aim, their ideal of social justice. But the methods by which they had hoped to achieve this and for which the name â€œsocialismâ€ had been coined have been discredited. No doubt the name will be transferred to whatever new program the existing socialist parties will adopt. But socialism in the old sense is now dead in the Western world.
But, though the characteristic methods of collectivist socialism have few defenders left in the West, its ultimate aims have lost little of their attraction. While the socialists no longer have a clear-cut plan as to how their goals are to be achieved, they still wish to manipulate the economy so that the distribution of incomes will be made to conform to their conception of social justice. The most important outcome of the socialist epoch, however, has been the destruction of the traditional limitations upon the powers of the state.
Unlike socialism, the conception of the welfare state has no precise meaning. The phrase is sometimes used to describe any state that â€œconcernsâ€ itself in any manner with problems other than those of maintenance of law and orderâ€¦But, once the rigid position that government should not concern itself at all with such matters is abandoned â€“ a position which is defensible but has little to do with freedom â€“ the defenders of liberty commonly discover that the program of the welfare state comprises a great deal more that is represented asâ€¦legitimate and unobjectionableâ€¦.The current situation has greatly altered the task of the defender of liberty and made it much more difficult. So long as the danger came from socialism of the frankly collectivist kind, it was possible to argue that the tenets of the socialists were simply false: that socialism would not achieve what the socialists wanted and that it would produce other consequences which they would not like. We cannot argue similarly against the welfare state, for the term does not designate a definite system. What goes under the name is a conglomerate of so many diverse and even contradictory elements that, while some of them may make a free society more attractive, others are incompatible with it or may at least constitute potential threats to its existenceâ€¦. [a] main ambition that inspires the welfare state: the desire to use the powers of government to insure a more even or more just distribution of goods. Insofar as this means that the coercive powers of government are to be used to insure that particular people get particular things, it requires a kind of discrimination between, and unequal treatment of, different people which is irreconcilable with a free society. This is the kind of welfare state that aims at â€œsocial justiceâ€ and becomes â€œprimarily a redistributor of income.”It is bound to lead back to socialism and its coercive and arbitrary methods.
Chapter 19, Social Security, pp. 300 & 304-305: There are so many serious problems raised by the nationalization of medicine that we cannot mention even all the more important ones. But there is one the gravity of which the public has scarcely yet perceived and which is likely to be of the greatest importance. This is the inevitable transformation of doctors, who have been members of a free profession primarily responsible to their patients, into paid servants of the state, officials who are necessarily subject to instruction by authority and who must be released from the duty of secrecy so far as authority is concerned. The most dangerous aspect of the new development may well prove to be that, at a time when the increase in medical knowledge tends to confer more and more power over the minds of men to those who possess it, they should be made dependent on a unified organization under single direction and be guided by the same reasons of state that generally govern policy. A system that gives the indispensable helper of the individual, who is at the same time an agent of the state, an insight into the otherâ€™s most intimate concerns and creates conditions in which he must reveal this knowledge to a superior and use it for the purposes determined by authority opens frightening prospects. The manner in which state medicine has been used in Russia as an instrument of industrial discipline gives us a foretaste of the uses to which such a system can be put.
It is much more difficult to see how it will ever be possible to abandon a system of provision for the aged under which each generation, by paying for the needs of the preceding one, acquires a similar claim to support by the next. It would almost seem as if such a system, once introduced, would have to be continued in perpetuity or allowed to collapse entirely. The introduction of such a system therefore puts a straight jacket on evolution and places on society a steady and growing burden from which it will in all probability again and again attempt to extricate itself by inflation. Neither this outlet, however, nor a deliberate default on obligation already incurred can provide the basis for a decent society. Before we can hope to solve these problems easily, democracy will have to learn that it must pay for its own follies and that it cannot draw unlimited checks on the future to solve its present problems.
It has been well said that, while we used to suffer from social evils, we now suffer from the remedies for them. The difference is that, while in former times the social evils were gradually disappearing with the growth of wealth, the remedies we have introduced are beginning to threaten the continuance of that growth of wealth on which all future development dependsâ€¦Though we may have speeded up a little the conquest of want, disease, ignorance, squalor, and idleness, we may in the future do worse even in that struggle when the chief dangers will come from inflation, paralyzing taxation, coercive labor unions, an ever increasing dominance of government in education, and a social service bureaucracy with far-reaching arbitrary powers â€“ dangers from which the individual cannot escape by his own efforts and which the momentum of the overextended machinery of government is likely to increase rather than mitigate.
Chapter 20, Taxation and Redistribution, pp. 318-319: One of the chief reasons why progressive taxation has come to be so widely accepted is that the great majority of people have come to think of an appropriate income as the only legitimate and socially desirable form of reward. They think of income not as related to the value of the services rendered but as conferring what is regarded as an appropriate status in society. This is shown very clearly in the argument, frequently used in support of progressive taxation, that â€œno man is worth Â£10,000 a year, and in our present state of poverty, with the great majority of people earning less than Â£6 a week, only a few very exceptional men deserve to exceed Â£2,000 a year.â€ That this contention lacks all foundation and appeals only to emotion and prejudice will be at once obvious when we see what it means is that no act that any individual can perform in a year or, for that matter, in an hour can be worth more to society than Â£10,000 ($28,000). Of course, it can and sometimes will have many times that value. There is no necessary relation between the time an action takes and the benefit that society will derive from it.
The whole attitude which regards large gains as unnecessary and socially undesirable springs from the state of mind of people who are used to selling their time for a fixed salary or fixed wages and who consequently regard a remuneration of so much per unit of time as theÂ normal thing. But though this method of remuneration has become predominant in an increasing number of fields, it is appropriate only where people sell their time to be used at anotherâ€™s discretion or at least act on behalf of and in fulfillment of the will of others. It is meaningless for men whose task is to administer resources at their own risk and responsibility and whose main aim is to increase the resources under their control out of their own earnings. For them the control of resources is a condition for practicing their vocation, just as the acquisition of certain skills or of particular knowledge is such a condition in the professions. Profits and losses are mainly a mechanism for redistributing capital among these men rather than a means of providing their current sustenance. The conception that current net receipts are normally intended for current consumption, though natural to the salaried man, is alien to the thinking of those whose aim is to build up a business. Even the conception of income itself is in their case largely an abstraction forced upon them by the income tax. It is no more than an estimate of what, in view of their expectations and plans, they can afford to spend without bringing their prospective power of expenditure below the present level. I doubt whether a society consisting mainly of â€œself-employedâ€ individuals would ever have come to take the concept of income so much for granted as we do or would ever have thought of taxing the earnings from a certain service according to the rate at which they accrued in time.
Chapter24, Education and Research, pp. 379-380: The very magnitude of the power over menâ€™s minds that a highly centralized and government-dominated system of education places in the hands of the authorities ought to make one hesitate before accepting it too readilyâ€¦there are strong arguments against entrusting to government that degree of control of the contents of education which it will possess if it directly manages most of the schools that are accessible to the great masses. Even if education were a science which provided us with the best of methods of achieving certain goals, we could hardly wish the latest methods to be applied universally and to the complete exclusion of others â€“ still less that the aims should be uniform. Very few of the problems of education, however, are scientific questions in the sense that they can be decided by any objective tests. They are mostly either outright questions of value, or at least the kind of questions concerning which the only ground for trusting the judgments of some people rather than that of others is that the former have shown more good sense in some respects. Indeed, the very possibility that, with a system of government education, all elementary education may come to be dominated by the theories of a particular group who genuinely believe that they have scientific answers to those problems (as has happened to a large extent in the United States during the last thirty years) should be sufficient to warn us of the risks involved in subjecting the whole educational system to central direction.
If you have read through all of the above, then you may very well be thinking, â€œThis is brilliant â€“ although really it should be mostly self-evident.â€ Yes it is, and 125 years ago, the average American knew it. What happened? What happened is that a century of progressive education has sapped the American people of its innate wisdom. For the last 80 years we have been subjected to Keynesian economics, John Dewey-inspired progressive education, Euro-style socialism and a welfare state mentality that stifles individual liberty. Hayek observed the trend and foresaw the outcome. If we can reopen the peopleâ€™s eyes to the truth of Hayekâ€™s words, we should be able to reverse course and restore the nation.
Ron Lipsman, Professor Emeritus of Mathematics, Former Senior Associate Dean College of Computer, Math & Physical Sciences University of Maryland