Tuesday, July 26, 2005

Hayek and Libertarianism

Lawrence Krubner argues in a comment on my earlier post and in this essay that Hayek wasn't a libertarian:
Friedrich Hayek is not a libertarian. Many on the libertarian right-wing of American politics worship Hayek for taking a strong stand against socialism when socialism was at its peak in England during the 1940s. Oddly enough, there are libertarians in America today who honestly think the Democrats are in favor of those things that Hayek opposed. Such libertarians are misled.
This is something I've gathered from reading Hayek as well. The socialism of the earlier 20th century is far far different from any politics advocated today. Some today might call themselves socialists if they are in the Green party or something, but the socialists Hayek fought wanted to actually centrally control production. Allow me to add this excerpt from Hayek's "Socialism and Science":
Anti-socialism means here oppositon to all direct government interference with the market, no matter in whose interest such interference may be exercised. It is not correct to describe this as a laissez faire attitude -- another of the smear-words so frequently substituted for argument -- because a functioning market requires a framework of appropriate riles within which the market will operate smoothly. Strong reasons also exist for wishing the goverment to render outside the market various services, which for one reason or another the market cannot supply. But the state certainly ought never to have the monopoly of any such service, especially not of postal services, broadcasting, or the issue of money. [italics Hayek's]
So it is definitely a plausible hypothesis that Hayek would have supported Democrat policies. I am still somewhat skeptical, however. One reason is that Hayek was vehemently opposed to inflationary measures, like government deficits or monetary expansion, even (especially) during recessions. To the extent that using fiscal policy to smooth out the business cycle is part of the Democrats' platform (I am not even sure that it is), he would not have supported it. Also, to the extent that deficit spending is required to support Democrat policies, he would not have supported them.

Related is taxation. Hayek considered preserving the "natural" system of relative prices to be paramount to almost all other concerns. And for this reason he primarily condoned "out-of-market" government programs. Income tax, of course, distorts relative prices so I am not convinced that he would support Democratic policies to the extent that they increase income taxes.

But I am unsure about everything I've said, and rereading some of the Lawrence's excerpts from The Road to Serfdom makes me even more unsure. I do agree, however, that most libertarians misinterpret Hayek.

UPDATE: I've found a quote that relates to my argument regarding taxation. Hayek writes in "Principles of a Liberal Social Order":
Our point was merely that considerations of justice provide no justification for 'correcting' the results of the market...

...the means [for government services] should be raised according to a rule which applies uniformly to all. (This, in my opinion precludes an overall progression of the burden of taxation of the individuals, since such a use of taxation could be justified only by such arguments as we have just excluded.)
That is, he views progressive taxation as an attempt to 'correct' the results of the market and as distortive of relative prices.


Blogger Lawrence said...

I may have been overstating my case when I suggested that Hayek would nowadays support the Democratic party. I was perhaps thinking of the Democratic party as it exists in my fantasies, which includes the fiscal responsibility which the Democrats demonstrated in the mid 90s, which may have only have existed because of strong pressure from Newt Gingrich. I'm probably mistating the case to the extent that I've suggested that Hayek would be a strong supporter of the Democrats.

However, what's clear is that the right is often wrong to think Hayek justifies their policies. The whole spectrum of politics in America and in the West has shifted to the right over the last 60 years. Hayek may have once been way out in right field, but he's solidly in the center of today's politics.

-- Lawrence Krubner

PS. Though I live in Virginia, I'll be in Philli next week. Phillip Honenberger, my co-blogger, is going to Temple University and we're going to meet up for lunch. I notice you're out at Swathmore. Do you know if the Philli blogosphere meets up as a group ever?

9:37 PM  

Post a Comment

<< Home