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    we're all gonna die..., 2008-07-17 10:19:16 | Main | I'd like to thank the reputabl..., 2008-07-28 23:36:41


    When I sat down last week and started reading F.A. Hayek's Road to Serfdom (1944) - the intellectual godfather, I'm told, of what was once called "the conservative movement" - I wasn't expecting to discover a fullblown pinko Islamocommunist in classical liberal fur, ready to devour our very souls:

    It will be well to contrast at the outset the two kinds of security: the limited one, which can be achieved for all, and which is therefore no privilege but a legitimate object of desire; and absolute security, which in a free society cannot be achieved for all and which ought not to be given as a privilege - except in a few special instances such as that of the judges, where complete independence is of paramount importance. These two kinds of security are, first, security against severe physical privation, the certainty of a given mimimum of sustenance for all; and, second, the security of a given standard of life...

    There is no reason why in a society which has reached the general level of wealth which ours has attained the first kind of security should not be guaranteed to all without endangering general freedom. There are difficult questions about the precise standard which should thus be assured; there is particularly the important question whether those who thus rely on the community should indefinitely enjoy all the same liberties as the rest. An incautious handling of these questions might well cause serious and perhaps even dangerous political problems; but there is no doubt that some minimum of food, shelter, and clothing, sufficient to preserve health and the capacity to work, can be assured to everybody. Indeed, for a considerable part of the population of England this sort of security has long been achieved.

    Nor is there any reason why the state should not assist the individual in providing for those common hazards of life against which, because of their uncertainty, few individuals can make adequate provision. Where, as in the case of sickness and accident, neither the desire to avoid such calamities nor the efforts to overcome their consequences are as a rule weakened by the provision of assistance - where, in short, we deal with genuinely insurable risks - the case for the state's helping to organize a comprehensive system of social insurance is very strong.

      --"Security and Freedom", p 147-148. (emph. added)

    Earlier in the book he was advocating for regulations to account for environmental externalities - which is rather less libertarian than all the demon horned domestic terrorist envirowackos today who just want to internalize prices on greenhouse gas pollution with a tax, or, go figure, markets:

    Any attempt to control prices or quantities of particular commodities deprives competition of its power of bringing about an effective coordination of indvidual efforts, because price changes then cease to register all the relevant changes in circumstances and no longer provide a reliable guide for the individual's actions.

    This is not necessarily true, however, of measures merely restricting the allowed methods of production, so long as these restrictions affect all potential producers equally and are not used as an indirect way of controlling prices and quantities. Though all such controls of the methods of production impose extra cost (i.e. make it necessary to use more resources to produce a given output), they may be well worth while. To prohibit the use of certain poisonous substances or to require special precautions in their use, to limit working hours or to require certain sanitary arrangements, is fully compatible with the preservation of competition. The only question here is whether in the particular instance the advantages gained are greater than the social costs which they impose. Nor is the preservation of competition incompatible with an extensive system of social services - so long as the organization of these services is not designed in such a way as to make competition ineffective over wide fields.


    It is by no means sufficient that the law should recognize the principle of private property and freedom of contract; much depends on the precise definition of the right of property as applied to different things. The systematic study of the forms of legal institutions which will make the competitive system work efficiently has been sadly neglected; and strong arguments can be advanced that serious shortcomings here, particularly with regard to the law of corporations and of patents, not only have made competition work much less effectively than it might have done but have even led to the destruction of competition in many spheres.

    There are, finally, undoubted fields where no legal arrangements can create the main condition on which the usefulness of the system of competition and private property depends: namely, that the owner benefits from all the useful services rendered by his property and suffers for all the damages caused to others by its use. ... there is a divergence between the items which enter into private calculation and those which affect social welfare; and whenever this divergence becomes important, some method other than competition may have to be found to supply the services in question. Thus niether the provision of signposts on the roads nor, in most circumstances, that of the roads themselves can be paid for by every individual user. Nor can certain harmful effects of deforestation, or some methods of farming, or of the smoke and noise of factories be confined to the owner of the property in question or to those who are willing to submit to the damage for an agreed compensation. In such instances we must find some substitute for the regulation by the price mechanism.

      --"Individualism and Collectivism", p 86-87.

    What a radical, huh? Fred Hayek might as well be Al Gore in one of his more populist campaign seasons.

    The central argument is, of course, that central economic planning ("socialism") is poor economics and a worse threat to individual freedom. There's probably not much point in summarizing the argument, considering how few would argue the point, but for a quick gloss: Economies of scale do not create a deterministic end-state of a market dominated by a few industrial monopolies that need to be controlled by the state for some common good, as so many state socialists, nevermind their capitalist counterparts, envisioned. It is impossible to define a "common good" at such a level of granularity by which an economy can operate efficiently, as any state planning board will be forced to pick winners and losers in order to allocate assets to fulfill their goals - better some arbitrary functional mechanism ruin your livelihood than your betters. Under such a system of domination of daily life as necessitated by narrow control over all economic activity, only the crudest, lowest common denominator of what passes for leadership will be able to unify a mob large enough to pass the next budget, and so, welcome to the future.

    Hayek in a nutshell, then: centralized economic planning boards are bad, but centralized social insurance schemes and state action to price in market externalities are good, or at least strongly arguable. I suspect the Reader's Digest version most people must have read, like the vulgarized versions of Adam Smith that are apparently circulated in economics classes and journalism schools, glossed over the second and third point.

    If you're not impressed by Hayek's argument for national insurance schemes putting the power of taxation to one of its few arguably good uses, you probably won't be impressed by the rest of it. Concise, thought-out arguments in this book seem to occur at about the rate of once every three chapters, with just-so assertions and repetition filling the space between. It's more like the scatological thought droppings on somebody's blog on their way to writing a book.

    But then, that's about how it looked when Hayek's book was written multiple times half a century earlier - and perhaps it's easier to complain now that it would have been at mid-century - by various anarchists, or as Bertrand Russell noted in Roads to Freedom (1919), in 300BC by Chuang Tzu:

    But when Sages appeared, tripping up people over charity and fettering them with duty to their neighbor, doubt found its way into the word. And then, with their gushing over music and fussing over ceremony, the empire became divided against itself.

    So long as human endeavors in political economy persist in repeating past mistakes, one would assume the same corrections will be re-issued for about as long.

    update: And then, "The Prospects of International Order", in which he advocates for a federated world government in which "the supernational authority must be very powerful". What a nut. Didn't he read Hayek?

    "The great opportunity we shall have at the end of this war is that the great victorious powers, by themselves first submitting to a system of rules which they have the power to enforce, may at the same time acquire the moral right to impose them on others"

    And he's a comedian, too.

:: posted by buermann @ 2008-07-20 15:37:11 CST | link

      From a years-ago reading of him, I came away wondering what on earth the wingnuts were doing when they referenced his work in support of the punitive state, with a misanthropic economy rigged to provide the daily goads and humiliations. My guess then, and now, is that they only read the parts where he attacks the thinkers he disliked.

      Perhaps a "good education" would have helped me see their perspective as compelling.

    posted by Zomg @ 2008-07-21 10:19:31 | link

      Don't beat yourself up over it, a good education is impossible under the punitive state due to the division of labor. Take a break from tending mewling snivelshits and try a little exhibitionist warmaking, or perhaps the forging sewing needles.

      While most wingnuts make a living marketing deviationalist anime porn, they must first pass into manhood by taking on the world with gun and anvil, alone against the cold tyranny of subsidized corn ethanol.

    posted by buermann @ 2008-07-21 22:35:41 | link

      I like the image provided by taking on the world with gun and anvil. That right there is the self-regulating, self-correcting economy.

    posted by Zomg @ 2008-07-22 04:41:01 | link

    go ahead, express that vague notion

    your turing test:

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