The strange popularity of F A Hayek

[test_specimen]

Skimming through the threads I started noticing, that a lot of people use F. A. Hayek quotes in their signature.

Hmmm. Why is that so?

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Here's a short summary of what Hayek was for and against, and who he was:

Friedrich A. Hayek, 1899-1992, a cousin of the philosopher Ludwig Wittgenstein (1889-1951) was a friend of Wittgenstein's biggest opponent, Karl Popper (1902-1994) and believed in Popper's proposition that scientific progress comes from falsification (theory true until proven wrong, as opposite to verification) and Hume's principle, that propositions of ethics cannot be proven.

His early works were concerned with monetary cycle and business cycles. In 1931 he presented "Prices and Production" which summarised his work. John Maynard Keynes, working in Cambridge, had published "Treatise on Money" in 1930 and saw Hayek's work as a critique and refuted it in scientific publications. Hayek became very popular in the UK, but when Keynes published his "General Theory" the interest for Hayek dropped and former students departed and became critics.

At the beginning of the 40's Hayek stopped writing on neoclassical economics and in 1944 the political "Road to Serfdom" became his best known non-academic work. His main objective became the fight against socialism and the critique of government intervention.

He wrote about the price setting mechanism (lack of knowledge being the main factor, too much knowledge on the consumer side destroying the system). Hayek believed in "spontaneous order" from unregulated systems with agents with limited knowledge.

At the time (60s and 70s) Keynes enjoyed a large following among the governments and economists, but the favour turned towards Hayek in the last 20 years, or so, and a lot of European governments quote Hayek when they reform/destroy the social welfare systems built by the Keynesianists.

However, Hayek got the Nobel price for economics in 1974 (ironically he shared it with Gunnar Myrdal, a Swedish socialist).

This is just a short summary, taken from:

http://cepa.newschool.edu/het/profiles/hayek.htm
http://www.nobel.se/economics/laureates/1974/index.html
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So my question is, for all those who "wear" a Hayek in their sig: do you agree with Hayek on the political or the economical theories? Because all I've seen so far are political quotes.

I don't agree with what Hayek said, because he added too much politics and too much ideology to it, even though some of his theories are sound his conclusions come from a anti-socialist and not from an unbiased view of the problems. Economics and politics are interwoven, but you can make out the general docking points. There is no reason why Communism should automatically lead to dictatorship, nor a reason why Capitalism means automatically democracy.

The conservative and liberal governments that nowadays quote Hayek are not actually following his ideas, they're just quoting him to distinguish themselves from socialist parties, that (except for British Labour) are more in favour of Keynes.

 

[insurgent]

He wrote about the price setting mechanism (lack of knowledge being the main factor, too much knowledge on the consumer side destroying the system). Hayek believed in "spontaneous order" from unregulated systems with agents with limited knowledge.

At the time (60s and 70s) Keynes enjoyed a large following among the governments and economists, but the favour turned towards Hayek in the last 20 years, or so, and a lot of European governments quote Hayek when they reform/destroy the social welfare systems built by the Keynesianists.

Shows the bias of your source.

There is no reason why Communism should automatically lead to dictatorship,

Shows your bias. Read The Road to Serfdom by Hayek, it's jampacked with reasons that collectivism is not compatible with democracy.

nor a reason why Capitalism means automatically democracy.

Nobody ever claimed that.

The conservative and liberal governments that nowadays quote Hayek are not actually following his ideas

Agreed.

So my question is, for all those who "wear" a Hayek in their sig: do you agree with Hayek on the political or the economical theories? Because all I've seen so far are political quotes.

I agree with both.

 

[The Last Conformist]

Read The Road to Serfdom by Hayek, it's jampacked with reasons that collectivism is not compatible with democracy.

I'm most likely never gonna read that book - could you present a couple of those reasons?

 

[test_specimen]

Shows the bias of your source.

That they destroy social welfare systems is not coming from the source, but from me. I'm not sure whether you could consider this as a bias, after all Hayek is completely against such systems, so if they are abolished he (or his disciples) should be happy.

Shows your bias. Read The Road to Serfdom by Hayek, it's jampacked with reasons that collectivism is not compatible with democracy.

True, I haven't read "Road to Serfdom" (I mostly read summaries, comments and school-book knowledge about him), but imo "collectivism is not compatible with democracy" is a generalisation. Hayek is just as extreme as, say, Marx, because he does not admit to any part of the other side of the argument having the slightest point.

Hayek could not simply say: "Socialism/communism is not efficient, we should abandon the concept", he said "socialism/communism means automatically an abolishment of individual freedom, whereas capitalism/free, unregulated market leads to more freedom".

Nobody ever claimed that.

Because that would also be a generalisation.

 

[insurgent]

That they destroy social welfare systems is not coming from the source, but from me. I'm not sure whether you could consider this as a bias, after all Hayek is completely against such systems, so if they are abolished he (or his disciples) should be happy.

I thought that was the quoted part of your post. The one between the lines.

Anyway, sure, I'd abolish the welfare state, but Hayek actually supported a very limited social system in which people get a minimum payment from the government if they are unemployed.

True, I haven't read "Road to Serfdom" (I mostly read summaries, comments and school-book knowledge about him), but imo "collectivism is not compatible with democracy" is a generalisation. Hayek is just as extreme as, say, Marx, because he does not admit to any part of the other side of the argument having the slightest point.

Hayek could not simply say: "Socialism/communism is not efficient, we should abandon the concept", he said "socialism/communism means automatically an abolishment of individual freedom, whereas capitalism/free, unregulated market leads to more freedom".

Right, but he points to several reasons for this. He doesn't spew out a generalised statement, he argues for it.

I'm most likely never gonna read that book - could you present a couple of those reasons?

Too bad, I can recommend it. I can defend his points and statements, but I will not try to summarise this work for your convenience.

 

[test_specimen]

But not only will a free market without government intervention and few or no social services make the overall standard of living lower (and the gap between the rich and the poor wider), it would also give tremendous power to the enterprises. I don't usually agree with anti-globalisationalists, but when they say that some enterprises have more power than small countries and are not subject to any form of democratic decision making but only driven by profit for its shareholders (wich are in most cases not the ones working and producing for the enterprise), they are right and a regulated market, that imposes restrictions on enterprises might be better.

 

[The Last Conformist]

Too bad, I can recommend it. I can defend his points and statements, but I will not try to summarise this work for your convenience.

Then you leave me with no reason to believe your claim that collectivism is not compatible with democracy.

 

[Adebisi]

At the time (60s and 70s) Keynes enjoyed a large following among the governments and economists, but the favour turned towards Hayek in the last 20 years, or so, and a lot of European governments quote Hayek when they reform/destroy the social welfare systems built by the Keynesianists.

Most Social Democrats are very pragmatic and I see no reason why they would follow Keynes as his theories have little value today. The radical left, the ideological part of the left-wing, does not support Keynes at all.

do you agree with Hayek on the political or the economical theories?

I agree with him on both.

I don't agree with what Hayek said, because he added too much politics and too much ideology to it, even though some of his theories are sound his conclusions come from a anti-socialist and not from an unbiased view of the problems. Economics and politics are interwoven, but you can make out the general docking points.

I dont see how you could remove values from economics. It's a science that deals with humans, and you somehow need to decide what should be optimized, what people want and what is good for them, just for example.

There is no reason why Communism should automatically lead to dictatorship

There is plenty of reason. The means of production would have to be expropriated. Insurgents need to be indentified and eliminated.

nor a reason why Capitalism means automatically democracy.

No, but individual rights granted by capitalism are themselves part of the rights that should be granted to everyone. Capitalism also creates wealth and knowledge not concentrated to the government, which works against dictatorship.

The conservative and liberal governments that nowadays quote Hayek are not actually following his ideas, they're just quoting him to distinguish themselves from socialist parties, that (except for British Labour) are more in favour of Keynes.

What is the point of this remark? What are they not following/believing in? Anything relevant?

 

[The Last Conformist]

There is plenty of reason [why Communism should automatically lead to dictatorship]. The means of production would have to be expropriated. Insurgents need to be indentified and eliminated.

The last is true of any government, so if it leads to dictatorship, non-dictatorial goverment is impossible.

I honestly don't see how expropriating the means of production necessarily leads to dictatorship either.

 

[Adebisi]

That they destroy social welfare systems is not coming from the source, but from me. I'm not sure whether you could consider this as a bias, after all Hayek is completely against such systems, so if they are abolished he (or his disciples) should be happy.

Hayek, like all economists, uses "utilitarian" argumentation. He's not a utilitarian obviously, but he does not want us all to suffer. I dont think he would be completly happy about the current development, unless it would bring anything good.

Hayek is just as extreme as, say, Marx, because he does not admit to any part of the other side of the argument having the slightest point.

How do you decide what the "extreme" is? If I have very strong beliefs in centrism, and wont admit that any of the extremes have the slightest point, am I an extremist then?

The economic theories of Marx are dead, it's probably easier to find a biologist who believes in Six-day creation than an economist who believe in Marx. Hayek, on the other hand, has contributed to the science of economics and his works are still relevant.

Hayek could not simply say: "Socialism/communism is not efficient, we should abandon the concept", he said "socialism/communism means automatically an abolishment of individual freedom, whereas capitalism/free, unregulated market leads to more freedom".

You are wrong, he says both.

Freedom, as defined by liberalim, is optimized in a capitalist society. Hayek would obviously not be talking about any other "freedom".

 

[Adebisi]

But not only will a free market without government intervention and few or no social services make the overall standard of living lower

Why?

I believe the opposite is true. That is the reason I am a Neo-Liberal.

it would also give tremendous power to the enterprises. I don't usually agree with anti-globalisationalists, but when they say that some enterprises have more power than small countries and are not subject to any form of democratic decision making but only driven by profit for its shareholders (wich are in most cases not the ones working and producing for the enterprise)...

Do you want the choices of your liffe to be "subject to democratic decision-making"?

I see no difference.

...they are right and a regulated market, that imposes restrictions on enterprises might be better.

Better in what way?

 

[Adebisi]

The last [insurgents needing to be identified and eliminated] is true of any government, so if it leads to dictatorship, non-dictatorial goverment is impossible.

No, it's not - it doesn't matter that I do not support our current system, my government has not put me in prison.

A democracy which eliminates the enemies of democracy is still a democracy.

I honestly don't see how expropriating the means of production necessarily leads to dictatorship either.

It could hardly be done in a legal way, as all enterprise would escape the country, and I have a hard time imagining a working democracy without rule of law.

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About Hayek - I do not know all of his theories too well. I think insurgent, Hayek (the poster) and luiz can defend him more easily.

 

[The Last Conformist]

No, it's not - it doesn't matter that I do not support our current system, my government has not put me in prison.

Are you retracting that identifying and eliminating insurgents leads to dictatorship, or are you denying that all gov'ts need to identify and eliminitate such?

In either case, not supporting the current system does not make you an insurgent, and I seriously doubt you are one. And if you are, I'm pretty positive the Finnish gov't is doing it's darnedest to put you behind bars.

It could hardly be done in a legal way, as all enterprise would escape the country, and I have a hard time imagining a working democracy without rule of law.

Plenty of countries have perfectly legally nationalized businesses, not caring one bit if it scares away enterprise (or cheering at retreat of the evil multinationals).

 

[Adebisi]

Are you retracting that identifying and eliminating insurgents leads to dictatorship, or are you denying that all gov'ts need to identify and eliminitate such?

Well if you want to put it that way, then option 1. Chile and Pinochet would be an example.

Communism needs to identify insurgents on a level where democracy is not possible.

Plenty of countries have perfectly legally nationalized businesses, not caring one bit if it scares away enterprise (or cheering at retreat of the evil multinationals).

But that wasn't the point. Imagine nationalising all enterprise in any modern, Western nation.

 

[insurgent]

In the midst of all the talk about eliminating insurgents ( ), I think this discussion could call for a quote from The Road to Serfdom:

"In a country where the sole employer is the State, opposition means death by slow starvation. The old principle: who does not work shall not eat, has been replaced by a new one: who does not obey shall not eat."

Oddly enough this was said by Leon Trotsky in 1937. The fact that this truth comes from this source shows the obviousness it possesses to collectivist anti-democrats.

Adebisi, I'm happy to see a liberal who is willing accept specimen's challenge, and may I just add a couple of arguments of Hayek's:

In a country, where the means of production are collectively controlled, so are the desires and hopes of its citizens. Money are the means with which individuals try to accomplish whatever their objective in life is. If the government controls these means, it can and will also use this to promote, prevent, and compel ways of life and objectives. Take the mixed economies of Europe, where the government taxes rich people more with progressive taxes, thus punishing that way of life, see how taxation of so-called luxuries and unhealthy products increases. Again, a group of people is punished because of the subjective opinions of those on top.
Governments usually comprise of people who want to exercise power. If they are given all economic means in the country, they will want to use this as a means of power.

Another argument is simply that democratic decision-making is far too slow to keep up with the fast and dynamic functions of the market. It does not possess the necessary knowledge to lead the economy as it would want. So, it will seek autocratic leadership simply to make decision-making more efficient and also to control the market more fully in order to force the right results. There will be dissent, something that can't be tolerated in a collectivist society, where everybody has to agree that the ultimate objective is the "common good", and so autocratic leadership will be necessary to force agreement. Individual freedom will also be curbed by the desire of the leadership to gain more knowledge in order to run the economy more effectively.

 

[The Last Conformist]

Well if you want to put it that way, then option 1. Chile and Pinochet would be an example.

Pinochet's Chile is an example for that identifying and eliminating insurgents doesn't lead to dictatorship?

I'm not aware that there was much in the way of insurgency in Pinochet's Chile, but calling the regime anything but a dictatorship would be pretty rich.

Communism needs to identify insurgents on a level where democracy is not possible.

Why? And what level of insurgency is not compatible with democracy (Colombia seems to be able to cope with a pretty high one, as does Sri Lanka)?

But that wasn't the point. Imagine nationalising all enterprise in any modern, Western nation.

I wasn't aware we were restricting the discussion to a modern Western society. Of course, doing it in a such would cause pretty much instant economical meltdown.

 

[The Last Conformist]

@Insurgent: It's been said any number of times that autocratic decision-making is faster than democratic, and it's easy to see why people would think so. But looking at political history, I see little to convince me that it applies in practice.

Ah, well, that'll have to do for tonight. G'dnight.

 

[insurgent]

It doesn't have to apply in practice, people just have to think it does. And they do. But that's not all.

 

[insurgent]

I just found this, it's kind of amusing, although it only presents part of the argument: http://www.mises.org/TRTS.htm

 

[Archer 007]

Hayek was a great and wise man.