Saturday, July 20, 2013

Whence All These Hitlers? Rescuing Hayek From His Fan Club

Have you noticed, on the extreme right wing of American politics, a tendency to use images of Hitler and the Nazis? These images are not, as they might have been in past extreme right-wing movements, used to express admiration. Rather they are used to condemn adversaries on the left. Glenn Beck is especially fertile in this regard (here,  here, and a medley here).

The choice of Hitler  may seem odd. A man who hated socialists, communists, and labor unions, who believed there was a conspiracy, made up mostly of Jews, to destroy the country... this is actually a pretty good description of Glenn Beck himself. (In fairness, Beck never identifies any members of the conspiracy as Jews-- it's just that almost all of them are.) So why Hitler? Why is his face so much more common than Stalin's, and why are the two likened so often?

The answer, I believe, is a book that has been widely praised by right-wing pundits, Friedrich Hayek's The Road to Serfdom. Glenn Beck has presented a lengthy segment about the book on his show, which resulted in a spike in sales on Amazon. Rush Limbaugh has recommended it on air (another spike in sales). And Paul Ryan lists it on his Facebook page as one of his favorite books.

Who is Friedrich Hayek and what is The Road to Serfdom? Hayek was an Austrian economist, who later became a British subject to avoid returning to Austria under the Nazis. Hayek was what is called in Europe a "liberal." This means first and foremost a belief in free markets, but Hayek saw liberalism as a more general philosophy of individual rights going back to the Renaissance, which had resulted in enormous progress for humanity. An essential for that progress was the development of free markets and competition.

Most of Hayek's arguments for liberalism were as an economist-- for example, this very good paper, arguing effective central planning of an economy is impossible because no central planner can possibly have the necessary information about all the rapidly changing local conditions. The Road to Serfdom, published in 1944, is a venture into the political: it is an argument that a centrally planned economy must inevitably lead to totalitarianism. He cites as examples of totalitarianism Nazi Germany, Fascist Italy and Stalinist Russia.

Hayek says that Naziism, Fascism, and Stalinism are products of a single philosophy, which he calls "collectivism." This is the idea that ends of society, and production in society, should be determined collectively, as opposed to liberalism, which believes that they should determined by individuals acting individually. The collectivism embodied in socialists' advocacy of central planning, Hayek thinks, prepared the ground for the rise of totalitarianism in Germany and Italy as well as Russia.

But Hayek places the most emphasis on Germany. He says in the foreword to the paperback edition of the book that this was because in Britain during World War II it was impolitic to be too vocally against Stalin, but as an Austrian he was also more familiar with events and ideas in Germany than in Russia. The Road to Serfdom is undoubtedly the origin of Glenn Beck's obsession with Nazis.

I found Hayek's argument that socialist central planning will lead to a gradual loss of individual freedom surprisingly convincing on logical grounds. It also makes sense on empirical grounds: even with the rigid state control of politics in China, for example, Deng Xiaoping's relaxation of state economic control clearly led to an increase in individual freedom. Less convincing is the claim that the ground was prepared for Hitler and Stalin by the intellectual ascendancy of collectivism over liberalism. This is a hard claim to prove or disprove.

But a larger problem is that the target Hayek is aiming at no longer exists. Nowhere in the world (with the possible exceptions of Cuba and North Korea) does anyone believe any longer in socialism in the sense of a centrally planned economy. Hayek admits as much in his 1956 preface to the paperback edition, but warns that tt is too soon for complacency:

The increasing tendency... to resort to direct state controls or to the creation of monopolistic institutions where judicious use of financial inducements might evoke spontaneous efforts is still a powerful legacy of the socialist period which is likely to influence policy for a long time to come. (xxxiv)

This is pretty weak beer for today's Republicans. It suggests that Hayek would have approved of a carbon tax, or even that great bugaboo of today's right, a cap-and-trade program, as a means of controlling greenhouse-gas emissions.  The problem for Republicans is that Hayek was not a knee-jerk ideologue but a serious thinker. He was pro-market and pro-competition and not, like many of today's Republicans, pro-business and anti-poor.

Where would Hayek stand on today's policy debates? Clearly, he was against unions, viewing them as a restriction on competition. But he would have probably have approved of many institutions that Tea Partiers abhor:

  • OSHA and parts of the Department of Labor: "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." (43)
  • Food Stamps and housing vouchers: "...there can be no doubt that some minimum of food, shelter, and clothing, sufficient to preserve health and the capacity to work, can be assured to everybody." (133)
  • Social Security Disability Insurance: "Where [there is no problem of insurance weakening the incentive to avoid risk] the case for the state's  helping to organize a comprehensive system of social insurance is very strong." (134)
  • The Consumer Financial Protection Bureau (the agency that Elizabeth Warren designed) as well as other regulatory agencies: "Even the most essential prerequisite of [competition's] proper functioning, the prevention of fraud and deception (including exploitation of ignorance), provides a great and by no means yet fully accomplished object of legislative activity." (45)
So how would Hayek have reacted to his current lionization by the American right? Probably much the way he reacted to his lionization by the American right in the fifties:

"... occasionally the manner in which [the book] was used brought home to me the truth of Lord Acton's observation that '...sincere friends of freedom have been rare, and [their] triumphs have been due to ... associating themselves with auxiliaries whose objects often differed from their own; and this association, which is always dangerous, has sometimes been disastrous.'" (xxx-xxxi)

The political debate in this country would be much saner if Hayek were alive today.

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