Bryan Caplan  

From the Quaint to the Bizarre: Jeff Friedman on Hayek

Less Stumped... Economic Nationalism, once mor...

Back in the day, I was one of the research assistants for the Collected Works of Hayek. Frankly, the more I read, the less impressed I was. Among other things, Hayek spends a lot of time unconvincingly blaming socialism on what he calls "constructivist rationalism." In a the latest issue of Critical Review, Jeff Friedman takes Hayek to task for this eccentric thesis:

On the rare occasions when Hayek (e.g., 1988, 59) actually names a “constructivist rationalist,” it is always a prewar figure such as Bertrand Russell or H.G. Wells. His unending polemic against “scientism” on the left lost any relevance once the reaction against the Holocaust and Hiroshima set in; the persistence of this polemic even after the advent of the New Left must have seemed to any left-wing reader of Hayek like a well-honed obsession, as it completely ignored the postwar left’s revulsion against authority, planning, and “conscious control.” Hayek’s notion that the left favors intervention in (or even the replacement of) markets by governments because it has transferred “to the problems of society habits of thought engendered by the preoccupation with technological problems, the habits of thought of the natural scientist and the engineer” (Hayek 1944b, 20) long ago shifted from being quaint to being bizarre.

The bottom line is that there have been lots of different kinds of socialists. A few have the "scientistic" mind-set that Hayek attacks. But others - the vast majority, I'd say - are driven by a quasi-religious faith that socialism will somehow lead to a better world... or at least cut the "parasites" of the capitalist world down to size.

Friedman admits that if you selectively read socialists to prove Hayek's point, you'll find a little supporting evidence. But the thrust of the socialist position is quite different:

It is true that people on the left sometimes still couch their objections to capitalism in terms of its “anarchy.” But the specific things that these people think of as anarchic boil down, not to an absence of “order” per se (of the sort that could be remedied by “conscious control”); but to the presence of an unjust order — or, to take account of Hayek’s quibble about the phrase social justice, the presence of an undesirable order — an order of poverty and economic instability and unhappiness and inequality.

So why exactly do socialists imagine that abolishing markets is the cure for poverty and economic instability and unhappiness and inequality? I'd say the answer is fairly straightforward. Once you realize that the typical human being suffers from anti-market bias, it's hardly surprising that a political movement would arise to carry this bias to its logical conclusion.

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COMMENTS (10 to date)
John Thacker writes:

That may well be true, but the champagne socialists of the academic world, which include many of the thinkers and leaders of various social democratic and socialist movies, that I've known are overwhelmingly of the "scientism" sort. Certainly you hear a lot of suggestions of the "put smart people in charge/on a committee" in such circles. Anyone who has encountered a Green has certainly encountered "constructivist rationalist," and certainly the environmentalist Green movement is a large and growing part of the left as a whole.

Besides, I hardly see how an anti-market belief and an ignorance of economics are incompatible with believing that a "scientific" planned alternative to the market is possible and desirable. It seems to me that they're complementary ideas. Even Geraldo's comment which Friedman treats as mere ignorance seems to me to be a belief that the market is anarchy, Hobbes's "war of all against all." You may call it just ignorance of economic theory, but I see in it as wel something akin to the spirit that wishes for the state to have a monopoly on violence to prevent crime. They wish for the state to have a monopoly on the setting of prices for exactly the same reasons. It is all very well to explain that "price gouging" causes the most efficient use of a resource and encourages investment, etc., but they still want an elected government to step in and control it for the same reason that they may listen to radical libertarians explain how privatized police, military, and contract law will work and still want an elected state to control all those things.

Brad Hutchings writes:

I don't know whether scientism is to blame for socialism, but I agree completely with Michael Crichton that scientism has led to the most horrendous social solutions to plague mankind. Whether it's eugenics, the population bomb, The Montreal Protocol banning CFCs (chalk up one space shuttle to that stupid scientific solution), global warming today... The problem with scientists is that they generally are smarter than everyone else and they know it and everyone else knows it, so they can get away with prescribing things they haven't thought through.

Matt McIntosh writes:

As usual, Thacker's right on target. (Get this man a blog, stat!) I think we need to differentiate here between the priesthood and the laity, so to speak. Hayek was a firm believer in JM Keynes' dictum about intellectuals, and he was attacking them rather than the general public because he believed if they could be discredited the public would eventually follow. And contra Jeff Friedman, the elites of the socialist movement were indeed overwhelmingly naive rationalists.

The sort of rationalism Hayek spent so much effort attacking is more a pernicious cognitive bias writ large rather than an explicit doctrine. Humans have a hair-trigger instinct to see agency everywhere, and have a hard time wrapping their minds around the concept of unplanned order. This is also why Darwinian evolution is so counterintuitive to most people. (When small children are asked why they think a particular animal is the way it is, they pretty much invariably give teleological answers. This carries over largely to economics as well.) For intellectuals, this bias (your anti-market bias) combined with a naive faith in mathematical modeling inspired by physics to form the fatal conceit that an economy both could and should be controlled.

This, too is a howler: completely ignored the postwar left’s revulsion against authority, planning, and “conscious control.”

Bollocks! I know you know better, Bryan. Support for idiotic interventionist measures and even outright socialism (e.g. in healthcare) is still alive and well. What decrease there has been has only been due to reality rapping them on the knuckles. In other words, the vector is the same even if the magnitude has changed.

Roger M writes:

Is it possible that those who think Hayek was obsessed have fallen for leftist propaganda? Knowing that their core beliefs cause revulsion in the general populace, the left shows one face to the public and another to each other. You have to be persistent to unmask the true face of the left. Sure, the new left proclaim a disdain for authority and structure, which appeals to young people. But young people don’t ask, “What next?” Should we assume that after they’ve destroyed authority and structure the new left has no further plans? I doubt that their anarcho-capitalists. What would follow the destruction is the new left would assume power and create their own structure.

Bryan, I take your point, but I take the points of the commenters above, too. It isn't just Hayek, for one thing: Oakeshott and Sowell have also written eloquently and persuasively about the perniciousness of "rationalists." And in my field (culture/arts/media) the worst damage has been done by people with theories, programs, and a determination to be "progressive." (Think modernism, highways, urban renewal, deconstruction, etc.) Are they irrational dreamers underneath? Could well be. (On the other hand, aren't we all? And perhaps that's part of being human. I'm certainly not going to fall for the old "who's more rational here?" argument...) But what characterizes them all is their conviction that their programs are morally virtuous and logically bulletproof. In many cases that I've witnessed, they've really barely given the market a moment's thought.

Scott Scheule writes:

Well put, Mr. McIntosh.

Robert Speirs writes:

For instance, the "anti-globalization crowd" come off as anarchists and rebels, but those of them that have a sincere but naive faith in the evil of large multinational corporations must also believe that large governments can do a better job of setting prices and distributing goods than corporations now do. The same baseless faith in the higher rationality of collective force informs support for expanding the power of the United Nations and the EU.

Dan Landau writes:

I hope Bryan hasn’t had the misfortune to spend as much time with socialists as I have. A central tenant their socialism is, the government should control the economy, right down to shoe sizes and colors. This is necessary because all business, all for profit activity, is evil. When it got difficult to believe in socialism, after the USSR fell and China went semi-market, the socialists I know all became environmentalists. The common theme here is straight forward, the government has got to control everything to protect us from those evil capitalist businessmen.

liberty writes:

The socialists are the same and almost as numerous, they have simply changed their outward appearance, sad to say. The leftist economists and politicians still call for price controls, regulation, higher taxes on the rich (if they don't want government control, why should it be so big and redistributive?) and larger welfare programs (medicare or universal healthcare, don't privatize social security etc).

As for planning, they may not call it that anymore, but between anti-trust, price controls and regulations, they still attempt some planning, and the economists are still trying to prove than an Employer of Last Resort program will end unemployment (the EU/EMU has already proposed it for Europe). France tried to control workers hours when the minimum wage put so many out of work. They all say that the USSR went too far but they all still see Socialism as a *good thing* and Socialism means centralized control over profits and means of production.

The other thing to remember: the communists of 1917 also claimed to be anti-government; not just anti-Monarchy, but anti-state. They thought that once communism had taken control, planning would no longer be necessary and the state would dissolve. There is no essential difference in ideology or even rhetoric, they just use a softer tone.

John Thacker writes:

To put it perhaps another way, it's not that they hate the absence of planning and a consciously controlled order, it's that they can't even conceive of such an absence, so its absence must "really" be a hidden, secret order controlled by those who deny their rulership. To me, though, that's still a case of what Hayek says about transferring "to the problems of society habits of thought engendered by the preoccupation with technological problems, the habits of thought of the natural scientist and the engineer." They don't prefer planning, just everything in their daily and professional life involves planning, organizing, and conscious control so that they naturally fall into those habits of mind and assume that everything, including the economy, must be run that way.

Socialists no more need to like planning and conscious control in order to believe that it is inevitable and thus must be managed in the best way possible, by a democratically elected government and "the people" (rather than shadowy groups of powerful individuals), than an atheist or secular humanist must hate the idea of there being a God and miracles in order to believe that there is not one, and thus humanity is better off knowing "the truth" rather than being lost in superstition.

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