Arnold Kling  

Hayek and Anti-capitalist Intellectuals

Kling vs. Lang... Estonian Symbolism...

Reviewing a new edition of The Road to Serfdom, Roger Kimball writes,

In the end, though, the really galling thing about the spontaneous order that free markets produce is not its imperfection but its spontaneity: the fact that it is a creation not our own. It transcends the conscious direction of human will and is therefore an affront to human pride.

Kimball's essay is called "Hayek and the intellectuals." The longstanding war between (some) intellectuals and capitalism is a subject that fascinates me. It plays a big role in several recent books. For example, in reading Amity Shlaes' forthcoming history of the Great Depression, The Forgotten Man, one can see this war being played out during the New Deal.

Then the war gets renewed in the 1960's, as Brink Lindsey points out in his new book, The Age of Abundance. Also, the war is one of the important themes in Deirdre McCloskey's The Bourgeois Virtues. She traces the war back to 1848, while Kimball argues that Hayek traced it back as far as Descartes.

COMMENTS (12 to date)
Harry writes:

Raises the interesting question of what is really democracy, apart from the formal definitions of political democracy (direct, representative, etc).

Also raises the question of how and why anti-capitalist movements, whether technocratic or capitalist, tend to be so adamantly democratic in rhetoric and theory, but so undemocratic in practice.

Bruce G Charlton writes:

"The longstanding war between (some) intellectuals and capitalism is a subject that fascinates me."

Fascinates me too. I think an element is the 'mandarin' stance which aims inextricably to combine technical expertise with cultural expertise - so that intellectuals are not seen as expendable technicians but as an aristocracy intrinsic to society.

In other words, intellectuals aspire to priestly status - as not just specialist experts but general-purpose, all-embracing wise and moral leaders.

Something about the intellectual world fuels this fantasy - maybe the dense complexity of intellectual discourse, its thickness and resistance - it feels like the whole world is there.

Also, the mandarin insists on the power of the individual human mind (his own) to encompass all essential knowledge. This is what makes mandarins anti-democratic, anti-capitalist and anti-science - all these are emergent social systems. All require that - ultimately - the individual intellectual defer to the group wisdom.

Intellectuals are especially reluctant to do this in politics - yet democracy entails that the popular vote is politically-wiser (on average, over the long term) than mandarins or any other kind of expert.

Harry writes:

erratum: second sentence in first reply should read "...technocratic or populist,..."

To Bruce: latter day mandarins can be anti-capitalist, anti-scienctific, but rarely (overtly) anti-democratic. Espousing democracy is the one inviolable platitude of the age.

Barkley Rosser writes:

I can't resist. Kimball is putting Descartes before de horse.

More precisely, in The Fatal Conceit Hayek traces it more precisely to Saint-Simon, although he does see Saint-Simon as representing the Cartesian tradition. But, if one is going to blame a general tendency to abstraction and rationalism as the source rather than specific proposals to run the economy, then one might as well push it back to Aquinas, who did, after all, operate out of the University of Paris, and well predated Descartes.

Bruce G Charlton writes:

Harry said: "latter day mandarins can be anti-capitalist, anti-scienctific, but rarely (overtly) anti-democratic. Espousing democracy is the one inviolable platitude of the age."

Indeed, that is what people seem to say, but when I listen closely I hear stuff about wanting 'direct' democracy instead of the existing type, or people voting against their interests (ie. intellectuals know better what other peoples interests are).

A party or leader might win two or three elections in a row, or a political line prove unelectable, yet this fails to dent the confidence of some intellectuals in their rightness and the electorate's wrongness.

In other words, the signals from multiple elections (which I admit are not transparent in meaning) are simply ignored by mandarins - explained-away rather than explained.

Matt writes:

You could probably trace it back to the ancient Greeks if you worked at it. How can an intellectual not dislike capitalism? It is a system whereby serving others brings the greatest reward. If the great unwashed masses dislike your art, music, books, ideas, etc., you get nothing. On the other hand, a mildly retarded man who understands one simple thing can become a millionaire, with all attendent benefits. There are morons who do not understand much beyond basic economics and yet they can make tons of money in things like real estate bubbles. Submit to the wants and needs of the people, and you can be rich. Even Ayn Rand hated that, which is why her hero blows up his building in the Fountainhead.

Interesting to see mandarin mentioned. Confucius thought merchants were scum living off the work of others, especially the hated middle man.

jp writes:

On the historical point, the debate goes back at least as far as 1830, when Macaulay published his essay on Southey's Colloquies on Society. (The essay is available here at the invaluable Econ Library site.)

For example:

Perhaps we could not select a better instance of the spirit which pervades the whole book than the passages in which Mr. Southey gives his opinion of the manufacturing system. There is nothing which he hates so bitterly. It is, according to him, a system more tyrannical than that of the feudal ages, a system of actual servitude, a system which destroys the bodies and degrades the minds of those who are engaged in it. He expresses a hope that the competition of other nations may drive us out of the field; that our foreign trade may decline; and that we may thus enjoy a restoration of national sanity and strength. But he seems to think that the extermination of the whole manufacturing population would be a blessing, if the evil could be removed in no other way.
Fundamentalist writes:

Thomas Sowell traces it to the enlightenment in his book "A Conflict of Visions." I just finished it and think it offers the best insight on the debate out there.

But I would trace it back a little farther to the Late Scholastics of the School of Salamanca in the 1500's. They were the first to propose free markets and free trade, but it remained an academic issue until the Dutch took them seriously and implemented their ideas in the Dutch Republic. The Catholic Church and Calvinist Protestants fought viciously to stop free markets, but thank God, the Erasmian Protestants (later known as Remonstrants) prevailed. Descartes, and the "Enlightenment", took the Catholic/Calvinist ideas, stripped God out, and ran with them.

Bruce G Charlton writes:

How fascinating to see the reference to Southey! - I spend my summer holiday's staying in Southey's marvellous old house Greta Hall (where he lived with Coleridge) in Keswick - England's Lake District.

However, it is easy to understand past intellectuals hostiity to modernization - at a time when its superiority was not at all obvious. But as the decades roll by it becomes more and more anomalous. Intellectuals and academics (especially) seem now to becoming an outlier, embittered and negative, and (in an elaborate way, by their distorted emphasis) both dishonest and self-deluding.

But I have just remembered a recent blog posting (where from? - I forget) which traced the distinctive attitude of intellectuals to their greater length of time during formative years spent excelling in formal educational institutions - organizations which are (in effect) command economies. Some milage in that idea, I suspect.

Adam writes:

It might be a bit of a stretch, but I'd argue that Karl Popper's The Open Society and its Enemies traces that very struggle to as far back as Plato. Though he doesn't call it "capitalism" per se.

morganja writes:

I think that there are several mostly unrelated factors at work here that tend to obscure the effects of each individual factor. While I tend to agree wholeheartedly with the psychological explanation of why the children of upper-middle class and wealthy parents tend to be vehemnently anti-capitalist, I note that defenders of Capitalism, as the term was used by Karl Marx, and as it is currently implemented in pratice, have little to no comprehension how much business is conducted in total violation of just about every free market principle. On sites like this, I hear a lot of people defending free markets in principle but are strangely silent on the actual system in place, which has little relation to free markets.
Both groups are talking past each other, not listening to what the other has to say, exercises is spouting off at the mouth, with no real effort to actually understand what is really going on in the world and how to improve it.
In many ways, both groups are religious disciples of seperate Gods, indistinguishable from each other in practice, just using different names for their prayers.

jp writes:
I note that defenders of Capitalism, as the term was used by Karl Marx, and as it is currently implemented in pratice, have little to no comprehension how much business is conducted in total violation of just about every free market principle.

Could you be more specific about what kinds of violations you're referring to? If you mean corporate welfare, it's pretty clear that Arnold, Bryan, and most of the regular commenters here are fully aware of the its distorting effects and are vocal in opposition to it.

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