The Road to Serfdom

The AIG thing from earlier this year reminded me of the very last panel:

http://mises.org/books/TRTS/18.jpg

Note well that Keynes -- with the power advantage of the socialist and nationalist British elite standing behind him -- crushed Hayek rhetorically in the journals using the opposite of a gentlemanly or non-offensive style. Keynes attacked Hayek with insults and rhetoric and little more -- and the socialist and nationalist British elite ate it up.

Many elite leftist academics still see Keynes' insults and attacks as a sufficient dismissal of the ideas of Hayek.

Being non-offensive and being a gentleman is perhaps the only strategy someone in a weak position can take. But is it not the strategy those who defeated Hayek used.

David writes:

"I also discuss his gentlemanly style -- going on the offensive without being offensive"

I read that book several times and cannot agree with that interpretation (the second part "In economics,..."). He was very clear regarding his explanations, concepts and historical facts founding his opinions. I am stunned with the cheap usage of concepts as socialism, individualism, totalitarianism, etc., is made in the US, mainly by the rightists.

"I also discuss his gentlemanly style--going on the offensive without being offensive-..."

He confronted his opponents, but not in the game they wanted, that is, he played an expanded game where the setting was part of the game, and he chose a more intellectualized one, while Keynes and his followers played a more politicized contest. Those choices only reveal their comparative advantages and weaknesses, don't they?

I can't imagine that anybody wants to disbelieve Hayek, but many of us are compelled to do so by experience. I say with sincerity that it is truly wonderful fiction; aspirational and inspirational thought. It is highly based in reality as the best fiction usually is. It is still fiction. It should guide us but not confine us.

I"m re-reading this for the Hayek colloquium in June. Most notable (of what I've read so far) for the present day is his observation that any attempt at partial planning will inevitably lead to complete planning, precisely because of how integrated the economy is.

Think about it. The federal government just announced it will own about 70% of GM. For all intents and purposes, that's nationalization. GM will be run by the federal government. Now, GM is dependent upon all sorts of resources. Suppose, to get GM back on its feet, the bureaucrat in charge decides GM needs to sell cheaper cars. What is a good way to get cheaper cars? Cheaper materials. If GM cannot get steel for the price desired, what will it do? Since it a government company, it can rather insist on lower prices for steel. Perhaps threaten. Or perhaps find a steel company and nationalize it so that it can make steel at the cheaper price (how can it make steel at a cheeper price? subsidies, of course), or even open up its own steel company to make steel at subsidized prices, which, being cheaper, will drop the price of steel and drive out competitors, creating a government monopoly on steel (which is essentially nationalization of the industry). The government would then be able to determine who gets steel and who does not. But now, to cut the price of steel, we need cheaper iron and coal . . . you see where this is going?

"It is still fiction."

Yet another Keynesian critique?

Yes, I got it. The next step is to nationalize the OPEC (cheaper petroleum). Ops, that was Bush.

"Nor is there any reason why the state should not assist the individuals 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."

This is my current view. I'm often told that I can't be a libertarian because of this view. Frankly, I'm for a guaranteed income as well, like Milton Friedman.

My question is this: Was Hayek a libertarian as he presented his views in The Road To Serfdom? I know that he seems to have changed his mind, and who can blame him when he saw government getting bigger and bigger. But, still, I would have thought that The Road To Serfdom and Capitalism And Freedom were written by libertarians. Were they?

Don has interesting points. It increases my appreciation of Rothbard's work, who basically says that nothing - nothing! - is the rightful province of government.

Hayek and Friedman are much more compelling for me, but in opening the door (see Don above) they lose control of the argument. Does Hayek really believe government health care is optimal? No - I'm sure he means limited support for the most indigent. But having countenanced it, how do we prevent it becoming the appallingly expensive yet decrepit British NHS? We can't.

My answer to Don: Hayek shows throughout the book that a political expansion of power, demanded by the electorate, and systematized by a bureaucracy, becomes a tyranny of fonctionnaires and a tool of authoritarians. Who would have thought the EPA, when founded in 1970, would be regulating the gas that comes out of our mouths?

Very insigtful information. I truly enjoyed reading it.