Saving Hayek from the People Who Think They’re Saving Hayek
I’ve been noticing a game lately played in the bookish corners of the left side of American politics. We’ll call it “We Know Hayek Better Than You.” It’s a game not without some attendant dangers. But it’s nothing if not fun.
Writing at Ezra Klein’s spot in the Washington Post, Karl Smith quotes Friedrich Hayek as follows:
That the ideal of justice of most socialists would be satisfied if merely private income from property were abolished and the differences between the earned incomes of different people remained what they are now, is true. What these people forget is that in transferring all property in the means of production to the state they put the state in a position whereby its action must in effect decide all other incomes.
He glosses:
That is, as Hayek goes on to explain, there is nothing fundamentally wrong with communal ownership of the means of production. The mistake is to think that the government could facilitate such ownership because then the government is effectively a monopolist and that would give the government almost unlimited power.
The idea that in principle it would be okay to completely redistribute all capital wealth is far to the left of anything proposed in modern America.
I hate to say it, but this is quite the dog’s breakfast of confusion, misinterpretation, and strained reading. One ought to be suspicious when your author writes an entire book entitled The Mirage of Social Justice. Perhaps he’s not really too enthused about social justice, you know.
Although it’s probably true that most socialists‘ idea of justice would be satisfied if income from private property were abolished, it does not follow that this was Hayek’s idea of justice. Hayek didn’t think it was “okay” to collectivize the entire means of production, whether by the state or by private action.
The ability to accumulate capital and to believe that one held it justly was, for Hayek, a most important incentive for the formation of responsible individuals. If the means of production were collectivized, individual character would suffer, and society would suffer with it. He wrote:
A free society will not function or maintain itself unless its members regard it as right that each individual occupy the position that results from his action and accept it as due to his own action. Though it can offer to the individual only chances and though the outcome of his efforts will depend on innumerable accidents, it forcefully directs his attention to those circumstances that he can control as if they were the only ones that mattered (The Constitution of Liberty, Chicago: University of Chicago Press, 1978, p. 78).
The sense of responsibility has been weakened in modern times as much by overextending the range of an individual’s responsibilities as by exculpating him from the actual consequences of his actions… To be effective, responsibility must be both definite and limited, adapted both emotionally and intellectually to human capacities. It is quite as destructive of any sense of responsibility to be taught that one is responsible for everything as to be taught that one cannot be held responsible for anything…
Responsibility, to be effective, must be individual responsibility. In a free society there cannot be any collective responsibility of the members of a group as such, unless they have, by concerted action, all made themselves individually and severally responsible… If the same concerns are made the responsibility of many without at the same time imposing a duty of joint and agreed action, the result is usually that nobody really accepts responsibility. As everybody’s property in effect is nobody’s property, so everybody’s responsibility is nobody’s responsibility (ibid., p 83).
So no, Hayek wouldn’t have thought it was a good idea to collectivize the means of production. There are some interesting theoretical questions hereabouts regarding corporations, their appropriate size, responsibilities, and attendant knowledge problems, but I suspect that my friends on the left aren’t actually pining for one megacorporation to rule them all. (Are they? I know it can be tough to keep up, but really, this is too much. Even I don’t support that.)
Hayek tells us we have private property and private capital because it does good things to the individual character. While there will be accidents, and while life is sometimes truly unfair, the best course of action is nonetheless for everyone to work as though their efforts actually mattered. And the best way to ensure that they will do so is to allow their efforts, whenever possible, to matter.
And when individual initiative has failed, what did Hayek want then? He wanted a modest system of social insurance — with emphasis on the modesty. After that, he wanted very stern incentives for people to get back up on their feet and leave that system.
One incentive that he considered at least reasonable was to forbid welfare recipients (and government workers!) from voting — an idea far to the right of anything now being considered in America. But not a bad idea in the abstract. He wrote:
It is also possible for reasonable people to argue that the ideals of democracy would be better served if, say, all the servants of government or all recipients of public charity were excluded from the vote (ibid., 105).
I look forward to my friends on the left continuing to deepen their knowledge of Hayek, and maybe entertaining this modest proposal. Were it not for my overwhelming concerns about how our current welfare system entraps its recipients, I might even support it myself.
The ability to accumulate capital and to believe that one held it justly was, for Hayek, a most important incentive for the formation of responsible individuals.
Fortunately for Hayek, he died before encountering 21st century Wall Street, where the goal of accumulating obscene amounts of wealth is the most important incentive for the formation of completely irresponsible individuals, and the notion of justice is at best ignored but more often ridiculed.Report
Bitterness is not a legitimate excuse for incoherence.Report
Nor is refusing to understand the same as being unable to.Report
So today’s robber barons are worse than those of the 1890s?
I’m not convinced that they are, but I’m open to persuasion. But either way, I don’t think that they are the ones under discussion here.Report
Do you not think their actions affect the naive faith in individual enterprise that you consider so important? Right now, that’s a harder sell than the Resurrection.Report
You’re probably correct. But if so, we have a choice: Do we get the rules of the free market right? Or do we scrap the whole thing in favor of… what, exactly?Report
I don’t know the answer. I’m not sure there is one. But I’m getting tired of people who swallowed Enron and strain at Obamacare.Report
Ok, you don’t like Wall Street (at least for the period since Hayek was alive presumably). What exactly is your point as it relates to the human side of capital formation? Frankly I don’t think you have one. At least you’ll have to think a little bit and try to connect some dots.Report
“I look forward to my friends on the left continuing to deepen their knowledge of Hayek, and maybe entertaining this modest proposal.”
I think this is coming, in a weird way. California is in real trouble. What we’ll see eventually, is that the Feds, controlled by a Republican Congress will loan the state the money it needs to avoid bankruptcy and in return the state will have to give up control over its revenue sources.Report
The latter disgusting quote here ought to be enough to convince us that this tendency toward the fetishization of certain figures, cults of personality, and argument from asserted authority (or, more accurately, private admiration) — which you rightly point out is seen on all sides, though in this case we’re discussing an attempt to complicate the public understanding of such a figure that one side in particular has elevated to near-sainted status, not the initial elevating itself — are poor ways to conduct deliberation about public policy. No argument or theory is more powerful or consistent with observed facts just because it came from the mouth of a particular advocate. We ought to consider what policies best serve our interests and values today, not fixate on the ideas of long-dead theorists merely because just those ideas — And not these others!!! — were the ones that truly came from the subject of our esteem.Report
I should add that if our interest is an academic accounting of the evolution of a writer’s thought, then of course it is right and proper to be as exacting as we can with just what the ideas were and weren’t.Report
Kuznicki is too timid. See:
http://snipurl.com/1fuhzd [underbelly-buce_blogspot_com]Report
You might have a half-clever point, if I’d ever written that I supported this idea. Or if Hayek had written that he supported it. Neither is true, of course.
Instead, I wrote that I’d “consider” the idea — if and when our welfare system were conducted very differently.
And if a frog had wings…Report
if I’d ever written that I supported this idea.
Pity you didn’t. It’s an interesting idea that deserves competent advocacy.Report
Michael Drew explains very well why this isn’t the best of ideas. Even if we had a welfare system without traps, and even if we did exclude government contractors from voting, we would still face the constant danger that any disenfranchised group would become a group of permanent second-class citizens.Report