Hayek, In Practice
meme from fb.com/freedomunfiltered/
I know a thing or two about a thing or two. As I have mentioned many, many, many times before, I see Friedrich August von Hayek or F. A. Hayek as my intellectual hero. It is about time that I truly elucidate why, for my own edification.1
As a Hayekian, how I define it, I believe in one true bedrock principle: The Fatal Conceit. This is the view that the world cannot be molded around anyone according to their desires all the time. Even the leader of the free world can’t get someone to do something if that person doesn’t want to. Bedrock principles are how everyone builds their worldview. I built mine off that. Makes me very popular at parties.
The Fatal Conceit with the italics is also the last published book of Hayek while he was alive. Sort of the capstone to his career as he saw the USSR fall for the exact reason he predicted it would back in the early 1940s and died shortly thereafter. Amazing. The most famous quote from this book is “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” This is a heavy sentence, with a lot of information that is easy to misunderstand, as the article image that caused you (yes, you!) to click on this article in the first place might be leaving you feeling. Salma Hayek and F. A. Hayek were not originally Americans, but they are All-American now. At least to me.2
But let’s dive into what this statement means, in practice. The key being in practice.3 Central planning or the ability to plan the world around you completely according to your wishes is functionally impossible in the real world. You just can’t do it. Ask the Soviet Union with basically anything or Target with Pokémon cards. Life has a way of ruining our best laid plans. I wish I was a millionaire fiction writer. Not there yet. You must take the world as it is, not how you wish it to be. Assuming a can opener won’t open that tin of beans. That’s an old economics joke about macroeconomists assuming too much in their models, like a world with perfect information and competition and no taxes or regulation. The kind of thing that turned academic economics into calculus.
The curious task, then, is the job of people like Hayek to explain the limits of fiscal and monetary policy (or really, any government policy) to affect behavior in exactly the way the people proposing the change want. Mandate something or ban it, ya know? Laws that don’t fit in with a person’s moral code will be ignored or skirted as much as possible. Why do you think resistance porn was so popular for four years? You’re only as good as your villain, and Trump was a great foil for progressives. Banning most drugs hasn’t led to a drug-free America, has it? Banning the world’s oldest profession hasn’t led to no prostitution, has it?
As a very fiscally libertarian-minded man, I don’t see the point in banning much of anything outside of the basics, like rape and murder. But, in truth, you’re not banning them. You’re activating liberty. Liberty and freedom get hooked together way too much when they are incredibly different. Freedom, from a most basic level, is one’s ability to do things. I could jump into the middle of my street buck naked right now, if I wanted to. Nothing external is stopping me. I’m not going to, but that’s where liberty enters the chat. Liberty is one’s natural rights. When a natural right is violated outside of a theater of war or self-defense, there is a punishment system. Or, at least, there’s supposed to be.
Natural rights are those rights endowed by our Creator. Life, liberty, property, the pursuit of happiness. Remember, pursuit, not the guarantee. Property rights, to all you tankies out there, is why capitalism works so well in America. America has more billionaires than any other country for a unique reason. How our government and economics meet. Capitalism with a constitutional republic with heavy doses of federalism like America’s leads to a bountiful harvest of creative types and the tools to make their dreams come true. Everyone, for the most part, has access to these tools. Creativity is not intellect. The rejoinder that “If you’re so smart, why aren’t you rich?” is true in practice but will immediately piss off every academic and engineer you know. Risk melded with creativity creates return on investment that leads to the Bezos-size yacht that needs a secondary support yacht. You gotta risk something to make something beautiful for public consumption and keep it going long enough. See the movie Whiplash.
Hayek took the philosophy of David Hume, the Scottish Enlightenment philosopher, and applied it to economics and life. Hayek is not known as an economist truly but as an economic philosopher. He was a genius. A genius that, like Tesla, was not fully appreciated while he was alive. As much as I hate on Libertarians, they are responsible for why I know of Hayek. Those two economic rap battles that “went viral” like a decade ago. Some of my favorite songs, no joke. I suggest watching those two economic rap battles and then reading The Fatal Conceit if you want more information. Might I also recommend Economic Facts and Fallacies and Basic Economics by Thomas Sowell, the last great living economist.
“Banning the world’s oldest profession hasn’t led to less prostitution, has it?”
It likely has. It’d be hard to demonstrate though. I wouldn’t trust a cross-sectional analysis, because a lot of what happens in Vegas or Amsterdam isn’t the locals. And it’d be hard to get accurate reporting anywhere it’s illegal.Report
The collapse of Communism left two groups of people bereft of a raison d’ etre.
One, the Communists, and two, the free market libertarians.
Without the foil of someone arguing for central state planning, “Central State Planning Doesn’t Work!” seems a bit odd.
The evidence we have from the actual working nations since WWII, is that mixed economies containing some centrally planned features like banking regulation and social safety nets, along with robust private property rights and markets, seem to deliver the optimum level of both freedom and prosperity.
This empirical evidence is really the lethal kill shot to the High Concept political theories which postulate a preset formula for utopia.Report
I consider libertarianism to be a critique, the same as I do all the DEI stuff. You don’t want to build a structure based on it, but it’s prudent to consider what it would say about a structure before you build it.Report
Critique, I like that.
Yes, we need banking regulations. Do we need that banking regulation? Have you really thought through the incentives at play now, and how this will impact them? Have you gamed out the unintended consequences? Or are you just passing it for political gain?Report
2008 demonstrated what happens when financial types are allowed to run wild, and that house of cards was built on something as concrete as home mortgages. Now there are funds based on Bitcoin. God help us.Report
Sure, but what is the right way to do it that sets up the incentives you need, and gets the result you want?
Too often, IMHO, we get so caught up in a mood to find ways to hang the bastards, that we forget that the point isn’t to hang them, but to encourage them to behave.Report
Dude! That’s my approach to libertarianism as well. Enormously useful as a razor but as a core governing philosophy; doesn’t take long before you end up groaning and talking about how libertarians need to abolish the existing electorate and select a new one.Report
Remember the Segway? The device that was going to revolutionize transportation? After missing multiple sales goals, the company sold out to a British investor, who later died in a Segway accident.
Always hear out the crank, the one guy who says that something won’t work. He may not always be right, but sit down with him for 10 minutes and consider what he has to say. Yeah, he might tell you that no one wants a movie based on a Disney World pirate ride, but he’s also going to tell you that that little machine can’t be doing 200 blood tests.Report
The Segway may have missed, but the technology behind it, that’s all over the place.Report
I’ve been impressed by all the pay-as-you-go scooters I’ve seen. There’s clearly some market potential. And I’d guess a lot of drone technology is similar to the Segway. But this is why we need critiques – or cranks. The Segway people didn’t need another design team, they needed one guy to roll his eyes at “almost perfectly safe”.Report
The guy rode it off a cliff into a river. That’s really got nothing to do with the design of the vehicle, (which I admit was unappealing to the public for other reasons) and everything to do with the driver.Report
Not design in this case, but maybe speed, unless he would have walked off a cliff.
But the company owner aside, saying that a product is almost perfectly safe causes two problems: some people will take it as a challenge, and some people will let their guard down. The latter is even more of a problem because the movement of the Segway and the rider can be unfamiliar.Report
He was riding around the edge of a cliff, and he messed up. If he had mountain-biked off a cliff, I doubt we’d blame the design of the bicycle. If he’d been hiking and fallen off the cliff, we wouldn’t blame the design of his shoes.
From a marketing perspective, it turns out no one needed a mobile podium; but the fact that the guy died on one, in the fashion he did, is irrelevant to the product design.
If Elon Musk dies tomorrow because he speeds, loses control, and rams his Tesla into a tree: barring mechanical failure or some other factor, that’s on Musk, not the car.Report
I ride one of its offspring every day! (OneWheel).Report
Living in a college town now, I see one of those more days than not. I want one. OTOH, I have reached an age where balance isn’t what it used to be and I heal so much more slowly. The scarring/hyperpigmentation on the back of my hands from a bicycle fall eight weeks ago looks like it will take a year to finish healing properly.
Some days I absolutely hate being an oldster.Report
It’s a TON of fun, very addictive. I’ve been doing it for about 4 years, I have three boards (a Plus, which I started on, and 2 XRs). If you’ve surfed or snowboarded, the mechanics are very similar (kind of a cross between the two). I basically “surf” everywhere I go.
It’s opened up my not-pedestrian-friendly and no-real-public-transit city to me in a way I would never have guessed – it makes my “city” into my “town”. I use it like I would a bike and use my car a LOT less, since this suffices for any short jaunts or errands with no parking needed, plus it makes getting there fun.
But yeah, it’s still a board sport and not without risk – I’m geared up and I’ve had two serious spills over about 10,000 miles, plus a couple minor ones with no injury. At about 250 miles I fractured my humeral ball, and the shoulder then froze on me – took about 6 months to get full motion back. And not long ago I took a divot out of the side of my hand about the diameter and depth of three stacked nickels, took forever to heal because it was just a huge missing chunk on a place where my hand flexes, so it wouldn’t stay closed. It’s STILL tender there, where the scarring is. I definitely don’t heal as fast as I used to either.
But in terms of overall risk – if you’re geared up and riding within your and its capabilities, I’d call it slightly more dangerous than a bike – but only slightly. All my friends who bike a lot have had metal-pinned elbows, shattered collarbones, broken arms, etc. too – and that’s not counting the guy who got hit by and pinned under an SUV and nearly died.
I was getting ready to ride with two friends who also ride them, and as we were gearing up, we watched a bicyclist hit a raised section of sidewalk and go ass-over-teakettle over his handlebars.
We think bikes are “safe” because we grew up with them, been riding them since we were kids…but they ain’t all THAT safe. 😉Report
How fast does it go, relative to walking?Report
Faster than it needs to. A skilled, light rider with excellent balance and reaction time can cruise 25 MPH, which is really fast for something you’re standing on, and about as fast as an amateur bicyclist really pumping along on a 10-speed or whatever (a pro cyclist on a special bike can go closer to 45). I tend to cruise between 17-19 MPH because at that speed there’s still some motor headroom to assist me if things get dicey (you hit an unexpected dip/bump, wind suddenly shifts, etc.) Once you get above 19 MPH (which is what the company calls “max speed”, though there’s no way to actually enforce this on the rider on a single-wheeled self-balancing device because of physics; the rider must take active measures to rebalance and slow down, which the board warns you to do via pushing its nose up at you when it’s running out of torque safety margin) balance becomes 100% your responsibility; the board can no longer be depended on to assist you, and if you make any small error or conditions suddenly change on you, you’re gonna have a bad day.Report
A lot of people take libertarianism literally rather than seriously though. They seem to believe that it will be so awesome once implemented, all other competing ideologies will just disappear.Report
The US doesn’t have the vast majority of the world’s billionaires. It doesn’t even have a simple majority. It has a bit over 25%. It doesn’t even have the most billionaires per capita. Hong Kong has over 4 times more billionaires per capita. Switzerland and Singapore have more than twice as many per capita. Norway and Sweden have more billionaires per capita than the US (Trollface in Bernie Sanders’ general direction).Report
Interestingly, the US has more than 50% more millionaires per capita than Norway and Sweden, despite having fewer billionaires.
Scandinavian tax systems tend to make it easy to keep and grow wealth once you have it, but the absolutely brutal taxes on upper-middle-class incomes make it difficult to build wealth from labor income.Report
Banning the world’s oldest profession hasn’t led to less prostitution, has it?
But taxing it would, because of supply and demand? This seems incorrect.Report
Depends on how much you tax it. Is it a sin tax, or a luxury tax?Report
A quick re-read of Wickard followed by Raich has me wonder whether marital coitus would be taxable.Report
Yes, but only in Maryland and New Jersey.Report
“We need to stop subsidizing Utah!”Report
Oregon and New Jersey are the states that restrict who can pump.Report
It’s Salma, not Selma.Report
Going to agree with Pinky on banning prostitution leading to less prostitution. A lot of people aren’t going to bother looking for a sex work out of sheer laziness if nothing else in the same way that a lot of people don’t do drugs because of the hassle in getting them.Report
I never quit drugs. I simply began to move in circles where I had to go to the trouble of finding them myself and soon stopped bothering.Report