The publication of the definitive edition of Friedrich A Hayek’s The Constitution of Liberty coincides with the unexpected best-seller status of his earlier book The Road to Serfdom as a result of its promotion by the conservative talk-show host Glenn Beck. In an age when many on the right are worried that the Obama administration’s reform of health care is leading us toward socialism, Mr Hayek’s warnings from the mid-20th century about society’s slide toward despotism, and his principled defence of a minimal state, have found strong political resonance.
The new edition of The Constitution of Liberty, which was first published in 1960, differs from the original primarily insofar as the extensive endnotes in the original edition have now been placed at the bottom of the page and heavily annotated by the editor, Ronald Hamowy. The notes, often more extensive than the text itself, make clear the extraordinary breadth and depth of Mr Hayek’s erudition.
Unlike Mr Beck, Mr Hayek was a very serious thinker, and it would be too bad if the current association between the two led us to dismiss his thought. Mr Hayek always had problems getting the respect he deserved; even when he was awarded the Nobel in economic science in 1974, the awards committee paired him with the left-leaning economist Gunnar Myrdal. With the passage of time, however, many of the ideas expressed in The Constitution of Liberty have become broadly accepted by economists — e.g., that labour unions create a privileged labour sector at the expense of the non-unionised; that rent control reduces the supply of housing; or that agricultural subsidies lower the general welfare and create a bonanza for politicians. His view that ambitious government-sponsored programmes often produce unintended consequences served as an intellectual underpinning of the Reagan-Thatcher revolution of the 1980s and 1990s. Now that the aspirations of that revolution are being revived by Tea Partiers and other conservatives, it is useful to review some of the intellectual foundations on which it rested.
Mr Hayek’s scepticism about the effects of “big government” are rooted in an epistemological observation summarised in a 1945 article called “The uses of knowledge in society”. There he argued that most of the knowledge in a modern economy was local in nature, and hence unavailable to central planners. The brilliance of a market economy was that it allocated resources through the decentralised decisions of a myriad of buyers and sellers who interacted on the basis of their own particular knowledge. The market was a form of “spontaneous order”, which was far superior to planned societies based on the hubris of Cartesian rationalism.
The Constitution of Liberty builds on this view of the limits of human cognition to make the case that no government can know enough about a society to plan effectively. The government’s true role is more modest: to create laws that are general and equally applied; these laws constitute the matrix in which the spontaneous interactions of individuals can occur. (It may, however, surprise some of Mr Hayeks new followers to learn that The Constitution of Liberty argues that the government may need to provide health insurance and even make it compulsory.)
There have always been two major critiques of Mr Hayek’s arguments, neither of which are fully answered by a rereading of The Constitution of Liberty. The first comes from the left. Mr Hayek provides a very minimalist definition of freedom as freedom from coercion, and particularly coercion by a central government. But as the economist Amartya Sen has argued, the ability to actually take advantage of freedom depends on other things like resources, health and education that many people in a typical society do not possess.
A second critique of Mr Hayek has tended to come from the right. He is necessarily a moral relativist, since he does not believe that there is a higher perspective from which one person can dictate another’s ends. Morality for him is more like a useful coordinating device than a categorical imperative.
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In the end, what drove people on the left crazy about Mr Hayek back in the 1950s is the same thing that makes him appealing to a Glenn Beck today. Mr Hayek made the slipperiest of slippery slope arguments: the smallest move toward the expansion of government would lead to a cascade of bad consequences that would result in full-blown authoritarian socialism. If anything, however, the history of the past 50 years shows us that the slippery slope has all sorts of ledges and handholds by which we can brake our descent into serfdom and indeed climb back up. Voters in the United States and Europe took seriously the arguments about the dangers of big government and reversed course after the 1980s. Indeed, the pendulum swung so far backward that financial markets were left dangerously unregulated prior to the financial crisis. President Obama’s return to “big government” didn’t last more than a year before it was met with fierce resistance.
In the end, there is a deep contradiction in Mr Hayek’s thought. His great insight is that individual human beings muddle along, making progress by planning, experimenting, trying, failing and trying again. They never have as much clarity about the future as they think they do. But Mr Hayek somehow knows with great certainty that when governments, as opposed to individuals, engage in a similar process of innovation and discovery, they will fail. He insists that the dividing line between state and society must be drawn according to a strict abstract principle rather than through empirical adaptation. In so doing, he proves himself to be far more of a hubristic Cartesian than a true Hayekian.
THE CONSTITUTION OF LIBERTY
The Definitive Edition
(The Collected Works of F A Hayek, Volume XVII)
F A Hayek
Edited by Ronald Hamowy
University of Chicago Press
583 pages; $25
The New York Times