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Having read a ton of Hayek I thought I'd share what the real Hayek is like, not the libertarian poster child. Actually existing Hayek would probably disappoint
by chrismealy 10y ago
Having read a ton of Hayek I thought I'd share what the real Hayek is like, not the libertarian poster child. Actually existing Hayek would probably disappoint most libertarians. He’s against corporate personhood, skeptical about patents and copyright, and for urban planning, unemployment benefits, public health, socialized medicine, and inheritance taxes. It seems like what gets him really riled up is setting prices for cucumbers or state-owned hat factories.
His contribution to social science is his focus on distributed information in economic production. Think about how decision-making is distributed in capitalist economies: bankers, investors, asset managers, producers, distributors, retailers, brokers, executives, corporate planning departments, middle managers, marketing departments, advertising, etc. Just imagine trying to replicate all that effort with a few office buildings' worth of planners in Moscow (Compare that to just Wall Street!). You can't run an economy without enough planners.
Hayek never tells jokes. I think if he had any sense of humor at all it might have occurred to him that designing the perfect society without planners (or much democracy) was certainly a kind of planning. He's like the whiteboard in "Office Space" that says "Planning to Plan" except it says "Planning to not Plan" and it's three books and 700 pages long ("Law, Legislation and Liberty").
- TheOtherHobbes 10y agoIndeed. I'm not really sure I see the difference between capitalist planning and communist planning. Don't corporations have growth targets and multi-year plans? Don't they (mostly) have a top-down management structure, where freedom of action and collective intelligence are constrained the further you get from the Central Committee (also known as the C-suite)? Don't corporations regularly do incredibly stupid, naive, uninformed, and self-destructive things that would be impossible if the kind of distributed intelligence claimed in this article was a reality? Are corporations any better at constraining the effects of toxic self-promoting and self-aggrandising individuals who talk a good game but are either incompetent or actively destructive? And so on. It doesn't really matter that Hayek is misunderstood and (mis)used for free market propaganda in the same way that Adam Smith is. What matters is that the existence of true freedom of thought and action is debatable in any culture which considers that kind of propaganda a necessity at all.
- rodgerd 10y ago> Don't corporations have growth targets and multi-year plans? Yes, and for the most part they are driven by the requirements of a relatively small community of fund managers and so-called activist investors.
- Danihan 10y agoCorporations compete with one another and fail more gracefully, that's the difference. When governments collapse, a lot of people tend to die.
- xixi77 10y agoAll that happens; but (1) corporate failure costs largely fall on the stakeholders of the corporation (yes bailouts etc. happen; they don't change the basic principle), and as a result (2) corporate money-losing projects in general fail faster than those managed by a government, with resources getting eventually reallocated to more productive purposes.
- TeMPOraL 10y agoThe primary difference, and the reason why capitalist economy beats centralized planning[0] is that it scales much better, by making it so that a lot of details solve "themselves". I.e. capitalism depends on most of the minutiae decisions to be made by market feedback loops - instead of e.g. explicitly setting it so that factory A produces X components, so that factories B and C could use them to make Y goods, capitalism lets the factories just run on a free market, and in time, an equilibrium of supply and demand will form. That said, planning on top-level is still needed and still done. The point of setting up feedback loops isn't to let them run unchecked, but to make it easier to control the whole system (including keeping it stabilized). Just like it would be stupid to build a thermostat without input, having the temperature be determined by the point at which the materials it's made of start to "sweat", you don't want to leave market totally unchecked, doing whatever the hell it wants. Governments still get to influence the market, the same way a temperature dial influences the thermostat. -- [0] - as performed by humans with pen and paper; I don't see a reason why a centralized planning scheme could not work better than capitalism if performed by optimization algorithms in a hyper-connected world.
- xixi77 10y agoAll true, but's more than just information: planners' incentives, including quicker failures, are also quite important.
- msgilligan 10y agoWhy do you say he's against 'corporate personhood'? Do you have a reference to something he said that would support that conclusion? The other things you list sound right to me. It's been a few decades since I actually read Hayek. For those who haven't read Hayek, I definitely recommend it.
- chrismealy 10y agoIt was in his address to the first meeting of the Mont Perelin Society IIRC. I'll look it up later.
- msgilligan 10y agoThat would be much appreciated.
- chrismealy 10y agoHere it is (from "Individualism and Economic Order") "the freedom of the individual by no means need be extended to give all these freedoms to organized groups of individuals, and even that it may on occasion be the duty of government to protect the individual against organized groups." https://goo.gl/JnftDO https://goo.gl/JnftDO You can see from the essay why a lot of right-wing American businessmen were disappointed in Hayek.
- msgilligan 10y agoThanks for that. Interesting, but not too surprising to anyone who has read much Hayek. Nuanced, of course.
- msgilligan 10y agoThanks for that. Interesting, but not too surprising to anyone who has read much Hayek. Nuanced, of course.
- cuchoi 10y agoWhat would you recommend to read from him?
- chrismealy 10y agoHis essay "The Use of Knowledge in Society" is short and worthwhile. I think I got more out of John Gray's "Hayek on Liberty" than reading Hayek in the original. Look for it on libgen.
- bingomad123 10y ago> He’s against corporate personhood, skeptical about patents and copyright, and for urban planning, unemployment benefits, public health, socialized medicine, and inheritance taxes. It seems like what gets him really riled up is setting prices for cucumbers or state-owned hat factories. That seems very consistent with typical free market libertarian stand. I haven't seen any libertarian loving socialized medicine or unemployment benefit. Are you confusing Libertarianism with something else perhaps ?
- malloryerik 10y agoI believe the commenter meant that Hayek was _in favor of_ urban planning, unemployment benefits, public health, socialized medicine, and inheritance taxes.
- bingomad123 10y agoA statement like that would most certainly should have required some clear references.