A Familiar Pattern
Friedrich A. von Hayek was an Austrian and British economist and philosopher known for his defense of classical liberalism, prior to the term "liberal" being corrupted to its current meaning. Hayek maintained that free-market capitalism and the information that changing prices brought to individuals allowed those individuals to chart their course of action and make intelligent decisions. This free flow of price information yielded what he referred to as a "spontaneous order". Very similar to Adam Smith's "'invisible hand" and Friedman's "free to choose" concepts, Hayek held that intelligent decisions based on the free flow of information created a force of order that was much more efficient than any totalitarian control. In 1974, Hayek shared a Nobel Prize in Economics.
Though Hayek has not lived to witness the developments of the past decade, it is of great interest how his observations from the mid-20th Century are piercingly cogent today.
I take the liberty to align some of his past observations with conditions and occurrences of the past few years.
To the Obama administration, and its dearth of people with real world and business experience, but very heavy on degrees and academic accolades, Hayek's quote regarding "Intellects whose desires have outstripped their understanding" rings familiar.
On Obamacare, this quote might apply:
"It is one of the saddest spectacles of our time to see a great democratic movement support a policy which must lead to the destruction of democracy and which meanwhile can benefit only a minority of the masses who support it. Yet it is this support from the Left of the tendencies toward monopoly which make them so irresistible and the prospects of the future so dark."-- The Road to Serfdom
And....
"Freedom to order our own conduct in the sphere where material circumstances force a choice upon us, and responsibility for the arrangement of our own life according to our own conscience, is the air in which alone moral sense grows and in which moral values are daily recreated in the free decision of the individual. ...the awareness of a duty not exacted by compulsion..."
Hayek's opinion on truth, its meaning and the game of suppressing that which is true seems very applicable to today's president and a news media that are conjoined in their "integrity challenged" existence. (i.e. the suppression of the Republican solution to the nation's healthcare problem.)
"Everything which might cause doubt about the wisdom of the government or create discontent will be kept from the people. The basis of unfavorable comparisons with elsewhere, the knowledge of possible alternatives to the course actually taken, information which might suggest failure on the part of the government to live up to its promises or to take advantage of opportunities to improve conditions -- all will be suppressed."
"...cynicism as regards truth which it engenders, the loss of the sense of even the meaning of truth, the disappearance of the spirit of independent inquiry... Perhaps the most alarming fact is that contempt for intellectual liberty is not a thing which arises only once the totalitarian system is established but one which can be found everywhere among intellectuals who have embraced a collectivist faith..."
"The word 'truth' itself ceases to have its old meaning. It describes no longer something to be found, with the individual conscience as the sole arbiter of whether in any particular instance the evidence (or the standing of those proclaiming it) warrants a belief; it becomes something to be laid down by authority... something which may have to be altered as the exigencies of this organized effort require it."-- The Road to Serfdom
Regarding governmental overregulation of individuals and businesses, these Hayek observations are center target, suggesting bureaucratic displacements and hamstringing individual initiatives.
"The state should confine itself to establishing rules applying to general types of situations and should allow the individuals freedom in everything which depends on the circumstances of time and place, because only the individuals concerned in each instance can fully know these circumstances and adapt their actions to them... (Individuals) must be able to predict actions of the state which may affect these plans.... the more the state "plans", the more difficult planning becomes for the individual."
On "safety nets", unemployment, food stamps, and undocumented perpetual disability, Hayek might have applied this observation....
"Let a uniform minimum be secured to everybody by all means; but let us admit at the same time that with this assurance of a basic minimum all claims for a privileged security for particular classes must lapse...."--The Road to Serfdom
Hayek would not have dreamed of an overactive Federal Reserve such as we have today, but he had the warnings from even tamer past monetary actions.
"...the past instability of the market economy is the consequence of the exclusion of the most important regulator of the market mechanism, money, from itself being regulated by the market process".-- Prices and Production (1931)
"Hayek argued that a monopolistic governmental agency like a central bank can neither possess the relevant information which should govern supply of money, nor have the ability to use it correctly."-- The Collected Works of F.A. Hayek
And finally, commentary on what could today be described as a "nanny state" creatd by the Federal Government and Obama's declaration that the Constitution is flawed because it does not instruct the government to do more for the individual and ensure social justice.
"I am certain, however, that nothing has done so much to destroy the juridical safeguards of individual freedom as the striving after this mirage of social justice.""Liberty not only means that the individual has both the opportunity and the burden of choice; it also means that he must bear the consequences of his actions. Liberty and responsibility are inseparable."-- The Road to Serfdom
As governments do "more" for the individual, they simultaneously reduce that individual's liberties. Reminiscent of Milton Freidman's quote regarding the damage done from "good intentions", Hayek said, "The greatest danger to liberty today comes from the men who are most needed and most powerful in modern government, namely, the efficient expert administrators exclusively concerned with what they regard as the public good."
Hayek never lived to connect his observations and commentary from the mid 20th Century to today's political and economic conditions. It is likely that his quotes and theories are restatements of wisdoms from decades and even centuries of human experience regarding governmental interaction with their citizenry. Mr. Hayek would certainly recognize the conditions of today and what has been a predictable metamorphosis away from a world with a free flow of information to one which has twisted the meaning of truth, suppressed information, forced unrealistic monetary policy, all at the hand of an overbearing yet inept class of self-anointed "intellects".
THERE'S A LOT TO CHEW ON IN THIS COLUMN: Why does logic so favor the Austrians?
THERE'S A LOT TO CHEW ON IN THIS COLUMN: Why does logic so favor the Austrians?
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