The early Austrian School was actually subject to a split. It stemmed from the first wave of the followers of its founder Carl Menger. Mengerians Friedrich von Wieser and Eugen von Philippovich were both a bit like Fabian socialists in their outlooks. Wieser, for instance, seems to have believed that marginal utility (the radically subjective basis of modern mainstream economics) provided a theoretical foundation for progressive taxation. But Wieser’s brother-in-law and fellow teacher, Eugen von Böhm-Bawerk, was of the classical liberal tradition. Böhm-Bawerk was a strident anti-Marxist who developed many of his own theories - which became foundational to the subsequent Austrian School - in the course of his criticisms of Marx. Böhm-Bawerk is still routinely credited by some with having demolished Marx… which he accomplished by systematically misreading, misunderstanding, and misrepresenting him.
The split was transmitted. Böhm-Bawerk was Mises’ teacher, and Mises became fanatical in his rejection of state intervention (except when he wasn’t… it’s complicated). Wieser was Hayek’s teacher, and Hayek is still thought by some hardliners to have been almost a socialist owing to his ability to countenance some welfare measures. Hayek also believed a state was necessary… which makes him a cuck by anarcho-capitalist standards. In Ancaptopia, law and order would be seen to by private security firms. The principle task of ‘law and order’ (as capitalism sees it) being the protection of private property, we’d actually be talking about capitalists with private armies. Which… would be great, obviously.
Initially, Hayek leaned in Wieser’s direction, apparently having one of those quintessential left-wing ‘phases’ in youth that inoculates a certain kind of person for life. (You could say the same about the Austrian School as a whole.)
Hayek then became Mises’ employee and protege, and drifted in the direction of Mises ideas, though he claimed he was never completely won over… which can be seen in his rejection of outright praxeology in favour of Popperian empiricism.
Despite being the prime mover behind early neoliberalism, an ideology devoted to attacking social provision, Hayek never completely abjured every possible form of welfare state. In the third volume of Law, Legislation, and Liberty (published in 1979, a long time after his youthful socialist phase) he makes noises about how Universal Basic Income may even be “a necessary part of the Great Society”. (Indeed, Milton Friedman the monetarist also refused to completely rule out some form of provision for the poor. His ‘Negative Income Tax’ proposals are testament to that.)
But then neoliberalism does not, and will not, eliminate all social provision. I think the neoliberals – the saner ones anyway – understand that you can’t actually have functioning modern capitalism unless there is a state that takes on some of the burden of making sure capital has a surviving workforce. The insistence upon eliminating welfare is a tactical ideological aim more than an actual plan. And many thoroughgoing neoliberals will defend social provision of some kind, as indeed did Hayek and Friedman, etc.
As has been noted by many left-commentators, neoliberalism is not actually anti-state except with reference to the state’s capacity to exercise any semblance of public control over capital flow. It relies upon the state was an instrument of class rule and repression, and as a way of funnelling public money to private interests.
There is something to be said for some aspects of some libertarian critiques of the welfare state. Some stress the unsavoury paternalism, coming from both the Right and Left; the icky doctrines of ‘desert’ and ‘need’, qualities people must meet before they receive assistance, with the tests and assessments to come from higher authorities. Of course, by ‘the Left’ what we’re talking about here is the kind of bourgeois social-democratic reformism that helps to mediate and dampen class struggle by incorporating the semi-delivery of demands from below into the praxis of the capitalist state. And right-libertarian critiques which position themselves on the side of the ‘little guy’ positively drip with bad faith.
As mentioned, both Hayek (the Austrian) and Friedman (the monetarist) could be found advocating for some kind of guaranteed income, or corrective to income deficit. Some libertarians have been happy with the idea, but have tended to stress the need to replace the currently existing systems.
Meanwhile, there are radical libertarians who see some redistribution of wealth as a possible corrective to historical injustices, such as those upon which they acknowledge capitalist society was built. It’s possible to frame libertarian ideas about natural rights in such a way that, all this time after Locke used them to justify imperialism and slavery, they demand redress for those same crimes.
It’s hard to argue against the idea that the currently-existing welfare systems in Western capitalism are deeply flawed, unjust, inadequate, paternalistic, controlling. Indeed, this is easier for a Marxist to agree with than a mainstream reformist left-winger, social-democrat, or liberal.
Even so, what a Marxist really wants is to abolish welfare completely not overhaul it, because a Marxist (at least a truly Scottish one, by my reckoning) wants the capitalist system – the system which creates the rich and, as a necessary dialectical twin, the poor – to be abolished completely. Socialism, for Marx, isn’t statist welfarism. It’s the abolition of the need for such things. The various libertarian critiques and proposals for redesigning welfare (among those libertarians who advocate such) tend to be based on the assumption that ‘the poor are always with us’, and the reasons for this assumption – once you get to them – range from the purblind to the nasty.
Of course, the various variants of top-down Marxism and socialism against which the libertarians and Austrians, etc, have waged their ideological wars have tended to be proposals (authoritarian or parliamentary) for extending welfare as it currently exists in capitalist society: as a hierarchical and bureaucratic division of a hierarchical and bureaucratic state, a capitalist state, which is inherently a tool for enforcing the rule of the capitalist class. The strange irony is that, while the truly Scottish Marxist can agree with the libertarian critique of welfare far more than can the reformist Labourite or the Stalinist statist, she can also go far further in her critique than the supposed champions of personal liberty. While they stand clucking at the statism of ‘socialists’, the true Scottish Marxist can call for the abolition of welfare, because she calls for the abolition of the capitalist state, because she calls for the abolition of capitalism itself. The libertarians find themselves – whether they realise it or not – in the peculiar position of defending the existence of the state as it is (because their idealised theoretical overhauls never happen, and probably can’t ever happen) from the Marxists… at least the ones in kilts.
Hayek’s conception of freedom, like other libertarians, is essentially negative. As libertarian writer Matt Zwolinski puts it, it is “a kind of freedom from, not a freedom to. More precisely, political freedom means freedom from coercion by the arbitrary will of others.” Thus, the disdain for the state stems from the state’s power to coerce, on the part of the “regulator (or the special interests served by the regulator)”.
This division down the middle of the concept of freedom, the distinction between negative and positive liberty, was famously pointed out by the great liberal philosopher Isaiah Berlin in his essay ‘Two Concepts of Liberty’. Libertarianism’s idea of liberty is the negative or pessimistic reiteration of an already negative concept elaborated by an already pessimistic philosophy.
Superficial similarities aside, Hayek’s critique of powerful institutions is distinguished from the Marxist and Anarchist traditions of anti-statism by the fact that Hayek – and in this he is typical of his corner – does not have a class analysis…. or at least, doesn’t put it into his idea of freedom. Hayek’s idea of freedom floats freely of class.
The “freedom of the employed”, as he puts it in The Constitution of Liberty, “depends upon the existence of a great number and variety of employers”. He baldly asserts, though he doesn’t use these terms, that the freedom of the working class is dependent upon the existence of a capitalist ruling class, a class of competing private owners of capitalist industries. That’s the import of his view, but he arrives at this import via a class-blind analysis, which sees things in terms of the abstract categories of ‘employers’ and ‘employees’. The negative conception of freedom is key because it permits him to see the existence of competing employers as offering alternatives to the employees. The freedom of the employee depends only upon his ability to leave his employers, and thus cheat his employer of any ability to coerce him.
What is missing here should be obvious: the positive freedom to not starve. This is the essence of the Marxist observation that bourgeois society, with the feudal bonds of obligation dissolved, exercises vast invisible, silent coercion over the working class. “Dull compulsion,” is Marx’s phrase. Separated from the means of subsistence, and from the means of production, the (largely) propertyless working class must sell their labour power in order to feed themselves and their families. That one can, technically, tell one’s employer to fuck off if they try to impose their will on you, is scant consolation if the only alternative is to seek a nicer employer. And isn’t the working day a coercion, an imposition, by its very nature, even if the employer doesn’t try to force you to agree with him? Even in the best circumstances, the working day forces you into a position where your labour, your life activity - the essence of your humanity or ‘species-being’ according to Marx - is turned into an abstract ability which is at the disposal and command of your employer. It is taken out of your control. You are thus, in some senses, dead or inhuman during this period. Everyone who has worked for a living knows the dreary misery of having to get up and spend another day of their life doing something they don’t fundamentally want to do, and having no choice about it. It’s simply that this is so fundamental to the world we live in, and it is so normalised by that world, that we take it for granted. If you’re lucky, you end up in a career which you find rewarding, or at least tolerable, but this is a lucky chance and a byproduct. It is something you produce for yourself. And most of humanity are not free to choose to not have to do this. Where is the dividing line between the freedom left to one aside from one’s obligations to one’s employer and the freedom that someone might try to take from one by force? How does one meaningfully distinguish negative and positive freedom - or rather their absence - for a wage worker?
Moreover, this conception of negative freedom, and of the employee deriving freedom from the existence of a variegated class of employers, is key to Hayek’s opposition to socialism. The equation is simple. In a socialist society, naturally the sole employer will be the state (since the state will own everything), ergo the multiplicity of bosses which is the guarantor of the negative freedom of the employee is negated, ergo the employee is vulnerable to the imposition of the will of the single boss.
Again, note how Hayek’s conception of socialism chimes almost perfectly with Stalinism. And we cannot entirely blame Hayek and others who have shared this assumption of what socialism ‘is’. When Hayek was developing his ideas, the Soviet Union cast its baleful shadow over the entirety of socialism and communism, with most communists in the world either championing its perversities as victorious realisations of the ideas of Marx, or at least tolerating it as in some sense ‘historically progressive’. Even the Trotskyists, themselves a tiny minority in the communist left, saw it as some kind of ‘degenerated workers’ state’, inherently different to, and better than, capitalism. Those currents of Marxist thought which abjured Stalinism entirely were minorities within minorities. And, of course, the idea that Stalinism was a form of socialism was buttressed, ironically enough, from the other end, with democratic reformist socialism being firmly based on capturing administration of the state and bringing industries under state control. The persistent failure to imagine any socialism that isn't based on a powerful state is evidence of conceptual blinkers on the part of all who - unlike Marx - suffer from it, from Stalinists to libertarians.
But this aside, the second thing to note here is that Hayek hasn’t just nixed socialism, nor has he just made the freedom of the working class dependent upon the existence of the capitalist class, but he also claims that the capitalist class is only permitted to exist by the working class! Because “the employed… form a majority, it is their conception of life that can determine whether or not such a group [the variegated class of employers] can exist and fulfil its functions”. But being only little people, they can’t know the troubles and responsibilities of the class they permit to exist. They might be terribly nice people, but they can’t be allowed to run society. In fact, Hayek (in his usual dreary prose, which somehow manages to be both vague and pedantic all at once) basically says that the kinds of “standards” the employed will develop will be collectivist. We know that’s what he means because he says that these standards “cannot be applied to the whole of society if it is to remain free”.
Hayek goes on to kindasorta almost notice class struggle, and to then proceed to vigorously take a side in the class struggle he just managed to not notice, when he says that it’s “inevitable that the interests and values of the employed should differ somewhat from those of the men who accept the risk and responsibility of organizing the use of resources.” From banal bourgeois rhapsodizing of what are now called “wealth creators” he then plunges directly into banal bourgeois condescension towards the “man who works under direction for a fixed salary or wage”, who “may be… conscientious, industrious, and intelligent” as his boss, but who can “never be as inventive or as experimental simply because the range of choice in his work is more limited”. Cart put firmly before horse there.
Hayek skips gracefully over the compulsion inherent in wage labour with the dainty euphemism “direction”. He then casually edits history out of his reasoning, consigning any questions about how or why anyone ends up in one position or the other, and whether or not there is any inherent reason why things couldn’t and shouldn’t transpire otherwise, to a zone of tactful and aristocratic silence. Once again, notice the removal of the temporal from the thinking. He may not embrace praxeology, but he remains a weak-force praxeologist, content with an ahistorical snapshot, reasoning universally from what happens to be there.
Notice how his basic assumptions are blithely taken for granted: that the “employed” cannot be expected to be as “inventive and experimental” as his or her employer; that the supposed inventiveness and experimentality of the employer even exists; that such qualities are integral to the running of the means of social reproduction… the basis of social reproduction in competitive accumulation being yet another thing that is simply assumed. And he isn’t even coherent. How can he disambiguate the intelligence he allows the “employed” to have from the qualities of invention and daring he magically imbues on the capitalist class (who singularly fail to impress us with such characteristics when we meet them in reality). And there’s also the question of the actual organisation of decision-making within firms. How does Hayek disambiguate those salaried workers who take major decisions every day in firms they don’t own from the salt-of-the-earth worker who, fine chap though he is, can’t possibly be expected to run things. There is strange way in which, once again, Hayek almost notices the complexity of class relations in the capitalist production process, with the class position of the executive aligned with that of the owner despite no formal ownership holdings. This leads us into a finer consideration of how the decisions Hayek so fetishizes get made. They are not, generally speaking, made by employers of special qualities but rather by (so to speak) systems of management, which sometimes operate quite impersonally, and even quasi-autonomously, according to the needs of competitive accumulation. And here, the final irony. Because what could possibly be more of an imposition on the negative freedom of the individual than the impersonal operation of market forces reified as competing blocs of capital?
But Hayek doesn’t see it. He describes how, as he sees it, being “employed” will retard “a man’s initiative and inventiveness”. He will have “little knowledge of the responsibilities” of those who run things. Let’s assume that this is true: for Hayek, this retardation of the capacities of the worker (whom he has already admitted may be as intelligent as his boss) seems to be a kind of freedom. The worker must only “fit himself into a given framework during a certain number of hours”; he needn’t shoulder the same burdens as “the independent”, who must constantly be thinking and planning. It is more or less a restatement – in delicately tedious tones - of the arguments of classical authors claiming that the slaves and plebs have it easier than their patrician, equestrian masters. It could be coming from the mouth of Coriolanus, but for its lack of poetic grandeur and guileless savagery. Hayek makes it clear that the “greatest difference” between the employed and the independent will be how they see issues of “remunerations”. The worth of the employed must be assessed, their “merit” socially-agreed upon. (He is generous enough to detach this from “results”, at least in some cases, which is where we see the possibility of some kind of welfare lurking.) So, presumably, as long as most are content to believe in notions of “a fair day’s work for a fair day’s pay”, and the employed are content to have the extent to which they have “faithfully and intelligently obeyed the rules and instructions” assessed, things will proceed smoothly. The apparent goal is “contentment within the organisation”. The employed must, in a telling phrase issued without self-consciousness, fit “themselves into the whole machinery”. The remuneration “must be generally regarded as just”. Acceptance of the rules is the key thing… except that this general agreement is not only unnecessary but absolutely to be avoided, even in principle, when talking about “men who act on their own initiative”. The majority being “employed”, Hayek assumes that their ideas will dominate society - not noticing that the people who own and run things have a class monopoly on the production and enforcement of ideology. The working class, he is effectively saying, will dictate “legislation and policy”! This power, along with the freedom from responsibility and leadership, and the many benefits enjoyed by the employed, is why the position of worker is supposedly so attractive to so many.
An irony is that the condition of the employee is supposedly so attractive, according to Hayek, because of certainties like “an assured fixed income” that he, among others, has helped to take away from so many workers under the neoliberalism he helped inspire.
Of course, Hayek wrote much of his output during the very ascendancy of Keynesian policy that he rejected, and during the long post-war boom, itself partly a result of state investment, and during the heyday of social democracy, itself partly a result of the upper hand going to the workers in the class struggle. He is able to be complacent about the lot of workers precisely because workers (at least in the developed capitalist world) were doing better than ever as he was writing. The irony is, as I say, that this is largely owing to factors he would’ve disavowed. This irony is hardly unique to Hayek, of course. Most mainstream commentators across the political spectrum – from the conservatives, through the liberals, over to the reformist left and even the Stalinists in their own way – based many of their theoretical and policy assumptions on the peculiarly happy state of capitalism after the Second World War.
But going back to his argument… isn’t there a contradiction there between the supposed power of the employed majority and the idea that they don’t, and can’t handle leadership and responsibility? This contradiction is constitutive to Hayek’s thought. It feeds into his anti-collectivism. The power exercised by the majority of the employed is impersonal and collective. And yet he remains incoherent, because his great issue with socialism (as he defines it) is that, the state being the only employer, it thus has the ability to impinge upon the negative freedom of the individual (the freedom from) that is, for him, the basis of liberty. And yet is not the majority of the employed a great mass of individuals, the coercion of whom is the horror of the powerful state? Is the socialist state an embodiment of the collectivism of the majority, of their wrongheaded ideas about remuneration, or is it an imposition upon them? The escape hatch is, of course, that the real subject of Hayekian liberty is not the individual per se, but the individual of supposed greater capacities, the entrepreneur, the “independent”, the boss who makes the tough decisions, etc. The contradiction between, on the one hand, the idea that the masses impose restrictions on society, and on the other that they themselves are imposed upon by the state, is neatly resolved by simply taking a side. And the side taken is determined by the factor Hayek entirely edits out: class.
The strange thing is how close he gets. He is nearly dialectical. He imagines the greater capacity of the “independent” man emerging from his position within “the machinery”, and the lesser capacity of the “employed” man similarly. This is almost a class analysis of consciousness. And he nearly reaches a dialectical understanding of the way the ‘socialist’ state (be it Stalinist or reformist) emerges from the class conflict that is endemic to capitalism, but which is left unresolved without full socialist transformation, and which therefore falls into a kind of perverted expression of the masses desire for change, mutated into a variant form of capitalist social administration.
But ultimately, Hayek repeats the shallow critique of majoritarianism implied by Austrian doctrine, and which will end up manifested in the self-pitying paranoid conservatism embraced by paleolibertarianism.
This passage provides a perfect (if dull) illustration of the viewpoint that now dominates the Right, that the powerful are discriminated against:
Where this class [the employed] predominates, the conception of social justice becomes largely adjusted to its needs. This applies not only to legislation but also to institutions and business practices. Taxation comes to be based on a conception of income which is essentially that of the employee. The paternalistic provisions of the social services are tailored almost exclusively to his requirements. Even the standards of consumer credit are primarily adjusted to them. And all that concerns the possession and employment of capital as part of making one’s living come to be treated as the special interest of a small privileged group which can justly be discriminated against.
Note the vagueness of the term “predominates”. Predominates how? Politically? Through sheer weight of numbers? Through intimidating stares? What’s the mechanism? In any case, we know it doesn’t work like that. The idea that the sheer numerical weight of employees leads to employee priorities determining tax and credit policy is laughable. Does the sheer numerical weight of pupils in a high school determine what the teachers are allowed to teach? One would have to abstract away all power relations, all social context, to believe that… which is exactly what Hayek does. The derided paternalism of welfare is nonsensical when seen as the expression of the will of the majority of employees. Hayek forecloses upon the idea that capital is employed for purposes other than “making a living”. Where is profit in this schema? And this allows him to pass over the idea that capital might thus be employed in furtherance of elite interests. But then he doesn’t see what he elsewhere calls ‘special claims’ as coming from the propertied. They come from everyone else.
As Richard Seymour puts it in Against Austerity (in a section I’ve quoted before), for Hayek
no general interest existed – or at least, it was impossible to calculate such a general interest. All that welfare institutions accomplished was the distortion of the universality of the ‘rule of law’ by making it serve particular interests. By entangling the sovereign state in a mesh of claims and counter-claims, demands for intervention, demands for help, mass democracy had weakened the state.
It’s a polite reiteration of the delusion of the great mass of ignorant employees, comfortable in their lack of responsibility and yet still envious of those who make all the tough decisions for them. And from there we get to the notion that “a small privileged group” (the word “privileged” here is used sarcastically by Hayek) is discriminated against. He genuinely thinks the rich are picked on.
Despite the neutral dryness of the expression, this is fairly standard bourgeois apologetics. The interesting thing is that you can rework this passage very easily to be about welfare queens, or women in general. Change its subject, and its objective functioning remains the same. (And of course, to change the subject is simply to concentrate on particular parts of a system – race, sex, etc - that Hayek does not see as connected, and implicitly disconnects from the system with his vague way of putting things.) Classical liberalism, oriented as it is to the perspective of power based on private property, becomes a template the ressentimental Right can use for their volk-anti-feminism, etc. Why does this work? Because the fundamental tessellation between liberal thought and reactionary thought – the tessellation that Hayek, perhaps above all others, can delineate for us – is the defence of private property. Reactionary thought is the defence of privilege, hence the imperative to deny the privilege in privilege. Liberalism denies that private property, the essential privilege in capitalist society, is privilege at all, by claiming it to be the wellspring of liberty. Snap.
Proof of the pudding? Within a few paragraphs, Hayek has moved on to explaining why inherited money privilege is “probably the best means of selection known to us” when it comes to “public servants” because new money creates wastrels but those born to it have steady character and a good education. Their supposedly enormous influence on the character of the rest of society will thus be as improving as possible. Even so, the bureaucracy privileges supposedly get extended to the rest of the population, because Hayek – without any semblance of a dialectical class analysis here – thinks of civil servants as just another (powerful) type of “employed” person, without interests or attitudes separate from the working class!
To quote Seymour’s summary again:
Hayek, following [Carl] Schmitt, …argued that social democracy compromised the state’s autonomy, by enmeshing it in a web of interests and client relationships. Later neoliberals further theorised this conception, arguing that public sector bureaucrats, far from being driven by a ‘public service’ ethic, are just self-maximising ‘entrepreneurs’, like any actor in the market….
Better redesign society to take account of this! Marketize everything formally! Hence Mont Pèlerin.
Absent that, the best amelioration we can hope for comes from having public servants who have inherited their privileges. In Law, Legislation and Liberty, Hayek comes to ponder an ideal government composed of a small number of wise gerontocrats, occasionally elected (every fifteen years or so) by an electorate who are encouraged to think beyond their own selfish ‘special interests’ by having their vote restricted to a once-in-a-lifetime opportunity. It might seem, on the surface, that this scheme clashes with Hayek’s ideas of inherited wisdom - but such a system would inherently generate lineages of power, even more so than the ones we already have.
Amazing how the concern for liberty which leads to a disdain to the state ultimately ends up with a view of the state as best run by those who have, effectively, inherited their positions… because they’re just the best people, probably. But always remember the from/to distinction. People have the right to be free of coercion, but Hayek is unconcerned with their freedom to flourish in a society which does not inherently hold them down by automatically holding others up. Indeed, he simply stares past this and doesn’t see it, except in glimpses which he interprets as he pleases as if they were a series of inkblots.
Here is Hayek’s fundamental rootedness in bourgeois ethical philosophy, which is based on prohibition, discipline, constraint – best codified by Kant. Here is his most fundamental difference from Marx, who rescues (by universalising) an older concept of ethics from Aristotle: that goodness is about the good life. Marx thus implies a radical ethical philosophy that is both intensely individualistic and not based on discipline and punishment, and also intensely social… because Marxism takes seriously the liberal drive to universalise ethics (which liberalism itself betrays), but the ethics it universalises is the ethics of personal fulfilment. In fine: the ethically good life is the materially good life, but for all. This sort of vista is beyond the ken of a fundamentally banal bourgeois thinker like Hayek. Here he is backed by the ostensible classical liberal disdain for utopias. His project, as with all reactionary thought – and most liberal thought – is best expressed as a drive to justify why that cannot happen. The drive is born of the assumption, and the assumption of the self-interest. As ever, people have an amazing ability to sincerely and passionately believe that which is in their own best interest. This takes many forms, and one of the major ones in Hayek is, to be blunt, snobbery.
Hayek’s pure (if furtive) snobbery is illustrated a little further down when, in the course of illustrating the need for thought leaders in everything from public policy to the arts, he asserts that “[w]hat little leadership can be expected from the majority is shown by their inadequate support of the arts wherever they have replaced the wealthy patron”. Unable to distinguish the actual lives of actual working class people from the “majority” of “employed” he sees dominating society via the state, he can’t imagine any reason why ordinary working people might fail to act like the great patrons of old, beyond their philistine ignorance… which, if we momentarily accept its existence, seems to come from nowhere (rather than from, say, a society that inherently stunts their capacities). If he ever remembered having almost admitted that the “employed” are prevented from developing sophisticated knowledge and understanding by the need to obey and work and be obedient parts of the machinery, he’s already forgotten.
Parenthetically, let’s remember the words of Hayek’s great intellectual opponent, the liberal hero, John Maynard Keynes, on the subject of Marxism:
How can I adopt a creed which, preferring the mud to the fish, exalts the boorish proletariat above the bourgeoisie and the intelligentsia, who with all their faults, are the quality of life and surely carry the seeds of all human achievement?
They might’ve argued, but it was over how best to serve their common class interest.
Hayek admits (accidentally) that the freedoms of the employed are curtailed. “He cannot go beyond his allotted task even if he is capable of doing more,” he says of the worker. Is that not an imposition on freedom? But remember the from/to distinction. If the employee is not able to do certain things, then he is at least (supposedly) not compelled to do certain other things. (Let’s leave aside, for the sake of argument, the fact that clearly, out here in the real world, that’s bollocks – especially if remember that the “employed” don’t just come as abstract white guys in Western democracies.) Let’s grant that this distinction represents something meaningful to most people. It’s not unreasonable in itself, especially to an individual. I may lament the fact that I’m not allowed to have sex with you (because you don’t want me to) without feeling it as much of an imposition as someone raping me. (Though, of course, a lot of today’s libertarians feel that being a ‘nice guy’ in the ‘friend zone’ is actually a far worse fate than being the woman he then penetrates while she’s unconscious.) But, once generalised to an entire lifetime of economically-coerced labour for the majority of the people in a given society, a different picture emerges.
Hayek can be quite explicit, even lachrymose in his cold way, about his regret that the working classes have, in his era, attained a role on the stage of history as subjects rather than the passive receiving objects they actually are:
[i]t is one of the great tragedies of our time that the masses have come to believe that they have reached their high standard of material welfare as a result of having pulled down the wealthy, and to fear that the preservation or emergence of such a class would deprive them of something they would otherwise get and which they regard as their due. We have seen why in a progressive society there is little reason to believe that the wealth which the few enjoy would exist at all if they were not allowed to enjoy it. It is neither taken from the rest nor withheld from them.
He then goes on to excuse the absence of meritocracy in this, the best of all possible economies, and also - with aristocratic hauteur - the distressing bad taste of some of the wealthy, by saying, basically, that it simply has to be that way. Shrug.
Of course, another of the manifold ironies here is that Hayek’s own project has led to a situation where the existence of an ever-less hampered class of wealthy has concentrated wealth every more disproportionately in their hands. You wonder why the ordinary worker should be worried about the inability of their society to produce wealth if they themselves never see much of what is produced? Hayek’s answer (to paraphrase) is: “stop being envious, if they didn’t have too much, you wouldn’t have anything at all”. Again, the supposed great thinker is essentially regurgitating platitudes (in words that make one feel that one is being forced to drink grey paint) that can be – and are – tossed off by every hack leader writer in every conservative tabloid newspaper. But then we shouldn’t look to the Austrian School for anything more profound than this. Mises’ great treatise on why people oppose capitalism, in his book The Anti-Capitalist Mentality, amounts to the deeply sophisticated theory that it’s all just envy. If the great intellectual defenders of capitalism can do no better than that, why should we expect any more from trivial punditocracy of today’s corporate media? Which is chicken and which is egg? There comes a point where a) it doesn’t matter, and b) one doesn’t care.
Now, there is an extent to which it’s true that the rising material standard of life for Western workers in the recent centuries has been down, not to (as Hayek parodies it) pulling down the wealthy in any simple way, but down to the capitalist expansion of the productive forces. Marx knew, earlier and more emphatically than most, the amazing capabilities of capitalism. But capitalism can do such things precisely because it organises labour as competitive expansion of value. And it manages this via the exploitation of labour for surplus value. Hayek’s whole edifice tumbles if we accept Marx’s account of where profits come from… which is why Hayek bases himself on Böhm-Bawerk, the man who first proved value come from our perceptions, and then, in accordance with this, proved that Marx was wrong by perceiving him to be so. Checkmate.
Yet the surplus irony continues to accumulate. When Hayek pontificates about how “organised efforts have to be set in motion by a few individuals who possess the necessary resources themselves or who win the support of those who do; without such men, what are now the views of only a small majority may never have a chance of being adopted by the majority”, he is straying close to the kind of vulgar-Leninist vanguardism that was the ideological bedrock of Stalinist parties who aligned themselves with the USSR (not actually such an irony, given their corruption by reformism). Meanwhile, his statement that “[p]ublic opinion… cannot decide in what direction efforts should be made to arouse public opinion” glibly discounts the way Marx came to see class consciousness emerging dialectically from struggle. Hayek, the great champion of liberty against statism, actually has more in common with Stalin than Marx did. The Hayekian project to restore classical liberalism, which came via Mont Pèlerin, via the Outriders, via the Adam Smith Institute and the Thatcher coup, and resulted in neoliberalism, following similar courses elsewhere, especially in America, looks more like vanguardism than vanguardism ever really did. It’s just vanguardism from above.
But then, as we’ll see, Hayek was by no means as averse to the authoritarian use of state power – when the time and cause was right – as is usually claimed. Moreover, the neoliberal system he helped create bears the traces of his hypocrisy.
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