Okay, so Phil is now editing the full text of the Austrians essay for Neoreaction a Basilisk, but you can read the whole thing ‘as I left it’ (so to speak) at my Patreon in return for a monthly donation of just one measly dollar, thus proving that labour isn’t the source of value.
Meanwhile, I will continue to post sections here which were cut from the essay for length reasons. My Patreon sponsors will get those at least a week before they’re made public. For instance, next week’s public post will go up at my Patreon - for patrons only - later today (probably). My patrons will also hopefully get early access to podcasts before they go up. Daniel and I just recorded a WWA Footnote cum Shabcast (Wrong with Shabthority?) on our mutual researches into the Right. That’ll be along soonest. We also have three other podcasts in the works, including a WWA Footnote featuring all four of us talking about the Trumpaversary.
By the way, I want to publicly thank those patrons of mine who stuck by me during a long period when I was finishing the Austrians piece by racing to turn huge piles of notes into (hopefully) readable prose. During this stretch, they were basically getting fuck all for their money. I don’t blame any of the people who jumped ship - totally fair enough - but I’m extra double fond of those who felt able to stick around.
Anyway, back to me - i.e. a nobody with a second rate degree from a third rate university - explaining why one of the foremost intellectuals of the twentieth century was shit.
Neoliberalism is not a simple reiteration of the principles of classical liberalism – a defence of the ‘market society’. It has its origins in an authoritarian reconfiguration of liberalism, beginning in the early twentieth century, specifically designed to meet the challenge of mass democracy and the welfarist demands that came with it. The great pioneer of this shift was Friedrich Hayek… [who] obscured his real sympathies regarding the state with talk of the ‘spontaneous order’ of the market. But it is clear that he thought a very strong state necessary for various reasons. One such was to cope with the pathologies of democracy.
…since neoliberals recognise that human beings are not necessarily predisposed to embrace ‘the market’, the law must not only protect the market order from popular attempts to subordinate it, but also help create neoliberal subjects. People must be compelled to embrace their ‘entrepreneurial’ selves, to treat every aspect of their lives as a self-maximising quest, and to embrace the calculus of risks and rewards in the market, including the inequalities that come with it, rather than seeking to control it. Attempts at circumventing or subverting the economic order, whether through political activism or criminality, must be harshly punished. The neoliberal state is a big, interventionist state, particularly in its penal mode.
– Richard Seymour, Against Austerity
All law is situational law. The sovereign produces and guarantees the situation in its totality. He has the monopoly over this last decision.
- Carl Schmitt
Personally, I prefer a liberal dictator to democratic government lacking in liberalism.
– F. A. Hayek
In Chile, the military junta of General Augusto Pinochet, which violently deposed the elected left-wing government of Salvador Allende in 1973, adapted the ideas of the Nazi jurist Carl Schmitt into its new constitution. According to the historian Renato Cristi, the Chilean system – “an authoritarian state with a free market system” – was inspired by the work of both Schmitt and the Austrian School economist Friedrich Hayek.
It’s worth noting that, as much as Hayek’s involvement with Schmitt’s ideas incriminates him, it doesn’t make him unique. Schmitt has been extremely influential. Infamously, the neoconservatives of the Bush II administration utilised Schmitt’s ideas to provide a ideologico-legal justification for much of what they got up to during the ‘War on Terror’. Schmitt was also an influence on Schumpeter, as it happens.
Schmitt joined the Nazi Party as it ascended to power, but wasn’t just an opportunist or fellow traveller. Schmitt was a reactionary before the Nazis came along. With the stimulus of the Nazi rise, he enthusiastically took part in book burnings and boasted of his anti-semitic animus. He was appointed President of the Union of National-Socialist Jurists, and became editor of their official newspaper for Nazi lawyers. He wrote and published legal justifications for the Night of the Long Knives and Hitler’s dictatorship. Schmitt was made State Councillor for Prussia by Hermann Göring, who subsequently protected him when he was accused of unorthodoxy and investigated. After the war Schmitt refused to renounce his Nazi past at the expense of an academic career, and remained a vociferous anti-communist and a critic of democracy, defending Francoism in Spain for instance.
For Schmitt, the rule of law depends upon its general application; it cannot be individually applied. On the one hand this is good universalist liberalism (i.e. everyone should be subject to same laws) but it is also a de facto defence of privilege because it ignores the absence of a level playing field (one law for the lion and ox is oppression), and also neuters the ability of the state to engage in social democratic levelling by virtue of making it illegitimate to address individual privilege such as that of royalty. Ironically, Schmitt’s idea of legality is a codification of the essence of classical liberalism in that it enshrines the sovereignty of private property within doctrines of generalised individual freedom and equality. Schmitt sees attacks on privilege as illegitimate because they target individuals.
His opposition to such attacks on privilege arise in the context of the Weimar Republic, an ostensibly left-wing government, led by the German Social Democratic Party (SPD), which arose after the German Revolution had ousted the Kaiser. Schmitt’s theories are an attempt to use the Weimar Republic’s commitment to legal liberalism as a way to argue that it not only cannot legitimately take radical socialist measures - not that it was actually so inclined – but that it can’t even engage in redistributive and social democratic policies. Schmitt’s argument wasn’t just aimed at foreclosing on socialism, but on the basic reorganisation of society which would be necessary to turn Germany into a liberal democracy complete with a welfare state.
The idea that redistribution is inherently illegal because it targets individuals is obviously compatible with a focus on the individual as the basis of society, along with a denial of class politics which then covertly engages in class politics - from above. This sort of outlook is key to Hayek (see last essay), and also with the libertarian assumption that certain imbalances between individuals – and thus social hierarchy – are inevitable, the result of inborn inequalities which will show themselves in market society as it sorts people by value.
Schmitt’s reasoning leads him close to the idea that any state intervention in society and economics is in contradiction with the concept of law. This is the essence of the identity Schmitt sees between basic social democracy and tyranny, and upon which his theories attempt to foreclose. It is a viewpoint that is, of course, basic to right-libertarianisms such as Hayek’s.
As William Scheuerman says in his book Carl Schmitt – The End of Law, in a chapter entitled ‘The Unholy Alliance of Carl Schmitt and Friedrich A. Hayek’:
If any form of particular or specialized legislation potentially constitutes a tyrannical act of revolutionary violence, the democratic welfare state will have to be depicted in nightmarish terms…. Although numerous commentators have since pointed to the exceedingly modest character of the Weimar welfare state, Schmitt offers a terrifying portrait of Weimar's experiments with the instruments of interventionist politics.
And Obamacare is Marxism.
Also, Schmitt’s picture of the interventionist welfare state as crippled - by being trapped in a vast web of spheres - chimes with Hayek’s view of liberal democracy as hampered by competing ‘special claims’. For Schmitt the “ethics of civil war” may be necessary to put an end to the crisis caused by the democratic state’s paralysis in the face of so many claims on it. In other words, society will be crippled by kowtowing to democracy. Schmitt’s defence of dictatorship stems from this notion. He proposes such dictatorship as a response to the modest democratic aims of the Weimar Republic, and applauds it when it comes along. Society needs to be rescued from the interventionist state, and this can be done via authoritarianism. Indeed, this is not only permitted but necessitated. The liberal state already involves junking law. The new state might as well be a dictatorship. Intervention is inimical to law, so the intervention you have might as well preserve the individual rights of all, including the powerful and privileged.
This doctrine is obviously applicable not only to Hayek’s (and the US empire’s) support for Pinochet in Chile, and other such dictatorships (Hayek tried to pimp his ideas to Salazar in Portugal), but also to neoliberalism, which is a heavily authoritarian response to social democracy. The practice doesn’t stem from the ideas. Rather the ideas stem from the practice, be it open or latent… in other words, from the underlying political situation which impends from the economic basis and the state of the class struggle. The ideas are expressions of class interests as they respond to this. The ideas generated then feed back into the practice and generate more ideas of the same sort. And the process repeats.
Richard Seymour recently referred to the Schmittian-Hayekian concept of law, and its integral role in the legal praxis of neoliberalism, with reference to the Spanish state’s response to the Catalan independence referendum. It was instructive to watch the triangulations that were practiced by EU leaders as they tried to respond to that crisis without openly stating their view - bred into the political class of Europe now by decades of neoliberalism - that state authoritarianism is a legal and just expression of democracies running on market-based concepts of freedom.
In Scheuerman’s words “Ultimately, Schmitt's peculiar restatement of the liberal concept of general law thus leads him to pursue an unambiguously illiberal and antidemocratic agenda.” But the agenda arises from an ideological response to a crisis in the very hegemony which it aims to protect.
Hayek, whose popular anti-socialist polemic The Road to Serfdom depends – as Scheuerman points out – on reactionary arguments derived from Weimar era debates, relies upon Schmitt in many ways, far more than is generally known or admitted, and more so than it relies upon classical liberal thought as Hayek claims.
Hayek argues that the growth of state intervention in the economy culminates in a "'total state." Of course, Schmitt had introduced this term into German political thought in 1930 when describing the same phenomenon, in which the classical liberal state/society distinction allegedly loses any real significance, and Hayek expressly cites Schmitt's statement in The Guardian of the Constitution that the "neutral state of the liberal nineteenth century [is being transformed into] the total state in which state and society are identical."
It’s important to remember that this is in response to a moderate, social democratic government. That’s the ‘total state’ in question: one which aims at mild redistribution and welfare provision. It is deemed a ‘total’ threat not because it wishes to dominate society totally, but because its partial and mild attack on the worst excesses of privilege (carried out, one should stress, in order to preserve the system as a whole) is deemed a ‘total’ wrong by these reactionary extremists. In their characteristic style, they deem it wrong on both moral and instrumentalist grounds.
Most importantly, Hayek seems to endorse Schmitt's central thesis. For Hayek, as for Schmitt, the emerging welfare state necessitates arbitrary forms of situation-oriented legal action, and it inevitably cripples parliamentary authority. The mere fusion of state and society, manifested most unambiguously in the contemporary democratic welfare state, unavoidably generates arbitrary government.
They embrace the idea of ‘exceptional’ intervention to save the system from public intervention via a welfare state. Hayek rejects the German model (Nazism) that Schmitt defended and became part of, and wants instead to see a return to the liberal state of the 19th century. For him, this is a return to a period before the state had fused itself with society.
It’s worth remembering a specific context in which these ideas later played out. Margaret Thatcher was one of the most significant individuals to be heavily influenced by Hayek’s ideas. You can see the ‘exception’ lurking in much of what she does, i.e. the calculated tactic of provoking a war with the miners as a pretext for destroying the National Union of Mineworkers, the most powerful union in the country. She responds to their strike with interventions ranging from systematic police violence to a policy of starving the strike out, from direct intervention in the media to a covert war on the miners by the intelligence services. Similarly, yearning to follow the advice Hayek - sent to her in a personal letter - to follow Pinochet’s Chile model, she arranges a war with Argentina which enables her to recoup her electoral fortunes. To her, and the Thatcherite generation, this all seemed a proportional response to the threat to liberty posed by the welfare state. She got this - or at least the theoretical expression of it - from The Road to Serfdom, thus she got it via Schmitt.
Hayek’s actual references to Schmitt in The Road to Serfdom are ambivalent, but he becomes less ashamed of his admiration as time passes. He never goes all the way but, as Scheuerman says, “[i]n his final works, Hayek openly endorses the core of Schmitt's critique of the so-called "pluralist party state."
By the time he writes Law, Legislation and Liberty (the second volume of which is called, amusingly for us now, The Mirage of Social Justice), Hayek is complaining of a “para-state” in which power is wielded by trade unions, etc. He comes to endorse drivelling ideas that would take the world back to before the democratic revolutions of the 19th century, but codified into a gerontocracy run by modern day Platonic philosopher rulers.
As Scheuerman describes it:
Because "probity, wisdom, and judgement" are required of Hayek's ideal deliberative legislators. most appropriate would be an "an assembly of men and women elected at a relatively mature age for fairly long periods, such as fifteen years, so that they would not be concerned about being re-elected.”
Hayek's proposed legislature, which "should not be very numerous" and would consist of representatives "between their forty-fifth and sixtieth years," would be chosen in a manner altogether different from present legislatures. Since "it would seem wise to rely on the old experience that a man's contemporaries are his fairest judges," 'government would "ask each group of people of the same age once in their lives" to elect the legislature. Making voting a one-time act should encourage “probity” among citizens as well, and thus help immunize them from the perils of special interest politics.
Quite how this would regulate a government’s ability to intervene – and thus slide into paralysis and unfreedom - is unclear. Quite why, outside Hayek’s own eccentric definition of freedom, this system itself wouldn’t constitute tyranny is equally unclear. For Hayek, it wouldn’t be tyranny because the state would be precluded from responding to collective demands that impinge on privileged individual interests. But, for everyone who didn’t have privileged individual interests, Hayek’s system would be an oligarchy. It would be even more of a rubber stamp on rampaging private power than the system we already have.
In Scheuerman’s words:
Hayek is ultimately less distant from Schmitt than Hayek claims. Hayek is legitimately disturbed by Schmitt's model of a plebiscitary dictatorship in which questions are posed from above by an authority unaccountable to effective public control. Yet his own institutional vision is hardly altogether free of the authoritarianism evident in Schmitt's proposals.
Hayek never openly endorses Schmitt’s call for dictatorship to suppress any form of redistribution, and thus stop the pluralist state from paralysing… not in writing anyway. But he did endorse it in practice. As we’ve seen, Hayek was one of the prime movers behind the birth of neoliberalism, itself an assault on democracy and redistributive policies, not only the possibility of them in the future but the effects of them in the past. Neoliberalism is a vast project of rollback of the effects of the social democratic state. And, though not (in most places) comprised of actual fascism or dictatorship, it has an iron core of authoritarianism built into it. It is aggressively penal and imperial, and its economic policies are based on taking areas of social life previously under some kind of public control – from government functions to the administration of national industries – and putting them into private hands, and making those hands hugely unaccountable through to the neoliberal imperative of deregulation. Neoliberalism is robbery with structural violence, not just to services and standards of living but to democracy and workers’ rights. Neoliberal “accumulation through dispossession” (to use David Harvey’s phrase) exploded into neoconservatism and its imperial adventures, themselves designed to facilitate a corporate takeover of the economy and infrastructure of Iraq. And neoliberalism was, at least in part, pioneered in Chile through an actual full-blown state tyranny, instituted in the service of an assault on a powerful workers’ movement, and a reformist government.
And Hayek was up to his neck in it, as we will see.
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