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Posts Tagged ‘F.A. Hayek’

“Classical Liberalism” Will Never Satisfy the Left | Mises Wire

Posted by M. C. on December 7, 2022

Mises and Hayek used “classical liberal” to distinguish themselves from the Left. Today the term is used primarily to appease the Left. Self-proclaimed classical liberals today mostly seek to distance themselves from MAGA Trumpism and the hated Deplorables, to convince progressives they are not like those awful right-wingers! 

https://mises.org/wire/classical-liberalism-will-never-satisfy-left

Jeff Deist

“Today the tenets of this nineteenth-century philosophy of liberalism are almost forgotten. In the United States “liberal” means today a set of ideas and political postulates that in every regard are the opposite of all that liberalism meant to the preceding generations.”

—Ludwig von Mises, 1962 (emphasis added)

F.A. Hayek is back in the public eye, thanks to a promising and weighty new biography from Professors Bruce Caldwell and Hansjörg Klausinger. Predictably, the book has brought Hayek’s critics out of the woodwork. Consider the recent backhand in The Spectator by Lord Robert Skidelsky, titled “Friedrich Hayek: A Great Political Thinker Rather than a Great Economist.” Readers quickly understand the author actually thinks Hayek was neither. This is perhaps not a surprise coming from Skidelsky, the fulsome biographer of John Maynard Keynes who clearly imagines that his subject “won” the debate against Hayek over planning versus markets (“He more or less gave up technical economics after his battles with Keynes and the Keynesians”).

But the ongoing criticisms of Hayek’s “neoliberalism”—i.e., his supposed political program1—ring very hollow even in hopeless outlets like Jacobin. Hayek and his mentor Ludwig von Mises were old liberals of the nineteenth-century variety. Neoliberalism, by contrast, is a derogatory catchall term used by the Left today to police what it sees as undue respect for markets and private capital among the Clintonite and Blairite factions pushing global social democracy.

But fundamentally there is only liberalism and illiberalism. Hayek and Mises steadfastly called themselves “classical liberals” out of necessity—to distinguish themselves from the modern liberal program.

Twentieth-century liberalism, the bad kind, had its roots in the Progressive Era. It manifested in Wilsonian expansionism and Franklin Roosevelt’s criminal New Deal, both deeply illiberal developments opposed by the two Austrians-cum-Americans. “Liberal” had morphed into a proxy term for individuals advocating left-wing economic and social programs rather than markets and laissez-faire. So regardless of the earlier strands of classical liberalism flowing from Adam Smith, John Locke, David Hume, or even Jean-Jacques Rousseau, Mises and Hayek used the term expressly in the context of midcentury Western politics.

After the Great Depression and two world wars, the old nineteenth-century liberalism was under open attack. But Mises and Hayek still advanced a liberalism of economic freedom and peace, in stark contrast to the central planning, interventionism, and positive rights (entitlements) promoted as scientific by Marxists and Keynesians. The quote at the top of this article, from the 1962 preface to the English translation of Mises’s foundational 1927 book, Liberalismus, demonstrates the critical distinction. The shift in the meaning of “liberal” over the thirty-five years between editions was clear and convincing. And it compelled the great economist to retitle the book The Free and Prosperous Commonwealth: An Exposition of the Ideas of Classical Liberalism to make sure Anglo-American audiences knew exactly which version of liberalism the book explained.

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This Is What the Progressives Want To Do to Us | Mises Wire

Posted by M. C. on March 6, 2021

The specific aspect of Bentham’s thinking (wide-ranging thinking, I should add) that appeals to the progressive mindset is his belief that there is no natural law, natural rights, natural liberty, and natural and naturally harmonic outcomes, especially in the marketplace.

Thus, it is not hard to see how, to paraphrase F.A. Hayek, “the worst get on top” in places like Minneapolis and Portland and, increasingly, Washington, DC. The sheer ferocity of the political radicals toward an alleged infraction of their view of “justice” is out of proportion to the actual alleged offense. In this atmosphere, most people just want out, leaving the radicals even more firmly entrenched to impose even more damage to others.

https://mises.org/wire/what-progressives-want-do-us

William L. Anderson

For all of the campaign and inauguration talk about “unity” and moderation, President Joe Biden is governing like a progressive on all fronts, from cultural issues to the armed forces to the economy. Biden’s unprecedented thirty-two executive orders his first week in office provide evidence he and his party intend to expand executive governance well beyond anything this country has seen in its long history. Furthermore, all his political appointments are people who fall well to the left of any kind of recognizable political center and who share the president’s progressive ideology.

So, what do progressives believe, anyway? What do we mean by the term “progressive,” and why is it in the ascendency today? Furthermore, even though its destructive results are well known when we look at its history, progressivism seems to have taken over almost all of our political and social institutions, shutting down all dissent in the process.

In 2014 libertarian attorney and scholar James Ostrowski published a book entitled Progressivism: A Primer on the Idea Destroying America, which is a worthwhile read if you wish to better understand this nebulous ideology. I heartily endorse the book (having read it myself), but will let Ostrowski speak for himself, and in this piece I will attempt to carve out a small niche of my own in writing about progressivism.

While the term “progressivism” sounds like something to describe modern, secular intellectual and political movements, it actually has its roots more than two hundred years ago in the utilitarian philosophy of Jeremy Bentham. Anyone who has taken a course in history of economic thought is well familiar with Bentham, who influenced the English economists from Thomas Malthus to John Stuart Mill and even beyond that.

The specific aspect of Bentham’s thinking (wide-ranging thinking, I should add) that appeals to the progressive mindset is his belief that there is no natural law, natural rights, natural liberty, and natural and naturally harmonic outcomes, especially in the marketplace. This placed him in opposition to Adam Smith and also to Frédéric Bastiat, whose Economic Harmonies stood in contrast to Bentham’s world view that free market exchanges, unless they were guided by wise people in high places, would have socially harmful results over time.

Bentham’s view was that in order to provide what he called “the greatest good for the greatest number,” governing elites were to ensure that they could guide large numbers of people to act in what progressives today would call “the public interest” by setting structures of incentives—positive and negative—depending upon the situation. We can see this as a precursor of what would culminate in the Communist “experiments” that turned vast stretches of Asia and Europe into mass death zones and in the works of American psychologist B.F. Skinner, who saw people as little more than rats in a box to be properly trained by their intellectual betters.

Understand that this is not an attack on incentives; all of us rely on incentives one way or another, be it the entrepreneur’s pursuit of profit or the rewards (and punishments) we give our children to help them find direction in life. One of the most interesting applications of incentives can be seen in how British economist and social reformer Edwin Chadwick saved countless lives by changing the pay structure of delivering British prisoners to the penal colony in Australia.

During the first half of the nineteenth century, ship captains delivering prisoners from England to Australia were paid up front for each prisoner who boarded their vessels. Having already been compensated, captains had no incentives to care for their captive crew, and about half of the prisoners died during the trips. In 1862, Chadwick convinced policymakers to change the compensation to include only those prisoners who survived the long passage. Not surprisingly, the survival rate rose to 98 percent.

While Bentham’s utilitarianism was a precursor to modern progressivism, one safely can say that progressives today are less interested in laying out structures of incentives to guide human behavior than they are in simply being obeyed. To better understand that point, we need go no further than Biden’s recent cancellation of the Keystone Pipeline in the upper Midwest and his administration’s determination to cripple one of this nation’s most productive industries.

Perhaps there is no greater article of faith among American progressives than that the oil and gas industries are creating a “climate crisis” that supposedly will engulf the planet and make life unlivable. Not surprisingly, the Keystone project has been in the cross hairs of American environmentalists for a long time, since much of the oil to be transported comes from Canadian tar sands. Declares the New Yorker in support of the cancellation:

In the spring of 2011, the NASA climate scientist James Hansen helped orient the pipeline as a climate-related fight, pointing to the massive amounts of carbon contained in the Canadian tar-sand deposits and making the case that, if they were fully exploited, it would be “game over” for the climate.

Hansen’s predictions over the past three decades are reminiscent of those of economists who have predicted ten of the last two recessions, but it is the rare journalist who actually goes beyond being a mouthpiece for the climate change cult, so we are supposed to believe that if the Keystone project were to continue and the Canadian tar sands were further exploited, the result would be rising temperatures that would make the planet unlivable. (Whether or not the tar sands are economically viable, given current energy prices, is another matter, but Biden didn’t nix the pipeline because he believed the project to be uneconomical, but rather because the environmentalist constituency that dominates his government hates any fuels that originate in the ground.)

During his campaign, Biden made his displeasure about oil and natural gas known and vowed to “phase out” the industry (read that, cripple one of the most productive industries in our economy and certainly one of the most indispensable industries at that) and replace fuels with electricity that comes primarily through wind power and solar panels. Again, we see the progressive mindset at work.

First, and most important, even if Biden were successful in completely ending all “fossil” fuel use by 2035—a date that seems to be in vogue with progressive politicians and “woke” corporations like General Motors—it is doubtful that such a move would have any significant (or even insignificant) effect upon the world’s climate.

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William L. Anderson is a professor of economics at Frostburg State University in Frostburg, Maryland.

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The Great Reset, Part II: Corporate Socialism | Mises Wire

Posted by M. C. on December 29, 2020

Nevertheless, the aims of the WEF are not to plan every aspect of production and thus to direct all individual activity. Rather, the goal is to limit the possibilities for individual activity, including the activity of consumers—by dint of squeezing out industries and producers within industries from the economy. “Every country, from the United States to China, must participate, and every industry, from oil and gas to tech, must be transformed.”6

https://mises.org/wire/great-reset-part-ii-corporate-socialism

Michael Rectenwald

As I noted in the previous installment, the Great Reset, if its architects have their way, would involve transformations of nearly every aspect of life. Here, I will limit my discussion to the economics of the Great Reset as promoted by the World Economic Forum (WEF), as well as to recent developments that have advanced these plans.

As F.A. Hayek suggested in his introductory essay to Collectivist Economic Planning, socialism can be divided into two aspects: the ends and the means.1 The socialist means is collectivist planning, while the ends, at least under proletarian socialism, are the collective ownership of the means of production and the “equal” or “equitable” distribution of the end products. Distinguishing between these two aspects in order to set aside the question of the ends and to focus on the means, Hayek suggested that collectivist planning could be marshalled in the service of ends other than those associated with proletarian socialism: “An aristocratic dictatorship, for example, may use the same methods to further the interest of some racial or other elite or in the service of some other decidedly anti-equalitarian purpose.”2 Collectivist planning might or might not run into the calculation problem, depending upon whether or not a market in the factors of production is retained. If a market for the factors of production is maintained, then the calculation problem would not strictly apply.

The collectivist planners of the Great Reset do not aim at eliminating markets for the factors of production. Rather, they mean to drive ownership and control of the most important factors to those enrolled in “stakeholder capitalism.”3 The productive activities of said stakeholders, meanwhile, would be guided by the directives of a coalition of governments under a unified mission and set of policies, in particular those expounded by the WEF itself.

While these corporate stakeholders would not necessarily be monopolies per se, the goal of the WEF is to vest as much control over production and distribution in these corporate stakeholders as possible, with the goal of eliminating producers whose products or processes are deemed either unnecessary or inimical to the globalists’ desiderata for “a fairer, greener future.” Naturally, this would involve constraints on production and consumption and likewise an expanded role for governments in order to enforce such constraints—or, as Klaus Schwab has stated in the context of the covid crisis, “the return of big government”4—as if government hasn’t been big and growing bigger all the while.

Schwab and the WEF promote stakeholder capitalism against a supposedly rampant “neoliberalism.” Neoliberalism is a weasel word that stands for whatever leftists deem wrong with the socioeconomic order. It is the common enemy of the Left. Needless to say, neoliberalism—which Schwab loosely defines as “a corpus of ideas and policies that can loosely be defined as favouring competition over solidarity, creative destruction over government intervention and economic growth over social welfare”5—is a straw man. Schwab and company erect neoliberalism as the source of our economic woes. But to the extent that “antineoliberalism” has been in play, the governmental favoring of industries and players within industries (or corporatocracy), and not competition, has been the source of what Schwab and his ilk decry. The Great Reset would magnify the effects of corporatocracy.

Nevertheless, the aims of the WEF are not to plan every aspect of production and thus to direct all individual activity. Rather, the goal is to limit the possibilities for individual activity, including the activity of consumers—by dint of squeezing out industries and producers within industries from the economy. “Every country, from the United States to China, must participate, and every industry, from oil and gas to tech, must be transformed.”6

As Hayek noted, “when the medieval guild system was at its height, and when restrictions to commerce were most extensive, they were not used as a means actually to direct individual activity.”7 Likewise, the Great Reset aims not at a strictly collectivist planning of the economy so much as recommends and demands neofeudalistic restrictions that would go further than anything since the medieval period—other than under state socialism itself, that is. In 1935, Hayek noted the extent to which economic restrictions had already led to distortions of the market:

With our attempts to use the old apparatus of restrictionism as an instrument of almost day-to-day adjustment to change we have probably already gone much further in the direction of central planning of current activity than has ever been attempted before….It is important to realize in any investigation of the possibilities of planning that it is a fallacy to suppose capitalism as it exists to-day is the alternative. We are certainly as far from capitalism in its pure form as we are from any system of central planning. The world of to-day is just interventionist chaos.8

How much further, then, the Great Reset would take us toward the kinds of restrictions imposed under feudalism, including the economic stasis that feudalism entailed!

I call this neofeudalism “corporate socialism”—not only because the rhetoric to gain adherents derives from socialist ideology (“fairness,” “economic equality,” “collective good,” “shared destiny,” etc.) but also because the reality sought after is de facto monopolistic control of production via the elimination of noncompliant producers—i.e., a tendency toward monopoly over production that is characteristic of socialism. These interventions would not only add to the “interventionist chaos” already in existence but further distort markets to a degree unprecedented outside of centralized socialist planning per se. The elites could attempt to determine, a priori, consumer needs and wants by limiting production to acceptable goods and services. They would also limit production to the kinds amenable to the governments and producers who buy into the program. The added regulations would drive midsized and small producers out of business or into black markets, to the extent that black markets could exist under a digital currency and greater centralized banking. As such, the restrictions and regulations would tend toward a static caste-like system with corporate oligarchs on top, and “actually existing socialism”9 for the vast majority below. Increasing wealth for the few, “economic equality,” under reduced conditions, including universal basic income, for the rest.

The Coronavirus Lockdowns, the Riots, and Corporate Socialism

The covid-19 lockdowns, and to a lesser extent the leftist riots, have been moving us toward corporate socialism. The draconian lockdown measures employed by governors and mayors and the destruction perpetrated by the rioters just so happen to be doing the work that corporate socialists like the WEF want done. In addition to destabilizing the nation-state, these policies and politics are helping to destroy small businesses, thus eliminating competitors.

As the Foundation for Economic Education (FEE) points out, the lockdowns and riots have combined to level a one-two punch that is knocking out millions of small businesses—“the backbone of the American economy”—all across America. FEE reported that

7.5 million small businesses in America are at risk of closing their doors for good. A more recent survey showed that even with federal loans, close to half of all small business owners say they’ll have to shut down for good. The toll has already been severe. In New York alone, stay-at-home orders have forced the permanent closure of more than 100,000 small businesses.10

Meanwhile, as FEE and others have noted, there is no evidence that the lockdowns have done anything to slow the spread of the virus. Likewise, there is no evidence that Black Lives Matter has done anything to help black lives. If anything, the riotous and murderous campaigns of Black Lives Matter and Antifa have proven that black lives do not matter to Black Lives Matter. In addition to murdering black people, the Black Lives Matter and Antifa rioters have done enormous damage to black businesses and neighborhoods, and thus to black lives.11

As small businesses have been crushed by the combination of draconian lockdowns and riotous lunacy, corporate giants like Amazon have thrived like never before. As BBC noted, at least three of the tech giants—Amazon, Apple, and Facebook—have appreciated massive gains during the lockdowns,12 gains which were abetted, to a lesser extent, by riots that cost 1 to 2 billion in property damages.13 During the three months ending in June, Amazon’s “quarterly profit of $5.2bn (£4bn) was the biggest since the company’s start in 1994 and came despite heavy spending on protective gear and other measures due to the virus.” Amazon’s sales rose by 40 percent in the three months ending in June.

As reported by TechCrunch, Facebook and its WhatsApp and Instagram platforms saw a 15 percent rise in users, which brought revenues to a grand total of $17.74 billion in the first quarter.14 Facebook’s total users climbed to 3 billion in March, or two-thirds of the world’s internet users, a record. Apple’s revenues soared during the same period, with quarterly earnings rising 11 percent year-on-year to $59.7 billion. “Walmart, the country’s largest grocer, said profits rose 4 percent, to $3.99 billion,” during the first quarter of 2020, as reported by the Washington Post.15

The number of small businesses has been nearly cut in half by the covid-19 lockdowns and the Black Lives Matter/Antifa riots while the corporate giants have consolidated their grip on the economy, as well as their power over individual expression on the internet and beyond. Thus, it would appear that the covid lockdowns, shutdowns, partial closings, as well as the riots are just what the Great Resetters ordered, although I am not hereby suggesting that they did order them. More likely, they have seized the opportunity to cull from the economy the underbrush of small and medium-sized businesses in order to make compliance simpler and more pervasive.

In the end, the Great Reset is merely a propaganda campaign, not some button that globalist oligarchs can push at will—although the WEF has represented it as just that.16 Their plans need to be countered with better economic ideas and concerted individual actions. The only reasonable response to the Great Reset project is to defy it, to introduce and promote more competition, and to demand the full reopening of the economy, at whatever peril. If this means that smaller-scale producers and distributors must band together to defy state edicts, then so be it. New business associations, with the aim of foiling the Great Reset, must be formed—before it’s is too late.

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Michael Rectenwald was a professor of liberal studies at New York University (retired).

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