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Mises v Hayek

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Wheylous Posted: Mon, Oct 10 2011 10:32 AM

http://mises.org/daily/5747/Why-Mises-and-not-Hayek

I had never expected Hayek to espouse all of those beliefs. I am simply suprised.

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every person has their good and bad... nevertheless, he was always simply labeled as a guy that was dogmatic about market forces. The interview makes that fact quite clear in the first few minutes of the interview when the interviewer said that the British left basically thought of him as a person that wanted to 'grind the poor' or wanted the children to go back to work in factories, etc.

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Wheylous:
I had never expected Hayek to espouse all of those beliefs. I am simply suprised.

Yeah I actually wish this was around earlier, as I wondered that exact question posed by the title of Hoppe's article when I was still in early stages of study.  Not long after, I accidentally stumbled upon Block's paper that went into great detail on the very topic Hoppe writes on.  It sounds a little silly, but I was actually kind of angry to read the truth about Hayek, from his own words.  I actually felt...kind of betrayed.

You may remember I had a dialogue on the notion of Hayek being an ordoliberal here (with Izzy, interestingly enough.)

 

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Praetyre replied on Mon, Oct 10 2011 10:00 PM

I have noticed that the establishment media tends to use Friedrich Hayek as the representative of more liberal policies contra Keynes, with Friedman in the centre-right. Curiously, the actual divergence of modern mainstream economics (the Keynesian-Neoclassical synthesis) is rarely discussed, a fact which continues to ruffle the feathers of the few remaining paleo-Keynesians. This is even shown in the famous "rap battle" between the two, though it's ironic to see both figures advocating more modern and respectively more and less radical versions of their own followers and fellow travellers ideologies.

I've seen these statements in the past, and much as I hate to admit it (not out of dislike for Hoppe, who I think has made some quite interesting strides in economics, even if his philosophical work seems a bit lacking to me), I fear Hoppe is right. It's tempting to simply put this down to living in an era which Hoppe, heisting the words out of my mouth like a psychic John Dillinger, is the (Western) era of the religion of social democracy. But Block's points regarding Mises and even non-economists like Rand and Oppenheimer having lived in times with just as bad or in some cases worse prospects for economic freedom seems too strong to ignore.

In Hayek's defense, he lived in the Anglosphere, which has easily the absolute worst political climate in the entire world (yes, parts of the third world may be nastier, but in the long term, these regimes will rise and fall, whereas Greece shows what happens when even basic cuts to government are made out of economic necessity). Now, you may argue that some of the Western European nations are worse, but:

France/Scandinavia: Still have a strong sense of cultural pride, and there are still movements which resist totalitarian humanism and multiculturalism there. In a historical sense, French philosophers were far more radical than those of the British (Adam Smith is practically the colonial era's Hayek, whereas Bastiat and Molinari were borderline anarchists), and Scandinavia-as-social-democratic-utopia has already been extensively discussed by those with far more wisdom than I.

Spain: Has an anarchist tradition (yes, of the Marxist variety, but AFAIK, they're still light years ahead of Chomsky), as well as a number of decentralist movements aiming towards national and cultural independence. They also score big historical bonus points for the School of Salamanca and the Scholastics.

Italy: Berlusconi himself expressed sympathy with people who evade onerous taxation. Their politicians seem to be corrupt, but I'll take Boss Tweed over the Anthony Comstock's of other nations any day, per the old C.S. Lewis quote about the cupidity of robber barons versus the fanaticism of do-gooders. They also have two long-standing micronations within their peninsula, so that's some bonus points for decentralism.

Austria: Seems like Germany on thorazine with less multiculti, but otherwise I know too little to say. That already puts it ahead of the UK, though.

Germany: From what I've read (in articles unrelated to the discussion at hand, from reading Gottfried, Hoppe and (indirectly) Kinsella and from what I know from Sphairon) this seems like a quite authoritarian place. But this pretty much comes down to the influence of the US in postwar reconstruction, so it's not really a fair gauge of the nation proper. Pass, unless someone has further info.

The Anglosphere (defined as Britain, all those dinky islands with names like St. Suchandsuch with 100 people on them, Gibraltar, New Zealand and to a much lesser extent, Australia) has one of the worst modern culture's in the world, and likely the absolute worst political culture in the West. I've often thought that maybe my experiences in Auckland aren't representative (though "Aster" isn't doing my thoughts on NZ any favors), but several of the British (both Scottish and English) contributors on this side described my brief polemics on the matter as basically "Sad but true".

From my limited view of the United States, it certainly has significant problems in it's own culture and political culture (the lack of immigration criticism, "global democracy" nonsense, anti-China protectionists and warmongers, Big Pharma and Big Agra, being the country of origin for social democracy, neoconservatism, Progressivism and multiculti), it still seems vastly preferable. In the words of H.L. Mencken:

 

H.L. Mencken:

The average man, whatever his errors otherwise, at least sees clearly that government is something lying outside him and outside the generality of his fellow men – that it is a separate, independent and often hostile power, only partly under his control and capable of doing him great harm. . . . Is it a fact of no significance that robbing the government is everywhere regarded as a crime of less magnitude than robbing an individual, or even a corporation? . . .

What lies behind all this, I believe, is a deep sense of the fundamental antagonism between the government and the people it governs. It is apprehended, not as a committee of citizens chosen to carry on the communal business of the whole population, but as a separate and autonomous corporation, mainly devoted to exploiting the population for the benefit of its own members. Robbing it is thus an act almost devoid of infamy. . . . When a private citizen is robbed a worthy man is deprived of the fruits of his industry and thrift; when the government is robbed the worst that happens is that certain rogues and loafers have less money to play with than they had before. The notion that they have earned that money is never entertained; to most sensible men it would seem ludicrous. They are simply rascals who, by accidents of law, have a somewhat dubious right to a share in the earnings of their fellow men. When that share is diminished by private enterprise the business is, on the whole, far more laudable than not.

The intelligent man, when he pays taxes, certainly does not believe that he is making a prudent and productive investment of his money; on the contrary, he feels that he is being mulcted in an excessive amount for services that, in the main, are downright inimical to him. . . . He sees in even the most essential of them an agency for making it easier for the exploiters constituting the government to rob him. In these exploiters themselves he has no confidence whatever. He sees them as purely predatory and useless. . . . They constitute a power that stands over him constantly, ever alert for new chances to squeeze him. If they could do so safely, they would strip him to his hide. If they leave him anything at all, it is simply prudentially, as a farmer leaves a hen some of her eggs.

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ThatOldGuy replied on Mon, Oct 10 2011 10:06 PM

 

Wheylous:
I had never expected Hayek to espouse all of those beliefs. I am simply suprised.

I sort of picked up on this while reading The Road to Serfdom. IIRC, he left a lot of responsibilities to the government that the private sector could have done better. I remember he (implicitly) credited the state with the creation of markets, money, and the spread of information; unless I'm reading this wrong (emphasis added): 
 

The functioning of a competition not only requires adequate organization of certain institutions like money, markets, and channels of information- some of which can never be adequately provided by private enterprise- but it depends, above all, on the existence of an appropriate legal system, a legal system designed both to preserve competition and to make it operate as beneficially as possible.

I didn't know what to make of this- Menger stated that money never came from governments and Hayek himself claimed that money could compete on the market in his Choice in Currency (which came later). I sort of ignored it- still, a shock to read after reading so much of the rise of totalitarianism in the world.

 

 

If I had a cake and ate it, it can be concluded that I do not have it anymore. HHH

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Aristippus replied on Mon, Oct 10 2011 10:18 PM

Praetyre:

What do you mean by political culture?  Much of what you're saying seems to focus around national sovereignty and homogeneity - is this a large part of what you mean by culture and political culture?

What happened to you in Auckland?  Also, the USA (as well as Canada, Ireland and South Africa) is usually included in the Anglosphere. 

 

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Here is a relevant Hayek post:

http://mises.org/Community/forums/p/24869/423791.aspx#423791

Its only been a year or so since I started to show appreciation for Hayek, as you can tell from this post, I too was skeptical of Hayek. Damn, now that I think about it, I wonder where the Hayek supports are in this forum.

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Aristippus replied on Mon, Oct 10 2011 11:29 PM

From my reading of Mises and Hayek I felt that the latter did not put enough emphasis on the role of the capitalist-entrepreneur as a forecaster of future prices (supply/demand), who can calculate profit or loss through a cardinal unit provided by the price system.  Instead it seemed to me that Hayek viewed the action of the individual in the catallaxy as being directed by past prices (he did not put it exactly like this but this is essentially what a Misesean interpretation reveals).  This is an important difference between the two, if my understanding of Hayek is correct.

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Praetyre replied on Mon, Oct 10 2011 11:35 PM

Political culture, as I see it, is the set of common assumptions, norms and beliefs held by all mainstream political factions within a particular country. For instance, in North Korea, the worship of Kim Jong Il and the supremacy of Maoist-Stalinism in the form of the Juche ideology is absolutely unquestioned, given anybody who does voice even the slightest dissent from the party line tends to mysteriously disappear. In America and Germany, the necessity of national repentance and transformation of the nation to atone for the crimes of past racist regimes is accepted, though for different reasons, by both sides of the mainstream political spectrum. In Taiwan, anti-communism is deeply rooted due to the Republic of China's historical conflicts with the Maoist rebels. In the Anglosphere, some of the "sacred cows" are the necessity for increased bureaucratic control over the economy and the individual to solve the problem of global warm... climate change, membership in the EU (much like Germany, the left justifies this as necessary for peace and political stability in Europe, while the "right" justifies this as necessary for Britain's continued relevance and participation in the new global economy), as well as the provision of healthcare through the apparatus of government and the permanent, compulsory wealth and income redistribution which Hoppe describes in D:TGTF.

A parallel can be drawn between these memes and the central tenets of certain religions. It would be unthinkable for a Muslim cleric to advocate polytheism, or for a rabbi, rebbe or any other shepherd of religious Jewry to include bacon and shellfish in a seder meal, or a Catholic bishop to be a homosexual prostitute. Even seemingly trivial things like television shows possess this mentality. Try stating you liked Jar Jar Binks to a group of Star Wars fans or that the Godfather was an exemplification of sub-par filmmaking and you'll see that tribalism of this sort extends far beyond the political sphere. Similarily, the questioning of these beliefs in a political culture automatically identifies the speaker as either a lunatic, a relic of past, less progressive times, a rebel or an outsider.

Political culture can be broader than this, as well. For instance, democracy is sacrosanct in most Western nations, while Islam is such for Arab nations, and Christianity for South America. These operate on a larger and looser scale, but the principle still applies.

The Anglosphere I will freely admit I identify by dint of the shared political culture listed above. There are far greater differences in culture, both political and otherwise, between Britain and the US/ireland/South Africa (which is practically Africa's Belgium in this regard) than there are between Britain, the Falkland Islands and New Zealand. I noted Australia as a much weaker example, given it's culture is more like a strange hybrid of British and Yankee with a colonial polish, but it gets in by proxy of similarities to New Zealand.

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Aristippus replied on Mon, Oct 10 2011 11:47 PM

I see what you mean and I agree with what you're saying.  I don't really have any first-hand experience with Europe or the UK so I wanted a bit of clarification.  I'm from Australia btw but I've never been to New Zealand.

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