Saturday, September 21, 2013

Hayek's Categorical Error

Hayek was scared, and rightly so if his analysis was right. Nazi Germany and Stalin's Russia were nightmares of states that the rest of the world would hope to wake up from. That the Russian people and the Germans eventually woke up does not excuse the excesses of power claimed by both totalitarian dictators.
Hayek, however, was wrong in his analysis.

First off, I want to dispatch and then turn away from the easiest and most superficial criticism of this work. Hayek is a bad writer. The construction of his English is tortured and awkward. Not every writer taking on English can write with the verve and elegance of Conrad or Nabokov. Sadly, even in his field, someone writing centuries before him has a better grip on lucid prose. Adam Smith, a Scotsman, writes in a clearer English to the contemporary reader.

Rhetorically, Hayek's largest problem with his argument is definitional. He dedicated his work `to the Socialists of all parties.' His tongue-in-cheek dedication is meant to yoke together both the Nazi program and Stalin's version of Marxism-Leninism. The work goes through pains to keep this parallel alive, but only goes to show that both of our antagonists in the work are effective dictatorships. The key argument of the work is that the road that both countries took to their respective places were parallel. Hayek goes through pains to support this thesis, tying together some ex-socialist in the Nazi movement as proof of the socialist root of Nazism. He ignores the fact that Nazism developed in the beer-halls of Bavaria as a nationalistic alternative to the internationalist SDP that lost its intellectual and moral high ground by supporting Germany's entry into the capitalist conflagration we know as World War One. The Nazi party and fascist ideology grew and developed not as a logical extension of socialistic ideals, but in conflict with both socialist and communist parties in the late twenties and early thirties.

Hayek's villain becomes not socialism as understood by any socialist, but instead the villain is a planned economy. Ignoring the fact that socialism is an economic, political, and moral system is one thing. Parts of the socialistic system are open to criticism and discussion and debate. However, Hayek's move is intellectually dishonest. If the countries of the Soviet Union and Germany had anything in common it was that they had centrally directed economies. Both countries had separate problems and were not heirs to the post-capitalist utopias in any form. Germany had to rebuild, as did the Soviet Union. The Soviet Union had not just the international war to recover from, but also faced internal strife. The tsarist country that became the Soviet Union was still very rural and largely agrarian and thus had to focus a damaging amount of economic focus on industrialization. Neither country was ready for the transition that Marx was able to see happening in mid-nineteenth century England or Germany.

Hayek's thesis is rendered moot by this false comparison. `Socialism' is not the villain. Dictatorship and totalitarian systems that repress the people are the enemy of a well-functioning state. Many different political and economic systems have led to serfdom. Hayek's market-based savior is no better. He argues that oppression is inevitable in both a planned economy and a market based one. The market-based economy, to Hayek, is preferable because the oppressor is the market itself, and not some entity that has a face. I fundamentally disagree with him here, as in an open system you have a chance to petition for redress an individual. If a market leaves me to starve, I have no one to look at for succor or blame. This is many times more alienating for me.

The final prescription Hayek advocates is one I and many other leftist can get behind. Although Hayek speaks against international planning, he recognizes the need for international cooperation. For him this is a cooperation of the markets, where governments hand over economic policy and the nation-state is weaker as a result. The confounding part here is that the socialist, Marxist view is internationalist. Nation-states themselves exist to protect bourgeois capital, and borders are at best an ethno-linguistic myth. What Hayek in the end argues against is competing state capitalist countries and advocates for the blurring of those boundaries.

I recommend this book, despite my rating, because it is important for people from all sides of the debate to know every side of the debate. Hayek is important in right-wing libertarian thought, but you should approach with caution if you have not read some of the important theorist he is speaking against; his definition of leftists are at the mercy of his arguments and not necessarily a reflection of any socialist's words or intents.

(Originally posted 6.2.2010 at