F. A. Hayek is renowned for implacable opposition to the British National Health Service, on the grounds that it would inevitably make the UK a Stalinist nation. But it’s a myth. He says almost the exact opposite in his most-cited book, The Road to Serfdom. He was opposed to making some aspects of a health service mandatory, but he explicitly approved of such social programs as a Universal Basic Income and health care for all who want it.
He did oppose anything called Socialism that involved central planning, and he did say that that was the road to Nazism and Communism. But he supported programs to correct market failures and have the government do some things that private enterprise simply can’t.
Where did Milton Friedman and Ronald Reagan get the idea that Medicare would be the end of a free society? The myth of F. A. Hayek and The Road to Serfdom. How did it become a Wrong-Wing article of faith? Friedman made a lot of it up, pretending that Hayek approved of his wackadoodle economic fantasies.
That’s part of today’s story.
Milton Friedman said of The Road to Serfdom
'This book has become a true classic: essential reading for everyone who is seriously interested in politics in the broadest and least partisan sense.'
Friedman’s fan clubs then set off a new round of hyperpartisanship, in which facts need not apply, that continues to this day. We call it Market Fundamentalism. That will be next week’s topic our topic in two weeks in this Diary series, after Woke Baby.
One of these days you and I are going to spend our sunset years telling our children and our children's children what it once was like in America when men were free.
Ronald Reagan and the AMA Ladies Auxiliary [sic], Operation Coffeecup
Ronald Reagan Speaks Out Against Socialized Medicine—Operation Coffee Cup
We have looked at two of the giants in real economics, Adam Smith and Leon Walras, who disposed of Mercantilism and Physiocracy. Now we turn to the sad story of an economic liberal hijacked by Wrong-Wingers.
Next we we will turn to the modern Mercantilists who have become the darlings of the owner class, the 1%, and their hirelings and hangers-on when they sold the Starve the Beast lie to the White patriarchal Christian Nationalist Supremacists, once a majority in the US, but no longer.
That’s a lot to unpack. Fortunately, much of it has previously been done.
From the Book
When a professional student of social affairs writes a political book, his first duty is plainly to say so. This is a political book.
Right.
It is necessary now to state the unpalatable truth that it is Germany whose fate we are in some danger of repeating.
There are few signs yet that we have the intellectual courage to admit to ourselves that we may have been wrong. Few are ready to recognise that the rise of Fascism and Nazism was not a reaction against the socialist trends of the preceding period, but a necessary outcome of those tendencies.
And here I thought that Nazism came out of rampant anti-Semitism and Prussian imperialism.
We know that we are fighting for freedom to shape our life according to our own ideas.
Perfect Newspeak, the language in which all speech is correct, because words mean good things when applied to good people, and bad things when applied to bad people.
Everybody wants freedom. We all want to be free to do what advances our interests. But there is purely selfish freedom, and there is freedom for all. Hayek claims that the second meaning is the setup for the disaster, because it necessarily means that the government will decide what freedom is and who gets it, infallibly resulting in freedom for none. Contrary to the evidence from successful democracies with enforceable human rights protections in their Constitutions.
The Nazi leader who described the National-Socialist revolution as a counter-Renaissance spoke more truly than he probably knew. It was the decisive step in the destruction of that civilisation which modern man had built up from the age of the
Renaissance and which was above all an individualist civilisation.
I have absolutely no idea what Hayek is wittering on about at this point. As I understand it, individualism as a philosophy and social movement did not arise until centuries later.
Oh. No wonder I couldn’t understand that statement. Hayek clarified a few pages later that by “individualism” he meant free trade, even though no such thing existed until the Dutch revolt against the Empire at the end of the Renaissance that kicked off the Eighty Years War.
There is nothing in the basic principles of liberalism to make it a stationary creed, there are no hard-and-fast rules fixed once and for all. The fundamental principle that in the ordering of our affairs we should make as much use as possible of the spontaneous forces of society, and resort as little as possible to coercion, is capable of an infinite variety of applications.
True, but vacuous. Hayek here means Classical Liberalism, aka doctrinaire laissez faire, not American Liberalism.
It is the so-called Right Wing in the US that is the most illiberal, and the most devoted to coercion. Progressives want to remove impediments to our spontaneous forces and resort as little as possible to coercion.
Now Hayek says that the real goal in political economy is
deliberately creating a system within which competition will work as beneficially as possible
not crude laissez-faire, and yet he argues strenuously against the measures needed to achieve it, that is, regulation of market failures. We took those requirements up in discussing Leon Walras.
Hayek then claims that calls for economic freedom mean to reverse the previous notion of freedom from coercion, and bizarrely blames in particular John Dewey.
A confusion largely responsible for the way in which we are drifting into things which nobody wants must be cleared up.
This confusion concerns nothing less than the concept of socialism itself. It may mean, and is often used to describe, merely the ideals of social justice, greater equality and security which are the ultimate aims of socialism. But it means also the particular method by which most socialists hope to attain these ends and which many competent people regard as the only methods by which they can be fully and quickly attained. In this sense socialism means the abolition of private enterprise, of
private ownership of the means of production, and the creation of a system of "planned economy" in which the entrepreneur working for profit is replaced by a central planning body.
Balderdash and hokum that has been turned into weapons-grade bolonium. But understandable for one steeped in Fascism and Communism, and incapable of seeing any later facts and evidence.
It is important not to confuse opposition against this kind of planning [coupled with appropriating all private property] with a dogmatic laissez-faire attitude.
Bingo! But embracing the laissez faire dogma and destroying competition is exactly what Hayek enabled his fans to do.
The systematic study of the forms of legal institutions which will make the competitive system work efficiently has been sadly neglected; and strong arguments can be advanced that serious shortcomings here, particularly with regard to the law of corporations and of patents, have not only made competition work much more badly than it might have done, but have even led to the destruction of competition in many spheres.
Similarly Hayek recognizes social goods that cannot be provided by private enterprises, and externalities on which a price must be set or the underlying practice forbidden.
Hayek is also
- anti-monopoly
- anti-protectionism
- anti-lobbying for special favors
- anti-coercion
- anti-moralist
I am not going to go through all of the rest of Hayek’s confused arguments that there is only this one form of socialism, which occupy a large part of the book.
Social Welfare
124 THE ROAD TO SERFDOM
These two kinds of security are, first, security against severe physical privation, the certainty of a given minimum of sustenance for all; and, secondly, the security of a given standard of life, or of the relative position which one person or group enjoys compared with others; or, as we may put it briefly, the security of a minimum income and the security of the particular income a person is thought to deserve. We shall presently see that this distinction largely coincides with the distinction between the security which can be provided for all outside of and supplementary to the market system, and the security which can be provided only for some and only by controlling or abolishing the market.
There is no reason why in a society that has reached the general level of wealth which ours has attained, the first kind of security should not be guaranteed to all without endangering general freedom.
There can be no doubt that some minimum of food, shelter and clothing, sufficient to preserve health and the capacity to work, can be assured to everybody. Indeed, for a considerable part of the population of this country this sort of security has
long been achieved.
Nor is there any reason why the state should not assist the individuals in providing for those common hazards of life against which, because of their uncertainty, few individuals can make adequate provision. Where, as in the case of sickness and
accident, neither the desire to avoid such calamities nor the efforts to overcome their consequences are as a rule weakened by the provision of assistance, where, in short, we deal with genuinely insurable risks, the case for the state helping to organise a comprehensive system of social insurance is very strong.
Friedrich Hayek Supported a Guaranteed Minimum Income
“We shall again take for granted the availability of a system of public relief which provides a uniform minimum for all instances of proved need, so that no member of the community need be in want of food or shelter.”
That’s from The Constitution of Liberty, “definitive edition,” p. 424. Yes, it comes as part of Hayek’s argument against mandatory state unemployment insurance. But it reflects a fundamental understanding that no one should go without food or shelter, and that it is the duty of the government to ensure this minimum level of existence. “The necessity of some such arrangement in an industrial society is unquestioned,” he wrote (p. 405).
The standard that Hayek simply assumed would exist goes beyond merely keeping poor people alive. In a wealthy society, he thought it inevitable that it would become “the recognized duty of the public to provide for the extreme needs of old age, unemployment, sickness, etc.” (p. 406). On this basis, he even endorsed the idea of compulsory insurance, such as the individual mandate of the Affordable Care Act.
Milton Friedman
Capitalism: What Makes Us Free?
We have been becoming an over-governed and over-regulated society. We have been moving down the road that Friedrich Hayek, in his great book, called the Road to Serfdom. We do not have to continue down that road. We can be the masters of our own destiny.
KAPLAN-LEVENSON: Friedman was carrying the Mont Pelerin torch and turning Hayek's complex ideas about privatization, deregulation and individual freedom into bite-sized snacks.
BURGIN: And Friedman turned out to be great at that - taking very complicated ideas and conversations and packaging them to make them sound very simple and compelling in ways that the normal people could understand. He understood the rhetorical power of simplicity.
BURGIN: The market could solve problems that the government couldn't.
KAPLAN-LEVENSON: And this applied to almost everything.
BURGIN: In his utopian world, he was pretty clear there would be no public education.
KAPLAN-LEVENSON: He pushed for school vouchers…
Let's not call it national health insurance. It's not national health insurance. There's nothing national about it. It's for individual people. There's no health about it because it'll make medical care less good. It'll make the health of the American people worse. And there's no...
BURGIN: So he talked about abolishing things like the FDA, abolishing national parks, abolishing the estate tax, abolishing the charitable tax exemption and just say we should throw this stuff out. He could say, I could share your desire to, you know, improve the well-being of people who are in bad economic circumstances, but I have this different, more economically efficient way to do so.
But Friedman did favor the Negative Income Tax, which we now call a Guaranteed Basic Income.
So anyway, even though there is nothing in Hayek about the British National Health leading to Stalinism, Milton Friedman and later Margaret Thatcher put that con over on the public.
Background
The title was inspired by the writings of the 19th century French classical liberal thinker Alexis de Tocqueville on the "road to servitude".[7] In the book, Hayek "[warns] of the danger of tyranny that inevitably results from government control of economic decision-making through central planning."[8] He further argues that the abandonment of individualism and classical liberalism inevitably leads to a loss of freedom, the creation of an oppressive society, the tyranny of a dictator, and the serfdom of the individual. Hayek challenged the view, popular among British Marxists, that fascism (including Nazism) was a capitalist reaction against socialism. He argued that fascism, Nazism and state-socialism had common roots in central economic planning and empowering the state over the individual.
Initially written as a response to the report written by William Beveridge, the Liberal politician and dean of the London School of Economics where Hayek worked at the time, the book made a significant impact on 20th-century political discourse, especially American conservative and libertarian economic and political debate, being often cited today by commentators. Subject to much attention, the ideas advocated in The Road to Serfdom have been criticized and defended by many academics since the book was published.
De Tocquevile, Democracy in America
Section IV, Influence Of Democratic Opinions On Political Society
Chapter 1, That Equality Naturally Gives Men A Taste For Free Institutions
I am, however, persuaded that anarchy is not the principal evil which democratic ages have to fear, but the least. For the principle of equality begets two tendencies; the one leads men straight to independence, and may suddenly drive them into anarchy; the other conducts them by a longer, more secret, but more certain road, to servitude.
Nations readily discern the former tendency, and are prepared to resist it; they are led away by the latter, without perceiving its drift; hence it is peculiarly important to point it out. For myself, I am so far from urging as a reproach to the principle of equality that it renders men untractable, that this very circumstance principally calls forth my approbation. I admire to see how it deposits in the mind and heart of man the dim conception and instinctive love of political independence, thus preparing the remedy for the evil which it engenders; it is on this very account that I am attached to it.
Hayek quotes
Democracy extends the sphere of individual freedom [he said in 1848], socialism restricts it. Democracy attaches all possible value to each man; socialism makes each man a mere agent, a mere number. Democracy and socialism have nothing in common but one word: equality. But notice the difference: while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude.'
The Beveridge Report, officially entitled Social Insurance and Allied Services (Cmd. 6404),[1] is a government report, published in November 1942, influential in the founding of the welfare state in the United Kingdom.[2] It was drafted by the Liberal economist William Beveridge – with research and publicity by his wife, mathematician Janet Beveridge[3] – who proposed widespread reforms to the system of social welfare to address what he identified as "five giants on the road of reconstruction": "Want… Disease, Ignorance, Squalor and Idleness". Published in the midst of World War II, the report promised rewards for everyone's sacrifices. Overwhelmingly popular with the public, it formed the basis for the post-war reforms known as the welfare state, which include the expansion of National Insurance and the creation of the National Health Service.
British Conservatives can’t get over wanting to kill the NHS, any more than US Republicans can stop salivating over killing or privatizing Social Security and Medicare.
Starve the Beast
Starve the Beast Voodoonomics + Fake Math
Good News Fifth Thursday: Starving the Beast is Still the Loudest Dog Whistle
Grokking Trumpists: Starving the Beast
Translating Code: Starve the Beast
Further Reading
The Mises Institute offers a free PDF of the Reader’s Digest condensation of The Road to Serfdom, which Hayek disliked for stripping away all of the nuance.
The Road to Serfdom, text and documents, Definitive Edition, by F. A. Hayek, edited by Bruce Caldwell. Free PDF
The central argument of this book was first sketched in an article entitled "Freedom and the Economic System," which appeared in the Contemporary Review for April, 1938
Republished by the Mises Institute as What Price a Planned Economy?
Capitalism and Freedom, by Milton Friedman
Democracy in America, by Alexis de Tocqueville (1840)
The Beveridge Report at The Internet Archive
READERS & BOOK LOVERS SERIES SCHEDULE
If you’re not already following Readers and Book Lovers, please go to our homepage (link), find the top button in the left margin, and click it to FOLLOW GROUP. Thank You and Welcome, to the most followed group on Daily Kos. Now you’ll get all our R&BLers diaries in your stream.`