F.A. Hayek: The Power of His Ideas

One hundred and ten years ago today, F.A. Hayek was born in Austria.


Growing up in that place at that time, he was educated in the socialist ideas that were then being developed in the German speaking countries. However, Hayek was a student of the great economist Ludwig Von Mises, founder of the Austrian School of Economics. During the 1930s, when National Socialism was engaging a struggle for the soul of Europe, Hayek was lecturing at the London School of Economics, fighting socialism through his work as an economist. As the lights once again went out over Europe, Hayek began to wed his economic expertise as an exponent of capitalism with the political thought that creates the conditions for it, classical liberalism.* Thus he became one of the most influential economists and political philosophers of the 20th century. He won the Nobel Prize for Economics in 1974 with Gunnar Myrdal for their joint contribution to the theory of money and its effect on economic cycles, as well as for his lifetime of thought about the interdependence of economics and social organization.


One of his most famous and enduring works was The Road to Serfdom, written in England, and published in 1944. It is an analysis of the ideas that led to the terrible crisis of WWII in Europe. The central thesis of the book is based on Hayek's analysis of what he called the fatal flaw of socialism, that it "presupposes a much more complete agreement on the relative importance of the different ends than actually exists, and that, in consequence, in order to be able to plan, the planning authority must impose upon the people that detailed code of values which is lacking."
(F.A. Hayek (1938). Freedom and the Economic System. In Bruce Caldwell, (Ed.) Socialism and War: Essays, Documents and Reviews, The Collected Works of F.A. Hayek, Volume 10, 1997).


*Unfortunately, the word liberal, which used to describe proponents of liberty and government limited in scope to the ennumerated powers of a constitution, was co-opted by the progressives of the early 20th century and has come to mean the opposite; big government with evolving power to meddle in the lives of the people. Our founders were classical liberals. Certain non-anarchist, small 'l' libertarians hold the political philosophy closest to that of certain founders, and conservatives to others. They would all be considered classically 'liberal', if the term had not be co-opted.


Currently in the United States, there is among patriots and patriot groups, the tendency to concede the world of ideas to the collectivists who wish to irrevocably change our Constitution and the system of government that it established. The progressives wish to do this, not by the means established in the Constitution itself, but through political machinations, judicial "legislation" and admininstrative dictates, all of which deprive "we the people" of any above the board discussion and debate. Indeed the progressives impose their programs and ideas upon us through politically correct redefinitions of terms, as well as through demagogery and strong-arm tactics. (Consider how the Bush administration dealt with the bankers, when he imposed TARP; how Congress dealt with AIG last February, and how Obama is currently dealing with the non-TARP secured creditors in the Chrysler Bankruptcy).


Although I do not agree completely with the Objectivist ideology, I have come to understand more and more that they are right in insisting on the importance of the ideas that drive history. Human beings are not blind and impotent in the face of events, unless they choose to be. Rather, the human being, alone of all of the animals, is endowed with a mind capable of reason, and free-will capable of choice. Indeed these endowments are what makes our liberty precious to us. In historical times, at least, we know that it has been ideas that drive human events. And this is why a man like Hayek has been so much admired. It was not his ability to get his way through force, like the politicians of history, but his ideas that have made him great.


Therefore, in honor of Hayek's birthday, I offer the following excerpt from The Road to Serfdom. It is about ideas:


"When the course of civilization takes an unexpected turn--when instead of the continuous progress we have come to expect, we find ourselves threatened by evils associated by us with past ages of barbarism, we naturally blame anything but ourselves. Have we not all striven according to our best lights, and have not our finest minds incessently worked to make this a better world? Have not all our efforts and hopes been directed toward greater freedom, justice, and prosperity? If the outcome is different from our aims--if, instead of freedom and prosperity, bondage and misery stare us in the face--is it not clear that sinister forces must have foiled our intentions, that we are the victims of some evil power which must be conquered before we resume the road to better things? However much we may differ when we name the culprit--whether it is the wicked capitalist or the vicious spirit of a particular nation, the stupidity of our elders, or a social system not yet . . . fully overthrown--we all are, or at least until recently, certain of one thing: that the leading ideas which in the last generation have become common to most people of good will and have determined the major changes in our social life cannot have been wrong. We are ready to accept almost any explanation of the present crisis of our civilization except one: that the present state of the world may be the result of genuine error on our part and that pursuit of our most cherished ideal have apparently produced results utterly different from those which we expected."
(F.A. Hayek (1944). The Abandoned Road. In Bruce Caldwell (Ed.). The Road to Serfdom: Text and Documents (The Definitive Edition). p. 65-66).


This statement comprises the beginning of The Road to Serfdom. The leading ideas of the last generation, the cherished ideals that Hayek was talking about were collectivism and socialist economic theory, imposed in Germany, first with a velvet glove under the Wiemar Republic, and later by the iron fist of the National Socialists. Hayek does not leave the reader to the fantasy that this was particular to the German people; rather he says:


"We still think of the ideals which guide us, and have guided us for the past generation, as ideals only to be realized in the future and are not aware of how far in the last twenty-five years they have transformed not only the world but also our own countries. We still believe that until quite recently we were governed by what are vaguely called ninteenth-century ideas or the principle of laissez-faire. . . . But although until 1931 England and America had followed only slowly on the path on which others had led, even by then they had moved so far that only those whose memory goes back to the years before the last war know what a liberal world has been like." (ibid., p. 66)


How much the more so, the past several generations in the United States?

Hayek was a man whose wisdom was gained by watching his world in Europe descend into totalitarian hell. The ideas prevelent during his childhood are responsible for the deaths of more than one hundred million people, if we count just those killed in WWII and those killed during Stalin's purges and the deliberate starvation of the Kulaks in order to seize their land.


Ideas matter. And the power of Hayek's ideas are extraordinarily important for lovers of liberty in our own time and space.

Hat Tip: Cafe Hayek: Hayek on the Totalitarian Surprise

See also: The Objectivist Round-Up and Rational Jenn.