I have a lot of sympathy for view that we have become increasing despondent and that this existed well before the current economic troubles. In future blogs and I’m afraid that I will have to refer back, time and again, to what I see as a fundamental (although not the only) cause of this malaise: those who wish either intentionally or unintentionally to smother free-market capitalism.
For anyone who believes in JS Mill’s idea of liberty – the notion that negative freedom allows people to experiment, learn and grow – one must also ask which economic system, together with its underpinning rules of engagement, enables this. For Hayek, economic freedom and free enterprise are but other ways of expressing Mill’s concept of liberty. Markets need free labour, the free exchange of goods, the easiest possible exchange of information about prices and the profit motive engenders risk taking and inventiveness.
But we seem more cautious than we once were, less imaginative and more pessimistic about the future. Why? Hayek’s work is rarely discussed these days and widely misunderstood, but I think can shed some light on the underlying cause.
In a famous essay, Hayek outlines why he rejects the political doctrines of the conservatives (and socialists). He argues that both conservatives and the left have structured and therefore constraining visions of the future. For the conservative it is usually about preservation or retrogression to some past order while for the progressive it is a picture of grand plans into which money and human time must be ploughed. But, “The tug of war between conservatives and progressives can only affect the speed, not the direction, of contemporary developments.” Both have a claim to some superior knowledge of a ‘better world’ which through coercion believes fellow humans should be directed to. Discussing conservatives, he says:
Like the socialist, he is less concerned with the problem of how the powers of government should be limited than with that of who wields them; and, like the socialist, he regards himself as entitled to force the value he holds on other people.
The socialist/Marxist doctrine is based around superior knowledge located in some crude version of reason. While liberals have always had a strong belief in rational action, Hayek is far from a crude rationalist:
“What I have described as the liberal position shares with conservatism a distrust of reason to the extent that the liberal is very much aware that we do not know all the answers and that he is not sure that the answers he has are certainly the rights ones or even that we can find all the answers.”
Surely the history of scientific discovery offers strong support for Hayek’s ‘rational rationalism’ as opposed to crude rationalism. It is replete with examples where dead certain truths, verified laws of physics and paradigms of science have come to grief. We should never forget our profound ignorance and therefore the danger authority offers in directing behaviour based on its superior knowledge. Knowledge is an ongoing discovery process which crude rationalism seeks to put a choke collar on.
How is this done? Through what Hayek describes as the ‘chief evil’. Unlimited government power. This power is used because both political strands share a common view that cannot accept ‘the long range power of ideas’ relying instead of superior knowledge, be it written in the scriptures or crude rationalism. Spontaneous change therefore is invariably smothered by government control.
One of the problems liberals have, however, is – in the modern parlance - ‘getting the message out there’. For Hayek the grand visions of some past order offered by conservatives (and increasingly progressives such as the Green movement), or some constructed order of a grand plan for the future held by the progressives offers a populist vision of order and security.
In the case of the former:
The conservative feels safe and content only if he is assured that some higher wisdom watches and supervises change, only if he knows that some authority is charged with keeping the change "orderly."
The liberal cannot offer such a vote winner. It can only offer the spontaneous order, freedom, choice, risk and undirected change. This produces booms and slumps, large gaps between rich and the less rich, short-term joblessness and sometimes pain. Looked at in the longer-term, it brings unimaginable wealth to an unimaginable number of people with a degree of freedom not seen in any previous society.
This is vision that is to scary unacceptable to the liberal and socialist. Long-range, uncoordinated discovery doesn’t sell against current ‘certainties’ that reside in the manifestos of the conservative and the socialist. That’s why people consistently clamour for either a conservative order or a Marxist/socialist order. As should be clear by now, these two parties work to undermine liberty and with it spontaneous change through the coercive arm of government control.
