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5.0 out of 5 stars
Master of free trade arguments, July 20, 2003
Concern for the self in this book zeroes in on the intellectual basis for a tremendous reputation in free world economics. It is by and about Friedrich August von Hayek, who died on March 23, 1992. Most of the 170 pages are devoted to the years leading up to THE ROAD TO SERFDOM, which Hayek wrote during World War II and published in 1944. The "autobiographical notes that Hayek wrote over a period of years beginning in 1945," (p. ix) which are used throughout the book, tend to look back into his past. Part Three, beginning on page 99, explains that the war provided a setting for thinking and writing "studies on the abuse and decline of reason to which I had devoted the first two years of the war." (p. 99). Part Three ends with a transcript (pp. 110-123) of a Radio Discussion, April 22, 1945, with University of Chicago assistant professor of economics Maynard C. Krueger, national chairman of the Socialist party, who ran as vice-presidential candidate on the national Socialist ticket in 1940, and Professor Emeritus Charles E. Merriam, who served three terms as alderman on the Chicago "City Council, and in 1911 was narrowly defeated for mayor of Chicago." (p. 109).
The discussion begins with a few pages on planning. When directly questioned about TVA, Hayek responded, "There is a great deal of the TVA to which no economist in repute, and certainly not the laissez-faire people, will object. . . . If the hydroelectric power really could not have been provided by private enterprise, I have no objection." (p. 113). If you really want economic growth, Hayek has a point, "where you can create a competitive situation, you ought to rely upon competition." (p. 113). This might be the same point: "I am a convinced free-trader, and free trade is part of the same philosophy." (p. 115).
The former alderman, Merriam, notes how the competition of ideas may result in the opposite of Hayek's ideal. "It was not the fact of communism but the fear of communism that was the most powerful factor in the development of Naziism." (p. 117). The argument gets back to planning, as Hayek says, "That method of central planning which is proposed as an alternative method of organizing production to take the place of competition means that a government, or some central authority, must take complete control of the resources." (p. 119). "Most of the war controls are central planning, but it is only temporary. ... During the war, we all have to go to some extent totalitarian." (p. 119).
If people have truly lost control of the government whenever it puts itself in a war unnecessarily, the socialist Krueger might be addressing everybody when he asserts, "You seem to place no faith whatsoever in the political process as a means of keeping government responsible to the people. Is that really your position? Do you have no faith in the political process as a means of establishing responsibility?" Hayek is as contrary as possible on this point. "I am quite convinced that it cannot be effectively controlled by the democratic process. It requires a degree of agreement among people which we can never expect in a free society." (p. 121). One sure quality of death, particularly during wartime, is that we will never hear a live broadcast of those three thinkers on the radio again. Since television has cut attention spans, Merriam might be truer than he knew then about Hayek's chapter of THE ROAD TO SERFDOM "on `Why the Worst Get on Top,' you seem to express grave doubts about the ability of a democratic society to accomplish much. You say, for example, that the more intelligent people are, the less likely they are to agree." (p. 122). Who would be willing to apply Hayek's concluding sentence to a current catastrophe -- lacking any economic sense, but costing billions -- American activities in Iraq? "I had realized that some kind of state action is extremely dangerous. Therefore, my whole effort was to distinguish between legitimate and illegitimate action. I have attempted to do that by saying that, so far as the government plans for competition or steps in where competition cannot possibly do the job, there is no objection; but I believe that all the other forms of government activity are highly dangerous." (p. 123).
Part Four starts out with some "wholly abstract problems." (p. 125). He spent years writing THE CONSTITUTION OF LIBERTY, "so that I was able to take the finished manuscript to my American publishers on my sixtieth birthday, May 8, 1959." (p. 130). Most of us were a lot younger back then, and to escape retirement at the age of 65, Hayek moved back to Germany. While the conversations quoted in this book are often after that date, they usually refer to what occurred in the years when he was most active in what was going on in the world. As a thinker, it is not surprising that he made more money than Karl Marx. The Index of Persons and Places on pages 161-170 is one of the best I have seen for explaining who each person mentioned in the book was, with more about Lord John Acton than about Achilles, and not much on Karl Marx (1818-1883). A question that he was asked in an interview printed in Reason magazine (July 1992), supposed that Joseph Schumpeter had been more right than Marx on how governments could be more responsible for "the collapse of capitalism due, not to its weakness (as Marx had predicted), but due to its strengths." (p. 154). Hayek could enjoy this paradox of Schumpeter, "that capitalism was certainly much better but it will not be allowed to last, while socialism is very bad but it is bound to come." (p. 154). Democracy allows the freedom for people to complain in ways that can inspire the government to make things worse, if I am catching the drift.
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