How Hayek bred a race of elite monsters

Though he's been dead for more than 20 years, Friedrich Hayek is the darling of the free market, practically a saint. But as Bill Black explains, Hayek's predictions -- used to justify and glorify unlimited enrichment of the ruling class -- never came true, and the states that followed his prescriptions most closely ended up the barbaric situation that he warned about in re-distributive democracies.

As the gap between the rich and the poor widens, as the proportion of GDP that goes to "guard labor" in our militarized police forces and our bulging private prisons, as the most corrupt captains of industry grow richer while the rest of us are faced with an old age in poverty -- and a working life dominated by caring for our own sick and elderly relations -- it's worth reviewing Hayek's record, and the greedy, selfish, corrupt world it produced.

It is telling that libertarians’ economic hero, writing what they claim was his single best chapter, “Why the Worst Get on Top,” invariably proved wholly and grotesquely incorrect about the certainty of tyranny and mass murder. Worse, since the time von Hayek wrote his chapter, the democratic governments he demonized have ceased the worst abuses against their own citizens, such as forced sterilizations. The worst abuses – mass torture and murder – have been committed by fascist regimes that von Hayek supported such as Pinochet in Chile. When we ask why von Hayek receives a Nobel Prize and remains Glenn Beck’s hero we cannot explain the results based on facts and predictive success (failure). Instead, we must look outside the realm of reality and enter into the realms that von Hayek glorified – ideology and greed.

Von Hayek received his Nobel Prize because he was so willing to be so wrong about so many things. His blood libel about the democratic governments of “the West” was useful to another group in which “the worst get on top” in far too many cases – “imperial” CEOs. Von Hayek legitimizes that which cannot be legitimized through real economics, reality, ethics, or logic – plutocracy. Von Hayek and Milton Friedman are the patron saints of plutocracy.

Von Hayek argues that there are three reasons why democratic government inherently leads to the elevation of the “worst” to the “top” – and by the “worst” he means murderous tyrants. Von Hayek begins Chapter 10 with the famous quotation from Lord Acton: “Power tends to corrupt, and absolute power corrupts absolutely.” Democratic government, of course, is consciously designed to prevent the creation of “absolute power” by the state or private entities. Von Hayek, therefore, has to argue that a democratic system of government designed to prevent the creation of absolute power will invariably produce absolute power.

Bill Black: How Hayek Helped the Worst Get to the Top in Economics and as CEOs [Bill Black/Naked Capitalism]

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  1. And just like with the prostitute-friending, anti-hate, accepting, liberal hippie type stuff that Jesus says in the Bible, Conservatives like to cherrypick the parts of Hayek's views that support their greed and disregard for the poor and completely ignore that Hayek said such things as:

    "There is no reason why, in a society which has reached the general level of wealth ours has, the first kind of security should not be guaranteed to all without endangering general freedom; that is: some minimum of food, shelter and clothing, sufficient to preserve health. Nor is there any reason why the state should not help to organize a comprehensive system of social insurance in providing for those common hazards of life against which few can make adequate provision."

    There goes the, "taxation to pay for welfare and aid for the poor is a form of slavery," argument.

  2. LDoBe says:

    Actually, he's been categorically wrong for the better part of a century, because his assumptions rest on an unrealistic and callow assumption that poor people are necessarily evil.

  3. I was really hoping this was going to be about Salma Hayek.

  4. jtf says:

    About two years ago I read that book to find out what the big deal was all about. Frankly, The Road to Serfdom is not about democratic government, it's about Communism and Fascism. The polemic completely misses the point of the book: the world of the early 20th century saw many people who called themselves liberals sympathize with Stalinism (before they realized that it completely betrayed the socialist ideal) and express admiration for Fascism (they later reacted with predictable horror). The book was not about democracies but about co-opting the democratic process to gain power; I read it as warning against the Huey Longs, the Engelbert Dolfusses, the Benito Mussolinis, and yes, the Hitlers of the world, not against Democracy per se.

    Yeah, he's was personally kind of a jerkwad who held what we'd consider antidemocratic views today, like limiting the franchise to the elite or supporting benevolent dictatorships (not that that's an uncommon immature fantasy among callow young econ students - and boy oh boy he got it wrong with Pinochet), but it's not worth it to get worked up about it any more than I get worked up about Lord Acton or the everyday psuedo-intellectual praising the system of China or Singapore without realizing just how sterile and oppressive those countries are.

    If there's one thing I don't understand, it's why movement conservatives think of this guy as their icon. He supported government services, taxation, and a right to a basic standard of living. He had a very antidemocratic streak but that's not a conservative position per se. Ironically Glenn Beck is precisely the kind of rabble rouser Hayek warned against, because Glenn Beck's ideology resembles Hayek's vision of a free market like your gramma resembles Calvin Coolidge. If anything the hagiography should be directed at Murray Rothbard, whose anarcho-capitalism can be summed up as "the free market outcome is the only morally correct outcome" and fits these crazies better. But I'm willing to bet the Glenn Beck hero worshippers never read any of either of their books anyway, and in any case they tend to be immune to facts.

  5. I learnt all I know about Hayek from this rap video:

    (Actually, that's a lie- I learnt all I know about Hayek from this BBC documentary. The fact that Thatcher was heavily influenced by him is enough to put me off reading his work...)

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