Friday 23 July 2010

Inevitable serfdom

Andrew Sullivan picks up on Farrant and McPhail's argument, via Barkley Rosser. Boettke also weighs in.

Anyway, they [Farrant & McPhail] say that Samuelson was right all along, and that one can find passages in RTS where Hayek certainly looks like he is making the strong version of the slippery slope argument that he later realized was an embarrassment, even if it is probably the source of the renewed sales. Thus, Farrant and McPhail would say that Limbaugh and Beck are more on the money here than Caldwell, even if they are ignoring Hayek's call for social insurance (a clear sign that he did not view any and all such moves as going onto the slippery slope).
(in comments} The fact is that Hayek says one thing in one place, but then says things in other places that appear to contradict what he said in that first place. This is part of why Samuelson and others have had trouble taking Hayek seriously when he got all in a dither over such people suggesting he was making the slippery slope argument. In some places he denies doing so, but in other places he sure as heck looks like he is making it. Needless to say, Hayek is hardly the first or only prominent economist to find himself contradicting himself, especially over long periods of time, and Hayek's views on some of these mattters did change over the course of his long life.
Whatever Hayek meant, it's best to read "The Road to Serfdom" as a rhetorical exercise that can ground your thinking about the motivation behind socialist policies. It's worst to think of it as a playbook for how this stuff plays out -- i.e., passing social insurance leads inexorably to tyranny. And it's easy to whine about Glenn Beck pounding home the wrong lesson by having his viewers buy the book. But let's remember who these viewers are. They already think that modest social insurance of the type a European Christian Democrat party might introduce is going to bring about serfdom. Sending these viewers to a non-crazy (that is, non-Skousen) text is one of the best public services Beck has performed.
Boettke (from comments, where his best stuff often winds up):
Barkley's position that Hayek's warning of the slippery slope has been proven bunk runs into a problem -- what Ulrich Witt referred to as the "endogenous public choice theorist.". In other words, the warning itself altered the path.

Hayek does distinguish between hot socialism which is more or less Soviet and Nazi, and cold socialism which is milder forms of social democracy. But I believe the commentators are missing Hayek's limits on democratic agreement argument. When cold socialist policies are pushed beyond general rules, the ability to get democratic consensus collapses. Then we are faced by a Hayekian form of Arrow's theorem; I first made this argument in my EEJ paper (1995) and then again in more detail in a paper with Pete Leeson on Hayek, Arrow, and Democratic Decision-Making.

So Hayek's analysis is applicable to both hot and cold socialism and cold socialism has exhibited many of the problems predicted. As Lavoie argued in National Economic Planning (1985), one of the real issues is militarization of the economy. This result is not only a result of bad intentions, but the logic of the situation -- check out the Wash Post series on the secret military world in the US since 9/11.

Commitment to the generality norm plus the endogenous process of heeding the warning, results in cold socialism not becoming hot socialism.
The whole comments thread over at Boettke's post is excellent, with Koppl, Rosser, Ebeling and others arguing the case.

Boettke wonders if my post has an inconsistency in conflating inevitability with very high probability. What I'd been, perhaps hamfistedly, trying to say was that Beck and the like are making an inevitability argument, that a very reasonable interpretation of RTS is that there's a very high probability that we can't avoid serfdom if we start down the road, and that that high probability is closer to Beck's reading of Hayek than to readings that take Hayek as offering only a cautionary tale. I follow Farrant in finding the inevitability / very high probability reading the more natural reading of RTS, though Hayek, as Rosser points out, does contradict himself more than a few times.

I'm also a bit curious about the endogenous public choice claim. I can buy that RTS acted as a cautionary tale, and may have affected folks decisions to pull back from planning in the mid 20th century. But isn't that kinda like the claims that, but for all the Y2K fearmongering, the world really would have ended with planes falling from the sky and electricity shutting down on 1 January 2000? As I'd noted last go-round:
I really like Hayek's "The Use of Knowledge in Society". The Road to Serfdom provides a nice explanation of why central planning is incompatible with personal liberty. But reading beyond that, following what Hayek seems to have intended, in reckoning that every divergence from market liberalism runs great risk of totalitarianism, is simply wrong. It's the right reading of Hayek, but the wrong reading of the world.
Arguing that RTS was critical in stopping the Road to Serfdom I think requires that planners, when push came to shove, would have preferred totalitarianism to liberalism, but only would have held that preference after getting past some critical stopping point.

If planners preferred liberalism to totalitarianism all along, the RTS mechanism fails and we'd just see the retreat from planning experienced in the mid twentieth century regardless of the publication of RTS. This is consistent with both the outrage of western social democrats at the argument made in RTS, and with the path in the real world.

If planners always preferred totalitarianism to liberalism, then RTS could never have made a difference.

It's only in the case that planner preferences between totalitarianism and liberalism shift as we move along the path to socialism that the publication of RTS could have prevented further moves. And the only plausible mechanism for this is Hayek's "Why the worst get on top": otherwise, you're having to specify that the planners' individual preferences shift. But that mechanism is inconsistent with the real world experience of socialism in the twentieth century. In places that went for full-blown socialism, the worst started on top. In places that retreated, the worst never got to the top. And, I can't think of a single case that's consistent with the RTS mechanism: well-intentioned planners being supplanted by nasty folks. Lenin was terrible, he started on top. Pol Pot was terrible, he started on top. Mao was terrible, he started on top. Even if RTS cautioned some Western planners against going farther, I'd love to hear of a single case that followed the basic Hayek mechanism: failures of planning (where planning was led by the well-intentioned) followed by the rise of the demagogue. In all the ones I can think of, the demagogue starts on top having won command of the communist party before the communist party took over the country, and the communist party hardly takes over because of the failures of an existing welfare state's planning apparatus.

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