Craner Explains Hayek to Padraig

G

germaphobian

Well-known member
It's interesting to see how people on the left are starting to really appreciate some aspects if Hayek's and Friedman's work. I've been seeing it quite a bit in the last few years. I mean, I remember the time when they used to be regarded as Satan incarnated and whenever any problems had to be explained people would just yell something like "deregulation", "outsourcing", "neoliberalism" or wichever of those magic, catch-all buzzwords. And it was largely due to one really, really bad and harmful book - The Shock Doctrine by Naomi Klein - which turned whole generation into drooling, unthinking simpletons. Effects of that book cannot be underestimated, because it dosen't matter if you read it or not, it seeped into every fiber of left's discourse. So every problem was explained in a very simple way, which goes something like this - "every bad thing that has happened since the WW2 is because of the evil theories of Milton Friedman (under the influence of Hayek and big Alpha Daddy Smith) and if not for those Russia would have become a beacon of democracy after collapse of USSR, much of Latin America would be a left wing paradise and Middle East would be a place of peace-loving hippies"; I'm not even simplifying much, that was the gist of the book stretched out over few hundred pages; Milton Friedman as the evil puppet master pulling all the strings behind the world affairs (like Soros is for the right). Now most thinking people are ashamed of that book, deny having read it, deny its influence and so on, but it was huge, fucking huge, lives in everyone's mind to some extent. Times really are changing.
 
Clinamenic

Clinamenic

Binary & Tweed
Just finished up Road to Serfdom... Some of the most bracing political science discourse I've read. As a progressive, I went into it with preconceptions about Hayek being an apologist for libertarian industrialism, but learned that, at essence, he is actually a progressive himself, and a classical liberal, and that the two value systems aren't at odds. It very radically altered my conceptions around political progress, not only without disillusioning me but even strengthening my hopes.

Turns out there was a Readers Digest coverage of Road to Serfdom which is largely responsible for the popular misconceptions around it and Hayek himself, and which no doubt contributed to the reluctance of the left to meaningfully engage with discourse like this.

Basically the view here is that economic liberty, even with its faults, is a fundamental axiom for a pluralistic and free society, and that the government should operate in ways that don't systematically occlude competitive dynamics (and can here still find ways to promote social welfare). On top of this, I think there are ways to promote social welfare in the private sector (e.g. the crypto-philanthropic complex, such as Gitcoin), but Hayek didn't get into that, at least not in this book.
 
Clinamenic

Clinamenic

Binary & Tweed
I would call myself a neoliberal, but I suspect that term in large part refers to people (who perhaps abuse/appropriate the discourse of Hayek and the like) who just don't want government getting in the way of their attempts to capture markets (a phenomenon which proper liberalism sets out to prevent, alongside such capture by the hands of a government).

And the "neo" here I gather is really just a return to 19th century liberal economic values, as a reaction to early 20th century trends of economic planning (especially fascism and communism, which Road to Serfdom compelling portrays as being more similar to each other than either one is to liberalism).

Here I do, unsurprisingly, actually find a dialectical value. If the central planning trends of the early 20th century, motivated largely by aspirations toward economic equality and the amelioration of individual economic want (even if this aspiration was co-opted by upper-class industrial or military incentives), led to certain lessons largely unknown to classical "once-around" liberalism, then neoliberalism as a "twice-around" liberalism constitutes, in theory, a more informed framework and praxis.

Of course, in reality our neoliberal status quo probably grants a lot more leeway to irresponsible industrialists and would-be (if not actual) monopolists than the main liberal economic thought leaders like Hayek would want, and in this real sense I oppose the status quo insofar as it permits such genuinely anti-competitive phenomena.
 
vimothy

vimothy

yurp
Hayek's critique of the possibility of a functional command economy still stands up today, I think. if you've not read it, his paper, "the use of knowledge in society", is a classic. in addition to undermining the basis for "socialist calculation" (basically, how does a central planner calculate accurate prices), it also, interestingly, undermines the basis for neoclassical economics, which in it's original aspect rests on the idea of a central actor, in the form of the "walrasian auctioneer" (so-called) who calls out prices in a static equilibrium.
 
Clinamenic

Clinamenic

Binary & Tweed
vimothy said:
Hayek's critique of the possibility of a functional command economy still stands up today, I think. if you've not read it, his paper, "the use of knowledge in society", is a classic. in addition to undermining the basis for "socialist calculation" (basically, how does a central planner calculate accurate prices), it also, interestingly, undermines the basis for neoclassical economics, which in it's original aspect rests on the idea of a central actor, in the form of the "walrasian auctioneer" (so-called) who calls out prices in a static equilibrium.
Click to expand...
Do you happen to know of any progressive defenses of neoliberalism? I'm working on one now, and could benefit from reading some others:

docs.google.com

A Progressive Apologia for Neoliberalism

It appears that, over the course of the twentieth century, the primary cultural thrust of progressivism has, insofar as it is characterized by its discontent with the status quo, identified the theoretical and practical framework of neoliberalism as its nemesis. While I am no economist, and while...
docs.google.com docs.google.com
 
vimothy

vimothy

yurp
It depends on what you mean by "progressive" and it depends on what you mean by "neoliberalism", but if you type "progressive defence of globalisation" into google, you'll get a lot of hits.
 
Mr. Tea

Mr. Tea

Let's Talk About Ceps
vimothy said:
It depends on what you mean by "progressive" and it depends on what you mean by "neoliberalism", but if you type "progressive defence of globalisation" into google, you'll get a lot of hits.
Click to expand...
I assume you remember how, around the turn of the century, "anti-globalization" was the main locus of anti-capitalist and left-wing protest movements in general, certainly in this country and the US, and probably many other places too? But at some point it metastasized into a primarily right-wing phenomenon, and "globalists" became a bogeyman for the likes of Alex Jones and MTG, as well as - predictably - a new euphemism for the You-Know-Who's.
 
Clinamenic

Clinamenic

Binary & Tweed
vimothy said:
It depends on what you mean by "progressive" and it depends on what you mean by "neoliberalism", but if you type "progressive defence of globalisation" into google, you'll get a lot of hits.
Click to expand...
Yeah I attempt to give certain definitions for these terms in the piece, but by "progressive" I mainly mean social justice-esque values of pursuing wider economic opportunity and enfranchisement (only without socialistic or proto-totalitarian means), and "neoliberalism" as the return to liberal economic policy after a status quo of strong economic planning and social welfare programs and whatnot (so basically I treat it as a "newer" and somewhat more informed iteration of classical liberalism, but I might be overlooking details there).

Essentially I'm trying to outline a praxis whereby "economic welfare" can be promoted without resorting to state programs, i.e. without economically illiberal intervention by the state.
 
Clinamenic

Clinamenic

Binary & Tweed
It would be a purely theoretical project, but a lot of it is already happening in my industry of peer-to-peer public goods funding software, and its surrounding subculture. I just think it needs a more robust world-historical framework, and a certain level of historical awareness to avoid accidentally erecting proto-totalitarian structures in the private sector.
 
Clinamenic

Clinamenic

Binary & Tweed
vimothy said:
It depends on what you mean by "progressive" and it depends on what you mean by "neoliberalism", but if you type "progressive defence of globalisation" into google, you'll get a lot of hits.
Click to expand...
Globalization per se isn't quite the aim here, in the sense of industry and commerce being able to transcend nation-state boundaries. I'm more concerned with how to reconcile liberal cultural values (which I'm using the term "progressive" pretty much to refer to) with liberal economic values.
 
Clinamenic

Clinamenic

Binary & Tweed
At least in The Road to Serfdom, and arguably still now, the progressive mindset (which I think rightfully takes issue with economic inequality, but wrongfully identifies state intervention as a solution, which isn't to say that all progressives do that) seems at odds with the economically liberal mindset, but I don't think they're quite as inherently antithetical as they may be portrayed as being.
 
Clinamenic

Clinamenic

Binary & Tweed
vimothy said:
It depends on what you mean by "progressive" and it depends on what you mean by "neoliberalism", but if you type "progressive defence of globalisation" into google, you'll get a lot of hits.
Click to expand...
Vim any thoughts on Friedman's idea for negative income tax?

mitsloan.mit.edu

Negative income tax, explained | MIT Sloan

Could a negative income tax replace the welfare system?
mitsloan.mit.edu mitsloan.mit.edu

"Theoretically, this would work by giving people a percentage of the difference between their income and an income cutoff, or the level at which they start paying income tax. For instance, if the income cutoff was set at $40,000, and the negative income tax percentage was 50 percent, someone who made $20,000 would receive $10,000 from the government. If they made $35,000, they would receive $2,500 from the government. (This is different from a universal basic income in which everyone, regardless of income level, receives the same amount of money.)"
 
padraig (u.s.)

padraig (u.s.)

a monkey that will go ape
germaphobian said:
It's interesting to see how people on the left are starting to really appreciate some aspects if Hayek's and Friedman's work. I've been seeing it quite a bit in the last few years. I mean, I remember the time when they used to be regarded as Satan incarnated and whenever any problems had to be explained people would just yell something like "deregulation", "outsourcing", "neoliberalism" or wichever of those magic, catch-all buzzwords. And it was largely due to one really, really bad and harmful book - The Shock Doctrine by Naomi Klein - which turned whole generation into drooling, unthinking simpletons. Effects of that book cannot be underestimated, because it dosen't matter if you read it or not, it seeped into every fiber of left's discourse. So every problem was explained in a very simple way, which goes something like this - "every bad thing that has happened since the WW2 is because of the evil theories of Milton Friedman (under the influence of Hayek and big Alpha Daddy Smith) and if not for those Russia would have become a beacon of democracy after collapse of USSR, much of Latin America would be a left wing paradise and Middle East would be a place of peace-loving hippies"; I'm not even simplifying much, that was the gist of the book stretched out over few hundred pages; Milton Friedman as the evil puppet master pulling all the strings behind the world affairs (like Soros is for the right). Now most thinking people are ashamed of that book, deny having read it, deny its influence and so on, but it was huge, fucking huge, lives in everyone's mind to some extent. Times really are changing.
Click to expand...
As someone who was around for peak antiglobalization, this is simply not true . Like a total fiction. There are many critiques that could be made of that moment in time but this is not one of them. Those ideas were all in wide circulation for at least a decade before The Shock Doctrine was published.

And without defending everything Naomi Kleim wrote, a lot of it is true. A group of U Chicago-trained economists really did run Chile's economy for Pinochet as his regime was busy torturing and murdering opponents. Thatcher and Reagan really did deregulate financial markets, privatize public services, and gut social spending. Lawrence Summers and Andrei Shleifer really did have a big hand, if not the only one, in turning post-Soviet Russia into the chaotic oligarchic mess from which Putin emerged. The IMF continues to force countries into harsh austerity measures to receive loans or service debts. Not all her examples are accurate and she probably veered too far into explicit conspiracism - tho neoliberals, and specifically Hayek, were very open about the need to get their ideas upstream of elections to avoid having to sell them directly to voters, hence The Manhattan Institute etc - but it's not an exaggeration to say neoliberalism has dominated American and British politics for the last 40+ years. What else do you think "there is no alternative" meant?

I would have less of a problem with neoliberalism's many negatives if it accomplished what it says it does, but it doesn't even have a great track record there
 
padraig (u.s.)

padraig (u.s.)

a monkey that will go ape
Clinamenic said:
Yeah I attempt to give certain definitions for these terms in the piece, but by "progressive" I mainly mean social justice-esque values of pursuing wider economic opportunity and enfranchisement (only without socialistic or proto-totalitarian means), and "neoliberalism" as the return to liberal economic policy after a status quo of strong economic planning and social welfare programs and whatnot (so basically I treat it as a "newer" and somewhat more informed iteration of classical liberalism, but I might be overlooking details there).

Essentially I'm trying to outline a praxis whereby "economic welfare" can be promoted without resorting to state programs, i.e. without economically illiberal intervention by the state.
Click to expand...
Dude you're literally just recreating Reagonomics
 
Clinamenic

Clinamenic

Binary & Tweed
And mechanically, I don't have a solid sense of how antitrust can function well without compromising free markets, but I'd imagine plenty of thought and practice has been put toward this, I'm just not acquainted with it.
 
Clinamenic

Clinamenic

Binary & Tweed
And there is also the question, I gather, of the extent to which neoliberalism can be blamed for negative international externalities, i.e. neocolonialism, which in my novice opinion is probably the most glaring downside of neoliberalism.
 
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