In Defense of Hayek – Examining Arguments Among Those Within the LvMI

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There’s an article out there, written by Hans Hermann Hoppe, that is pretty brutal when it comes to speaking of Hayek. Alternatively, contemporaries such as Block, and Rothbard have held similar positions to those Hoppe communicates in his article. Before we get into the meat and potatoes…

Allow me to start by stating a few things:

I actually appreciate a large amount of Hoppe’s work, and Rothbard’s work. I know the two were quite close and had similar positions on Hayek. Rothbard had arguments that he levied toward Hayek in his book “The Ethics of Liberty.” Furthermore, there are records of Rothbard making similar arguments that Hoppe makes here regarding the work of Hayek.

I came to libertarianism through Rothbard and will always put a great deal of value on his brilliance as a philosopher. Hoppe has contributed a great deal to the intellectual space that is also of the utmost value. He put a spotlight on the very real and difficult topic of conflict resolution in a way that no one else had quite figured out how to do. I find his Argumentation Ethics work to be second to none.

While I will go on to defend Hayek here, as the title would suggest, I am not naïve enough to claim that his work was perfect by any means. It’s important to understand that none of these guys had a perfect batting average. None of them.

Having said that, let’s get to it.

Hoppe starts off by throwing a fair amount of shade right from the get. The first thing he does is point to the fact that his positions are essentially Mises’s positions when it comes to economics. And that people who proclaim themselves to be fans of Hayek’s haven’t actually taken the time to read any of his older economic works.

Hoppe writes:

There is little difference in Mises’s and Hayek’s economics. Indeed, most economic ideas associated with Hayek were originated by Mises, and this fact alone would make Mises rank far above Hayek as an economist. But most of today’s professed Hayekians are not trained, economists. Few have actually read the books that are responsible for Hayek’s initial fame as an economist, i.e., his Monetary Theory and the Trade Cycle and his Prices and Production. And I venture the guess that there exist no more than 10 people alive today who have studied, from cover to cover, his Pure Theory of Capital.

Many of Rothbard’s economic positions mirror Mises. Further, most of the economic positions held by most who have existed within the Ludwig Von Mises Institute mirror those of Mises. How is this somehow an argument that delegitimizes Hayek alone? Should we then toss aside Hazlitt, Rothbard, Block as well, since they are all working off of the same foundation that Mises laid the groundwork for?

The second half of this paragraph is very strange to me, why exactly is it so pivotal that everyone become a trained economist to have an opinion worth respecting in regard to political philosophy? Would the same be said if one is to proclaim they appreciate the work of Mises? “Well, that’s nice, but are you a trained economist? I never understood this argument, frankly. “You are not a source expert, so you have no right being a fan of his work.”

He then goes on to take a swing at these different phases of Hayek’s career. This is essentially a continuation on the critique against Hayek from Walter Block, which you can read here. In which Block argued that there was a Hayek I and a Hayek II. And that Hayek II was deeply flawed as opposed to the only somewhat less flawed Hayek I. In this paper, Block even went so far as to call Hayek a logical positivist. Ironically, this is the closest Block comes to addressing Hayek’s larger theories.

Right away, we have the information available to reject such a claim that Hayek supported logical positivism. Just because Hayek appreciated some of the work of David Hume, does not mean he had accepted all of it absolutely.

There may thus well exist better scientific evidence for a false theory, which will be accepted because it is more scientific, than for a valid explanation, which is rejected because there is no sufficient quantitative evidence for it” – F.A. Hayek, Lecture to the memory of Alfred Nobel, December 11, 1974

Friedman has this magnificent expository power. He is on most things, general market problems, sound. I want him on my side. You know, one of the things I often have publicly said is that one of the things I most regret is not having returned to a criticism of Keynes’s treatise, but it is as much true of not having criticized Milton’s [Essays in] Positive Economics, which in a way is quite as dangerous a book.” F.A. Hayek – Hayek on Hayek, p. 145

He either was not familiar enough with Hayek’s work, or just didn’t care to delve into the nuance of his position, but it’s clear that Hayek, as he had stated himself, did not support a positivist position as the foundation of his philosophy.

Regarding the rest of Block’s critique, I’d like to touch on it momentarily and place it against what Hoppe has argued above, Block writes:

Following in Hutchison’s footsteps on this research is Salerno (1993). Salerno has shown that as the years went by, and Hayek moved from his Hayek I position to his Hayek II views, he pulled further and further away from the uncompromising praxeological and free market analysis of his mentor Ludwig von Mises (1963); that whereas Hayek I was reasonably close to Mises in many ways, Hayek II began resembling him in philosophical outlook less and less.

So, which is it? Is the issue that Hayek’s work at one point too closely resembled Mises’ work? Or is it that Hayek made a mistake in distinguishing unique concepts of his own that deviated from the philosophy of Mises? Was there any way, short of being an Anarcho-Capitalist, that Hayek would have done right in their eyes?

First and foremost, when was Hayek ever this dogmatic in any of his work? Logical positivism is naïve empiricism, which is the sort that does work in objective truth arguments. This is in no way shape or form Hayek’s style.

As mentioned, Hayek was critically self-aware, and offering explanations from what he could gather, given the information he had available. Being hard focused on objective truth has never been the territory of Hayek, who favored exploration of philosophy and language, not objectivism. This is why there is such a large difference in his work as opposed to that of Ayn Rand, for instance.

I would argue the positions of Mises and Hayek are not much different than is lead on when it comes to praxeology vs empiricism. Hayek was humble and more open to discussion, and never claimed to be a dogmatic purist in any sense.

Let’s explore this a bit. Hayek said this of Mises, and his approach at philosophy:

This is a development which has probably been most carried out most consistently by Ludwig von Mises, and I believe that most peculiarities of his views which at first strike many readers as strange and unacceptable trace to the fact that in the consistent development of subjective approach he has for a long time moved ahead of his contemporaries.

Probably all the characteristic features of his theories—from his theory of money (so much ahead of the time in 1912) to what he calls his a priorism—his views about mathematical economics in general and the measurement of economic phenomena in particular, and his criticism of planning, all follow directly (though, perhaps not all with the same necessity) from this central position.

From analyzing this statement, it seems that Hayek is not rejecting the position of Mises, rather his rhetoric. Something Mises even seemed to be aware of, else he wouldn’t have spent so many of his introductions in chapters of “Human Action” defending himself before he even got his arguments out.

Another interesting development is when we analyze the fact that Mises’ own personal view of the action axiom was in fact emperical. If we look at the work of Isreal Kirzner, he mentions the following in: “Mises: The Man and His Economics

This writer [Kirzner] once asked Mises how a person can know human beings other than himself act purposefully….Mises’ answer surprised me greatly; it may perhaps soften the image of Ludwig von Mises as an extreme apriorist. Mises answered my query, in effect, by saying that we become aware of other agents by observation. It is observation that convinces us not to be solipsists.

It seems, after taking a close look at these positions, the largest difference? Hayek was more open in his communication, and he realized the limitations of language. Both of these individuals [Hayek and Mises] are working from the action axiom, but only one of them are articulating outwardly in their work that they came there partially though perception, Mises admitted as much but only in a personal discussion with Israel Kirzner.

Mises arrived at a place essentially asserting that we must be able to perceive, which is what many can refer to as “empirical,” without obtaining any of the negative connotations that may come with the term (as evidenced in the way Block talks about logical positivism.)

One of the largest issues we run up against when taking a rigorous examination of the positions held, is limitations in language. Something that Hayek was often writing about and actively observing throughout his career.

What exactly do I mean by realizing the limitations of language? Take a look at this study released by the Institute of Economic Affairs, titled “The Confusion of Language in Political Thought.”

I digress, let us focus back on the article at hand, Hoppe writes:

Rather, what explains Hayek’s greater prominence is Hayek’s work, mostly in the second half of his professional life, in the field of political philosophy — and here, in this field, the difference between Hayek and Mises is striking indeed.

I will spare you the laundry list of grievances that Hoppe lays out. If you are interested in reading the article itself, you can do so here. What he does is bang out a list of all the times where Hayek excused state action in his later books on political philosophy. For that reason, Hoppe is convinced, Hayek is no more than a “social democrat.”

This claim by Hoppe, is better understood when you realize that many anarcho-capitalist thinkers are so dogmatic, that memes such as this are actually accurate representations of how they view all others and their political philosophies.

Mind you, I consider myself an ancap, so this isn’t coming from a place that is attacking the ideology as a whole. That said, we can do better when it comes to some things.

We know for sure that political philosophy, as pointed out by Hoppe and Block, wasn’t something he [Hayek] was extremely well-versed in when compared to the level of advanced nuance that Rothbard, Hoppe, and Block approach it with.

He came about these studies later in his career. He said so himself many times. What’s striking, is something that Hayek was open, honest, and humble about admitting, is used almost as ammunition against him by his peers within the Mises Institute.

Also, worth noting is the context in which Hayek writes of all the things that Hoppe rattles off is missed completely. I won’t go into the weeds of every single claim he makes, but let’s take the often-criticized mention of “UBI.” Here is the often-demonized quote:

“a certain minimum income for everyone…”

That is the quote as Hoppe communicates it in his article, he says nothing more of context or the content that followed.

On its face, it seems he was banging the drum for Universal Basic Income. This isn’t a very libertarian position, no disagreements there. However, let’s actually look at the book itself, and examine the context in which the suggestion was mentioned:

It’s clear to see that Hayek wasn’t suggesting a UBI here, even though his initial suggestion may seem to indicate as much, upon further inspection of the following content what he is talking about is offering a system that ensures those unable to take care of themselves do not suffer. He goes on to specify “…a uniform minimum for all who cannot provide for themselves

Again, Hayek was not a deity that was above all criticism, but simply cherry-picking this sentence “the assurance of a certain minimum income for everyone” and choosing to leave out the sentence directly after “…or a sort of floor below which nobody need fall even when he is unable to provide for himself,” is a bit more aggressive than a critique of Hayek’s position requires.

This argument thrown at Hayek is a bit of Hoppe’s brutal honesty coming out, but I would like to mention that this honesty is entirely irrelevant here. Hoppe is critiquing Hayek from an anarchist position, and nowhere within the Constitution of Liberty, or any of his work for that matter, is Hayek advocating anarchy. Hoppe is being un-necessarily confrontational here, in a very irrelevant way.

Let’s take a look at what Hayek himself has to say on this idea inside his book Constitution of Liberty:

Not Locke, nor Hume, nor Smith, nor Burke, could have argued, as Bentham did, that “every law is an evil for every law is an infraction of liberty.” Their argument was never a complete laissez faire argument, which, as the very words show, is also part of the French rationalist tradition and in its literal sense was never defended by any of the English classical economists. They knew better than most of their later critics that it was not some sort of magic, but the evolution of “well constructed institutions,” where the “rules and privileges of contending interests and compromised advantages” would be reconciled, that had successfully channeled individual efforts to socially beneficial aims. In fact, their argument was never antistate as such, or anarchistic, which is the logical outcome of the rationalistic laissez faire doctrine; it was an argument that accounted both for the proper functions of the state and for the limits of state action.

HAYEK, F.A., “The Constitution of Liberty”, Ch,. 4, 1960

So, what is it that they are missing, exactly? What is the point I keep dancing around with Hayek’s larger theories? And what is it that set Hayek apart from Mises?

Hayek was working with far larger theories than anyone that critiques his work ever cares to examine. Specifically, in this case, the concept of social evolution, and the psychology involve therein in regard to political philosophy and policy.

To get some more insight as to the unique perspective that Hayek was coming from, take a look at the preface material in the Road To Serfdom where Hayek speaks on his observances of England, and how the mental outlook of individuals within a system leads toward perpetuating a system. He discusses a form of mental evolution (or perhaps, devolution in this case) and how it leads to helping the state reach its ends.

Here is a quote from Hayek, delivered during a speech where he essentially reads from one of his collections of essays on the subject, that has always been very profound to me. It clearly explains what exactly set Hayek apart from so many others, that hasn’t been addressed by any of his critics.

It became then clear to me, that although Charles Darwin’s successful application of his ideas of evolution through the account of origin of different organic species, although this was the first grandiose success of this line of thought, due to the industrious empirical research that I cannot admire enough. – the intellectual source of the idea of evolution lay not in the study of nature, but in the study of the even more complex phenomenon of human interaction. In the study of this even more complex phenomena, the formation of language and law.

When you consider the 1956 preface and the quote provided above, you begin to see that Hayek was operating with much larger concepts that is being given proper credit for. And in trying to reconcile his positions as his peers, positions that Hayek himself had admitted that he very well could have got wrong (and some that he very well did get wrong) Rothbard, Hoppe, and Block take a reductionist approach at quantifying Hayek’s work as nothing more than misguided level 1 libertarian arguments. In reality, he was working with concepts far larger than even his contemporaries seem capable of honestly addressing.

Furthermore, this false dichotomy presented is bothersome. The most important difference to pay attention to between Mises and Hayek lie not in their body of work, rather in their audiences. Hayek had found a way to bend the ears of world leaders, and felt he had the opportunity to help influence these leaders with philosophy that he felt could effectively curb the direction of a push toward a centrally planned socialist society that eroded the rights of individuals and chipped away at liberty.

After all of this, I propose, far more glaring a difference in opinion, a far more polarizing parallel is not the one that is being forced between Mises and Hayek, rather the one that lie between Mises and Rothbard.

Let us examine the position Mises had when speaking of the government:

“Government as such is not only not an evil, but the most necessary and beneficial institution, as without it no lasting social cooperation and no civilization would be possible.”

And a bit later in the same book…

 

A shallow-minded school of social philosophers, the anarchists, chose to ignore the matter by suggesting a stateless organization of mankind. They simply passed over the fact that men are not angels. They were too dull to realize that in the short run an individual or a group of individuals can certainly further their own interests at the expense of their own and all other peoples’ long-run interests. A society that is not prepared to thwart the attacks of such asocial and short-sighted aggressors is helpless and at the mercy of its least intelligent and most brutal members. While Plato founded his utopia on the hope that a small group of perfectly wise and morally impeccable philosophers will be available for the supreme conduct of affairs, anarchists implied that all men without any exception will be endowed with perfect wisdom and moral impeccability. They failed to conceive that no system of social cooperation can remove the dilemma between a man’s or a group’s interests in the short run and those in the long run.

Ludwig Von Mises – The Ultimate Foundation of Economic Science, p. 98f

And, Rothbard:

I define anarchist society as one where there is no legal possibility for coercive aggression against the person or property of any individual. Anarchists oppose the State because it has its very being in such aggression, namely, the expropriation of private property through taxation, the coercive exclusion of other providers of defense service from its territory, and all of the other depredations and coercions that are built upon these twin foci of invasions of individual rights.

Murray Rothbard – “Society Without A State” in The Libertarian Forum (1975)

Where is the outrage over the position held by Mises, if every argument is to be held against the lens of an anarchist? At no point in his work did Hayek employ the rhetoric used by Mises when describing those who support a stateless society. He was open, humble, and willing to admit when he was wrong. Is it perhaps that this very grace in discourse and communication exhibited by Hayek is a point of disdain for those who oppose him? Maybe.

Whatever the case, there is far more to gain by accepting that no one individual has ever got everything right. There is plenty to learn from Hoppe, Rothbard, Hayek, and Block. One would likely find a much more productive practice lay in studying all of these individuals that are part of the same intellectual powerhouse that is the LvMI, and taking the time to examine the nuance in each of the foundational theories that were presented by these once in a lifetime scholars.

You can read more by Vinny Marshall on Think Liberty here.

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