Would Hayek Have Supported Obamacare?

Yes, says Erik Angner, a professor at George Mason University. In The Road to Serfdom and The Constitution of Liberty, Angner correctly notes, Hayek indicated that there was no need to take a dogmatic position in opposition to government-furnished safety nets. On the other hand, Hayek probably was opposed to government takeovers of entire industries, and the structure of Obamacare makes one suspect that is the ultimate object in this case.

On still another hand, this is the problem with the Hayeks and Friedmans of the world. No one disputes that they did much to bring free-market ideas to the public (although whenever you criticize them even slightly, you are invariably accused of denying the good that they did). At the same time, they made enough exceptions on truly fundamental questions that they left the rest of us to deal with the inevitable “But even Hayek said….”

Hayek’s most significant contributions were his works in pure economics, in the late 1930s and early 1940s. (You can read some of those here.) This is what won him the Nobel Prize. They are difficult reading, which is why people prefer The Road to Serfdom or his later works in political philosophy.

It’s not a hard-and-fast rule, but the most robust promoters of Hayek and Friedman tend to be borderline allergic to Rothbard and Mises, whose names they cite far less often, if ever. This allows them to be more respectable in the public-policy circles that despise them. But it also opens them up to the “even your heroes Hayek and Friedman…” trap. (Thanks to Spenser Eller.)

MGraves

Tom, this criticism seems a bit wrong headed to me. Friedman said, paraphrasing, that “I want to know what my ideal society looks like, but I also think I should be willing to discuss intermediate measures that take us closer to that society”. You could just as easily argue that Hayek’s position gets us closer to our goals, in that Friedman’s dictum is obeyed – in our present political environment, it is a lot easier to convince people that social programs must live within the constraints of a sustainable, balanced budget than it is to convince them that there should be no social programs at all. I agree that utter or near elimination of these programs would be even better, and I suspect so would Friedman & Hayek. But to constrain these programs in the manner described above would be orders of magnitude better than the present situation.

Just as we should support the sequester because the choice is between “bad cuts” and “no cuts at all”, analogously our choice on social programs may be between “constraint” and “utter profligacy”; “elimination” is not likely to be an option at all for a very long time. Moreover, once the public is able to see the benefits of constraint of social programs, elimination or near elimination may become more plausible.
http://twitter.com/RiskManage41 Steve

Just to play devil’s advocate, Friedman and Hayek are Nobel Prize winners. If you are trying to win an argument, citing people who are widely respected among economists is probably a better way to do it. People cite Paul Samuelson and Joseph Stiglitz over John Kenneth Galbraith or Robert Reich, because Samuelson and Stiglitz have a higher standing among their peers.

I would like to see Mises get more attention as the great (if not greatest) free market economist he was. His thoughts on socialism, entrepreneurship, subjective theory of value, are still the gold standard. He died a few years after the Nobel Prize started to get awarded.

But what about Rothbard? People do talk about his book on the depression and give him a lot of credit for his insights on Hoover’s policies. What else should they be citing of his? Why doesn’t Fritz Machlup, or Carl Menger or Schumpeter get more attention? I really think it’s because people cite those at the very top. Hayek wrote a book that was widely read among people in the Soviet Union and the states that followed. Friedman had a big influence on public policy. He got rid of the draft and was really the most influential economist in bringing basic economic concepts to the average person.
http://www.libertariannews.org/ Michael Suede

Given that individual votes don’t count for anything, and given that politicians are going to do what they want anyways, it is irresponsible to advocate for compromise. The job here is not to advocate for one policy over another, but to make people understand that the use of coercion is wrong and always leads to bad outcomes.
Franklin

I think this is nicely stated. But the reversal still requires a monumental paradigm shift. As an operations person, I seek (and will never find) governmental metrics monitoring, for setting and sustaining the trajectory toward a laissez-faire (in mind and money) society.
For example, the Mises/Rothbard vision is like Lombardi’s mantra on football perfection. We are certain, as flawed human beings, that we’ll never get there, but it is the elusive goal to which we strive.

In the real world (as opposed to the Lewis Carroll bedlam in the Beltway) how do we measure progress and assess, realistically, our “striving”? We employ objective metrics to guide the way. In some nicely tuned businesses, even belabored by bureaucracy, there is a similar strategy, and there is continuous improvement.

Now tell me, where the hell do you ever, but ever, find objective metrics in government, which identify the reach and overreach of government? Even in some think tanks or sources like _The Economist_, there might be some “economic freedom” metrics, but they seem to be muddied by a level of subjectivity, and over-complexity.

How about a simple per capita spend? Government spending means government intrusion. And no, not this rubbish metric the Republicans loved to embrace (harkening back to the Reagan years) on deficit relative to GDP. What nonsense.
How about a simple, basic metric, inflation-normalized, of government spending per citizen? Let’s start it at, say, 1787.
Ouch, now that’s ugly an line graph. Hayek would have puked.

So we’re going to embrace a downward trajectory on per capita governmental spending?! We can’t even unload _Sesame Street_, and this is even after the leftists cry that the government support is a fraction of its sustenance.

Feh…. “We’re all mad here.”
guest

Hans-Hermann Hoppe wrote about this, too:

Why Mises (and not Hayek)?
http://mises.org/daily/5747/Why-Mises-and-not-Hayek
http://www.TomWoods.com Tom Woods

I think you are taking me to be saying this: “If we can’t abolish all social programs immediately, I don’t want any cuts at all. Merely calling for cuts is to be a sellout.”

I’ll take any improvement any time. My point is, I am discouraged by theorists who even __in theory__ concede the merits of these programs.
BB

What’s worse than having to deal with an appeal to authority in economics with Hayek or Friedman is when they are appealed to in support of libertarian bona fides. I recently had this come up in a discussion with a so-called left-libertarian. Does anybody else ever get a bit tired of feeling like Mr. Critical in an argument? These two are certainly not Rothbard, and I am so tired of utilitarians whose arguments and actions undermine the ethically sound positions of Rothbardian libertarians (if that’s even a category).
BB

Thanks for the post. Excellent article that pretty much confirmed my gut feeling on Hayek.
Andre Veloso

I don’t think either Friedman or Hayek would support a non-voluntary and monopolistic system as Obamacare, despite all the people trying to suggest they did, just because they seemed to agree with certain government measures.
http://patrick-button.blogspot.com/ Patrick Button

It is Hayek’s “moderate” stance that makes him much more attractive to me than the anarcho-capitalists, whom I regard not simply as prudentially wrong but immoral.

To say that the state must never ever do anything other than prevent force or fraud places far to absolute a restriction on it. The Church says that the state should have a role in social development and welfare that is subordinate to the family and civil society, but that role still exists.
Anonymous

What, pray tell, makes this philosophy immoral?

You then say that restricting government to preventing force and fraud places far too absolute a restriction on it. But its when governments go farther than that they start to cause trouble. Once one realizes that the vast majority of the problems that government is trying to fix with its problems were, themselves caused by government problems – the issue of morality comes into focus. This is as true in health care as it is in other fields. A century of government interventions into health care (starting with the Flexner Report, the wage controls of WWII leading to the 3rd party payer insurance system, Medicare, Medicaid, etc, etc, etc) have caused the very problems that the government claims to want to cure. But they will fail again, and this will lead to the calls for more government.

The onus is on the supporter of the state (the biggest thief, murderer, kidnapper, impoverisher, and perpertrator of fraud), rather than on the supporter of the non-aggression principle to justify the morality of their position.
banana

So it is moral for the state to steal my property?

That’s a cool philosophy, bro.
sameasbefore

nah, it’s just a simple schism between subjective value theory/a priorism vs. objective empiricism

The trouble with empiricists is that they are too uneducated to know that there are well known techniques for abstraction developed by Mises, Rothbard, etc. which can be used for sound analysis in the presence of staggering ignorance of empirical observations.
paul

Firstly, coercion must be defined, the NAP is only valid if you subscribe to a belief in “natural rights”, but if you subscribe to the burkean paradigm as Hayek did, and believe that all rights arise from tradition/social convention, your view on what constitutes “coercion” is going to be very different and much less clearly defined, which IMO is the more realistic worldview, since we do not possess perfect knowledge and cannot say for certain what limits should be placed on collective mandates(with state as agent) over the individual.
paul

“I am discouraged by theorists who even __in theory__ concede the merits of these programs.”

In the U.S context (Im Irish btw), states rights would seem to be the best option, with the constitution serving as a benchmark for limiting the size and scope of the federal government. I personally would favor the further devolving of state(or in my case national) power to the municipal level(along the lines of the Swiss model), which would leave a great deal of public policy decision and implementation at the local level, in areas such as policing, education, targeted public assistance measures, healthcare etc .

would subsidiarity not be the best rule of thumb in ensuring a limited, and the most optimal level of government(due to competitive pressures with other districts and the accelerated trial and error process) over a non negotiable, blanket laissez faire approach?