"Who’s Afraid of Friedrich Hayek?"

Mark Thoma points to an article that asks "Who’s Afraid of Friedrich Hayek?" without any comment.

The original article is by Jesse Larner who asks Who’s Afraid of Friedrich Hayek? The Obvious Truths and Mystical Fallacies of a Hero of the Right. I think her main conclusion is:

In titling his individualist manifesto The Road To Serfdom, Hayek clearly was equating collectivism with a tendency to slavery. ...

She starts with:

Hayek was a surprise, in several ways. He’s nowhere near as extreme as his ideological descendants. He admits that there are a few rare economic circumstances in which market forces cannot deliver the optimum result, and that when these occur, the state may legitimately intervene. He recognizes such a thing as the social interest and will even endorse some limited redistributionalism—he goes so far as to suggest that the state ensure a minimum standard of living, an idea that surely embarrasses the good folks at Cato. Politically, Hayek is not the cynic I had braced for. Plainly, transparently—and in stark contrast to many modern conservative intellectuals—he is a man concerned with human freedom. One of the unexpected things in Road [to Serfdom] is that he writes with passion against class privilege.

Emphasis Mine

Hayek can propose these things because he is a conservative. And a conservative defends rights and opposes privileges. The arguments within conservatism are mainly about the differentiation between the two.

A conservative could propose that the worker's right to a minimum standard of living trumps the right to enjoy the profits accuring from property because the former reflects a greater good - the right to life.

Unfortunately, conservatives get waylaid into defending the rights and privileges of the ruling class (capitalists, feudal lords, slave owners) over all others. They would come to believe that the current ordering of society (capitalist, feudal, slavery) is the best available and has to defended against the chaos that would result in changing the system.

Larner goes on further to explain why she thinks Hayek is so passionate in his belief that socialism will always lead to totalitarianism because planning reflects the needs and outlook of the planners:

A complex economy is something no person or institution can understand. But it can generate a sustainable order, with a rational allocation of resources, as individuals respond to their own circumstances and make choices as consumers and entrepreneurs, signaling the subjective value that they place on goods and capital stock through the price mechanism: One of Hayek’s most original contributions to economic theory is the insight that economic systems are based primarily on information rather than resources. To plan an outcome and to direct economic inputs and outputs toward this outcome is to stifle the emergence of a spontaneous, democratic response to the needs of the individuals who make up the community—a response that will necessarily have winners and losers, but that will not privilege the vision or depend on the limited information of a governing elite, and that will encourage further experimentation. The responsibility of a government that fosters individual freedom is to set up transparent and impartial rules so that the legal reaction to personal choices can be predicted for all, regardless of social station; to tolerate no privileged access to the law; to provide security; and to protect contracts and private property, so long as doing so does not conflict with the very small set of social assumptions on which there truly is broad consensus (arguably, Hayek’s suggestion that government should be responsible for a minimum standard of living would have fit into this consensus when Road was published.)

Emphasis Mine

Larner is writing this when the price signals from the real estate market caused a huge bubble in property prices, another bubble in stock prices, another bubble in oil and other commodity prices, and a bubble in food prices. And she still believes in the efficient pricing through the market?

And as for the efficient allocation of resources, toll roads are still being built in Sydney while the rail network is near collapse.

Larner overlooks one way of planning: democracy. We all vote on different plans and the one with the most votes is implemented.

I think Larner is of the reformist left in that she would soften the edges of capitalism through the spontaneous emergence of worker collectives that compete within a capitalist economy.

In that, I think she is naive to think that the ruling class would sit idly by while its power is whittled away. No ruling class has ever gone quietly into the dust bin of history.

Make no mistake, a worker collective directly challenges the capitalisr right to rule the economy. For once people see that they can make better decisions that the capitalists, then the people would question the need for a separate class of property holders and their privileges.