Do You Believe in Life After Hayek

Sorry about the title; advertisements for The Cher Show are all over New York these days, so the song is in my head. Anyway…

In the Boston Review, the left economists Suresh Naidu, Dani Rodrick, and Gabriel Zucman offer an excellent manifesto of sorts for a new progressive economic agenda. I was asked to respond, and in a move that surprised me, I wound up returning to Hayek to see what we on the left might learn from him and his achievement. Here’s a snippet:

Far from resting neoliberalism on the authority of the natural sciences or mathematics (forms of inquiry Hayek and Mises sought to distance their work from) or on the technical knowledge of economists (as Naidu and his co-authors claim), Hayek recognized that the argument for capitalism had to be won on moral and political grounds through the political arts of persuasion.

Here’s where things get interesting. Though Hayek famously abandoned formal economics for social theory after the 1930s, his social theory remained dedicated to elaborating what he saw as the essential problem of economics: how to allocate finite resources between different purposes when society cannot agree on its most basic ends. With its emphasis on the irreconcilability of our moral ends—the fact that members of a modern society do not and cannot agree on a scale of values— Hayek’s point was fundamentally political, the sort of insight that has agitated everyone from Thomas Hobbes to John Rawls and Jürgen Habermas. Hayek was unique, however, in arguing that the political point was best addressed, indeed could only be addressed, in the realm of the economic. No other discourse—not moral philosophy, political theory, psychology, or theology—understood so well that our ultimate moral values and political purposes get expressed to others and revealed to ourselves only under conditions of radical economic constraint—when one is forced to assign a limited set of resources to different ends, ends that favor different sectors of society.

Morals are not really morals if they are not material, Hayek believed. Outside the constraining circumstance of the economy, our moral claims are so much wind. Inside the economy, they assume force and depth, achieving a revelatory clarity and profundity….

The intrinsic links between moral and economic life as well as the intractability of moral conflict, the incommensurability of our moral views, were the kernels of insight that animated Hayek’s most far-reaching writing against socialism. The socialist presumes an agreement on ultimate ends: the putatively shared understanding of principles such as justice or equality is supposed to make it possible for state planners to conceive of their task as technical, as the neutral application of an agreed upon rule. But no such agreement exists, Hayek insisted, and if it is presumed to exist, nothing will reveal its non-existence more quickly than the attempt to implement it in practice, in the distribution of finite resources toward whatever end has been agreed upon.

Hayek translated moral and political problems into an economic idiom. What we need now, I would argue, is a way to uninstall or reverse that translation.

In the rest of the piece, I briefly (very briefly) sketch out, with the help of Polanyi, what that might mean. This is something I hope to be developing further in an article I’m writing with Alex Gourevitch on socialist freedom. But in the meantime, here’s the Boston Review piece in full.

Marshall Steinbaum and Alice Evans also have excellent responses.

13 Comments

  1. Enrique PetrovichTroy Grant March 4, 2019 at 5:03 pm | #

    In a direct (liquid) democracy capitalism and socialism coexist and are interchangeable with circumstances. Why must it be all or nothing?

  2. mark March 5, 2019 at 5:15 am | #

    1974 Oct 19 Sat
    Joseph (Sir Keith)
    Speech at Edgbaston (“our human stock is threatened”)

    Perhaps I should explain. I mean ‘politics’ instead of an exclusive diet of economics, and I mean Tory politics, all the things we Tories stand for, and have stood for long before Socialists came on the scene. Yes, we have to get economics back into proportion, as one aspect of politics, important but never really the main thing. This may be unfashionable, indeed anti-fashionable, because it is the current intellectual fashions which have wrought so much havoc in this country.

    During the elections, discussion focussed almost exclusively on economics; and we lost the election. Were these two facts unconnected? I don’t think so. The voter has faced three parties all of who claimed that they alone had the secret of fighting inflation, of achieving economic growth, of keeping down prices and providing benefits. This was the kind of auction in which Labour was bound to outbid us, because they are quite unhibited [sic], in promising the earth.

  3. mark March 5, 2019 at 5:16 am | #

    Over the years, this auction has raised expectations which cannot be satisfied, generated grievances and discontents. Far from bringing well-being, this economics-first approach has aggravated unhappiness and social conflict, as well as over-straining the whole economic system to a point where it is beginning to seize up.

    Would it not now be better to approach the public, who know that economics is not everything, as whole men rather than economic men? Should we not deal with matters which concern the nation; respect for other people and for law, the welfare of young people, the state of family life, the moral welfare of all the people, cultural values, public-spiritedness or its lack, national defence, the tone of national life? These are at the centre of the public’s concern. The economic situation is not an independent variable; it reflects the state of political life, the degree to which people are aware of realities, and the climate of opinion. You will only have a healthy economy in a sound body politic.

    In the same way, our Tory approach to economics as party, as a tradition reflects our total approach to life and society .Our approach emphasises liberties, decentralised power, individual responsibility and interdependence. It differs substantially from that of Socialists. I am not talking about people who happen to vote socialist, but the active Socialist members and the socialist intellectuals, those who have shaped current fashions regarding the economy, education, the arts, social welfare, the family.

  4. mark March 5, 2019 at 5:16 am | #

    And the opposite of socialist is not capitalist. Our party is older than capitalism, and wider than any class. It grew up in the first place out of concern for liberties, traditions and morals. It has evolved a good deal in the past three centuries yet it has retained its essential character; its area of concern is the whole of public life and all matters which should be of public interest down to the treatment of every man, woman and child.

  5. David Fitts March 5, 2019 at 12:22 pm | #

    In the process of earning my Bachelor’s degree in Poli Sci, I took several classes in Marxism, motivated in the main by brother’s death while serving in the Marines in Vietnam, the day before by 16th birthday. While attending college, I worked in a bread factory. The first class in Marxism I took, was taught by a Sociology Prof. Early on, she made that claim that socialism was impractical because of the ignorance of the working class. I asked her if she had ever worked in a factory. “No, I haven’t.” I responded “Then how could you possibly know what you’re talking about? From my own experience, I can tell you that, if management didn’t show up on any given day, if you simply told us how much bread you wanted us to produce, we could do it.”
    My next class in Marxism resulted in my joining the International Socialists, which I participated with for over 4 years. When I began organizing in our factory, I did so on the simplest terms possible: should not our labor accrue to us the greatest possible benefit? Fully 1/3 of the workforce there, were very open to ideal of socialism. Because of my organizing efforts, I was elected chief union steward for the plant, indicating that a majority of the people were sympathetic to the views I expressed.
    My point here is that we should not be making this subject any more complicated than it needs to be. I realize you are writing for academia and I’m grateful for the fact that this where I “cut my teeth” on these ideas. But, ultimately, it is working people who must be the generative force for change. In order for that to happen, there has to be a rudimentary understanding on their part about the dynamics involved. I hope it doesn’t seem to contradictory that I am big fan of Paulo Freire’s “Pedagogy of the Oppressed,” but it is an academic work that very much addresses my concern here.

    • Chris Morlock March 6, 2019 at 1:18 am | #

      I’m more and more drawn to a Autonomist and Workerist forms of socialism myself and less and less likely to try to understand the academia or left-journalist worldview. People seem to be very receptive to socialist policies when they are presented in a calm, rational, mathematical, and logical way rather than being swooned by the musings of people who are clearly not effected by the constant existential nature of an actual worker.

      The intellectual class seems to always obfuscate the issues in an endless ideological and political game. Elements of “socialism” are an inevitable solution to our dying economic system, and it’s really not complicated. Why we even engage in sophomore poly-sci debates about socialism vs capitalism is truly perplexing, or perhaps not perplexing at all when it’s the primary thing used to dissuade people from engaging in conversation about it at all. Is it political or economic?? Do we need to agree on some basic concept of justice or distribution before we build out a larger plan??

      I can appreciate the historical relevance of Hayek but this is a brain burner for me.

  6. avin March 6, 2019 at 3:26 am | #

    Hi Corey
    Can you provide a link/reference to the 1939 article by Hayek that you talk about in the body of the article? Googled it out but couldnt find anything

    • Corey Robin March 10, 2019 at 5:05 pm | #

      It’s called “Freedom and the Economic System” (there are actually two versions of it or maybe two articles with that title) and it’s in Vol. 10 of The Collected Works of F.A. Hayek, edited by Bruce Caldwell. The volume is called “Socialism and War.” Published by U. Chicago Press.

  7. Benjamin David Steele March 8, 2019 at 9:46 am | #

    “Hayek translated moral and political problems into an economic idiom.”

    To put it differently: Hayek used persuasive rhetoric (i.e., Jaynesian authorization of reactionary hierarchical authority) to express ideological dogma (i.e., moral and political beliefs) as ideological realism (i.e., the economics of capitalist realism). This involves Julian Jaynes’ theory of a general bicameral paradigm, essential to any dominant paradigm (e.g., the past several centuries of capitalism).

    And this has everything to do with a society dependent on punishment and shame, the essence of social control within actual functioning capitalism. It is about the narrowing down of focus and the constraint of imagination, something in this case accomplished by the rhetoric of ideological realism asserted and enforced by agreed upon authorities (public intellectuals, media figures, politicians, police, etc). You know the ‘reality’ of ideological realism when the local law enforcement comes to evict you at the behest of the bank that now owns what was your home.

    We can describe that Hayek’s rhetoric was powerful. But we need to understand why that was the case. There is nothing inherently compelling about “economic idiom”. If you’re interested in Jaynes’ ideas, here is something I put together:

    https://benjamindavidsteele.wordpress.com/2016/11/07/beyond-that-there-is-only-awe/

    Jaynes proposes a useful framework. He calls it the General Bicameral Paradigm. “By this phrase,” he explains, “I mean an hypothesized structure behind a large class of phenomena of diminished consciousness which I am interpreting as partial holdovers from our earlier mentality.” There are four components:

    (1) “the collective cognitive imperative, or belief system, a culturally agreed-on expectancy or prescription which defines the particular form of a phenomenon and the roles to be acted out within that form;”
    (2) “an induction or formally ritualized procedure whose function is the narrowing of consciousness by focusing attention on a small range of preoccupations;”
    (3) “the trance itself, a response to both the preceding, characterized by a lessening of consciousness or its loss, the diminishing of the analog or its loss, resulting in a role that is accepted, tolerated, or encouraged by the group; and”
    (4)“the archaic authorization to which the trance is directed or related to, usually a god, but sometimes a person who is accepted by the individual and his culture as an authority over the individual, and who by the collective cognitive imperative is prescribed to be responsible for controlling the trance state.”

    The point is made that the reader shouldn’t assume that they are “to be considered as a temporal succession necessarily, although the induction and trance usually do follow each other. But the cognitive imperative and the archaic authorization pervade the whole thing. Moreover, there is a kind of balance or summation among these elements, such that when one of them is weak the others must be strong for the phenomena to occur. Thus, as through time, particularly in the millennium following the beginning of consciousness, the collective cognitive imperative becomes weaker (that is, the general population tends toward skepticism about the archaic authorization), we find a rising emphasis on and complication of the induction procedures, as well as the trance state itself becoming more profound.”

    This general bicameral paradigm is partly based on the insights he gained from studying ancient societies. But ultimately it can be considered separately from that. All you have to understand is that these are a basic set of cognitive abilities and tendencies that have been with humanity for a long time. These are the vestiges of human evolution and societal development. They can be combined and expressed in multiple ways. Our present society is just one of many possible manifestations. Human nature is complex and human potential is immense, and so diversity is to be expected among human neurocognition, behavior, and culture.

    An important example of the general bicameral paradigm is hypnosis. It isn’t just an amusing trick done for magic shows. Hypnosis shows something profoundly odd, disturbing even, about the human mind. Also, it goes far beyond the individual for it is about how humans relate. It demonstrates the power of authority figures, in whatever form they take, and indicates the significance of what Jaynes calls authorization. By the way, this leads down the dark pathways of authoritarianism, brainwashing, propaganda, and punishment — as for the latter, Jaynes writes that:

    “If we can regard punishment in childhood as a way of instilling an enhanced relationship to authority, hence training some of those neurological relationships that were once the bicameral mind, we might expect this to increase hypnotic susceptibility. And this is true. Careful studies show that those who have experienced severe punishment in childhood and come from a disciplined home are more easily hypnotized, while those who were rarely punished or not punished at all tend to be less susceptible to hypnosis.”

    • Benjamin David Steele March 8, 2019 at 10:37 am | #

      Basically, ideological realism can only ever operate and dominate as a paradigm through collective trance. It’s a shared hallucination. Jaynes’ discussion of hypnosis would be enlightening here. He notes that hypnosis (as with anything that follows the same pattern) requires collective imperative, which explains why hypnosis is more powerful in larger crowds than when done with individuals (consider the amazing feats a stage hypnotist can get people to do as compared to scientists studying isolated subjects in a laboratory)

      Maybe capitalist realism has been so powerful for the very reason of large nation-states, empires, and mass media to express a collective imperative and to socially enforce it through centralized authority. Consider the power of authorization a national media host or national politician can hold these days, when his voice can literally be projected into the homes, cars, and offices of millions of people (sometimes hundreds of millions).

      If you want to consider how this works, listen to the powerful voices of those who have promoted major changes: Hitler, FDR, MLK, etc. Listen to their speeches and read about those who heard those speeches at the time. To collectively become entrained to such powerful voices is an inherent capacity within human nature. For capitalist realism, it also required influential figures like Reagan and Thatcher, and it was surely no accident that Reagan was an actor and media spokesperson as that would have made him familiar with the use of rhetoric and authorization.

      This is the context in which we have to understand Hayek. His voice of authorization was backed up by an entire system of hierarchical authority. His rhetoric was powerful because it drew upon collective imperative that, in its most basic form, had been established for centuries. But maybe he had the genius to refashion it for new conditions and needs.

    • Benjamin David Steele March 8, 2019 at 10:44 am | #

      Here is a good example of Reagan’s training as an authority figure who could wield authorization. He started his career as a baseball announcer. It was common for him not to be at the games nor even be watching the games he announced.

      Instead, he’d receive paper read outs that gave him the bare facts of the game and he had to imaginatively fill in the details and do it convincingly to make it seem real, even though most of it was entire bullshit. He used people’s trust in him as an authority figure in media to help them see the ‘reality’ of a game that he himself was not seeing.

      He later applied that talent to politics and economics. That is the power of authorization. It is even more powerful when it is implemented toward a collective imperative, far greater than a sporting event, although maybe sports as spectacle isn’t so far off from the spectacle of power in general.

      The point is one speaks with certitude. That is why Trump’s followers don’t care that he speaks the truth and even admit that they know he lies all the time. What matters is that he speaks as if he believed what he says. It’s the make-believe quality that matters so much, the suspension of disbelief that is required for any enactment of ideological realism.

  8. Paul Yamada March 14, 2019 at 1:36 pm | #

    Interesting that none opf the above seem to have read any works by Phil Mirowski.

  9. Willibro March 16, 2019 at 2:26 pm | #

    Dr. Robin: Hope you will soon publish something useful in response to excruciatingly long, self-congratulatory right-wing thumb-suck from Robert “Bloody Bob” Kagan: https://www.washingtonpost.com/news/opinions/wp/2019/03/14/feature/the-strongmen-strike-back/

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