Russ Roberts on Hayek in the Wall Street Journal

Lynne Kiesling

Wow, Russ Roberts has a wonderful column in today’s Wall Street Journal about Hayek and the recent interest in his work (the link is subscriber-only, but if you Google for the article you should be able to get the whole thing to pull up from Opinion Journal). It’s an outstanding summary of why Hayek’s ideas are important and relevant. A choice quote illustrates the ones I think are most important:

Third, as Hayek contended in “The Road to Serfdom,” political freedom and economic freedom are inextricably intertwined. In a centrally planned economy, the state inevitably infringes on what we do, what we enjoy, and where we live. When the state has the final say on the economy, the political opposition needs the permission of the state to act, speak and write. Economic control becomes political control.

Even when the state tries to steer only part of the economy in the name of the “public good,” the power of the state corrupts those who wield that power. Hayek pointed out that powerful bureaucracies don’t attract angels—they attract people who enjoy running the lives of others. They tend to take care of their friends before taking care of others. And they find increasing that power attractive. Crony capitalism shouldn’t be confused with the real thing.

The fourth timely idea of Hayek’s is that order can emerge not just from the top down but from the bottom up. The American people are suffering from top-down fatigue. President Obama has expanded federal control of health care. He’d like to do the same with the energy market. Through Fannie and Freddie, the government is running the mortgage market. It now also owns shares in flagship American companies. The president flouts the rule of law by extracting promises from BP rather than letting the courts do their job. By increasing the size of government, he has left fewer resources for the rest of us to direct through our own decisions.

Hayek understood that the opposite of top-down collectivism was not selfishness and egotism. A free modern society is all about cooperation. We join with others to produce the goods and services we enjoy, all without top-down direction. The same is true in every sphere of activity that makes life meaningful—when we sing and when we dance, when we play and when we pray. Leaving us free to join with others as we see fit—in our work and in our play—is the road to true and lasting prosperity. Hayek gave us that map.

This theme of “economic control becomes political control” is crucial to making sense of the corporatist nature of political activity, and why regulation is so pernicious for individual well-being and liberty. An excellent read.

3 thoughts on “Russ Roberts on Hayek in the Wall Street Journal

  1. I surfed over to the WSJ to check it out the article, and I found this headline:

    “Swatch Group Founder and Chairman Nicolas Hayek Dies ”

    I am sure it was just a coincidence.

  2. Russ’s article is an echo of the theme of his most recent EconTalk podcast:

    Bryan Caplan of George Mason University and blogger at EconLog talks to EconTalk host Russ Roberts about two books: Eugene Richter’s Pictures of the Socialistic Future and F. A. Hayek’s The Road to Serfdom. Both books warn against the dangers of socialism. Pictures of a Socialistic Future, published in 1891 is a dystopian novel imagining what life would be like after a socialist revolution. The Road to Serfdom, published in 1944, explores the links between economic freedom and political freedom and the inherent similarities between communism and fascism. Both books look at the German roots of centralized planning and the nature of the people who rise to power when the State is powerful. The conversation includes discussion of the these topics as well as the rule of law and the amount of state control of the economy in Nazi Germany.

    If you like the article, you should enjoy the podcast…

  3. I should have put quotes around the paragraph beginning “Bryan Caplan” and ending at “Nazi Germany.” That’s the nutshell description from the EconTalk website.

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