Posts tagged Hayek

Column on Capitalism & Socialism Rightly Understood

Capitalism & Socialism Rightly Understood

Tibor R. Machan

In a recent Op Ed for The New York Times, Professor Gar Arperovitz of the University of Maryland, who teaches political economy there, has written that “something different [from what OWS wants] has been quietly brewing in recent decades: more and more Americans are involved in co-ops, worker-owned companies and other alternatives to the traditional capitalist model. We may, in fact, be moving toward a hybrid system, something different from both traditional capitalism and socialism, without anyone even noticing.”

Well, this comment shows, among other things, a profound misunderstanding of both capitalism and socialism. In the formers system there is no prohibition of pockets of communitarian associations, kibbutzes, communes, cooperatives, and so forth. This is a point made emphatically by one of the 20th century’s foremost philosophical defenders of capitalism–or, as he put it, “capitalist acts between consenting adults”–the late professor Robert Nozick, in his famous book Anarchy, State, and Utopia (Basic Books 1973).

Nozick pointed out that in the libertarian system he presented in his book there is every chance to experiment with a great variety of human associations–he called the “utopias”–provided these do not sanction the coercion of some people by others. And since the kind of associations that “worker owned companies” are need by no stretch of the imagination involve any kind of coercion, they are entirely compatible with capitalism wherein the major element is freedom of association, not the pursuit of any particular goal (including profit).

It is odd that Professor Alperovitz would not be up front about this. Is he perhaps intent on misrepresenting the nature of a capitalist political economy, making it appear to be something it isn’t, namely, limited to promoting only certain types of human associations such as business firms? What about the thousands of churches in the semi-capitalist system of America which are on record promoting various spiritual goals? What about the Amish, the Moonies, the Roman Catholics, the Salvation Army, the Red Cross and many others, including clubs, fraternal organizations, and so forth, that have nothing to do with seeking the ends that most business enterprises seek? All these are fully compatible with the basic principles of capitalism but not so much with socialism. None of these are permitted in countries like North Korea or Cuba, let alone in the former Soviet Union which attempted to implement socialism, namely, the state ownership of the major means of production and the total abolition of the right to private property, a right that indeed facilitates the variety of ways people may freely associate with one another.

Professor Alperovitz is a teacher of political economy so he must certainly know about the point Nozick made and about how a near-capitalist society such as the United States of America and many other Western countries are hospitable to, indeed promote, the great variety of communal associations he misleadingly identifies as socialist? Why would he do this?

If Professor Alperovitz wants to defend socialism or some hybrid of true capitalism and true socialism–whatever that might be–he should do this up front. He should acknowledge that socialism involves state coercion, especially on the economic front, and capitalism doesn’t. The various non-economic human associations he misidentifies as socialist do not involve coercion, which makes them fit within a capitalist but not within a socialist political economy.

But I guess Professor Alperovitz isn’t really willing to put his money where his mouth is, to come out four square for a genuine socialist/capitalist hybrid. He is, instead, defending something no bona fide capitalist or libertarian–e.g., Milton Friedman, F. A. Hayek, Ayn Rand, Murray N. Rothbard, Ron Paul et al.–opposes. Every one of these champions of capitalism accepts that in a genuine free country there can be innumerable human groupings and these include worker owned firms and farms.

Column on Who is Near Socialism Now?

Who is Near Socialism Now?

Tibor R. Machan

Nearly all people who believe in a pro-active government–one that doesn’t merely make sure the rule of law by which individual rights are protected is followed but gets in there picking winners and losers–have a good deal in common with socialists. They are more or less avid statists. This includes monarchists, fascists, communists (with some peculiarities though), welfare statists, modern liberals, many conservatives and so on. Only classical liberals and libertarians are exceptions. They either adhere to a very limited role for the government–they are, in short, minarchists; or they may even embrace a kind of anarchism.

In America there are very few thinkers who come right out a identify themselves as socialists but quite a few are clearly statists. They believe government ought to make large contribution to the way the society and culture shapes up, from education, economics, science, all the way to the arts. Only religion and the press are excluded, mainly because the framers of the US Constitution to explicit and firm objection to government involvement in religion and journalism.

But there is a good test for telling if an American statists is in fact nearly a socialist, even a socialist of the Marxist variety. This is to see if he or she holds that people’s labor belongs to the society or to them–is one’s labor private or public property? The recent controversy about President Obama’s health care policy, one feature of which is that government is authorized to force citizens to purchase health insurance, is a kind of litmus test. This policy involves the government coercing people to engage in a certain kind of labor, even if only the labor of purchasing health insurance. Citizens, just for being citizens, are deemed subject to being forced to do something they may very well not choose to do, namely, to expand their labor and resources in ways they may believe is wrong.

Yes, this is not a Draconian measure for sure. And there are some other similar measures already on America’s law books, so it isn’t even entirely exceptional. But it is rather blatant and unabashed. Forcing people to get a license to work in some profession is similar but one might chalk that up to an overly zealous concern with safety, not to making people purchase what they do not want. The idea that a citizen’s labor belongs to the government to manage, to give direction to, is not just statist but indeed part and parcel of Marxian socialism.

Here is the late Professor Robert Heilbroner, famous mainly for writing The Worldly Philosophers (Simon & Schuster, 1961, a history of economic thought nearly all students are assigned upon entering college), spelling out the point in his less well know book, Marxism: For and Against (W. W. Norton, 1980):

“Indeed, the creation of socialism … requires the curtailment of the central economic freedom of bourgeois society, namely, the right of individuals to own, and therefore to withhold if they wish, the means of production, including their own labor. The full preservation of this bourgeois freedom would place the attainment of socialism at the mercy of property owners who could threaten to deny their services to society—and again I refer to their labor, not just to material resources—if their terms were not met…” (p. 157, my emphasis)

That is the crux of the issue: Not just private property but the private control or freedom of one’s labor is abolished under socialism; the state in that system (which is to say the group people in government) knows best what citizens need to do and have the legal authority, even duty, to make citizens comply for the good of society.

Is this what is involved in Obamacare? To a certain extent it is and if it is an intricate aspect of Mr. Obama and his supporters’ public philosophy, it signals that they are moving toward socialism, the state’s rule over the population of the society. (It bears out F. A. Hayek’s warning issued back in the 1940s about the heavy handed welfare state, in his The Road to Serfdom [Routledge & Sons, 1944]!)

And that means that all those who have made the charge that Obamacare is socialist have been on target and not engaging merely in badmouthing, besmirching the president’s efforts to solve an important social problem. And why protest the charge anyway? Why don’t Mr. Obama and his supporters admit outright that they want a socialist health care system and maybe even a socialist political economy in America? If such honestly were to obtain, we could start a real argument instead of engaging mostly in name-calling.

Column on Zernike’s Stupid Outrage

Kate Zernike’s Stupid Outrage

Tibor R. Machan

In a news report on October 2nd, 2010, titled “Movement of the Moment Looks to Long-Ago Texts,” New York Times reporter Kate Zernike tells us that books like Frederick Bastiat’s The Law, from 1850, and F. A Hayek’s The Road to Serfdom from 1944, are selling like hotcakes among Tea Party members. OMG! How awful. Next we will be told that some people are studying Socrates, Plato, Aristotle, Aquinas, Hobbes, Hume, Smith, Locke, Marx and other authors of “long-ago” texts in order to learn about political economy, ethics, social philosophy and such.

I suppose the hip thing to do would be to burn all these long-ago texts and focus only on the blogs, especially from the Left, in our efforts to gain an understanding of how the world works. Zernike writes as if most of our university curricula ought to be dismissed as useless, irrelevant, even destructive of human knowledge because, after all, in many courses one is advised to read other than the latest texts.

This is truly ignorant. Where does she think the Obamas and Krugmans and other champions of vast government powers gain their approach to political economy and public policy? How about Thomas Hobbes? Or Rousseau? Or Hegel or Marx or Keynes? All of these and their fellow statists produced works way back when.

It was in fact Keynes who made the observation that might have helped Ms. Zernike to get a grip on how ideas function in this world. As he wrote in 1936, “The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.” (The General Theory of Employment, Interest, and Money [Harcourt, Brace, 1936], p. 383.)

And it is, after all, Keynes’ views on the modern economy that’s pretty much guiding the thinking and policies of the Obama administration and the columns of Krugman (who makes no secret of this fact as he pushes for more and more government stimuli to solve our problems). Who thought up the idea of top down management of a country’s economy? It was the long ago champions of mercantilism whom Adam Smith criticized so severely for constantly meddling in the economy. And before that it was Thomas Hobbes who promoted absolute statism which clearly implied just the sort of policies that today’s Leftists favor and which pretty much guide their thinking today.

It is actually refreshing that Tea Party members are studying classic texts in the fields of economics and social philosophy to offset the mostly statist political education they have very likely received in their own contemporary education, an education surely biased in favor of government control of nearly everything in our lives given how that education itself is nearly uniformly government funded and administered. This certainly could use some balance from some of these long-ago thinkers the Tea Party is dipping into for some advice.

Instead of attempting to belittle Tea Party folks because they read some classic works critical of the huge scope of government–the Leviathan Hobbes was advocating –Zernike might have reported on some of the arguments they are absorbing from these thinkers and what replies might be offered them in defense of those other long-ago authors who loved government and are today influencing most politicians and bureaucrats with their statist teachings.

Tea Party folks may or may not be reading the best books to gain their grasp of the right way to approach today’s American political economy but for certain the task they face isn’t impeded at all by a bit of reading of the long-ago texts of their choice. Maybe when they end up on the Jaywalking segment of NBC-TV’s The Tonight Show with Mr. Leno, they will actually demonstrate a bit of education instead of the blatant ignorance that most of those being featured exhibit.