Softpanorama

May the source be with you, but remember the KISS principle ;-)
Home Switchboard Unix Administration Red Hat TCP/IP Networks Neoliberalism Toxic Managers
(slightly skeptical) Educational society promoting "Back to basics" movement against IT overcomplexity and  bastardization of classic Unix

Philip Pilkington: The Origins of Neoliberalism, Part III – Europe and the Centre-Left Fall under Hayek’s Spell

By Philip Pilkington, a writer and research assistant at Kingston University in London. You can follow him on Twitter @pilkingtonphil


In the practical art of war, the best thing of all is to take the enemy’s country whole and intact; to shatter and destroy it is not so good.

– Sun Tzu

In part one and two of this series we explored how Hayek waged war on what he thought was the cause of all the political ills of the 20th century: namely, economic planning in all its forms. We also saw that Hayek’s doctrine of classical liberalism and anti-statism proved too radical for American political and business establishment and that it required diluting by Milton Friedman.

We turn now to Europe, which would come to adopt its own form of neoliberalism. Once again, while the end result was a somewhat different creature from that conceived of by Hayek, it was nevertheless his strained, absolutist thinking that lies at the heart of the system that developed.

Motivations for a European Repression of History

As we have already seen some in the American right-wing loathed the economic planning that had grown up in the US in World War II and which, due to producing good outcomes for the overwhelming majority of citizens, gained consensus in the post-war years. This gave rise to a new propagandistic discourse aimed at what Hayek and others called “socialism” but which had little to do with the collective ownership of the means of production and was in reality a mixture of pragmatism and centre-left sentiment. The reason that Hayek’s extremism found fertile soil in Europe was that the underlying conditions were altogether different from those in America but ironically, that meant the model was bent into an even more palatable-looking form.

Europeans were, quite frankly, not as gullible as their American neighbours. They were less inclined to have the words that make up their language twisted and distorted in order to become meaningless propaganda of the sort that Orwell imagined. Unlike in America there was a strong socialist tradition in Europe and people knew what socialism was – and what it was not. The reason neoliberalism ultimately developed in Europe was altogether different.

In the post-war years many right-wing liberal politicians and intellectuals were tarrying with the same problem that Hayek faced in the 1930s. Any honest look at history – and indeed for many of these people this history was lived – would lead one to conclude that totalitarianism and war had developed in Europe, as Keynes hinted that it might in his 1919 book The Economic Consequences of the Peace, due to punitive reparation policies that were deflationary in nature. The neutral observer would also conclude that these circumstances had been exacerbated in Germany by a government which dogmatically pursued austerity policies and that this ultimately led to Hitler’s election. This presented right-wing liberals with a conundrum: how could they continue to support so-called laissez faire, small government policies if these policies resulted in forces that were so destabilising that they had led in the past to the most monstrous of tyrannies?

The answer for some was to convert to Keynesianism and to acknowledge that some degree of economic planning was not inconsistent with the principles of conservatism. The answer for others was to embrace Hayek’s delusion wholeheartedly and pretend as if it were economic planning and not laissez faire policies that had led to Hitler. So, they picked up a copy of The Road to Serfdom, joined Hayek’s network which was centred on the Mont Pelerin Society and threw history down the memory-hole.

Their problems were, however, much greater than their American compatriots. While the labour unions were indeed extremely important in the American political structure, they were never integrated in the same way that they were in many European countries. Europe, after all, had a strong tradition of social democratic parties that literally grew out of the labour movement. For this reason the unions had become more institutionalised in Europe than they had in the US, which lacked a labour party proper.

While in private many of the Mont Pelerin ideologues might have called these unions “socialist” – and indeed Hayek had some very unpleasant things to say about them as we shall see – this was not a tactic that would readily win political and institutional power. A public face was needed that would accommodate the unions in a way that they would not become vehicles for the economic planning that these “thinkers” had convinced themselves would result in totalitarianism.

Folie à syndicat

Throughout his life Hayek was extremely hostile to unions – a hostility that would later be taken up directly by the Thatcher government in Britain – but many of the Europeans around him thought this ideology counterproductive to the spread of neoliberal ideas. Some of these politicians and intellectuals genuinely did seem to believe that unions had a place in a neoliberal society, while others were likely being pragmatic.

Hayek and his Austrian compatriots saw the unions as a dangerous force – a potential harbinger of their fantasy totalitarianism – and sought to have governments squash them using the legal apparatus. Somewhat ironically Hayek’s stance on unions can only really be properly compared in Europe to the positions taken by the fascist and Nazi movements in the early 20th century insofar as brute legal force was sought to crush organised labour in the most authoritarian manner imaginable. Perhaps then, it should not surprise us that many members of Hayek’s inner circle would later rally to the support of savage dictatorships in Latin America.

However, other emergent European neoliberals took a completely different view and one would probably not be far wrong in saying that this was because the Hayek position brought up some rather unsavoury memories of the fascist era and the abuse of the legal apparatus that took place in those times. The main faction who supported the thesis that unions should be integrated – unsurprisingly, mostly Germans – were the ordoliberals. They, like the neo-Austrians, had formed largely as a collective of intellectuals opposed to the emergence of totalitarianism in Europe, but they had a slightly different view of what sort of society they thought would defend against it.

The ordoliberals and their allies – who dominated the discussion in the Mont Pelerin Society on this issue – believed that unions had already been integrated into the structures of power sufficiently that their more radical elements had been neutralised. They believed, rightly it turned out, that the union leaders could be “educated” in the ways of neoliberalism and help to keep their own workers in check. Thus the unions were seen by the ordoliberals and their allies as an integral part of their ideal of a neoliberal system of governance.

This ideology would later become known in Europe as “social partnership” and would prove, in Germany especially, as a remarkably effective way to keep wages low by indoctrinating union leaders into believing that doing otherwise would necessarily result in their workers being laid off. (The perceptive reader who is aware that many of Europe’s current problems actually stem from this will see yet another important link between today’s events and our little history). Within the left and the union movement those opposed to social partnership in its neoliberal form would also be painted as “Reds” and “communists” and be criticised in line with Hayek’s totalitarian delusion in much the same perverse way as the charge of “socialism” is used in the US. Those who go against the neoliberal orthodoxy in the European labour movement, while tolerated, are generally seen as socialists of a rather old fashioned sort whose silliness stems from the fact that they failed to learn the lessons of Europe’s totalitarian past. Need we amend this to correctly read: “Hayek’s construction of Europe’s totalitarian past”?

Not only were the ordoliberals concerned with keeping unions in check in terms of their bargaining powers, but they also saw in Europe a very real threat that workers were gaining political ground within the workplace. While they did not generally agree with Hayek’s stance on unions, they certainly did see this as an obstruction of “the market” and thus, in the language of Hayek’s delusion, a possible source of totalitarianism. Once again, however, the ordoliberals saw social partnership as a means by which they could back labour leaders who were not antagonistic to managers at the expense of their more radical colleagues. As in the case of wage bargaining, the ordoliberal project was to essentially gain control over the union movement and turn it into a means by which to further the neoliberal agenda.

Hayek and the Austrians reacted to all this in a rather extreme manner, even, rather surprisingly, invoking the spectre of class war. Indeed, one might easily mistake their stance for a sort of right-wing Leninism. Fritz Machlup, for example, at a meeting of the Mont Pelerin Society in 1947 said that:

Industrial peace is something that we should be afraid of, as it can only be brought at the cost of further distortion of the wage structure. I am most afraid of Professor Iversen’s proposal for wage determination by State, and consider it the end of democratic government.

According to such a view, of course, any countries with minimum wage laws do not, by Machlup’s idiosyncratic standards, have democratic government; and labour markets should, in a functioning Machlupian society, be in a state of constant war.

But rhetoric aside the Austrians largely lost the debate on the unions in Europe, while the ordoliberals won the day. Unlike in the case of monopolies, however, there was substantial opposition from Hayek and his allies. Whereas large corporations were to be accepted as normal by all those of neoliberal persuasion in both America and Europe, the tension over unions within the movement would continue; reaching fever pitch in the administrations of Reagan and Thatcher. These politicians and their allies, in a very real and direct sense, can be seen as purist Hayekians in the context of labour policy where they were not in terms of macroeconomic policy for which they favoured the doctrines of Friedman and the monetarists.

Conclusion: Neoliberalism Today

Many of us today live under neoliberal structures of governance. Each country may have its own peculiarities, but on broad principles they follow a pattern that invokes laissez faire, balanced government budgets, control over wages, privatisation, an abstention from economic planning beyond that strictly required and deregulation. What is more, Hayek’s delusion has become widespread to the point of all discourse being completely saturated. In polite company and in public you can certainly be left-wing or right-wing, but you will always be, in some shape or form, neoliberal; otherwise you will simply not be allowed entry.

Any policy or notion that offends the neoliberal mind-set and threatens to shatter Hayek’s delusion is said to only put us on the road to serfdom. It is not difficult to win a rational argument by pushing the point home that this is utter fantasy and nonsense, is completely ignorant of history and is founded on pre-school notions of economics; but that matters little. When you leave the room people will whisper to one another that you are an odd sort with silly ideas and probably should not be trusted.

Such is characteristic of all systems of crude propaganda. Propaganda, by construction, appeals to a series of images inside peoples’ heads – snapshots of a history either half-forgotten or fabricated entirely. These images, in turn, are design to affect peoples’ emotional centres and control them through manipulating that which causes their anxieties and their fears. That the founder of this propaganda himself believed in it entirely makes no difference, for it is the foolish man who thinks that effective propaganda is based on pure and cynical lies.

The oddness of the world in which we live today is that neoliberalism as a system of governance has become entirely dysfunctional. Those ambitious souls in the present ruling generation that received the torch from the inventors of the discourse believed it to be a pragmatic doctrine. This is not surprising given that we have seen that this is precisely how it was constructed. But as we have also seen neoliberalism was built on a fundamental fantasy – a sort of primal repression. Any serious student of history in general and economic history in particular knows that such policies are bound to be deflationary in the medium to long-run and that they will likely generate economic meltdowns and result in social and political turmoil.

And so our leaders, both intellectual and political, try to get a grasp of the situation we face today. But they consistently fumble and fall over; tripped up by their own ideologies. Hayek’s delusion is potent – very potent – and just as he all those years ago preferred to retreat into a fantasy world rather than face what was going on all around him, so too today our leaders do the same. Against all odds and in an act of what can only be considered heroic ignorance Hayek went to the grave with his delusion intact, we can only wonder how long others will uphold it before they buckle under its weight.

Topics: Guest Post, Politics, The destruction of the middle class, The dismal science

 Email This Post Posted by Yves Smith at 1:48 am

142 Comments » Links to this post

 

142 Comments:

 

 

  •  William says:

    January 11, 2013 at 4:29 am

    Great post. Reminiscent for me of what Michael Hudson talks about, effectively that the Free Traders in Great Britain at one time drank their own kool-aid, believing their own propaganda or PR, when different policy solutions were called for and would have been beneficial, a policy architecture that at one time in G.B.’s economic history had been to Great Britain’s advantage caused it to cede it’s superpower status more rapidly than had they changed course.

    Reply
  •  The Dork of Cork. says:

    January 11, 2013 at 6:43 am

    I remember being in a trade union officials office back in those cat days……..
    He had old black and white pictures of labour minister Bertie on his walls in almost JFK (not quite) like poses……

    I was really stuck for words.
    I could not get up to courage to ask him why ?

    Whats really not talked about in Ireland is how absurd and strange the place is.
    Its almost as if this euro jurisdiction does not exist in reality – everything I see is made of cardboard.

    Its like a bad , malfunctional Holodeck programme

    Reply
  •  RanchJames, Longdrycreek says:

    January 11, 2013 at 7:33 am

    Back to the books for you, Sir. Since you claim to know much about the U.S., I suggest you consult Wolfgang Schivebursch’s “Three New Deals.” FRD, Mussolini, and Hitler. Peas in a pod until 1939.
    If you have interst, I urge you to read Hernando de Soto’s “The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else.”
    Of course, central planning is useful if one wants to exterrminate a population or thin it.
    But as we learned in FDR’s 1930′s in the U.S., The Brain Trust was terrible at running farms.
    These books, among other I have in my library, are sufficient to give you a start on understanding the flaws the Hayek and other saw in the offing.
    Best wishes to you. JAG

    Reply
  •  Watt4Bob says:

    January 11, 2013 at 7:44 am

    My latest rant is that everywhere I look, everyone is attempting to do the same thing, especially businesses;

    They’re trying to do the work of ten people with five or six people, and those people are under-paid.

    Competent people move away from these conditions if they can, so businesses are left to run under-staffed with low-skil, or incompetent employees, which results in low productivity and dis-satisfied customers.

    Because those people are under-paid and trying to do the work of two, they are depressed, and dispirited, they reflect that reality into the market.

    Recently I find that in managing IT/telcom projects involving multiple vendors, I have to enlist the help of independent engineers to do tasks that the vendors in-house people would have done in years past because vendors are trying to deliver services without the cost of deep engineering resources.

    Last month, I had a pre-sales engineer ask me “Who’s going to do the heavy-lifting on this?” referring to the programming necessary to integrate some legacy Cisco equipment with the hardware/services he was getting ready to deliver. Throughout the sales process, this vendor had touted their Cisco expertise. In the past it had been my experience that vendors would be embarrassed to admit they couldn’t handle every aspect of the job.

    In the retail business it’s an almost universal complaint that you have to search for salespeople when you need assistance, and when you find them they have bad attitudes.

    How long until nothing works because no one wants to pay the cost of doing business?

    Not to mention the fact that people making $6/hr can’t afford to buy your products.

    It’s an obvious race to the bottom, and we’re making remarkable progress on that front.

    Reply
  •  Schofield says:

    January 11, 2013 at 8:17 am

    The failure of Hayek’s Neo-Liberalism can be seen in the economic planning that took place in the bail-out of financial sectors of countries operating under Neo-Liberal ideology. If you recall in the United States Republican members of Congress were initially hostile to the bail-out but as the severity of the domino effect on credit provision sunk in they reluctantly supported the bail-out measures. Such reluctance reflects the Neo-Liberal inability to understand the sovereign bank role played by government in supplying and regulating credit to allow the private banks to do so and indeed for the sovereign government bank to supply credit to the economy when the private banks are reluctant to do so. Reluctance stemming from the private banks themselves crashing the economy by hyper-inflating house prices.

    The failure of Neo-Liberals to recognise that government operates as a sovereign bank in the manner I’ve outlined lies at the heart of the so called “Fiscal Cliff Crisis” and also is reflected in their failure to understand the Platinum Coin Seignorage solution and their opposition to it. Indeed their opposition to the notion of government as sovereign bank is rational in the sense that acknowledging the role of a sovereign government bank means the possibility of democratic economic planning which will better regulate the activities of the private banks to prevent them under-mining the real economy and also engage in redistribution of wealth. Such “rationality” stems from the ambivalency of human nature and a propensity to “thieve” from others. A sovereign government bank clearly interferes in the ability to thieve:-

    http://cliodynamics.info/PDF/Spinney_NewScientist2011.pdf

    Reply
  •  David Lentini says:

    January 11, 2013 at 9:27 am

    Philip,

    Thanks again for another series of great posts. I think our failure to grasp the intellectual history of our time has seriously crippled our ability to come to grips with the crises we face. Instead of starting from a position of having some knowledge of how we got into the messes we face, we have noting by legend, myth, and superstition. Indeed, as you conclude, the failure of our so-called elites to understand the most basic aspects of the philosophical and intellectual foundations on which their policies and values are based has left us rudderless in the midst of a typhoon.

    I hope you’ll consider writing more about the cultural history that brought us here. While Hayek and Friedman (and others) did the intellectual groundwork for the economic and social phantasms of neoliberalism and libertarnianism, the public in general had no such conditioning. Indeed, the whole neoliberal-libertarian movement was just a backwater of cranks for decades. What happened to make it so popular.

    In your American history, you point to Ronald Reagan as a sort of Pied Piper of neoliberalism. I agree that Reagan was a popular spokesman and had an effect on public opinion, but I don’t think that he alone somehow Mesmerized America into buying what Friedman was selling. I think the public attitude shifted towards his positions for a variety of unrelated reasons. First, America’s cultural mythology has always been heavily influenced by a strain of Calvinism that comprised a strange amalgam of Christian eschatology and greed, leading during the Enlightenment to a belief that wealth was God’s blessing on the chosen and man was infinitely perfectible; the latter deriving from the former’s view of America as the true Eden and the colonization of the continent the culmination of the Biblical End Time. Second, the death of Enlightenment’s attempt to distill out a basic universal moral framework from Christianity and its replacement by Modernism’s cult of the self during the 19th Century. Third, the rise of industrial production, especially Fordism, that for a time gave the public at large a level of material wealth previously available to only the very rich. The rise of industry was predicated by the apparent triumph of science and technology, the former the keystone of the Enlightenment’s attempt to surpass religion with rationality, also created a sense of ever-increasing good–the new was inherently better than the old.

    Is it really a wonder then, how, after the Second World War ended the Great Depression, that the American public grew increasingly self-centered and anti-social? Following such social critics as Christopher Lasch, Richard Sennett, and Erich Fromm, one sees a progression from the “public man” to homo economicus as the public is more enthralled by the apparent power of owning more and doing more, justified by the triumph of science over religion and its moral edicts. By the late ’60s, much of the American public that trusted the New Deal had grown impatient with the government’s failure in Viet Nam and the limits it was reaching on domestic welfare. The ground was then very fertile for Friedman’s and Hayek’s ideas of government-as-evil (or at least incompetent) and they could do much better if only unfettered by taxes, regulations, and civil rights laws? Give the frustrations of the public by the late ’70s–the disappointment in the rate of increase in material gain and the apparent failure of the government to “fix” that problem–Reagan started sounding pretty good.

    Of course, no one would speak or think about the real implication of neoliberal and libertarian society–the tendency of some human beings to seek power and collude in that search. In other words, the inherent path of neoliberalism and libertarnianism toward corporatism; the fact that tyranny can come from individuals as easily as from governments; the fact that the question of whether the society that allows slavery is more free than the society that forbids slavery is not so easy to answer.

    Reply
  •  jsmith says:

    January 11, 2013 at 9:54 am

    “The oddness of the world in which we live today is that neoliberalism as a system of governance has become entirely dysfunctional. Those ambitious souls in the present ruling generation that received the torch from the inventors of the discourse believed it to be a pragmatic doctrine.”

    Good series especially this last installment on the exposition of the mutability of neoliberalism in the hands of clever of fascists – a doctrine to fit any political system or religion it encounters.

    Can modern society rise above the incessant sea of courtier propaganda to see that we are living under a modern version of the “divine right of kings” dressed up as pragmatic doctrine?

    Another thing, while PP gets a slight dig in on Leninists one of the more interesting comparisons in light of his analysis is that now we can see why Marxism and socialism were such an anathema to Hayek and his minions – basically, Marx’s vision of economics was largely correct while the neoliberals’ system was ungrounded horsesh!t based upon nothing more than the delusions of sick minds.

    From its inception, neoliberal thought in any form has failed to honestly address that little thing called “reality”.

    Thus, the rise of the even more insidious side of neoliberal thought where the rulers – as a Bush aide reportedly stated – create their own “reality” utilizing the techniques of Strauss and others – the Big Lie, etc.

    Whether they will ultimately be proven correct or not, Marxists thought socialism a progressive step based upon an accurately depiction of economic systems of the past and present.

    A neoliberal society?

    A whole-cloth manufactured chimera based on delusion and ignorance.

    Not only was Marxism/socialism a threat to the wealth of the courtiers but it was an intellectual threat because as a system of thought it was actually born of an accurate depiction of reality.

    As annoying as some doctrinaire Marxists can be, at the very least the take as their base a system that most non-Marxists can agree has much value as a tool in describing the social world in which we live.

    Give me a leftist diatribe over a neoliberal fairy-tale any day.

    Reply
  •  Hugh says:

    January 11, 2013 at 10:01 am

    Hayek was just a convenient dupe whose goofy libertarian ideas, mixed with a little neoclassical economic theory, were taken up by kleptocrats as a perfect philosophical cover for their looting: neoliberalism. In neoliberalism, it is important to distinguish between the form and the function. Neoliberals, for example, seldom balance budgets despite their clamoring for them. The push for balanced budgets is just a way to eliminate spending and increase taxes on the 99% as well as privatize more of government and the commons. At the same time, there is the countervailing and contradictory tendency of demanding tax cuts which primarily benefit the rich.

    Corporate welfare schemes are seldom touched by balance budget crusades. Again this illustrates the difference between the rhetoric and the action of neoliberalism (and one of its intellectual antecedents, libertarianism). They can talk about “free markets”, “self-correcting markets”, and “creative destruction” all they want, but at the end of the day and despite the protestations of reluctance and distaste, the rich and the corps take the government welfare and the bailouts, and stick it to everyone else. They do this, not because they have been forced to against their beliefs, but because they always meant to (because it is always about the looting, not the words). You can look on it as Brer Rabbit and the briar patch as applied to politics and economics.

    Reply
  •  The Dork of Cork. says:

    January 11, 2013 at 10:51 am

    @Stephan
    As long as you can safely spend your winning their actions are not foolish – they are very rational.

    The trick is to keep the patient alive but not too sentient.

    That recent BIS paper / proposal that governments role is only to preserve money contracts even if the physical world enters a singularity is very very instructive.

    Governments role is now to manage entropy in the interests of the managers.

    Reply
  •  Massinissa says:

    January 11, 2013 at 10:53 am

    Its always sad when the Inner Party starts drinking its own Prolefeeds… *cough Romney and 47% cough*… The delusions of a few have been popularized and become commonplace among our elite. What should have been, for them, a convenient ideology to pursue their goals, has led to being that, PLUS making them completely irrational. So now instead of the greedy bastards of the past…

    We have thoroughly irrational greedy bastards. What an improvement! >.> At least fascist sympathizers like Henry Ford understood basic economics.

    Reply
  •  cripes says:

    January 11, 2013 at 11:13 am

    Yes. History shows us again and again that ideology is construed to justify class interests, and courtiers to paint their philosophical ceilings are a dime a dozen. The Kochs and Scaifes are latter day Medici seeding a hothouse industry of pissant intellectuals to tart up their playing. At least leave us a sitting chapel. But no, we get Friedman and Greenspan.

    Reply
  •  cripes says:

    January 11, 2013 at 11:39 am

    At least leave us a sistine chapel. Darn spellchecker.

    Reply
  •  Susan the other says:

    January 11, 2013 at 12:03 pm

    Yuk. It’s been terrible watching politics this last century. Like watching Grendel grow up. Time to accept our limits, whatever they are. Slavery was the quickest way to profit; feudalism was slavery with a veneer of patriarchy; mercantilism was feudalism with a keel and a sail; and capitalism is mercantilism with a corporate charter. So what’s post-capitalism gonna be? In a world with nothing left to exploit.

    Reply
  •  diptherio says:

    January 11, 2013 at 12:27 pm

    Philip Pilkington:
     

    Any serious student of history in general and economic history in particular knows that such policies are bound to be deflationary in the medium to long-run and that they will likely generate economic meltdowns and result in social and political turmoil.

     

    This is a feature of neo-classical economics, not a bug. It’s main purpose is to serve as ethical cover for the status quo, which is anything but ethical in reality.

    Consider, Thorstein Veblen from Theory of Business Enterprise

    …the modern industrial system is a concatenation of processes which has much of the character of a single, comprehensive, balanced mechanical process. A disturbance of the balance at any point means a differential advantage (or disadvantage) to one or more of the owners of the sub-processes between which the disturbance falls; and it may also frequently mean gain or loss to many remoter members in the concatenation of processes, for the balance throughout the sequence is a delicate one, and the transmission of a disturbance often goes far. It may even take on a cumulative character, and , may thereby seriously cripple or accelerate branches of industry that are out of direct touch with those members of the concatenation, upon which the initial disturbance falls. Such is the case, for instance, in an industrial crisis, when an apparently slight initial disturbance may become the occasion of a widespread derangement. And such, on the other hand, is also the case when some favorable condition abruptly supervenes in a given industry…

    The keeping of the industrial balance, therefore, and adjusting the several industrial processes to one another’s work and needs, is a matter of grave and far-reaching consequence in any modern community, as has already been shown. Now, the means by which this balance is kept is business transactions, and the men in whose keeping it lies are the business men…Hard times or prosperity spread through the system by means of business relations, and are in their primary expression phenomena of the business situation simply. It is only secondarily that the disturbances in question show themselves as alterations in the character or magnitude of the mechanical processes involved. Industry is carried on for the sake of business, and not conversely; and the progress and activity of industry are conditioned by the outlook of the market, which means the presumptive chance of business profits.

    All this is a matter of course which it may seem simply tedious to recite. But its consequences for the theory of business make it necessary to keep the nature of this connection between business and industry in mind. The adjustments of industry take place through the mediation of pecuniary transactions, and these transactions take place at the hands of the business men and are carried on by them for business ends, not for industrial ends in the narrower meaning of the phrase.[emphasis added]

    Just as bankers, operating on a bankruptcy-for-profit model, a la Romer and Akerlof, engage in behaviors that they know will bring their firms crashing down eventually, so too do those operating our country on a bankruptcy-for-profit model know exactly what they are doing. Their goal is the creation of profits, of gain, not the stability of the economic system, and gain can be had just as much from collapse as from unfettered operation. In fact, gain, especially ill-gotten gain, is actually easier to acquire during times of general crisis, at least if one happens to be in an advantageous position.

    Hayek may have been deluded, but the people who have instituted and continue to institute these policies know exactly what they’re doing.

    Reply
  •  Democraatus says:

    January 11, 2013 at 12:58 pm

    Am I the only one who cannot find logical arguments in this piece? The continuous flow of ad hominems and general name calling (those filthy Austrians again) don’t help the cause.

    If you want support for your cause, stop writing jargon like a Phd/doctor and present clear logic. Secondly, please behave when commenting as author. Your behaviour is below acceptable level.

    Whether you agree or disagree whether tax is theft: if you cannot understand this premises, it is worse with the real understanding of the world than I thought.

    Reply
  •  JEHR says:

    January 11, 2013 at 1:08 pm

    We are usually about 10 years behind the US in adopting certain ideas. We have an economist as our Prime Minister. Think about that!

    Here’s a letter I wrote to some of the MPs:

    This morning I heard the Minister of Fisheries, Keith Ashfield, being interviewed on our local CBC program. He ended with the comment that the Federal Government’s main focus now was on balancing the budget just as it was the main focus of the New Brunswick government to balance its budget.

    Well, as you probably know, these two things are not the same: The New Brunswick government is dependent upon its own taxes and a grant from the Federal government for its revenues. What Mr. Ashfield failed to mention was that the Federal Government has no tax revenue constraints on its spending. As a country with its own sovereign currency, Canada can afford to spend money on anything it chooses to spend it on as long as it is in its own currency.

    That spending, by the way, included bailouts for banks which occurred in 2008 to the tune of $114 Billion and includes payouts under employment insurance for fisheries workers who work on a seasonal basis in the province of New Brunswick. The Federal Government has chosen to take Canada into austerity by reducing public service employment (adding to unemployment in a time of recession!) and by reducing public spending in all departments by 10% (in a time of recession adding to the misery of people by decreasing services) and by reducing accessibility to programs like employment insurance for seasonal workers.

    The austerity that Prime Minister Harper seems to think is so necessary is just his ideology working its way through our economy. There is no need for austerity; what we really need is more jobs (not fewer) and increases in wages which have been stagnant for years (except for the CEOs of corporations and banks who have obtained most of the wealth gains since the financial crisis).

    I think the Federal Government has chosen austerity in order to balance the books so that when election time comes round the Conservatives will be re-elected for their good housekeeping practices.
    Actually, in real life money works in a different way than most of us suppose it does. Deficits at the Federal level actually are necessary so that the other sectors of society (the private individuals and private companies) can have “savings” (or “deleverage”). All sectors of society cannot save at the same time so that government deficits serve a useful purpose especially during a time or recession.

    Below is a video by S. Kelton explaining how money really works in the economy. It focuses on the United States but applies to Canada as well. Once people realize that the constraints on Federal spending are placed there artificially to suit the government in power (and the “need to balance the books” is an artificial constraint in a time of recession), then others can confront the government’s choices for spending. Why can it bail out the banks (spend) and not provide decent unemployment payments (spending) for fisheries workers? Why are the banks special but not individual workers?

    The government is elected to provide the public with services and goods that the public needs. Harper seems to think that privatization is the answer for fulfilling goods and services rather than the public sector. Both are important but we need more focus on helping the public obtain employment so that wages can increase and people can buy the things they need and thus help the economy.

    See video: http://www.nakedcapitalism.com/2012/12/stephanie-kelton-explains-modern-monetary-theory-to-you.html

    There are a number of places on the Internet where you can obtain information on Modern Monetary Theory which is an important analysis of how money works. Not knowing how money works, gives “budget balancing” much more importance than it deserves. The links between austerity and deficits is also important. In a recession, deficits are necessary for providing jobs; whereas, austerity during a recession just brings more pain and unemployment.

    Things can be different. There are alternatives.

    I hope you will give these ideas some consideration.

    Reply
  •  JEHR says:

    January 11, 2013 at 1:13 pm

    Wow, there are a lot of angry people that wrote comments before they had coffee today!

    Reply
  •  Jim says:

    January 11, 2013 at 1:52 pm

    Philip:

    As you continue on your quest for certainty in political and economic matters try to keep in mind the following:

    Hayek chose the Market (what he calls a spontaneous order)
    You chose the State (in your identification with MMT)

    Hayek concealed his normative choice for a liberal order behind evolutionary considerations which conferred upon his reasoning an air of objectivity.

    You concealed your normative choice for a state-centered monetary-economic order behind historical considerations (i.e. choosing to begin your description of monetary history with money origination in the state) which also conferred upon your reasoning an air of objectivity.

    The logic of both choices is the same. Both you and Hayek can only proceed in your respective analysis by artificially privileging a certain premise (in this case either the Market or the State) and then moving ahead with evolutionary or historical considerations.

    At some point you may come to realize that any phenomena (Nazism, the nature of monetary-economic systems, etc.) are susceptible to multiple (see, for example, MMT, MMR, and Neoliberal thoughts on our monetary system) or even contradictory conceptual encasements.

    In my opinion the beauty of democratic theorizing is the realization that we are all grounded in an equality of ignorance and that we only have each other to rely on in sustaining a fabric of collective living.

    Reply
  •  chris m says:

    January 11, 2013 at 2:25 pm

    most basic pol sci/american government courses define government at the outset as the legit use of force. the notion that taxes are theft denies this reality. government’s derive their legitimacy through the consent of the governed. in a democracy this is typically a simple majority of the governed.

    so taxes are not theft. more proaganda of this nature does not suffice to rebut an otherwise effective take down of this shared delusion.

    Reply
  •  Brian B says:

    January 11, 2013 at 2:28 pm

    I’ll give this writer some credit. He knows how to write a conclusory hit piece with little basis in fact. Undoubtedly because he resides in the economic fantasyland of academia.

    The funny thing is he can’t claim half the things he is claiming because no country has ever tried Hayek’s ideas.

    The Republicons and Democriminals in the US pay lip service to them but in reality the only capitalism they support is crony capitalism and its resulting preservation of the current elite.

    Reply
  •  Brian B says:

    January 11, 2013 at 2:47 pm

    “hayek’s idea’s never been tried for a reason. why should anyone weigh favorably a fantasy theory that has never been employed in any actual society.”

    There’s the rub. The presumption that something is correct simply because it is widespread and something that has not been tried is incorrect for the simple reason it has not been tried. I am presuming a few centuries ago you would be here railing the world is flat.

    Crony capitalism is a feature of entrenched interests; not a feature of capitalism. Ask any small business owner.

    Reply
  •  skeptonomist says:

    January 11, 2013 at 4:01 pm

    Pilkington seems to think that current policies in advanced countries have evolved through a process of competition between intellectuals, and that politicians are driven by ideology. It would be more realistic to think of it in terms of warring interests, not only “class” interests such as capitalists versus workers, but special economic interests such as monopolistic corporations and big banks and unions, which may be for their own worker’s interest and against the interests of other workers. Then there are rawer motivations such as racism (always important in American politics) and nationalism. Economic ideology is probably more often a cover in this real world than a primary motivation.

    Reply
  •  Brian says:

    January 11, 2013 at 4:16 pm

    This has been an excellent series of articles. The clear, linear explication is a model of simplicity. The citations were well chosen.

    Delusion is a basic tenet of human society; all the great philosophers, from Epicurus on, have focused on recognizing and removing delusion. Unfortunately, while individuals can achieve that, with much work, human society seems incapable of it; instead we stumble on until everything fails, chaos intervenes, and some new or reworked delusion is installed. I don’t suppose our situation will prove any different.

    Reply
  •  jsmith says:

    January 11, 2013 at 5:02 pm

    Funny, give a person a copy of “Endgame” by Derrick Jensen and they turn into it’s VIOLENCE MAN, VIOLENCE!!! screaming tartars.

    Yes, we readers did notice your repeated “allusions” of which is a sample:

    “Because civilization depends on widespread violence (premise three), all civilized people (even dogmatic pacifists) are complicit in violence simply by their own participation in the industrial economy.”

    Wow, man, you’re blowing our minds!

    You mean, v-i-o-l-e-n-c-e – is that right? – is something to consider when taking about society and civilization?

    Trippy, man!

    Why, I’m sure no other philosophers/sociologists – Hobbes, Rousseau, Marx, Foucault, Sartre etc – throughout history ever thought to comment on said topic, huh?

    I’m sure no readers of NC have ever read such philosophers, right, so that we all need to consistently have our poor minds blown when in your thread-hijacking (because that’s what it is) you repeatedly claim – hold on again here it comes again, kiddies – it’s all VIOLENCE, MAN, VIOLENCE!!

    Wait a second, Screename, are you telling us that you’re NOT a philosopher?! Or a sociologist?!! Or an economist?!!

    Just an IT guy?!!

    Holy F@ck!!!

    And you figured this violence thing out all by yourself (with the help of Mr. Jensen, I’m sure)?!!!

    Even crazier, man!

    Quit your IT job, STAT!!! and get thee to a think tank, bro!

    Violence….holy fuck, it’s been staring us all in the face for so long.

    But wait, I think it’s all f*cked because we’re HUMANS, man!!

    No, wait, hear me out.

    Since humans are violent then it’s really not the violence it’s the fact that we’re HUMANS, MAN!!!

    It’s because we’re humans that we’re violent and thereby have to pay taxes, man!!

    Holy Fuck, now I’m blowing my own mind….

    Reply
  •  Ben says:

    January 11, 2013 at 5:32 pm

    Wow this message board got contentious!.
    My main quarrel would be that Phil wanted Hayek to be the cause of all our present problems. He certainly is behind austerity, but Friedman was more the auteur of the crony capitalism that allowed corporations to become the tail wagging the dog of society. Too big to fail was the main proximate recent problem, and that belongs to Freidman’s effects on the American political system and Wall Street’s surreptitious coup.

    Reply
  •  Mike Hall says:

    January 11, 2013 at 5:33 pm

    Philip

    Brilliant series, thanks for your efforts.

    Reply
  •  Keynesian says:

    January 11, 2013 at 6:01 pm

    Great treasure of historical material Philip Pilkington! Here is a little more history about that little man called Von Hayek.

    After the publication of “The General Theory of Employment, Interest and Money” by John Maynard Keynes, economists all over the world expected an outraged response from Keynes’ loud and indignant nemesis, von Hayek. But for some reason Hayek was unable, or unwilling to respond with any counter arguments whatsoever. There was simply no response, only a deafening silence.

    [quote]If The General Theory was riven from top to bottom with misapprehensions, misleading assumptions, false logic, and inappropriate and deluded leaps of imagination, this was surely the time for Hayek to dismantle Keynes’s arguments before they took hold. But answer came there none. Hayek remained hushed. Faced with confronting Keynes at full flow, Hayek blinked. Weeks passed, but his expected counter-blast was not forthcoming….Keynes’s great work was met with neither a bang nor a whimper. Hayek’s response, so keenly awaited by classical economists throughout Britain and the continent, was a yawning silence.(Polanyi, Karl, The Great Transformation: The Political and Economic Origins of Our Time, Beacon Press. Kindle Edition. pp.152-153).[/quote]

    Hayek was a student of Ludwig von Mises and held the position of director to the Austrian Institute for Business Cycle Research. Hayek had the entire Austrian School of Economics to help with a counter response. Hayek wrote over forty years later,

    [quote]“I ought to explain why I failed to return to the charge after I had devoted much time to a careful analysis of his writings—a failure for which I have reproached myself ever since,”9 he wrote in a 1983 piece to mark the centenary of Keynes’s birth. “It was not merely . . . the inevitable disappointment of a young man when told by the famous author that his objections did not matter since Keynes no longer believed in his own arguments. Nor was it really that I became aware that an effective refutation of Keynes’s conclusions would have to deal with the whole macroeconomic approach. It was rather that his disregard of what seemed to me the crucial problems made me recognize that a proper critique would have to deal more with what Keynes had not gone into than with what he had discussed, and that in consequence an elaboration of the still inadequately developed theory of capital was a prerequisite for a thorough disposal of Keynes’s argument.”10 (Ibid., p. 175).[/quote]

    Later, Hayek attempted to write his own book in response to Keynes’ “The General Theory” entitled “The Theory of Capital” published in 1941. However, Hayek wrote about his own book, “it very gradually dawned on me”32 that “the thing’s become so damned complicated it’s almost impossible to follow it.”33 (Ibid., p. 183). Milton Friedman agreed and wrote, “I think his capital theory book is unreadable.” (Ibid., p. 29.)

    Reply
  •  digi_owl says:

    January 11, 2013 at 6:19 pm

    Thanks, confirms my thinking that the Labor Party in Norway is more light blue than red (blue in Europe being capital friendly while red being labor friendly). This because they seem to operate under the idea in recent decades, that to help labor they have to help capital first. A kind of trickle down way of looking at things.

    Reply
  •  dilletaunted says:

    January 11, 2013 at 6:30 pm

    This was excellent.

    Ideas for the next series, Philip?

    Reply
  •  different clue says:

    January 11, 2013 at 6:35 pm

    Reading briefestly on a small break from work. Who was it who said “property is theft”? Some French socialist whose name I forget. A lot of what is so-called “private” property today was thefted from the common ownership of traditional peoples at gunpoint or spearpoint or bow-and-arrow point or swordpoint. Viz the Enclosure Acts all over England and Scotland. Also, the violent conquest of North and South America, New Zealand, Australia, etc. and the “privatisation” and “propertyfication” of all that tribal commons land. Soooo . . . . taxation is not the only theft.

    Separately, a picky-poo point: Hitler was never elected. He was install-appointed as Chancellor AFter his Nazi Party got less votes than the election before, and it appeared clear to the German OverClass that his Nazi Party would keep getting fewer votes each cycle. The German OverClass inSTALLED Hitler into the Chancellorship to make sure he would provide the governance THEY wanted. Or am I wrong about that?

    Reply
  •  skippy says:

    January 11, 2013 at 7:50 pm

    Funny stuff….

    Criticisms

    Milton Friedman considered Mises inflexible in his thinking:

    The story I remember best happened at the initial Mont Pelerin meeting when he got up and said, “You’re all a bunch of socialists.” We were discussing the distribution of income, and whether you should have progressive income taxes. Some of the people there were expressing the view that there could be a justification for it.
    Another occasion which is equally telling: Fritz Machlup was a student of Mises’, one of his most faithful disciples. At one of the Mont Pelerin meetings, Machlup gave a talk in which I think he questioned the idea of a gold standard; he came out in favor of floating exchange rates. Mises was so mad he wouldn’t speak to Machlup for three years. Some people had to come around and bring them together again. It’s hard to understand; you can get some understanding of it by taking into account how people like Mises were persecuted in their lives.[25]

    Within the post-WWII mainstream economics establishment, Mises suffered severe personal rejection: for example, in a 1957 review of his book The Anti-Capitalistic Mentality, The Economist said of von Mises: “Professor von Mises has a splendid analytical mind and an admirable passion for liberty; but as a student of human nature he is worse than null and as a debater he is of Hyde Park standard.”[26]

    Conservative commentator Whittaker Chambers published a similarly negative review of that book in the National Review, stating that Mises’ thesis that anti-capitalist sentiment was rooted in “envy” epitomized “know-nothing conservatism” at its “know-nothingest.”[27]

    Economic historian Bruce Caldwell writes that in the mid-20th century, with the ascendance of positivism and Keynesianism, Mises came to be perceived by many as the “archetypal ‘unscientific’ economist.”[28]
    In a 1978 interview, Friedrich Hayek said about his book Socialism: “At first we all felt he was frightfully exaggerating and even offensive in tone. You see, he hurt all our deepest feelings, but gradually he won us around, although for a long time I had to – I just learned he was usually right in his conclusions, but I was not completely satisfied with his argument.” (Hayek’s critique of central planning never incorporated Mises’ contention that prices as an indicator of scarcity can only arise in monetary exchanges among responsible owners, a particular case of the universal economic law that value judgements are utterly dependent on property rights constraints.)[29]

    Murray Rothbard, who studied under Mises, agrees he was uncompromising, but disputes reports of his abrasiveness. In his words, Mises was “unbelievably sweet, constantly finding research projects for students to do, unfailingly courteous, and never bitter” about the discrimination he received at the hands of the economic establishment of his time.[30]

    After his death, his wife quoted a passage that Mises had written about Benjamin Anderson, and said that it best described Mises’ own personality: “His most eminent qualities were his inflexible honesty, his unhesitating sincerity. He never yielded. He always freely enunciated what he considered to be true. If he had been prepared to suppress or only to soften his criticisms of popular, but irresponsible, policies, the most influential positions and offices would have been offered him. But he never compromised.”[31]

    A number of critics of Mises, including philosopher Herbert Marcuse, economist J. Bradford DeLong[32] and sociologist Richard Seymour,[33] have criticized Mises for writing approvingly of Italian fascism, especially for its suppression of leftist elements.[34]

    Von Mises wrote in Liberalism, a book published in 1927:
    It cannot be denied that Fascism and similar movements aiming at the establishment of dictatorships are full of the best intentions and that their intervention has, for the moment, saved European civilization. The merit that Fascism has thereby won for itself will live on eternally in history. But though its policy has brought salvation for the moment, it is not of the kind which could promise continued success. Fascism was an emergency makeshift. To view it as something more would be a fatal error.[35]

    Mises biographer and supporter Jörg Guido Hülsmann calls the criticism that Mises supported fascism “absurd”, pointing to the rest of the quote that called fascism dangerous and described as a “fatal error” the view that it was more than an “emergency makeshift” against the threat of communism.[36]

    http://en.wikipedia.org/wiki/Ludwig_von_Mises

    Skippy… when are some people going to understand that the Austrians are just the ” church of property is sacrosanct” over – all other – considerations and that individualistic freedom trump’s – social cohesion – when all the evidence is to the contrary (Lord of the Fly’s anyone – CIA kiddy testing in Northern Europe – corporations destroying a world ?). That their entire sense of self is attached to a piece of material stuff and not the human standing right next to them?! FFS its such a childish position I – I – I – narcissistic wounding stuff.

    Reply
  •  David Gorodess says:

    January 11, 2013 at 8:07 pm

    “A particularly telling example(of Market Fundamentalism) is Margaret Thatcher’s Companion of Honour, Friedrich von Hayek. His mode of arguing is characterized by arbitrary declarations and assumptions – for instance, concerning the ‘impartiality of the state’ – coupled with Nobel Prize-winning tautolgies. Thus we are told in his bestselling ‘Road to Serfdom’ that “It was men’s submission to the impersonal forces of the market that in the past has made possible the growth of a civilization which without this could not have developed. Likewise, Hayek declares that ‘the Rule of Law, in the sense of the rule of formal law’ is the only safeguard against ‘arbitrary government’. Having thus assumed with class-apologetic arbitrariness the necessary relationship between ‘the rule of formal law’ and ‘non-arbitrary government’, thereby aprioristically excluding substantive justice from the domain of legislative reason, Hayek concludes a few lines further on with an equally arbitrary – and utterly tautological – declaration according to which a ‘substantive ideal of distributive justice must lead to the the destruction of the Rule of Law’. In the same way, Hayek’s apriori ideological preconception produces the unsustained axioms that ‘planning leads to dictatorship” and that ‘the more the state “plans” the more difficult planning becomes for the individual’. However, later in the book he contradicts his own lament about the difficulties of individual planning by happily embracing the idea that ‘A complex civilization like ours is necessarily based on the individual adjusting himself to changes whose cause and nature he cannot understand’. In this way we are left not only with a blatant contradiction between the idealization of ‘individual planning’ under capitalism and its effective denial by the market, but also with a grotesque notion of what the submissive individual is supposed to accept as the ultimate conquest of our ‘complex civilization’. Indeed, we are told – curiously in the name of freedom – that unquestioning submission by all individuals to the tyranny of the market is the ultimate virtue.
    Evidently, Hayek cannot admit the possibility and legitimacy of envisaging an alternative to the rule of capital, to which in his view everybody must submit; least of all if it means taking control by the individuals over their own life-activity through consciously organized -i.e. genuinely planned – forms of productive social interchange, managed on the basis of their own decisions as opposed to preexisting ( and in Hayek’s view even in principle incomprehensible) material dictates. What remains a complete mystery in Hayek’s approach is: why should one prefer his kind of uncontrollability and submission to what he quite demagogically projects as the ONLY alternative?
    ~Meszaros, Beyond Capital p.198

    Reply
  •  skippy says:

    January 11, 2013 at 8:47 pm

    From the NC dream-time…

    Skippy says:
    December 12, 2011 at 5:27 am

    “Man is born an asocial and antisocial being. The newborn child is a savage. Egoism is his nature. Only the experience of life and the teachings of his parents, his brothers, sisters, playmates, and later of other people FORCE HIM to acknowledge the advantages of social cooperation and accordingly to change his behavior.” ~Ludwig Von Mises, Omnipotent Government, p. 241

    Skippy…hate clubs have a hard time without archenemy’s (commies). One left to go… working classes.

    Lidia says:
    December 12, 2011 at 10:43 am
    Skippy, thanks for that quote. When I talk to libertarians or read their writings, what comes across to me is a very bad sort of autism (and I say this as someone who has a family member with autism).

    I think they really don’t know how other people feel, they don’t know how to be tolerant or to share, and they can’t imagine living any other way.

    They project their own ABNORMAL asocial and antisocial tendencies onto everyone else. This Mises quote reminds me so very much of Calvin’s regarding a newborn baby as a “seething sack of sin”. When you base a worldview on that, it’s bound to deliver precisely the distortions you’ve programmed into it.

    RanDomino says:
    December 12, 2011 at 10:56 am
    I strongly suspect many of them are sociopaths, as in the mental condition that prevents them from having empathy.

    F. Beard says:
    December 13, 2011 at 8:40 am
    This Mises quote reminds me so very much of Calvin’s regarding a newborn baby as a “seething sack of sin”. Lidia

    The same Calvin who justified usury?

    Speak for yourself, Calvin!

    psychohistorian says:
    December 12, 2011 at 3:03 pm

    Thanks skippy.

    The quote reminds me of my position, stated here multiple times, that folks should not be allowed to get beyond grade school without becoming one with the concept of societal sharing.

    Skippy says:
    December 12, 2011 at 5:35 am
    Austrian theory includes the concept of time preference, or the degree to which a person prefers current consumption over future consumption. During a lecture in his Money & Banking course, Hoppe hypothesized that, because they tend not to have offspring, thus heirs, children, old people and homosexuals tend to focus less on saving for the future. One of Hoppe’s students characterized this statement as derogatory and a matter of opinion rather than fact. According to the Chronicle of Higher Education:

    In his lectures, Mr. Hoppe said that certain groups of people — including small children, very old people, and homosexuals — tend to prefer present-day consumption to long-term investment. Because homosexuals generally do not have children, Mr. Hoppe said, they feel less need to look toward the future. (In a recent talk at the Ludwig von Mises Institute, which Mr. Hoppe says was similar to his classroom lecture, he declared, “Homosexuals have higher time preferences, because life ends with them.”) [The student], Mr. Knight found that argument unwarranted and obnoxious, and he promptly filed a complaint with the university. In a telephone interview on Saturday, Mr. Knight said: “I was just shocked and appalled. I said to myself, Where the hell is he getting this information from? I was completely surprised, and that’s why I went to the university about this.”[3]

    http://en.wikipedia.org/wiki/Hans-Hermann_Hoppe

    Skippy…Just the Wiki page gives me the creeps.

    Philip Pilkington says:
    December 12, 2011 at 6:04 am
    And once again I say: a lot of this Austrian stuff is about good old fashioned psychological intellectualisation.

    http://en.wikipedia.org/wiki/Intellectualization

    “Oh no, I’m don’t have a fundamental, burning, irrational, emotionally driven hatred toward blacks/gay/the poor/women — I’m just saying that they are generally less productive/less conducive to saving/more inclined to take on debt than white mal… I mean… everyone else.”

    Most of this libertarian stuff is so transparent its not even funny. Hoppe is just an extreme manifestation because he’s probably completely around the bend. But you can see it shine through in most libertarian discourse.

    Read more at http://www.nakedcapitalism.com/2011/12/journey-into-a-libertarian-future-response-to-reader-comments.html#UzdgZx19FH4cIBlW.99

    Skippy… ask an Austrian if gawd exists… why YES!… may I see your evidence please… sure… we are here… it was written!.. we were born into SIN… see above Quote at top of comment.

    How in the fuck does Moses.. I mean Mises arrive at his conclusion ie:

    “Man is born an asocial and antisocial being. The newborn child is a savage” – crackerjack trope

    Man… know wonder sociopaths rise to the top so often, no emotional impediment in a competitive environment, know wonder they love corporations so much, align themselves with these engines of malice… stripping away the last vestiges of goodwill between humans, wrap themselves up with the Coat of arms of ennoblement and Gwad given heredity, promote freewill when its a price the market determines… BARF~~~

    Seriously… if myself had a choice between the Austrian sociopaths and a benevolent dictator looking out for social well being, not killing the planet, advancing the understanding of our universe, do no harm as the first rule of act… well… All Hail the Dictator!

    Got that Mises.org – zeroheadge… I rate you lower than a dictator… even the vicious ones… at least their honest about their cruelty. How you numb nuts try and pass off yourselves as enlightened humans and yet say stuff like “Man is born an asocial and antisocial being. The newborn child is a savage” is truly insidious. I am your mortal enemy… and embrace my hatred of you…

    Reply
  •  Keynesian says:

    January 11, 2013 at 9:50 pm

    [quote]“Professor Hayek . . . does not see, or will not admit, that a return to ‘free’ competition means for the great mass of people a tyranny probably worse, because more irresponsible, than that of the State. The trouble with competitions is that somebody wins them. Professor Hayek denies that free capitalism necessarily leads to monopoly, but in practice that is where it has led, and since the vast majority of people would far rather have State regimentation than slumps and unemployment, the drift towards collectivism is bound to continue if popular opinion has any say in the matter.” (George Orwell, “Grounds for Dismay,” Observer, London, April 9, 1944.).[/quote]

    Reply
  •  Late to the Party says:

    January 11, 2013 at 10:22 pm

    Hello, just curious for my own sake after reading the polemics here what the same speakers (you) would like to do (passively: what you like to see put into place), you know, economically and politically? I want to put an opinion with an actor (agent, citizen or whatever you want to say), since I can’t put a name to a face!

    Reply
  •  Keynesian says:

    January 11, 2013 at 10:48 pm

    Fake Prize, Fake Economist

    [quote]Hayek’s venture into doomsday prognostication in The Road to Serfdom was also cited as evidence that he lacked the intellectual rigor expected at the Chicago School. According to John Nef, chairman of Chicago’s Committee on Social Thought, some Chicago economists believed The Road to Serfdom “too popular a work for a respectable scholar to perpetrate. It was all right to have him at Chicago so long as he was not associated with the economists.”42 In the fall of 1950, at the suggestion of Nef, Hayek became professor of social and moral science in the Committee on Social Thought, a chair funded in part by the Volcker fund. Despite the rebuff, Hayek accepted the post. (Wapshott, Nicholas, Keynes Hayek: The Clash that Defined Modern Economics (pp. 217-218). Norton. Kindle Edition.)[/quote]

    Hayek won the Nobel Prize in Economics 1974…. sort of. It is the Nobel Prize that a bank created. It is the same prize that was awarded to Milton Friedman.

    [quote]The Nobel Memorial Prize in Economic Sciences, commonly referred to as the Nobel Prize in Economics,[1] [2] but officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel (Swedish: Sveriges riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne), is an award for outstanding contributions to the field of economics, generally regarded as one of the most prestigious awards for that field.[3] While not one of the Prizes established by the will of Alfred Nobel in 1895, it is consistently identified with them.
    Some critics argue that the prestige of the Prize in Economics derives in part from its association with the Nobel Prizes, an association that has often been a source of controversy. Among them is the Swedish human rights lawyer Peter Nobel, a great-grandson of Ludvig Nobel.[26] Nobel criticizes the awarding institution of misusing his family’s name, and states that no member of the Nobel family has ever had the intention of establishing a prize in economics.
    http://en.wikipedia.org/wiki/Nobel_Memorial_Prize_in_Economic_Sciences/quote

    So why did Hayek get the Sveriges Riksbank counterfeit Nobel Prize in Economics even though the University of Chicago would not hire Hayek as a professor of Economics.

    [quote]The reasoning behind the Nobel committee’s decision to recognize Hayek’s contribution to “pioneering work in the theory of money and economic fluctuations” was not quite the endorsement it seemed. Hayek had to share the honor with Gunnar Myrdal,30 a Swedish Keynesian economist and social democratic politician. According to Friedman,31 by yoking Myrdal to Hayek the Nobel committee hoped to avoid the charge of sympathizing with the Left. In the event, the double bill provoked substantial controversy, with Hayek declaring that Nobel Prizes for economics were absurd and worth neither giving nor receiving, and Myrdal condemning the Nobel committee for honoring Hayek. (Ibid., p. 256)[/quote]

    Reply
  •  David Graeber says:

    January 12, 2013 at 3:35 am

    This is great stuff – you should really write a book about all this (or are you already?) I suppose I like it partly because it also confirms my own sense that neoliberalism is basically about prioritizing the ideological victory of capitalism over effective economic policies, even at the cost of undermining the very long-term viability of capitalism itself. “Kamikaze capitalism” I’ve sometimes called it. But this history is a beautiful illustration of how that obsession with ideology first came to be.

    Reply
  •  hermanas says:

    January 12, 2013 at 6:35 am

    Saw this today, http://www.counterpunch.org/2013/01/11/the-hula-hoop-theory-of-history/

    Reply

     

     



    Read more at http://www.nakedcapitalism.com/2013/01/philip-pilkington-the-origins-of-neoliberalism-part-iii-europe-and-the-centre-left-fall-under-hayeks-spell.html#h0e5Oaa5UTXcQp6T.99

    • Etc

    Society

    Groupthink : Two Party System as Polyarchy : Corruption of Regulators : Bureaucracies : Understanding Micromanagers and Control Freaks : Toxic Managers :   Harvard Mafia : Diplomatic Communication : Surviving a Bad Performance Review : Insufficient Retirement Funds as Immanent Problem of Neoliberal Regime : PseudoScience : Who Rules America : Neoliberalism  : The Iron Law of Oligarchy : Libertarian Philosophy

    Quotes

    War and Peace : Skeptical Finance : John Kenneth Galbraith :Talleyrand : Oscar Wilde : Otto Von Bismarck : Keynes : George Carlin : Skeptics : Propaganda  : SE quotes : Language Design and Programming Quotes : Random IT-related quotes :  Somerset Maugham : Marcus Aurelius : Kurt Vonnegut : Eric Hoffer : Winston Churchill : Napoleon Bonaparte : Ambrose Bierce :  Bernard Shaw : Mark Twain Quotes

    Bulletin:

    Vol 25, No.12 (December, 2013) Rational Fools vs. Efficient Crooks The efficient markets hypothesis : Political Skeptic Bulletin, 2013 : Unemployment Bulletin, 2010 :  Vol 23, No.10 (October, 2011) An observation about corporate security departments : Slightly Skeptical Euromaydan Chronicles, June 2014 : Greenspan legacy bulletin, 2008 : Vol 25, No.10 (October, 2013) Cryptolocker Trojan (Win32/Crilock.A) : Vol 25, No.08 (August, 2013) Cloud providers as intelligence collection hubs : Financial Humor Bulletin, 2010 : Inequality Bulletin, 2009 : Financial Humor Bulletin, 2008 : Copyleft Problems Bulletin, 2004 : Financial Humor Bulletin, 2011 : Energy Bulletin, 2010 : Malware Protection Bulletin, 2010 : Vol 26, No.1 (January, 2013) Object-Oriented Cult : Political Skeptic Bulletin, 2011 : Vol 23, No.11 (November, 2011) Softpanorama classification of sysadmin horror stories : Vol 25, No.05 (May, 2013) Corporate bullshit as a communication method  : Vol 25, No.06 (June, 2013) A Note on the Relationship of Brooks Law and Conway Law

    History:

    Fifty glorious years (1950-2000): the triumph of the US computer engineering : Donald Knuth : TAoCP and its Influence of Computer Science : Richard Stallman : Linus Torvalds  : Larry Wall  : John K. Ousterhout : CTSS : Multix OS Unix History : Unix shell history : VI editor : History of pipes concept : Solaris : MS DOS :  Programming Languages History : PL/1 : Simula 67 : C : History of GCC development :  Scripting Languages : Perl history   : OS History : Mail : DNS : SSH : CPU Instruction Sets : SPARC systems 1987-2006 : Norton Commander : Norton Utilities : Norton Ghost : Frontpage history : Malware Defense History : GNU Screen : OSS early history

    Classic books:

    The Peter Principle : Parkinson Law : 1984 : The Mythical Man-Month :  How to Solve It by George Polya : The Art of Computer Programming : The Elements of Programming Style : The Unix Hater’s Handbook : The Jargon file : The True Believer : Programming Pearls : The Good Soldier Svejk : The Power Elite

    Most popular humor pages:

    Manifest of the Softpanorama IT Slacker Society : Ten Commandments of the IT Slackers Society : Computer Humor Collection : BSD Logo Story : The Cuckoo's Egg : IT Slang : C++ Humor : ARE YOU A BBS ADDICT? : The Perl Purity Test : Object oriented programmers of all nations : Financial Humor : Financial Humor Bulletin, 2008 : Financial Humor Bulletin, 2010 : The Most Comprehensive Collection of Editor-related Humor : Programming Language Humor : Goldman Sachs related humor : Greenspan humor : C Humor : Scripting Humor : Real Programmers Humor : Web Humor : GPL-related Humor : OFM Humor : Politically Incorrect Humor : IDS Humor : "Linux Sucks" Humor : Russian Musical Humor : Best Russian Programmer Humor : Microsoft plans to buy Catholic Church : Richard Stallman Related Humor : Admin Humor : Perl-related Humor : Linus Torvalds Related humor : PseudoScience Related Humor : Networking Humor : Shell Humor : Financial Humor Bulletin, 2011 : Financial Humor Bulletin, 2012 : Financial Humor Bulletin, 2013 : Java Humor : Software Engineering Humor : Sun Solaris Related Humor : Education Humor : IBM Humor : Assembler-related Humor : VIM Humor : Computer Viruses Humor : Bright tomorrow is rescheduled to a day after tomorrow : Classic Computer Humor

    The Last but not Least Technology is dominated by two types of people: those who understand what they do not manage and those who manage what they do not understand ~Archibald Putt. Ph.D

    Copyright © 1996-2021 by Softpanorama Society. www.softpanorama.org was initially created as a service to the (now defunct) UN Sustainable Development Networking Programme (SDNP) without any remuneration. This document is an industrial compilation designed and created exclusively for educational use and is distributed under the Softpanorama Content License. Original materials copyright belong to respective owners. Quotes are made for educational purposes only in compliance with the fair use doctrine.

    FAIR USE NOTICE This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available to advance understanding of computer science, IT technology, economic, scientific, and social issues. We believe this constitutes a 'fair use' of any such copyrighted material as provided by section 107 of the US Copyright Law according to which such material can be distributed without profit exclusively for research and educational purposes.

    This is a Spartan WHYFF (We Help You For Free) site written by people for whom English is not a native language. Grammar and spelling errors should be expected. The site contain some broken links as it develops like a living tree...

    		 You can use PayPal to to buy a cup of coffee for authors of this site

    Disclaimer:

    The statements, views and opinions presented on this web page are those of the author (or referenced source) and are not endorsed by, nor do they necessarily reflect, the opinions of the Softpanorama society. We do not warrant the correctness of the information provided or its fitness for any purpose. The site uses AdSense so you need to be aware of Google privacy policy. You you do not want to be tracked by Google please disable Javascript for this site. This site is perfectly usable without Javascript.

    Last modified: February, 10, 2021