Hayek Versus Hayek

Hayek in Scandinavia

The passage that most startled me in Koppelman was this one:

If one must point to a destination to which Hayek’s reasoning leads, it is where the Hayekians never look: the Nordic nations. Denmark, Finland, Norway, and Sweden have big expansive welfare states. But they also have burgeoning capitalism. Free markets make those countries rich, and the benefits are shared by even the most marginal workers. (p. 64)

I’d never heard the Nordic countries described as a libertarian paradise before. But it turns out, this is a common claim by libertarians. They point out that Sweden, for example, has become more capitalist in recent decades. Of course, for decades libertarians have been screaming about the slippery slope to a command economy that results from the kind of socialism in the Nordic countries (more on that in a minute). Thus the turn to more capitalist solutions in the Nordic countries should serve as an empirical denial of libertarianism rather than one of their victories.

It is Koppelman, not Hayek claiming the Nordic countries are Hayekian; if Hayek ever made such a claim, Koppelman does not provide a citation to that effect. In fact, Hayek’s views were used in these countries as they were building their socialist democracies to argue against the very systems that Koppelman wants to claim are Hayekian:

[F]aced with dominant social democratic parties that were self-confidently expanding the welfare state, many liberals and conservatives embraced arguments according to which socialist policies and economic planning would put democracy itself in peril. In this way, F.A. Hayek became quite central to post-war Scandinavian discussions on democracy. The Road to Serfdom (1944) was translated into Swedish in 1944, into Danish in 1946. and into Norwegian in 1949, and its ideas were embraced by the leading non-socialist parties as well as by leading liberal intellectuals across the region, some of whom, such as Christian Gandil in Denmark and Trygve Hoff in Norway, were in direct contact with Hayek himself through the Mont Pèlerin Society. (p. 507)

If socialism, democracy, and the free market are compatible, it is hardly fitting to credit that idea to Hayek when his views were being used in Scandinavia in the 1940s and 1950s to argue the exact opposite position. If Koppelman is to be believed, there is no significant difference between Hayek and his co-winner of the Nobel Prize in Economics in 1974 the self-proclaimed “social engineer,” Gunnar Myrdal. It was Myrdal, not Hayek, who recognized the reality of the “mixed economy” everywhere in the West and recognized how invoking the “free market” was an ideological weapon, not a theoretical or empirical economic reality. As Myrdal argued in 1960:

Anybody who makes a plea for the ideals of “free” economy and who then chooses to point out…how we are leaving those ideals behind us, and who from there go on to characterize what we are indulging in as “creeping socialism” and warns that we might be on the “road to serfdom,” can be sure of a sympathetic audience, particularly if he does not become too specific.” (p. 12)

If the Nordic countries have successfully merged a generous welfare state with a thriving free market, it makes much more sense to credit Hayek’s ideological adversaries such as Myrdal rather than Hayek. The Nordic countries, in no way, fit the description of the polices Koppelman tells us Hayek actually endorsed: “The welfare state he defends is too stingy: he fears that income stabilization measures, such as Social Security, are a slippery slope to socialism” (p. 8). For Koppelman, when approaching Hayek, we must not actually follow Hayek where he thinks his program leads (or where it has, in fact, already lead) but where Koppelman assures it could potentially lead, if only we discard many of Hayek’s own conclusions.

Koppelman argues that government programs like massive military spending and the Interstate Highway System mostly “can be justified in Hayekian terms. The most expensive [Federal] programs, Social Security and Medicare, function as a variant of the social minimum that Hayek endorsed since most of their benefits lack significant other income” (p. 51). This passage is notable by the absence of any citation to Hayek himself endorsing Social Security or Medicare. Just a few pages before Koppelman makes this claim he reports

The issue made him hysterical: “Concentration camps for the aged unable to maintain themselves are likely to be the fate of an old generation whose income is entirely dependent on coercing the young.” He wrote that in 1960, after Social Security had been in place for decades. In 1976 he declared that “the extensive redistribution of incomes through taxation and the institution of the welfare state” would slowly, indirectly, and imperfectly” to “central economic planning.” (p. 44-5).

The Scandinavian countries’ moderation, in other words, disprove Hayek’s ideas, not serve as examples of them. Koppelman sees Hayekian economics as easily accommodating Social Security but Hayek himself bitterly opposed it. This pattern is repeated far too often in the book: with Koppelman assuring us that Hayek’s vision is a moderate one but then showing us no such moderation in Hayek’s own writings.

Of course, things have changed. Perhaps those Koppelman believes today’s neo-Hayekian serious policy wonks have embraced Nordic approaches to governance. Koppelman rages against the libertarian opposition to Obamacare because “Hayek himself proposed the basic scheme of Obamacare in 1960” (p. 35). But, according to Koppelman, Hayekians should endorse the kind of socialized healthcare found not just in Nordic countries but all over the developed world. There is certainly evidence to support the need for such governmental action:

Chart showing that in the US, alone among developed countries, life expectancy is decreasing.
Woolhandler, Steffie, David U. Himmelstein, Sameer Ahmed, Zinzi Bailey, Mary T. Bassett, Michael Bird, Jacob Bor, et al. “Public Policy and Health in the Trump Era.” The Lancet 0, no. 0 (February 10, 2021). https://doi.org/10.1016/S0140-6736(20)32545-9.
Chart showing Americans are much more likely to forego medical care due to cost
Kamal et al., “How Prepared Is the US to Respond to COVID-19 Relative to Other Countries?” https://www.healthsystemtracker.org/chart-collection/how-prepared-is-the-us-to-respond-to-covid-19-relative-to-other-countries/
Chart showing the US spends much more on healthcare than other countries.
Woolhandler, Steffie, David U. Himmelstein, Sameer Ahmed, Zinzi Bailey, Mary T. Bassett, Michael Bird, Jacob Bor, et al. “Public Policy and Health in the Trump Era.” The Lancet 0, no. 0 (February 10, 2021). https://doi.org/10.1016/S0140-6736(20)32545-9.

Americans spend far more on healthcare than in equivalent countries. Americans deny themselves healthcare because of out-of-pocket expenses much more than those countries. The United States, alone, is facing a decrease in life expectancy. It would seem that this is a market failure that good Hayekians would support. But, of course, they do not and their opposition takes a very Hayekian form: the costs incurred by increasing governmental involvement in healthcare outweigh any benefits that could come from it. Those “serious” neo-Hayekian institutions Cato (here or here) and the Mercatus Center at George Mason University (here or here) agree that the available evidence does not meet the high burden of proof that state action faces when it interferes in the “market” of healthcare.

Myrdal was Hayek’s “ideological opposite” (p. 20) in another way. Myrdal shared very little of Hayek’s belief that governmental “interference” with the market was incompatible with democracy. By contrast, Hayek wrote, “the democratic statesman who sets out to plan economic life will soon be confronted with the alternative of either assuming dictatorial powers or abandoning his plans” (p. 106). The fact that Sweden has democratically moved to a greater embrace of market solutions seems to prove Hayek wrong that such governmental activities were a threat to democracy or a slippery slope to totalitarianism.

Koppelman does note that Hayek was suspicious of many aspects of democratic governance. Again, when we look at Hayek’s life we are justified in thinking that Hayek might not have thought democracy was important at all. Koppelman notes, in a single sentence, that Hayek met and supported “General Augusto Pinochet, who promoted capitalism in Chile by exterminating its critics” (61). That sentence is more discussion than many neo-Hayekians give Hayek’s support for the Chilean dictatorship; in the Cambridge Companion to Hayek, the topic is never mentioned at all.

The fact is, Hayek supported an authoritarian regime that tortured and killed thousands of its own citizens and he never uttered a word of public criticism of the dictatorship. He praised Chile’s dictatorial rule and scholars have noted that “Hayek’s support for Pinochet was a natural consequence of his system of thought and not an aberration” (also here, here, here, here, and here). Koppelman argues that Hayek misunderstood the relationship between democracy and freedom, a position few libertarians seem to agree with. Some serious neo-Hayekian policy wonks at Mercatus argue that Pinochet’s regime was a great success. Some at Cato argue that Brazil’s authoritarian leader would be well-advised to follow the path Pinochet took in Chile. If Hayek’s theories are capacious enough to embrace Pinochet’s dictatorship (as Hayek thought) and Nordic democratic socialism (as Koppelman thinks), it is difficult to see how they can provide a framework for democratic governance.

Hayekian Climate Change Denial

Three smokestacks emitting a great deal of pollution into the atmosphere.
Koppelman correctly notes that “The most consequential effect of libertarianism, under Koch’s leadership, has been the spread of climate change denial and the effective blocking of any coordinated effort to address the greatest danger that the human race has faced in many millennia.”

Denying the reality of climate change “embraces a catastrophic program that could make sense only in a Rothbadian framework” (p. 110). “On climate policy,” writes Koppelman, “Rothbard has triumphed over Hayek” (p. 220), If Koppelman’s distinction between the evil Rothbard branch of libertarianism and the kinder/gentler Hayekian approach we should be able to easily distinguish between the two when it comes to climate change. Such a distinction is impossible to make, however. Climate denialism arises out of a straightforward application of Hayek’s notion of placing a high burden of proof on governmental action and then showing that advocates have not met that burden (see here, here, here, here, here, here, here, here, here, here, and here).

Koppelman charges that Charles Koch, the billionaire funder of many libertarian causes is a serious impediment to governmental action on climate change. He admits that Hayek had a profound influence on Charles Koch but he should properly be viewed as a disciple of Rothbard rather than Hayek:

The coal and petroleum industries, with Koch leading them, have expended enormous efforts to cast doubt on the science and persuade the world that climate change either is not happening or is not caused by human activity. American For Prosperity [Koch’s political organization]…, which is tightly controlled by Koch, has worked hard to disseminate preposterous claims that the scientific community is conspiring in order to empower the state. The techniques of lying and distorting are largely copied from the earlier tactics of the tobacco industry when for decades it obfuscated the link betweeen smoking and lung cancer. (p. 220)

Koppelman is exactly correct that climate change denialists copy the strategies of the tobacco industry, indeed as Naomi Oreskes and Erik Conway showed in Merchants of Doubt, they were sometimes the exact same people. The underlying strategy was simple and Hayekian: thrust the burden of proof onto one’s opponents and then manufacture enough doubt in the public square to delay action by claiming advocates for change have not met their required burden. This is what Leah Ceccarelli has dubbed a “manufactured scientific controversy.”

That is the exact strategy employed by American’s for Prosperity (AFP), Koppelman accurately describes as “Koch’s marionette” (p. 220). AFP distorts costs and benefits to cast doubt that the projected harms of climate change and then claim that the costs of action are too high to justify acting:

AFP generally says very little specifically about the science of climate change beyond repeatedly stating that regulatory steps by the U.S. Environmental Protection Agency (EPA) and legislation being considered by Congress are based on “global warming alarmism” — weasel wording used to dismiss the scientific basis for action with few specific details on what AFP believes or doesn’t believe about climate change. AFP says the “costly so-called `solutions’ to global warming” being considered by government would “have only a miniscule impact on global temperature and would not be detectable against the background of natural variation.

But what of those “serious” scholars at Cato? The situation is no different there. Koppelman writes:

Libertarian think tanks, notably the Cato Institute, have been potent sources of the misinformation. Unlike Americans for Prosperity, the think tanks are not Koch’s marionettes. Their scholars are free to write what they like. But they are predisposed to be skeptical of claims that there is any problem that demands a large government response. (p. 220)

We can question whether or not Cato and other libertarian think tanks are as independent as Koppelman presents them, rather than part of a large coordinated network of advocacy institutions embracing climate denialism in the name of the free market. However, the last sentence that Cato writers are “predisposed to be skeptical of claims that there is any problem that demands large government response” reveals the Hayekian idea that underlies Cato’s argumentative strategy, which might differ from that of AFP in emphasis but is essentially identical, including stooping to character assassination:

Cato does not deny that climate change is real, though it insists that the IPCC climate models are inaccurate. At least for its blog communications, this C[onservative] T[hink] T[ank] shifted its focus away from outright climate denial to other forms of manufacturing uncertainty. Cato regularly claimed that the IPCC’s climate models were too inaccurate to correctly project the rate of global warming. Attacks on the personal integrity of climate scientists …could also be found in nearly every 10th blog article. Altogether, the overall focus within the Science category was to frame the anthropogenic influence on the climate as existent but insignificant, while warming rates were presented as being not as bad as feared. This approach reflects a new framing strategy that Cato itself described quite openly as “lukewarming.”

When is a Libertarian not a Libertarian?

A drawing of a tall sailing ship, sailing into the sunset.
The libertarian ship has already sailed away.

Over at a libertarian blog, a symposium on Koppelman’s book has convinced no one that he has it right. For me, the responses make me wonder why Koppelman, and similarly inclined thinkers, still identify as “libertarians?” What is it about that word that attracted them and want to claim it? If Koppelman really believes that most of the Democratic party is Hayekian, what does he think is gained by convincing them that they are “libertarian?” As he notes, the term is now used by those bitterly opposed to his political theory principles. The libertarian ship has sailed and he is not on it. There is nothing gained by insisting that “libertarian” does not “really” refer to the kind of Koch extremism he despises. What is the point in insisting on using the word?

An analogous situation occurred in the biological sciences. In 1995 biological anthropologist, Jonathan Marks published a remarkable book, Human Biodiversity: Genes, Race, and History. The book was a scientific attack on racism, for Marks, “race” was not a scientific category the very idea had a very ugly and dangerous history. Within a few years, racist Steve Sailer, seized the term, “Human Biodiversity” (HBD) and popularized it as meaning the exact opposite thing Marks meant. Sailer used the term as a label for old-fashioned scientific racism. The whole story is laid out in Angela Saini’s book, Superior: The Return of Race Science (pp. 87-89). Marks didn’t waste his time trying to reclaim the term but simply surrendered it to the racists. He continued publishing attacks against scientific racism and let Sailer and his ilk use “HBD.” The result is that anyone interested in the science of human diversity knows that anyone using the term “Human Biodiversity” is unreliable and dangerous.

I see no reason why scholars interested in human freedom and responsible governance do not do the same with “libertarianism.” Let the radicals have the term, it is far too late to save it from itself. If Koppelman, and like-minded folks, abandoned the label, then everyone would know that anyone calling themselves “libertarian” is unreliable and dangerous.

This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

1 thought on “Hayek Versus Hayek

  1. Having read that, I can only conclude that Koppelman, in youthful ignorance and enthusiasm for ‘One principle to rule them all, one principle to find them, One principle to bring them all, and in the darkness bind them.’ took on the identy of “libertarian” and cannot bring himself to slough off his youth by coming to a new identity.


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