Every once in a while folks in the political corner of the blogosphere start talking about Hayek’s argument in The Road to Serfdom. As Matt Yglesias said Monday, lots of people, conservatives and liberals alike, say that Hayek believed that any welfare state inevitably leads to totalitarianism. Then some people who have actually read Hayek reply that he always supported social insurance, safety nets, public goods provision and many forms of regulation. Then confusion ensues. In this post I want to address some very recent wrangling on the subject and then try to explain how Hayek could consistently warn against the dangers of the welfare state and simultaneously support one.
I. The Present Discussion
To begin, consider Henry Farrell’s recent post at Crooked Timber following up on a similar discussion a few months prior. He seems prepared to insist that, contra Tyler Cowen, that Tony Judt had not been unfair to Hayek when Judt said:
Hayek is quite explicit on this count: if you begin with welfare policies of any sort — directing individuals, taxing for social ends, engineering the outcomes of market relationships — you will end up with Hitler.
Despite Hayek’s repeated claims that he does not think “welfare states” lead to totalitarianism, and Farrell’s repeated recognition of Hayek’s claims to this effect, Farrell insists that “I don’t think Judt was being unfair at all.” In a follow-up post, after reading a similar (but more academic) discussion between Andrew Farrent & Edward McPhail and Hayek Scholar Bruce Caldwell on the other, Farrell declares:
I’m calling this one unequivocally in favor of Judt – contra Tyler Cowen, he wasn’t being unfair at all.
Obviously Farrell and Judt’s claims are over the top due to their use of various “of any sort” “unequivocally” “at all” and “Hitler” modifiers. But instead of beating up on them, let’s use our collective annoyed-by-someone-on-the-internet energy in a constructive fashion: to see what we can learn about Hayek’s real arguments against socialism and the welfare state.
In Libertarianism: What Everyone Needs to Know, I examine the question of which country is the most libertarian. I argue briefly that while the United States has the highest percentage of self-identified libertarians and uses the most libertarian rhetoric, it is not the most libertarian country in terms of its actual policies. Switzerland, Australia, Canada, and some others are much more libertarian (especially classical liberal-libertarian) than the United States.
Here’s a brief excerpt from an earlier draft:
The Wall Street Journal and Heritage Foundation produce an annual Index of Economic Freedom. They rate countries for their respect for property rights, freedom from corruption, business freedom, labor freedom, monetary freedom, trade freedom, investment freedom, financial freedom, fiscal freedom, and government spending. Hong Kong, Singapore, Australia, New Zealand, Switzerland, Canada, Chile, Mauritius, and Ireland have higher scores than the United States. The United States ranks only 10th overall.
This index may understate how anti-libertarian the United States is. After all, the index penalizes countries if their governments spend large amounts on social insurance. Yet classical liberals and neoclassical liberals are not in principle opposed to government social insurance. [That is, they will accept it under certain conditions.]
Thus, suppose we separate the idea of the administrative state—which tries to control, regulate, manipulate, and manage the economy—from the social insurance state—which provides tax-financed education, healthcare, or unemployment insurance. On the Index of Economic Freedom, many countries that rank lower than the US have far less extensive administrative states than the US. For instance, Denmark ranks much higher than the United States on property rights, freedom from corruption, business freedom, monetary freedom, trade freedom, investment freedom, and financial freedom. Luxembourg, the Netherlands, the United Kingdom, and many other countries beat the US on these measures as well. Thus, many other European countries might reasonably be considered more economically libertarian than the US.
The administrative state directly interferes with citizens’ economic liberty. To expand the scope of the administrative state’s power just is to limit the scope of individual citizens’ economic liberty*.
What about the social insurance state, especially one that works pretty well? If you regard all taxation as theft, then you’ll see the social insurance state as a direct assault on property rights. But, even then, the social insurance state does not, in itself, directly curtail most economic liberties. (Of course, if the government taxes almost all of your income away or sets a limit to how much you can own, then that will limit your effective economic liberty.)
We could imagine a political-economic regime in which there is a completely or largely unregulated free market but in which the government taxes people to provide social insurance and some other welfare benefits. On its face, this regime seem much congenial to classical liberalism than a regime that provides no welfare benefits, but which regulates most enterprises, sets prices, controls entry into markets, and imposes licensing rules.
*On economic liberty:
Libertarians claim that, as a matter of basic justice, people have the right to acquire, hold, use, give, and in many cases destroy personal property. They may decide what to eat, drink, and wear, and determine what kinds of entertainment and cultural experiences they will consume. They may acquire wealth for themselves or for others. They have the right to enter into a wide range of contracts for the exchange of goods and services. They may enter into and negotiate employment contracts (including wage rates, hours worked, working conditions, and so on) as they see fit. They may decide for themselves how to balance leisure and work. They may choose to join unions or not. They may manage their households as they see fit. They may create things for sale. They have the right to start, manage, and stop businesses, to sell franchises in such businesses, and to run such businesses for their own private ends in the way they regard as best. This includes the right to form certain kinds of joint ventures, including certain kinds of corporations and workers’ cooperatives. People may own private productive property, such as factories or machinery, and develop property for productive purposes. They may acquire, lend, take risks with, and profit from capital and financial instruments. They have the right to determine their own long-term financial plans, including retirement saving and investments in certain forms of insurance. Libertarians even believe that people have the right to sell sexual services or their own body parts, such as kidneys.
In “Political Liberty: Who Needs it?”, I wrote:
Imagine that in our culture, or in the human race in general, we tended to associate being given a red scarf by one’s government as a mark of membership and status. You are not fully in your national club until you get your scarf.
Now, suppose the government gives red scarves to everyone, except homosexuals. Homosexuals would rightly be upset—they would rightly claim that the government’s refusal to grant them red scarves shows that homosexuals are considered second-class, inferior people. The government’s behavior would tend to induce people (including homosexuals themselves) to regard homosexuals as having low status… Homosexuals and their sympathetic allies would have reason to take to the streets and demand that homosexuals be granted scarves.
(Note: I was discussing the value of voting rights rather than marriage.)
I don’t advocate having the government distribute red scarves in order to signal status. That’s not the business the government should be in.
However, if the government did distribute scarves as a way of signaling status and membership, I’d want it to do so equally. I’d be outraged if it excluded homosexuals, or blacks, or whomever, even though I think it’s dumb for the government to issue scarves in the first place.
I don’t want trivialize marriage. In the case above, the value of getting a red scarf is purely symbolic. The value of having government accept and recognize your marriage contract is not purely symbolic.
Now, it’s an interesting question whether government should recognize marriage contracts, and on what terms it should do so. But given that it does in fact recognize certain marriage contracts between opposite-sex consenting adults, it would need compelling justification not to recognize otherwise identical marriage contracts between same-sex consenting adults.
Going back to the hypothetical world above where red scarves are used to indicate status: Suppose, in that world, that Abrahamic churches, mosques, and synagogues also had a long tradition of distributing red scarves when a person became an adult. Suppose many Americans received a red scarf from their church at the same time that they received it from government. Suppose most of those churches refused to issues scarves to homosexuals because they regarded homosexual sexual activity as inherently sinful.
If the government then began to issue scarves to homosexuals, that would not be an assault on the churches or their members’ freedom. After all, it would not thereby be requiring the churches to issue such scarves. It would not intervene in the churches at all. Rather, this would be a case of a religious institution and a political institution running in parallel. Changing the latter is not the same as changing the former.
For the same reason, if the government changes the civil institution of marriage, that is not the same thing as changing the religious institution. If the government allows homosexuals to marry in civil ceremonies, it does not thereby impose anything on churches.
Ah, but don’t these use the word “marriage” in both cases? Sure, but we can all recognize that there is marriage-sub-civil and marriage-sub-religious. In the eyes of the Catholic Church, I am not married-sub-religious, but I am married-sub-civil.
Evidence here.
U.S. Sen. Rand Paul remarked on President Obama‘s decision to publicly support same-sex marriage by saying, “Call me cynical, but I wasn’t sure his views on marriage could get any gayer.”
I won’t call you cynical. You’re a morally backward person with a perverted view of sex and marriage. How’s that?
UPDATE: Some readers have expressed disappointment that I am not engaging in a reasoned debate. I understand your concerns. But what’s the point of having a reasoned debate? Has anyone on the other side ever, even once, come to this position as a result of reasoned arguments from relatively uncontroversial principles? I am not trying to have a reasoned debate with the other side. I am instead trying to heap scorn on the other side, much as in the 60s people heaped scorn on racists.
This story at the Chronicle of Higher Education caught my eye.
“I am not a welfare queen,” says Melissa Bruninga-Matteau.
That’s how she feels compelled to start a conversation about how she, a white woman with a Ph.D. in medieval history and an adjunct professor, came to rely on food stamps and Medicaid. Ms. Bruninga-Matteau, a 43-year-old single mother who teaches two humanities courses at Yavapai College, in Prescott, Ariz., says the stereotype of the people receiving such aid does not reflect reality.
A striking section:
She entered graduate school at the University of California at Irvine in 2002, idealistic about landing a tenure-track job in her field. She never imagined that she’d end up trying to eke out a living, teaching college for poverty wages, with no benefits or job security. [Emphasis mine.]
I find this perplexing. I also entered grad school in 2002. At the time I entered, I knew that the job market for Ph.D.s tended to be bleak. I also knew that the market for people with Ph.D.s in history was considerably worse than it was for people with Ph.D.s in philosophy. I also knew that getting a tenure-track job was difficult even if you come from a top program in one’s field, let alone a program outside the top 20, such as the program Bruninga-Matteau attended. I frequently imagined that I would never get a job, which is one reason why I made sure to start publishing while in graduate school. (I don’t know if Bruninga-Matteau has published anything. Nothing shows up in Google Scholar or JStor, but that doesn’t mean much.)
It wasn’t as if I acquired this knowledge through difficult research. All of this information was publicly available and well-known. I am sorry that Bruninga-Matteau ended up in this situation. However, the article makes it sound as if she just expected to get a tenure-track job. She was “idealistic”. She “never imagined” she’d have to eke out a living. If that’s accurate, then it seems to me she made a culpable mistake. Anyone pursuing a Ph.D. in history as of 2002 should have known better than to expect a tenure-track job. If you are pursuing a Ph.D. in a humanities field right now, it’s your responsibility to know the risks. If you think the risks are worth it, go for it. But please don’t complain that you didn’t know the risks. (Even if the system sucks and should be reformed, you should know that the system sucks before you stake your future on it.)
Ms. Bruninga-Matteau grew up in an upper-middle class family in Montana that valued hard work and saw educational achievement as the pathway to a successful career and a prosperous life
I’m a first generation college student. Still, despite coming from a background where no one has experience with higher education, I knew getting a Ph.D. was risky.
I’m not interested here in debating public policy or welfare benefits, though you are free to do so in the comments section. I’m also not interested in debating the use of adjuncts, though I have plenty to say about that.
I’m interested in this article because it is (or at least seems to be) a striking case of naïveté. It’s surprising to me how many graduate students are just like Bruninga-Matteau. Perhaps that’s not accidental. Perhaps the Ph.D. admissions process tends to select for 2 kinds of students: 1) go-getters who know what it takes and do what it takes, and 2) book-smart people who have their heads in the clouds when it comes to practical matters. I frequently meet graduate students from the second category, though I rarely meet assistant professors who come from that category.
Given that we have the government we do, does anyone think we shouldn’t support the Smith-Amash NDAA Amendment?
So far as I can tell, we should be thrilled and grateful Congress has members like Adam Smith (D-WA) and Justin Amash (R-MI). Their amendment would stop the President from indefinitely detaining anyone in the U.S. without due process. Contact your congressman and encourage them to support it. You can do so through the ACLU very easily.
In the wake of North Carolina’s awfulness, I thought I’d share some happy LGBT news. On Wednesday Argentina passed a law that protects citizens’ rights of gender self-determination. From the AP:
No other country has gone so far to embrace gender self-determination. In the United States and Europe, transgender people must submit to physical and mental health exams and get past a series of other hurdles before getting sex-change treatments. Argentina’s law also is the first to give citizens the right to change their legal gender without first changing their bodies.
Bravo Argentina! I think the best part of the law is that it doesn’t require approval from judges or doctors for gender identity changes. Maya, at the wonderful Feministing blog writes,
Not having a valid ID that matches your gender identity is a huge barrier to access to education, employment, health care, you name it. As Kalym Sori, an Argentinian trans man said, “This is why the law of identity is so important. It opens the door to the rest of our rights.” But in most places in the world–and in the U.S.–trans people must show proof of a medical diagnosis and often major interventions, like surgery or hormone therapy, before they can get that legal recognition.
From a libertarian perspective, this law makes right what is so wrong with trans policy everywhere else. All states should have laws like Argentina’s, which is just to say, all citizens should be free from oppressive legal restrictions on gender identity. First, states shouldn’t be empowered to require that people declare a gender on their ID’s in the first place. (As an aside, I don’t think we should have state ID’s either, but that’s another post I guess.)
Second, we should reject the language of ‘disorder’ for people who choose gender identities because gender dysphoria isn’t necessarily (if ever) a medical problem that needs to be treated. It’s not wrong to change genders, and it doesn’t hurt anyone else, so there’s no reason to empower public and medical officials to decide who can and cannot adopt a particular gender. Just watch Deirdre McCloskey discuss her experience with judges, psychiatrists, and the police during her transition- anyone who is concerned about the state coercively regulating people’s behavior should object to this kind of treatment.
Third, and this is really the worst, some places still require sterilization and divorce before a person can officially change gender. The US just changed its requirements in 2010, but many states still require sterilization for drivers licenses.
Sometimes libertarians argue that we should be silent about ‘cultural issues,’ (aka, everything but property). Yet LBGT rights are one topic where it’s clear what it means to embrace a culture of liberty. My co-bloggers have pretty much made the case for gay rights, and for similar reasons, justice also requires rights of gender self-determination. Public policy should not disadvantage people just because their gender doesn’t ‘match’ their biological sex. Instead, the state should get out of the gender business and let everyone choose their own gender identity.
PS: For more on this topic, Javier Hidalgo just sent me this new article, which looks like a good read!
Critics of same-sex marriage often argue that its defenders are guilty of seeking to “redefine” marriage.
It is true that the term “marriage” has traditionally been applied, for the most part, to heterosexual unions specifically (though often polygamous ones, a fact such critics persistently pretend to overlook). But it is also true that the term “marriage” has traditionally been applied exclusively to relationships in which the husband held legal authority over the wife – relationships in which the wife was not only subordinated to her husband but actually absorbed into his legal identity.
If we are going to appeal to traditional usage to deny that same-sex partnerships are genuine marriages, then by the same argument we will have to deny that relationships between legal equals can count as marriages. In the traditional meaning of “marriage,” then, there are no married couples in the United States today. If instead we insist that relationships among legal equals can be marriages, then we have granted that marriage is an open-textured concept whose meaning is not limited to its historically given forms; in that case, same-sex marriage can no longer be ruled out by linguistic fiat.
Until recently, I had only read the first two books of Hayek’s grand trilogy Law, Legislation and Liberty. People told me that the third book was the least interesting. The real action, they said, was in the first two books. I decided to see for myself whether they were right. After finishing the book, I admit that much of the analysis is straightforward public choice theory that others had already carried to a higher level of sophistication. Further, the conceptions of law, spontaneous order and the critique of social justice are best articulated in the first two books. However, Book III has a number of interesting elements. One of them is Hayek’s insistence on a universal basic income while vehemently rejecting the idea of social justice. On this blog, we sometimes tie the two together. So what gives?
Let’s consider the relevant passages:
The assurance of a certain minimum income for everyone, or a sort of floor below which nobody need fall even when he is unable to provide for himself, appears not only to be wholly legitimate protection against a risk common to all, but a necessary part of the Great Society in which the individual no longer has specific claims on the members of the particular small group into which he was born (55).*
So Hayek is for a minimum income. This much is clear. But notice the next passage:
It is unfortunate that the endeavor to secure a uniform minimum for all who cannot provide for themselves has become connected with the wholly different aims of securing a ‘just’ distribution of incomes (55).
What? Isn’t the point of the UBI to secure a just distribution of incomes? Isn’t the UBI legitimate because people it is owed to people in order to justify the social order as a whole?
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