Clueless road to serfdom

Published in The Australian (Sydney), 14 August 2008

THE great sociologist Max Weber once defined the art of politics as “a strong and slow boring of hard boards” that required “both passion and perspective”. What, one wonders, would Weber have made of Kevin Rudd, who early this month ventured into the sphere of political philosophy with a renewed attack on liberal thinker Friedrich Hayek? While it is hard to deny the passion behind the Prime Minister’s views, the perspective of his critique of the Nobel prize-winning economist is far from clear.

Rudd claimed that the old dichotomy of Left and Right was no longer apt in the 21st century or, in his own words, that there was no longer a need to choose between Hayek and Leonid Brezhnev. It’s quite a remarkable way to put it, as if the choice between a liberal economist and a Soviet leader should be a tough one for a democratic prime minister. But in any case, if Rudd refuses to make this choice, history has already made it for him. Where Soviet-style communism has failed dismally, Hayekian ideas keep inspiring economists and politicians across the globe.

That aside, posing Left against Right was not appropriate even in the 20th century. Who in their right mind would describe Adolf Hitler as the ideological opposite of Joseph Stalin, or Mao Zedong of Benito Mussolini? The real dividing line in political thought has been between collectivists on the one hand and defenders of individual liberty on the other. While Hayek undoubtedly belonged to the latter camp, this did not make him Right or Left. Hayek was a liberal in the classical meaning of the word. But the liberal tradition of John Locke, Adam Smith, and Hayek never fitted into the politicians’ simplistic Left-Right view of the world. Perhaps Rudd’s remarks reveal more about his own thinking than about Hayek’s.

Unfortunately, Rudd’s errors do not end there. His characterisation of Hayek’s philosophy was equally off the mark. In his view, Hayek was a radical ideologue of the free and unfettered market, blind to everything but the individual. Yet even a cursory reading of Hayek’s numerous books and essays should have prevented him from making such a claim.

Hayek recognised that individualism alone is not enough to understand the world. Nothing in Hayek’s writings suggests that there was no place for friendship, families or good neighbourhood in his theory.

But that is what the Prime Minister seems to believe. In differentiating himself from Hayek, Rudd explicitly stated that a compassionate society must act through the state.

Yet he probably would be surprised that Hayek did not object to basic redistribution. In The Road to Serfdom, he wrote: “There can be no doubt that some minimum of food, shelter and clothing can be assured to everybody.” The real difference between Hayek and Rudd is one of emphasis and scope, not of principle.

Rudd also seems to think that his insight that markets can fail makes him stand out from Hayek. Yet Hayek, the great theorist of limited knowledge, would have been the first to concede that markets can and do fail. At the same time, he would have warned that market failure alone does not give the state licence to correct it. There is a possibility that state intervention can make matters worse and that accepting some market imperfections may be the better option.

The possibility of state failure, though, is strangely absent from Rudd’s ideas, as if he thinks only markets can fail and infallible politicians such as him have the task of curing the disease.

Yet it is obvious that an alleged market failure (say, climate change) can lead to an even more severe state failure (a costly emissions trading scheme, for example).

Finally, Rudd’s view of the state as the sole healer of society’s ills is out of touch with political thinking in other parts of the world.

One need not go as far as former West German chancellor Helmut Schmidt, a Social Democrat, who once congratulated Hayek by proclaiming, “We’re all Hayekians now.”

Take British Conservative Party leader David Cameron. While Cameron can hardly be called a full-blown free-market radical, he nevertheless understands that the relationship between the individual, society and the state is more complicated than Rudd likes to see. “There is such a thing as society,” Cameron says. “It’s just not the same as the state.” Probably without even realising it, he has expressed a very Hayekian view: that through voluntary and charitable institutions the free society can often solve problems much better than the state.

Weber was right. Good politics is a strong and slow boring through hard boards. Had Rudd kept this in mind, he would not have used a sledgehammer of polemics to deal with Hayek’s economic philosophy.

Oliver Marc Hartwich is the chief economist at British think tank Policy Exchange. He will be joining the Centre for Independent Studies as a research fellow later this year.

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