The Mirage of Social Justice


[Check out The Road to Serfdom: Text and Documents–The Definitive Edition (The Collected Works of F. A. Hayek, Volume 2) at Amazon]

‘Neoliberalism’ – A Term Both Ubiquitous and Ill-Defined – is an Evolving Body of Market-Driven Ideas. Or a Conspiracy by Elites to Torment the Poor…

Margaret Thatcher arrives in Washington, November 1988 (courtesy Ronald Reagan Library)

Margaret Thatcher arrives in Washington, November 1988 (courtesy Ronald Reagan Library)

Spontaneous Order: Looking Back at Neoliberalism

Tim Barker  writes:  “The owl of Minerva,” Hegel famously wrote, “flies only at dusk”: historical events can be theoretically comprehended only in retrospect. Is this the case with neoliberalism? A term ubiquitous in the academy but scarcely used outside it, the concept is difficult to define with precision. A common shorthand identifies it as the economic and philosophical ideology behind the Reagan-Thatcher revolution; it is also often agreed that this ideology contributed somehow to the financial crisis of 2008. Now, with the recession technically over but recovery still ambiguous, two recent books attempt to describe neoliberalism’s historical origins and explore its current political implications.

Markets in the Name of Socialism: The Left-Wing Origins of Neoliberalism

by Johanna Bockman
Stanford University Press, 2011, 352 pp.

Masters of the Universe: Hayek, Friedman, and the Birth of Neoliberal Politics

by Daniel Stedman Jones
Princeton University Press, 2012, 432 pp.

In Masters of the Universe: Hayek, Friedman, and the Birth of Neoliberal Politics, Daniel Stedman Jones charts the rise of neoliberalism, which he defines as the “coherent, if loose, body of ideas” that underwrite our contemporary “market-driven society.” He begins with the intellectual biographies of three exiled Central European thinkers—Ludwig von Mises, Friedrich Hayek, and Karl Popper—who challenged the industrial West’s consensus around social welfare programs, full employment, labor unions, and state intervention. This first, émigré generation (joined by kindred Americans and West Germans) were “neoliberal” in their opposition to central planning, but also “neoliberal” because they sought a reformed liberalism for the middle of the twentieth century, not a simple return to the laissez-faire of the nineteenth. Hayek’s Road to Serfdom, for example, countenanced significant departures from laissez-faire, including universal health care.

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Analysis: Why Government Doesn’t—and Can’t—Manage Resources Like a Private Business


Government versus Private Resource Management: The Theory

Robert P. Murphy writes: According to a common but naïve worldview, there are objective, well-known techniques for producing various goods and services, and the consumer preferences regarding these outputs are also common knowledge. In such a worldview—which even many professional economists, in discussing policy, seem to hold—it seems only natural to conclude that government officials could improve upon the decentralized market outcome. After all, the government has access to the same “production function” as private firms, and if it decides to be the monopoly producer of a good or service, it can avoid wasteful advertising expenses and other redundancies. Such arguments were behind the proposals for outright “market socialism” in the era between World Wars I and II, and, to this day, they guide recommendations for heavy government regulation of “natural monopolies” such as utilities.

However, more-practical economists recognize the limits of their textbook diagrams with elegant marginal revenue and marginal cost curves. In reality, we operate in a world of uncertainty. The “least cost” method of producing a good or service is never obvious, nor is what consumers will be willing to pay for various items. In a famous lecture, “Competition as a Discovery Procedure,” Friedrich Hayek explained how markets in the real world stumble upon this hidden knowledge. Various people with access to different information make piecemeal discoveries and constantly modify their operations accordingly; they receive feedback from market prices in the form of profit or loss. Firms mimic particularly profitable innovations, and if a firm does not adapt quickly enough, it will go out of business. Hayek thus viewed competition as a process rather than a condition or end-state. The state of “perfect competition” described in the textbooks—which includes the property that all firms in an industry use the identical “least-cost” method of production—is actually something that would emerge over time onlybecause of the competitive rivalry between the firms, and only if the conditions in the real world remained static long enough for all firms to fully adapt.

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[VIDEO] F. A. Hayek on Social Justice

From Firing Line, William F Buckley Jr hosts a discussion on social justice with George Roche III (Hillsdale College) and Noble Laureate economist F. A. Hayek. http://www.LibertyPen

Note host William F. Buckley arguing the case for social justice and redistributionism, to drive the discussion. Not because Buckley personally embraces and defends collectivism, obviously, he’s merely conducting a revealing interview,  drawing out contrasting views. Artfully performing his role as moderator, Buckley’s does a surprisingly fair job of making the opposition (socialism) case, in order to probe Hayek’s and Roche’s positions. It’s a pleasure to watch. Hayek is brilliant.

The growth of central planning, and the concentration of power in the last several years makes the Johnson-era “Great Society” catastrophe of federal overreach and corruption look quaint by comparison. There’s no lucid counterpoint being made. The public debate is muddled by smaller minds. It makes me wish we had a respected public figure like Hayek in national media, in our time. This discussion is more relevant now than when it was recorded. Popular intellectuals of this caliber are sorely missing. The ideas expressed here are as fresh and vibrant–and consequential–today as they were then. And the stakes are just as high.

F A Hayek – Social Justice – YouTube

Fight of the Century

Keynes vs. Hayek. Fight of the Century! E-con Stories, by John Papola & Russ Roberts. I forgot how good this is.