People Read Hayek

Over at Battlepanda:

I am also (finally!) reading Hayek's The Road to Serfdom. I'm reserving my judgement because I am only about half way through, but my first impression of it seems to confirm my view of Hayek as a very reasonable man who wrote a book condemning socialism in fairly hysterical terms because, perhaps, the direction socialism seemed to be taking at the time merited it. He is certainly no knee-jerk lover of laissez-faire.

Those are two very important points that aren't often made. Hayek in fact can be read much the same way that Adam Smith can be - recognizing the weaknesses of capitalism, and recommending the government take a limited role in securing the function of the economy.

But it's the historical context that is crucial. Road to Serfdom came out in 1945, before the war was even over. At the time, "socialism" as a word basically referred only to the USSR, and all it's attending crimes. The success of the mixed economies in Europe hadn't happened yet. So of course Hayek can be forgiven for being terrified of the increasing "socialising" of western economies.

Then Margaret Thatcher was elected in 1979, and Ronald Reagan was inaugurated in 1981. In both countries, free-market radicals (allegedly inspired by Hayek) quickly laid waste to the government and economies, though in the US people seem to forget that. (That Ronald Reagan was actually mourned stunned me.) But here's the thing: It made as little sense to dogmatically follow Hayek when he was 35 years out of date as it did to dogmatically follow Marx in Russia in 1917, 35 years after he died. Neither author had anything useful to say about the times and places where they were most fervently followed.

Odd, in a sense. Neither author was relevant for their times, but they serve as useful bookends to the Cold War - Marx inspired the October Revolution of 1917, and Hayek (in part) motivated the Reagan Republicans who survived the Cold War, if barely.