[ExI] Hayek

Tara Maya tara at taramayastales.com
Sat Jun 14 00:58:06 UTC 2014

Peter L. Berger wrote a good essay on, among other things, Schumpeter and (indirectly) Hayek, in 1992:

"It seems to me that one most usefully discusses capitalism and socialism if one understands them quite narrowly as two alternative systems of production (as, indeed, the Marxists have always done)--the one based on market forces and private ownership…the other on state control and on public ownership…. By these definitions, an oft-cited 'socialist' country like Sweden (even in the heyday of Social Democratic governance) is, I would contend, no such thing. Sweden, like most of the other Northern European democracies, has developed a very elaborate system of distribution and redistribution. But the welfare state, even in its Scandinavian apotheosis, continues to rest on a capitalist system of production; indeed only the affluence created by the latter makes this welfare state possible. Sweden is not, as its proponents keep saying, a 'third way'; rather, it is a variation on the 'first way.'

"There must be some limit beyond which state ownership begins to threaten democracy. Yet present knowledge does not permit us to discern exactly where this limit is. Comparisons between existing capitalist democracies (say, between countries like Austria and Switzerland, which have quite different levels of public ownership) suggest that there is a good deal of leeway. The libertarian view that each step in the direction of public ownership is a step toward despotism is not borne out by evidence. On the other hand, given the empirical linkage between democracy and capitalism, policy makers would be well-advised to be cautious in expanding public ownership.… 

...the reason why capitalism is necessary for democracy [is that] it provides the social space within which individuals, groups, and entire institutional complexes can develop independently of state control. To use a term that has lately returned to fashionable usage, capitalism creates space and opportunity for civil society. Conversely, the empirical correlation between socialism and dictatorship can be explained precisely by the absence of such social space in a socialist system. To achieve this effect, needless to say, it is not at all important whether the original capitalist class is or is not inspired by democratic ideas, for it is the consequences of capitalism, not the motives of the capitalist that create the space for democracy."

-- The Uncertain Triumph of Democratic Capitalism, Peter L. Berger in Capitalism, Socialism, and Democracy Revisited

Tara Maya
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On Jun 13, 2014, at 12:02 PM, William Flynn Wallace <foozler83 at gmail.com> wrote:

> I was challenged to read a book by Hayek and show where he was wrong, and so I read The Road to Serfdom (well, until I got the ideas).
> Hayek outlined two forms of socialism:  those with central planning and those without (which I will refer to as social services governments).
> For both of these he predicted an eventual decline into totalitarianism, and certainly those governments with central planning have all failed and became, or were from the beginning, dictatorships, unless I am mistaken.  You know them all.  
> However, he seems to be wrong about the social services governments, like Sweden.  Hayek did say that it would take longer:  "In the latter type of socialism the effects I discuss in this book are brought about more slowly indirectly, and imperfectly.  I believe that the ultimate outcome tends to be very much the same, although the process by which it is brought about is not quite the same as that described in this book."  (from the preface page XX of the 1976 edition)
> I did not find the processes that he referred to in this book that he said affect the social services types.
> There are several social services types, like Sweden, that have not failed, have not drifted into totalitarianism by anyone's measure.
> These governments have their troubles, as do we, with increasing free riders and accumulating debt, but dictators they and we have none.
> Thus Hayek is wrong - so far.  
> bill w
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