Sunday, April 25, 2010

The Road to Serfdom: Part 2

Social and political philosophy is often couched in the language of "isms;" that is, highly idealised conceptual frameworks. These polarized idealizations never exist in the "real world," but they usually represent broad sociopolitical tendencies. In short, societies tend to "lean" one way or another. F.A. Hayek's, The Road to Serfdom identifies two of these "isms:" individualism and collectivism. His basic argument is that eighteenth-century individualism (John Locke, Adam Smith) led to dramatic increases in the quality of life in the Western world; and that nineteenth-century collectivism has led to equally dramatic decreases in that quality of life. Hence, the book's title: The Road to Serfdom. Hayek argues that social and political philosophy is a matter of choice, we are not predestined toward one or the other: philosophical ideas matter! In the United States today, the Democratic Party leans toward collectivism and the Republican Party leans toward individualism, however neither party seem to be very cognizant of the philosophical bases that Hayek identifies. So let's sketch in the broad drift of these two polar "isms."

Individualism argues that personal liberty, individual planning, free market competition, and democratic political institutions are essential for the realization of the "Good Life." Moreover, individualism argues that the relatively unfettered pursuit of self interest by individuals contributes leads to the social good. In other words, society as a whole benefits when individuals are allowed to plan their own lives (pursue their own self-interest) by forging voluntary contracts with others. We all pursue what we believe is "good" for us as individuals. We can best realize these personal individual ends (get a good job) by means of voluntary cooperation with others (paying tuition at the College of Mount St. Joseph). No one forced you come to MSJ. If the college fails to meet your expectations you can choose to take your tuition money and go to another college. If over time, enough students decide to go to another college, MSJ will go bankrupt. However, if we meet student expectations, we'll not only survive but also drive our competitors out of business. (Look out UC, Xavier, Miami, Thomas More, and NKU!) When we earn that monopoly, we cannot sit back and enjoy that enviable position, because our current or future competitors will copy what we did to earn that monopoly. Thus, over the long run competition leads to higher quality education at a lower cost. Not that government had little to do with it. The only thing the free market really needs is to enforce contracts, and monitor and enforce laws against theft and fraud.

Collectivism argues that the free market generates inequalities that cannot be overcome. That's because all markets are subject to business cycles that, by their very nature, wax and wane. Of course, those who own the means of production survive by cutting back on labor costs: buying machines to replace works, making workers work longer hours for less money etc. At the bottom of the business cycle, competition does not work because there are more workers than jobs and therefore dissatified workers are easily replaced. Thus, when workers find themselves at the bottom of one of these cycles, they become alienated from themselves, their family, and their work. They lack economic security. Collectivism, therefore seeks to spread out this risk by using the coercive power of government to plan national and global economies. Collective planners are experts that replace the free market mechanism with a collective system that insures the well being of everyone. Typical collectivist mechanisms include social welfare, unemployment insurance, socialized medicine, centalized banking, and public education. When government control is complete we call it totalitarianism. Under totalitarian collectivist regimes private property, private institutions, and individual planning are replaced by public property, public institutions, and collective planning. Therefore, under a totalitarian regime the College of Mount St. Joseph would be taken over by government's central planners. At that point, all colleges would be controlled by government and you would have no choice of which college you want to attend. My guess is that if MSJ were to continue as a public institution, planners would keep its health care programs and scrap all the other programs. There would be no competition between programs because they'll all be the same. Central planners would decide what is taught, who teaches, how much they get paid, and which students get admitted. Of course, UC would be converted to a football college that trains men to play football. But it would be very boring to watch because the teams wouldn't be allowed to keep score.

My next blog will discuss what Hayek says about the nature of leadership and followership under individualism and collectivism.


VangelV said...

I believe that your identification of individualism with the Republican Party is wrong. Evidence suggests that both parties are statist and support the growth of government over individual liberty.

A more accurate description would have the Democrats limit liberty in the economic sphere while Republicans would limit liberty in the social sphere. If we look at the spectrum we do not see a distribution along a line where one end is labeled 'collectivist' and the other 'individualist'. A more accurate description would have the political map as a two dimensional construct where individuals and party are scored on their views regarding liberty in the economic and social spheres. A good explanation can be found at the Advocates site where participants can take a very simple ten question quiz that will show where they stand.

Freedom's Philosopher said...

I certainly agree with the usefulness of distinguishing between the social and economic spheres. However, Hayek and others have argued that they are really inseparable: the ideal is social liberalism and economic conservatism. Both parties have strayed from the ideal. In recent years, republicans have drifted more toward social conservatism, and democrats toward economic liberalism. The "wild card" is now foreign policy. Unfortunately, both parties seem more-or-less enamoured with global imperialism. I always vote democrat as the lesser of two evils. However, most libertarians don't vote. That might be the only logically consistent position. Thanks for the interesting link!

theyenguy said...

Though I am not an Austrian Economist, I present three of Friedrich August Hayek’s statements, from his book The Road To Serfdom (1944)

He stated: “the very men most anxious to plan society (are) the most dangerous if allowed to do so — and (they are) the most intolerant of the planning of others” page 93.

And: “It is, as it were, the lowest common denominator which unites the largest number of people. If a numerous group is needed, strong enough to impose their views on the values of life on all the rest, it will never be those with highly differentiated and developed tastes — it will be those who form the ‘mass’ in the derogatory sense of the term, the least original and independent, who will be able to put the weight of their numbers behind their particular ideals.Moreover, tyrants will often “be able to obtain the support of all the docile and gullible, who have no strong convictions of their own but are prepared to accept a ready-made system of values if it is only drummed into their ears sufficiently loudly and frequently” page 138.

And: “Independence and self-reliance, individual initiative and local responsibility, the successful reliance on voluntary activity, noninterference with one’s neighbor and tolerance of the different, respect for custom and tradition, and a healthy suspicion of power and authority: Almost all the traditions and institutions in which democratic moral genius has found its most characteristic expression, and which in turn have molded the national character and the whole moral climate of England and America, are those which the progress of collectivism and its inherently centralistic tendencies are progressively destroying” page 219.

My response to Mr Hayek is that bible prophecy of Revelation 13:1-18 reveals that God has ordained a collective, that is a collectivist future, for mankind, and I provide the details in article A Sovereign System, A Sovereign King And A Sovereign Banker To Rule Planet Earth, Bible Foretells

Frank T. DeMartini said...

Here is an article I've written that deals with the Democratic Convention and their turn to collectivism: