Column: Not in the spirit of Hayek

Reuters News
Posted: May 14, 2013 4:30 PM

By Nicholas Wapshott

(Reuters) - It has been a bad couple of weeks for conservative social scientists.

First a doctoral student ran the numbers on the study by Harvard's Carmen Reinhart and Kenneth Rogoff that underpins austerity and deep public spending cuts as a cure for the Great Recession and found it full of errors.

Then a policy analyst, Jason Richwine, who angered Senate Republicans trying to pass immigration reform with a one-sided estimate of the cost of making undocumented workers citizens, was obliged to clear his desk at the Heritage Foundation when it became known his Harvard dissertation suggested Hispanics had lower intelligence than "the white native population."

It makes you wonder what Friedrich Hayek would have to say about such aberrant research. Hayek has become the patron saint of conservative intellectuals - and with good reason. He went head to head with John Maynard Keynes in 1931 in an effort to stop Keynesianism in its tracks. Hayek failed, but his attempt gave him mythical status among thinkers who deplore big government and central management of the economy.

Hayek became a conservative hero a second time with publication of his "Road to Serfdom" (1944) that suggested the larger the state sector, the more there was a tendency to tyranny.

Many of today's Hayekians harden up Hayek's carefully expressed thoughts to declare that all government is potentially despotic, while also ignoring his arguments in favor of governments providing a generous safety net for the less advantaged, including a home for every citizen and universal health care.

Perhaps because Americans were first introduced to Hayek's "Road to Serfdom" in a much truncated Reader's Digest edition. They would do well to re-read the original.

The rest of Hayek's vast oeuvre doesn't get much notice, even from those who boast of their devotion to the master. But it is not a stretch to say that the very notion of conservative think tanks grew out of his plea for an ideology that would inspire and unite the right as effectively as socialist theory continues to inspire the left.

In the aftermath of World War Two, when Western governments adopted Keynesianism wholesale and Social Democrats with big spending agendas won landslide elections, Hayek assembled a ragbag of nonconservatives and maverick thinkers to a summit in an off-season ski resort on Mont Pelerin, Switzerland. He set them a task: come up with an ideology to inspire conservatives and arm them with cogent arguments to counter socialists and Keynesians. He warned them the effort could take 25 years.

The group met annually, argued sharply with each other, and eventually outlived the fashion for Keynes and socialism. Mont Perelin's achievement is that conservatives, once mostly traditional and opportunistic, are now armed, and some would say cursed, with a compelling ideology of their own. By the time of Ronald Reagan and Margaret Thatcher, both Hayek devotees, a worldwide conservative revolution was challenging the onward rush of socialism and, with various degrees of success, slowing its progress.

Hayek, however, was not satisfied. A born contrarian and pessimist, he hotly denied responsibility for Reaganomics or Thatcherism. He distrusted all politicians for the compromises they must make, which is why he tried to deter protégés like Milton Friedman from joining the Nixon administration.

Perhaps the most enduring legacy Hayek left, along with an immense body of work, is the clutch of conservative think tanks that fuel conservative political debate, among them the Hoover Institution, the Cato Institute, the Manhattan Institute, the Ludwig von Mises Institute and the Heritage Foundation.

So what would Hayek make of the Richwine affair? One thing right off: Hayek disliked national borders because they inhibited the free movement of labor. He was also color-blind. So the racial prejudice that underpins much opposition to immigration reform he would find abhorrent. He would also find Richwine's sloppy and partial immigration paper an affront to scientific integrity.

Hayek had tough things to say about traditional seats of learning and they would apply equally today to the lavishly appointed think tanks he inspired. His views were so out of the mainstream that for most of his life he was treated as a pariah, even by Chicago University's conservative economics professors who did not think his economics up to snuff.

Instead, Hayek had to accept a specially established chair in the social studies department funded by a businessman who had adored "Serfdom". As a truly original and free thinker, Hayek was wary of businessmen who spend shareholders' dividends on employing tame academics to research pet projects.

It was from personal knowledge, then, that he wrote, in "The Constitution of Liberty" (1960), about "the need for protecting institutions of learning against the cruder kind of interference by political or economic interests." He advocated "watchfulness, especially in the social sciences, where the pressure is often exercised in the name of highly idealistic and widely approved aims." He went on, "The danger lies … in the increased control which the growing financial needs of research give to those who hold the purse strings."

He distrusted reactionary conservatism and wrote an essay, "Why I Am Not a Conservative," spelling out why. There was little point, he believed, in merely attempting to restore a previous age, however idyllic.

"The belief in integral freedom," Hayek wrote, "is based on an essentially forward-looking attitude and not on any nostalgic longing for the past or a romantic admiration for what has been." He went further. "I doubt whether there can be such a thing as a conservative political philosophy. Conservatism may often be a useful practical maxim, but it does not give us any guiding principles which can influence long-range developments."

Reading Hayek can be uncomfortable for those who are under the impression he would agree with them.

So what of the myriad, well-paid fellows attached to conservative institutions? Hayek deplored intellectuals who became involved in party political battles, as so many think-tank fellows do today.

"The task of the political philosopher," he wrote, "can only be to influence public opinion, not to organize people for action." But he did not have in mind encouraging grass-roots causes like the Tea Party. An unashamed elitist and individualist, Hayek was suspicious of all mass movements.

"The higher the education and intelligence of individuals," he wrote in "Serfdom", "the more their views and tastes are differentiated." The corollary is that "to find a high degree of uniformity and similarity of outlook, we have to descend to the regions of lower moral and intellectual standards where the more primitive and ‘common' instincts and tastes prevail. It is, as it were, the lowest common denominator which unites the largest number of people."

He deplored those, perhaps like the talk radio and Fox News audience, "prepared to accept a ready-made system of values if it is only drummed into their ears sufficiently loudly and frequently." Instead, hope of achieving a better society "must rest on persuading and gaining the support of those who by disposition are ‘progressives.'"

Hayek believed academics could achieve their best work in an ivory tower. Most of the think tanks he spawned, however, cluster around Capitol Hill, the better to play politics.

Reinhart and Rogoff may be given a pass. They should have checked their figures more carefully and have apologized. It is governments imposing terrible unnecessary hardships on their people, using Reinhart and Rogoff as a pretext, who are to blame for perpetuating the error.

Richwine, however, is different. If Heritage were ignorant of his racist Harvard thesis before it hired him, they are now being punished for their lack of diligence. When an institution loses the trust of the very people it sets out to please, they deserve to lose donors and be ignored in the future.

There is a hard lesson there for similar institutions dedicated not so much to discovering the truth as to pandering to a political clique. If they had read Hayek a little more closely, or with a more open mind, they might have saved themselves a great deal of embarrassment.

(Nicholas Wapshott is a Reuters columnist but his opinions are his own.)

(Nicholas Wapshott is the former New York bureau chief of The Times of London. Previously, he was editor of the Saturday Times of London, and founding editor of The Times Magazine. He is a regular broadcaster on MSNBC, PBS, and FOX News. He is the author of "Ronald Reagan and Margaret Thatcher: A Political Marriage" (2007). His "Keynes Hayek: The Clash That Defined Modern Economics" was published by W.W.Norton in October. )