Hayek is a favourite with right-wing politicians and economists; he is a philosophical touchstone (as opposed to the Philosopher’s Stone). When all else fails, fall back on Hayek. But the problem for those who routinely quote Hayek is that they have failed to identify the flaws in his arguments and they have brushed aside his inaccurate predictions.
So who was Friedrich August von Hayek and why is he so important to the contemporary Right? FA Hayek was born in Vienna in 1899, the son of a doctor, his grandparents had been raised to the nobility by the Austrian Emperor. However after 1919, all titles were banned in the new Austria. In 1922 Hayek took doctorates in political science and economics, it was around this time that he read Ludwig von Mises’ book Socialism. After this, he began attending von Mises’ seminars and became a committed capitalist. Mises, incidentally served under Englebert Dollfuss until he left for the US where he influenced a generation of libertarians including Murray Rothbard and Ayn Rand. His widow, Margit von Mises, set up the Ludwig von Mises Institute which continues to this day.
Is it easy to see why von Mises and Hayek hated socialism (or anything left for that matter): they were both of aristocratic stock and small ‘c’ conservatives. Socialism was anathema to both of them and Hayek was more than happy to lend his support to regimes that were authoritarian. Hayek was responsible for the creation of neoliberalism since it was his economic theories that were appropriated by Thatcher, Reagan and Pinochet. When asked what her government believed in; Thatcher was reported to have reached into her handbag from where she produced a copy of Hayek’s Constitution of Liberty, which she slammed down on the table and said “This is what we believe”.
Here is one of Hayek’s predictions,
“legalised powers of the unions have become the biggest obstacle to raising the standards of the working class as a whole. They are the chief cause of the unnecessarily big differences between the best- and worse-paid workers.”
Unfortunately for Hayek and his followers, he was wrong. The standards of the working class did not improve with Thatcher’s Hayek-inspired anti-union legislation. The systematic destruction of the country’s manufacturing base was purely ideological and had nothing to do with ‘improvement’ of worker’s conditions or anything like it. The trade unions, particularly the National Union of Mineworkers, represented one of the biggest obstacles to the neoliberal project, along with the Labour-controlled metropolitan councils.
Hayek’s writings provide automatic justification for the pursuit of economic policies which benefit the few at the expense of the many. These ideas are often sold to the public under the guise of ‘liberty’ and the ‘devolvement of power from the centre’. Even the concept of the free market implies that freedom is only possible through the acts of consumption and acquisition. This is, of course, to ignore the fact that ‘freedom’ means different things to different people. Freedom for the followers of Hayek, von Mises et al means freedom for those who are in a position to afford it.