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The Honolulu Advertiser
Posted on: Monday, April 26, 2004

Ahem! I beg to differ with you, Mr. Slater

By Robert M. Rees

Cliff Slater's recent column in praise of F.A. Hayek's book of 1944, "The Road to Serfdom," was headlined, "Best-Seller changed history." It should have been the reverse, "History changed best-seller," because apparently the passage of time has caused some of us to forget the emptiness of Hayek's treatise on letting the market decide.

The book, written toward the end of World War II, is an eloquent attack on fascism but adopts the extreme antithesis that all economic planning by government leads to totalitarianism. Concluded Hayek, "If we are not to destroy individual freedom, competition must be left to function unobstructed."

In his tribute to Hayek, Slater neglects to pay homage to two of Hayek's intellectual precursors, Herbert Spencer and William Graham Sumner. To understand them is to understand Hayek. Both worked to establish Social Darwinism and the survival-of-the-fittest doctrine upon which Libertarian thought of today rests its case against government pursuit of social justice.

Spencer, in 1850, argued in "Social Statics" that government interference in free markets — such as safety requirements or minimum-wage laws — only disturbs the natural and wonderful order of things.

It was Spencer, not Charles Darwin, who coined the phrase "survival of the fittest" and who likened the suffering of the poor and oppressed to the weeding out of the unfit. Spencer came to America in 1882 and gained wide acceptance during our Gilded Age for the Social Darwinist view that any individual who can't get along should be ignored and discarded.

The U.S. Supreme Court, in 1905, famously manifested Spencer's views in its Lochner v. New York decision when it ruled that government attempts to improve the hours and working conditions "in which grown and intelligent men may labor to earn their living are mere meddlesome interferences with the rights of the individual." (Justice Holmes, in dissent, admonished his brethren that the 14th Amendment does not enact Spencer's views.)

It was before and after the Lochner era that another of Hayek's precursors, Yale Professor William Graham Sumner, proselytized on behalf of Social Darwinism. Wrote the former Episcopalian minister-turned-sociologist, "The millionaires are a product of natural selection, the naturally selected agents of society for certain work." The rest of us are worker bees, destined by natural selection to a life of unquestioning hard labor.

Hayek, while at the London School of Economics, combined healthy disdain for the fascist collectivism of the day with his repressed opposition to John Maynard Keynes and the Social Darwinism of Spencer and Sumner to produce his attack on government planning.

Planning, he proffered, can only limit the choices of future generations. When Slater notes that the book was "lauded" even by George Orwell, he omits Orwell's conclusion in his Observer review that the book offered "no practicable way" of achieving progress and that the "effect (of the book) is a depressing one."

Not just depressing but silly is Hayek's proposal that the U.S. Constitution be amended so as to remove Congress from the realm of achieving desirable outcomes. Henceforth, Congress should formulate only rules for competition. This, argued Hayek, would put an end to progressive taxation and other policies that "discriminate" against some while helping others.

Slater notes that Hayek cites Adam Smith's invisible-hand metaphor, Smith's assertion that even when motivated by greed — Slater can bring himself only to refer to it as "so-called greed" — we are promoting the common good because we never work so hard as when our self-interest is at stake. When Smith first promulgated this dictum in 1776, it came as good news to slave owners and employers of child labor who up until then might have felt a tad guilty.

What Slater doesn't cite is Smith's observation about capitalists: "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public." We have seen evidence of this in recent events, and today even the most devout of Libertarians must be thankful for the antitrust and other legislation that keeps laissez-faire capitalism under control.

Slater maintains that Hayek's book appeared during a time — "Difficult for most people today to imagine," writes Slater — when some believed that government ownership might be better for the average citizen than private ownership.

In the sort of muddled history that so often characterizes ideological cheerleading, Slater cites President Truman's call "for socializing the steel industry" as proof of the push to replace private with government ownership.

The fact is that Truman ordered his secretary of commerce to seize the steel companies when the steel workers union, on April 4, 1952, gave notice of a nationwide strike during the Korean War. Truman sought to ensure wartime production of needed materials, and government ownership was not the objective.

In any case, a preference by some for government interference is not so difficult to imagine if you have just an inkling of what life was like for the uneducated and poor in the United Kingdom and the United States prior to World War II and the social programs of the post-war period. For some insights, since he approves of Orwell, Slater might start with "Down and Out in Paris and London."

Economist Paul Krugman, in Slate magazine, recently summed up all one needs to know about Hayek: "If one asks what substantive contributions (Hayek) made to our understanding of how the world really works, one is left at something of a loss."

Robert M. Rees is moderator of 'Olelo Television's "Counterpoint" and Hawai'i Public Radio's "Talk of the Islands" programs.