Economics

Fukuyama on Hayek: Great, But He Didn't Realize That Governments Are People, Too

|

No Salma, but that's still a pretty good look

The New York Times, perhaps in penance for its news pages characterizing F.A. Hayek one of those "long-dead authors" whose "long-dormant ideas" have until recently been found mostly on "dusty bookshelves," gave some Book Review space over the weekend to Francis Fukuyama for a respectful assessment of the Nobel Prize-winning economist. I'll reproduce the end bit here, since it has the most contentious claims:

A second critique of Hayek has tended to come from the right. He is necessarily a moral relativist, since he does not believe that there is a higher perspective from which one person can dictate another's ends. Morality for him is more like a useful coordinating device than a categorical imperative. But surely the Western tradition that Hayek celebrates is as concerned with virtue as with freedom, whether from the standpoint of Christianity or that of classical republicanism. One searches in vain through this or any of his other books for a serious treatment of religion or the moral concerns that animate religious­believers.

In the end, what drove people on the left crazy about Hayek back in the 1950s is the same thing that makes him appealing to a Glenn Beck today. Hayek made the slipperiest of slippery slope arguments: the smallest move toward the expansion of government would lead to a cascade of bad consequences that would result in full-blown authoritarian socialism. If anything, however, the history of the past 50 years shows us that the slippery slope has all sorts of ledges and handholds by which we can brake our descent into serfdom and indeed climb back up. Voters in the United States and Europe took seriously the arguments about the dangers of big government and reversed course after the 1980s. Indeed, the pendulum swung so far backward that financial markets were left dangerously unregulated prior to the financial crisis. President Obama's return to "big government" didn't last more than a year before it was met with fierce ­resistance.

In the end, there is a deep contradiction in Hayek's thought. His great insight is that individual human beings muddle along, making progress by planning, experimenting, trying, failing and trying again. They never have as much clarity about the future as they think they do. But Hayek somehow knows with great certainty that when governments, as opposed to individuals, engage in a similar process of innovation and discovery, they will fail. He insists that the dividing line between state and society must be drawn according to a strict abstract principle rather than through empirical adaptation. In so doing, he proves himself to be far more of a hubristic Cartesian than a true Hayekian.

More on Fukuyama's review by Cato's David Boaz.

Reason on Hayek here, including this wide-ranging 1977 interview in which he discusses his news-to-George-Soros problems with Milton Friedman and the Chicago School, his relationship with John Maynard Keynes, and his prescient hopes for pre-Thatcher England. Sample on the latter:

That change was long overdue

Reason: Is Britain irrevocably on the road to serfdom?

Hayek: No, not irrevocably. That's one of the misunderstandings. The Road to Selfdom was meant to be a warning: "Unless you mend your ways, you'll go to the devil." And you can always mend your ways.

Reason: What policy measures are currently possible to reverse the trend in Britain?

Hayek: So long as you give one body of organized interests, namely the trade unions, specific powers to use force to get a larger share of the market, then the market will not function. And this is supported by the public because of the historic belief that in past the trade unions have done so much to raise the standard of living of the poor that you must be kind to them. So long as this view is prevalent, I don't believe there is any hope. But you can induce change. We must now put our hope in a change of attitude.

NEXT: Reason Contributors on the Air

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. How about a Salma Hayek photo with the caption: “oops”. You people got no conception of how to boost hits.

    1. You people got no conception of how to boost hits tits.

      1. You should want to spend your tax money on mammograms for the amount of time you boys fantasize about tits

        1. some of us prefer teats

          1. Especially if they’re guvmint teats!

        2. Isn’t this where Episiarch comes in and gets all edgy and obscene?

          1. who the hell do you think my ‘rather’ spoof is?

      2. Don’t spend your money on mammaries! Spend it on poopies!

        1. Spoof, I am starting to think you are the guy on the fetish show who wanted to be treated like a baby and wear diapers.

          STAY AWAY FROM ME AND MY TITS

          1. Two pieces of bologna can hardly be considered “tits”.

            1. Rob, go chew sugarefree’s dick

  2. If anything, however, the history of the past 50 years shows us that the slippery slope has all sorts of ledges and handholds by which we can brake our descent into serfdom and indeed climb back up.

    If history is chock-a-block with examples, then it should be easy to give a few.

    And no, I don’t, actually, regard temporary pauses on the slope to refute the slope itself.

    1. Many examples: Athens, Rome, Pharonic Egypt, Sumeria, England, uh, OK I see your point.

      1. They just didn’t have the right people in charge!

        We’re different.

        1. The past had ledges, handholds, and brakes which pale in comparison to the modern technology and sophistication we enjoy today. We have some serious high tech ledges and brakes in place now… nothing to see here. Move along.

    2. And no, I don’t, actually, regard temporary pauses on the slope to refute the slope itself.

      Neither would I. And I don’t think hayek would, either. There’s no indication that TRS is at all suggesting a monotonic decline; i.e. Fukuyama is an ass.

  3. Indeed, the pendulum swung so far backward that financial markets were left dangerously unregulated prior to the financial crisis.

    This is the WORST of the fallacies that is constantly perpetuated by the Grey Lady. I am SO FARKING SICK of hearing that our layers upon layers of regulations left markets “dangerously unregulated”. There is ZERO evidence that this was the case yet it gets repeated ad nauseum on a regular basis.

    Sickening.

    1. Not being nationalized is dangerously unregulated, dude. Get on the right page.

      1. Have you ever posted anything other than meaningless spittle, Episiarch?

        1. Un-self-aware comment of the day.

          1. The problem, NutraSweet, is that is literally too stupid to even understand that. I mean, even a chimp can probably see it after the fact, but shriek makes chimps look like Einstein. Wearing a mortarboard.

            1. come on, shrike had some actually insightful comments on the republican debate thread. Give him the nano-iota of credit that he deserves.

        2. Have you ever posted anything that isn’t demented hyper partisan abject idiocy, shriek? TELL ME ABOUT THE MARKET, DUDE!

          1. Look, its the agitprop anarchy duo! Like two comic book characters that never grow up!

            1. You just blew the sockpuppet game, dude. You really had me going–well done–but you just fucked up.

              Well, I suppose it was fun while it lasted.

              1. You still have Paris.

    2. I used to work for a company that handled Sarbanes-Oxley compliance, so I find it particularly irritating.

      Of course, the narrative of dangerously unregulated markets is useful despite the reality of the situation so it is maintained by the left.

    3. You really can’t expect anything more than thumb up his ass beltway myopia from the ‘Yama. He has to live with those people. Where else in the country is he going to go for decent neo soul food hors d’oeuvres?

    4. That is because you are a blind idiot, Tman. Banks regs prior to 2003 required minimal capital requirements to prevent bank runs until Bush the Lesser dropped them – thus he had to later write a $700 billion TARP check to cover the deposit withdrawals in 2008.

      I know – you no regs – NONE – that is Statism!

      1. You’re so unbelievably fucking stupid, shriek, that I have to wonder how long it takes you to tie your shoes.

        Oh wait, I’m being silly. You’re only allowed to wear loafers so that you don’t end up strangling yourself accidentally.

        1. Banks regs prior to 2003 required minimal capital requirements to prevent bank runs until Bush the Lesser dropped them

          Emperor Bush dictates bank reserves? Damn baby…if you are going or have gone to college it must be for a humanities major. A bachelor’s in humanities to be specific. Poly-sci? Psychology? Sociology? Something light on math, right?

      2. Uh huh. So what’s your opinion on Sarbanes-Oxley and its effects in detail?

        1. Deliberate accounting fraud is way down – not that S-OX is the only reason.

          Could be that Arther Andersen is gone – or that all the corporate crime of 2001-2003 was exhausted.

          1. haha corporate crime bubble! fits nicely in austrian economic business cycle. there is after all a finite supply of crooks.

          2. The smoking pile of book-cooking lawyer-shit previously known as Arthur Anderson is called ‘Accenture’ these days. It never went away, joke’s on you shrike.

            1. Bullshit.

              Accenture broke off in 1999ish as the consulting side of the business.

              The auditors lost everything. I worked side by side with the fuckers at the time.

              no joke, pal.

              1. shrike|5.9.11 @ 4:29PM|#
                “…I worked side by side with the fuckers at the time….”

                Yes, starting about 8PM with the broom.

              2. Is that what you told your nephew, Stanly? Tell us more about this sweet water park log ride they installed on your base.

      3. I dissent from this position.

      4. Oh goody, shriek the expert day trader is now going to school us all on the recession and why it happened because BUSHPIGCHENEYHLIBURTONNOOOBLLOOODFOROILL!!!! .

        Listen dummy, the recession happened because the FED backed loans that shouldn’t ever have been made. They removed the risk from the market and bubbles did what bubbles do.

        To blame “lax regulation” on this is just idiotic. I don’t expect you to understand this because you are a moron, but there it is.

        1. “removed the risk”? Hilariously stupid.

          Tell that to Lehman, Bear, Citi, WaMu, Wachovia, etc.

          They wish there had been no risk and that the Fed “backed them”.

          1. Um, half the guys you named got bailed out and essentially profited off of the recession.

            Jesus christ are you fucking stupid.

          2. Citi? Seriously?

            1. Citi lost over 90% of their market value and the Treasury still owns equity in them.

              Remember, Bush had to go socialist to save capitalism?

              Which he had to – unfortunately.

              1. Compare to being out of business, as they should be, that sounds pretty good.

                1. What JW said. The fact that they even have a market share at all at this point is because of taxpayer money. They have essentially used the government to bail out their shareholders, who should have lost billions. And they continue to do so to this day.

                  NONE of this would have been prevented by increased “regulation”. What should have happened is banks that made loans to people who could not afford them should’ve gone out of business for making stupid loans. Instead the FED bought to loans and bailed out giant corps like Citi, thus removing any consequences for their stupidity.

                  Kinda like GM.

                  1. No one gives a fuck about the shareholders, idiot.

                    It was the millions of depositors that would be left holding their dicks while the puny little FDIC borrowed MORE billions to cover the insurance.

                    1. So how does any of that prove that the market was “dangerously unregulated”?

                      You don’t even realize how full holes your circular logic is, do you.

      5. This statement is false.

        It actually doesn’t contain a single true element, so I can’t say “this part” is false – it all is.

        Shrike here asserts that banks had no minimum reserve requirements after 2003. False.

        Shrike here asserts that W changed the banks’ reserve requirements. That is also false.

        I’m guessing – this is just a guess, however, since I don’t really speak shrike – that what he’s trying to express is that the risk-based capital requirements for banks were changed. That IS true. And unfortunately, the weightings were changed to regard securitized loans as less risky [and therefore subject to lower capital requirements] than whole loans. That gave banks a gigantic built-in incentive to sell their native loan portfolios and buy bonds instead. But that was seen, at the time, as a regulatory crackdown; the regulators were trying to force incentivize banks to put their money into investments the regulators saw as safer. It didn’t end well – of course – in a classic Hayekian exercise in unintended consequences.

        1. To be specific, I am talking about Wall St broker/dealers and the lapse of the Net Capital Rule in 2003.

          http://en.wikipedia.org/wiki/Net_capital_rule

          I am not talking about regional banks.

          Leverage went way up – from 9-1 to as high as 60-1.

          1. Wow, you managed to find a broker/dealer rule change that had even less to do with the purported outcome than the risk-based capitalization rule.

            Did you even read your own Wikipedia article?

            1. Ok, you tell me, why did the I-banks fail?

              They were regulated by a supine SEC and not the Fed, the OCC, or the FDIC.

            2. Of course he didn’t read it! He never does when he cites. By this point, it’s a running gag:

              SEC response

              In connection with an investigation into the SEC’s role in the collapse of Bear Stearns, in late September, 2008, the SEC’s Division of Trading and Markets responded to an early formulation of this position by maintaining (1) it confuses leverage at the Bear Stearns holding company, which was never regulated by the net capital rule, with leverage at the broker-dealer subsidiaries covered by the net capital rule, and (2) before and after the 2004 rule change the broker-dealers covered by the 2004 rule change were subject to a net capital requirement equal to 2% of customer receivables not a 12 to 1 leverage test.[15]

              In an April 9, 2009, speech (“2009 Sirri Speech”) Erik Sirri, then Director of the SEC’s Division of Trading and Markets, expanded on this explanation by stating (1) the 2004 rule change did not affect the “basic” net capital rule that had a leverage limit (albeit one that excluded much broker-dealer debt), (2) an “alternative” net capital rule established in 1975 that did not contain a direct leverage limit applied to the broker-dealer subsidiaries of the five largest investment banks (and other large broker-dealers), and (3) neither form of the net capital rule was designed (nor operated) to constrain leverage at the investment bank holding company level, where leverage and, more important, risk was concentrated in business units other than broker-dealer subsidiaries.[16]

              In a July 2009 report, the General Accountability Office (“GAO”) reported that SEC staff had stated to the GAO that (1) CSE Brokers did not take on larger proprietary positions after applying reduced haircuts to those positions under the 2004 rule change and (2) leverage at those CSE Brokers was driven by customer margin loans, repurchase agreements, and stock lending, which were marked daily and secured by collateral that exposed the CSE Brokers to little if any risk. The report also stated officials at a former CSE Holding Company told the GAO they did not join the CSE program to increase leverage. The GAO confirmed that leverage at the CSE Holding Companies had been higher at the end of 1998 than at the end of 2006 just before the financial crisis began. The GAO report includes a comment letter from the SEC that reaffirms points raised in the 2009 Sirri Speech and states that commentators have “mischaracterized” the 2004 rule change as having allowed CSE Brokers to increase their leverage or as having been a major contributor to the financial crisis. The letter states that the CSE Broker “tentative net capital” levels “remained relatively stable after they began operating under the 2004 amendments, and, in some cases, increased significantly.”[17]

        2. I also never mentioned reserve requirements as they did not apply to the investment houses (Lehman, Merrill, Bear, etc) that formed the crater of the credit explosion.

          1. shrike|5.9.11 @ 4:37PM|#

            I also never mentioned reserve requirements as they did not apply to the investment houses (Lehman, Merrill, Bear, etc) that formed the crater of the credit explosion.

            At least you know how to back that truck up. Some things they can never take out of a country boy like you no matter how many hours you spend in haut kultur of day trading in your living room, eh?

        3. Shrike here asserts that banks had no minimum reserve requirements after 2003. False.

          Shrike here asserts that W changed the banks’ reserve requirements. That is also false.

          On #1 I said they fell/dropped – not that they disappeared.

          On #2 the W SEC did change capital requirements which I have proven – never mentioned “reserves”.

          I do plead guilty to a vague use of the term “banks” since I meant the big Wall St banks and not regionals/locals.

          So you are wrong, Fluffy. I know you are a smart guy – but you were too zealous this time.

    5. Indeed, the pendulum swung so far backward slope was so slippery that financial markets were left dangerously unregulated free of risk prior to the financial crisis. President Obama’s return to “big government” didn’t last more than a year before it was met with fierce token ?resistance.

      That’s better.

      1. Indeed.

  4. But Hayek somehow knows with great certainty that when governments, as opposed to individuals, engage in a similar process of innovation and discovery, they will fail.

    The difference, of course, being that individuals make decisions for themselves, while governments make decisions for other people.

    I may not know for sure which of two available jobs would be better for me, but the government doesn’t have the first fucking clue what is good for people.

    1. also, it’s like he’s suggesting that hayek says that individuals never fail. If fukuyama is making an honest parallel between governments being just like individuals, then he would realize that if an individual fails 30% of the time, the probability of any one of us getting fucked over all time is a static 30%. If government fails 30% of the time the probability of any one of us getting fucked over goes to one.

    2. The difference, of course, being that individuals make decisions for themselves, while governments make decisions for other people.

      Actually, I think this is incorrect. The problem with government agents is that they don’t consistently make decisions in the interest of society, but sometimes make decisions in their own interest.

      I may not know for sure which of two available jobs would be better for me, but the government doesn’t have the first fucking clue what is good for people.

      Most regulations don’t pretend to know what the proper choice is, just what the wrong choice is. The process of innovation and discovery is about the wrong choices, not the right ones, for the most part.

      1. The problem with government agents is that they don’t consistently make decisions in the interest of society, but sometimes make decisions in their own interest.

        My point (and Hayek’s) is that the government doesn’t have the relevant information to make the decisions in the best interest of individuals, let alone the interest of society (whatever that means).

      2. No, it’s not about bad motives at all. It’s about too many tractors, not enough tires. You could replace planners with selfless angels and you still wouldn’t be able to gauge demand correctly. At least, you’d never out-compete six billion interconnected decision-makers, some more risk-averse than others, working in real time.

        Just look in some direction from where you’re sitting and note the first product which falls under your gaze. How many iterations of it currently exist in the market, and how many others failed. What determined that you would purchase the one that you did, and how would a planner come into possession of this information in a timely manner?

        Consider how many decisions you make in one day. Which alarm clock? Which toothpaste? Which gas station and how many gallons today? You make thousands of these minute choices every day. Then listen to normal conversations between people who don’t consider this type of stuff. They know price, better than they know their right hand. And then remember: they don’t even know that they know this. And — they don’t have to.

        1. I was making my own point. You summarize Hayek’s fine.

  5. Voters in the United States and Europe took seriously the arguments about the dangers of big government and reversed course after the 1980s.

    Well you could have fucking fooled me.

    Do people still take Fukuyama srsly?

    1. Have we reached the end of history yet?

      1. History ended in 1992, dude. There was a book and everything!

        1. That’s why I feel so adrift. Maybe I should try Hare Krishna.

          1. History ended. It does not repeat. Entropy is complete. Enjoy nothingness forever.

            1. ProL, you missed a fairly obvious Muppet Movie joke. I’m so disappointed in you.

              1. Disappointment after history is pointless. Commenting is pointless. Pointlessness is pointless.

                1. “Good grief…it’s a running gag.”

                  1. As is nihility, Kermit.

                    1. Anyone feel a draft in here?

                    2. A draft would imply a remaining heat source. There is only nothingness.

                    3. There is only nothingness.

                      And blog commentary. Same thing, I know.

                    4. If you existed, you would be wise.

  6. If anything, however, the history of the past 50 years shows us that the slippery slope has all sorts of ledges and handholds by which we can brake our descent into serfdom and indeed climb back up.

    I believe this is what the left calls “deregulation”.

    1. Speed bumps on the road to serfdom.

      1. Great name for a Band

        1. No. That band would open for the Wallflowers at free gigs sponsored by Mello Yello.

          It would be a decent album title though.

          1. Rush’s next album.

  7. Fukuyama’s point about the slippery slope is the laziest and most infuriating criticism of Hayek it is possible to make. Hayek himself addressed this criticism many times, including in the interview above. Here’s what Hayek said in the preface to the 1976 edition of Road to Serfdom: “It has frequently been alleged that I have contended that any movement in the direction of socialism is bound to lead to totalitarianism. Even though this danger exists, this is not what the book says. What it contains is a warning that unless we mend the principles of our policy, some very unpleasant consequences will follow which most of those who advocate these policies do not want.”

    I suppose it would be a mistake to expect Fukuyama to have read Hayek’s most famous work before writing about him.

    1. More of the same in a letter to Paul Samuelson: ‘I am afraid in glancing through the 11th edition of your Economics I seem to have discovered the source of the false allegation about my book The Road to Serfdom which I constantly encounter, most resent and can only regard as a malicious distortion which has largely succeeded in discrediting my argument . . . [Y]ou assert that I contend that “each step away from the market system and towards the social reform of the welfare state is inevitably a journey that must end in a totalitarian state” and that “government modification of market laissez faire must lead inevitably to political serfdom.” . . .
      How anyone who has read my book can in good faith say this when ever since the first edition I say right at the beginning . . . “Nor am I arguing that these developments are inevitable. If they were, there would be no point in writing this. They can be prevented if people realize in time where their efforts may lead. . . .’

    2. yeah, but hayek is really tough to read. It’s not like english is his first language, and he has that winding germanic way about his discourse. Seriously, I was more frustrated by hayek than I was by pynchon (I actually managed to finish a pynchon)

      1. Reading Hayek is absolutely brutal. I was wondering if it was him or the translator, but it’s him.

        1. Really? I think he’s pretty clear, although I have to read slowly and pause frequently to digest what I’m reading. And then there’s always the chance that I’ve nevertheless misunderstood it.

          Still, pretty clear.

        2. If you can make it through Sartre, Hayek holds no terrors.

          1. L’enfer, c’est les autres.

        3. Reading Hayek is absolutely brutal.

          However, he’s absolutely *worth it*! The reader screaming in horrified recognition of present-day manifestations helps provide impetus to continue the book.

        4. Reading Hayek is absolutely brutal.

          Is that why you prefer Muppets?

          1. That’s like professionally insulting.

        5. Reading Hayek is like learning Bach. Extremely difficult at times but always very rewarding.

        6. It depends on what you read. Compared to The Sensory Order, The Road to Serfdom reads like a Family Circus cartoon.

        7. Reading Hayek is absolutely brutal.

          It’s been a long time, but I don’t recall him being brutal. It’s not like reading Whitehead, for instance.

        8. Not as brutal as reading Chomsky’s Syntactic Structures.

        9. Skip the book, just wait for the movie!

      2. And it was like 100 years ago. LOL!

      3. I agree that he’s not the most accessible writer, but Road to Serfdom clearly and explicitly rejects the position liberals routinely attribute to it- as does the rest of Hayek’s work. The sort of distortions of Hayek’s work presented by Fukuyama simply aren’t honest mistakes that a reasonable person who’s actually read Hayek’s work could make.

  8. In the end, there is a deep contradiction in Hayek’s thought. His great insight is that individual human beings muddle along, making progress by planning, experimenting, trying, failing and trying again. They never have as much clarity about the future as they think they do. But Hayek somehow knows with great certainty that when governments, as opposed to individuals, engage in a similar process of innovation and discovery, they will fail. He insists that the dividing line between state and society must be drawn according to a strict abstract principle rather than through empirical adaptation. In so doing, he proves himself to be far more of a hubristic Cartesian than a true Hayekian.

    This is really insipid reasoning.

    Since individuals manage through trial and error to make decisions about their own individual affairs, this to Fukuyama implies that governments can by trial and error make decisions about the individual affairs of millions of people.

    In other words, he completely fails to understand the entirety of Hayek’s work on the information problem in command economies. It’s actually millions of times harder for governments than for individuals, since the individual only needs to anticipate developments for himself, while governments need to anticipate developments for millions of subjects. Fukuyama manages to miss that, and manages to treat the government’s decision to spend billions on solar power the same as my decision to buy a single tax of gas, as if these are both “one” decision.

    1. Assuming that it isn’t exponentially harder to manage the affairs of millions than one.

    2. It’s actually millions of times harder for governments than for individuals, since the individual only needs to anticipate developments for himself, while governments need to anticipate developments for millions of subjects. Fukuyama manages to miss that, and manages to treat the government’s decision to spend billions on solar power the same as my decision to buy a single tax of gas, as if these are both “one” decision.

      Hayek, iirc, doesn’t make this mistake in logic, but since you bring it up, I will echo Brett L’s comment. It is wrong in many ways, the primary being that the types of decisions that government makes are different in kind, not just in degree. The kind of information needed to make those decisions is different in kind, not in degree, and the consequences of those decisions are different in kind and not in degree.

      If you are going to defend Hayek, use better arguments.

  9. Fuk-yo-mama’s conceit with the information problem is antithetical to what you say Fluffy.

    The government has vast statistics, and geniuses like Peter Orszag by the handful, hence this abstract thing called ‘government’ has far, far better information than an individual. Combined with the Prime Directive ethos progressives value in there being allegedly no profit motive in such capital allocation decisions, the government is eminently more suited to spend my money than me.

    The information problem Hayek contends the government has is exact problem (and unspoken chauvinism) the lefties use to justify their central schemes.

    1. Hayek’s contention is not that any single individual has more information than a government, but that the conglomerate interactions of all individuals known as the “market” acts on greater information than the relatively small group of government planners can either accumulate or even absorb enough intelligently to react to in a timely manner.

      Hayeek says that no individual or group of individuals has access to all information, hence putting one small group making major decisions for everybody is foolish.

  10. Francis Fukuyama is a lifetime academician born of lifetime academician. The guy has lived life in a bubble.

    When Fukuyama writes,

    His great insight is that individual human beings muddle along, making progress by planning, experimenting, trying, failing and trying again.

    Fukuyama fails to see he has given definition of Progressive Pragmatism.

    Should Hayek get showered with accolades over what was well known since William James and Charles Peirce.

    Fukuyama needs to hit the books.

  11. It is wrong in many ways, the primary being that the types of decisions that government makes are different in kind, not just in degree.

    I’m not sure I see this, NM, since the private sector/civil society is full of organizations that must make decisions that affect their stakeholders. Can you give us an example of a decision by government on domestic/economic policy is different in kind from any decision that would ever be made in the private sector?

    BTW, totally agreed with your dis of Tex-Mex chow the other day.

  12. Indeed, the pendulum swung so far backward that financial markets were left dangerously unregulated prior to the financial crisis.

    Financial markets collapsed because the US government dumped 6 trillion dollars into the home loan market.

    I guess in the dipshit world of Fukuyama intentional government manipulation of markets is considered a deregulation.

  13. I’m not sure I see this, NM, since the private sector/civil society is full of organizations that must make decisions that affect their stakeholders.

    The decisions of those organizations are, I think, analogous to the decisions made by government in the relevant ways (per Hayek’s point). Fluffy is, I believe, making a contrast between the decisions of individuals and organizations (including government). But organizations and individuals make different kinds of economic decisions and need different kinds of information as a result.

    And yes, Tex-Mex and New Mexican food are also different in kind as are New Mexican and most varieties of actual Mexican cuisine from Mexico.

    1. I do not think that it is a question of the type of information/decision involved (these are of interest only to the organization itself), but rather of the degree of disconnection present in the choice-result feedback loop. Lawful force occasions what would otherwise constitute irrational choice making; the further down the public -> private continuum we travel, the more directly entities are subjected to bearing the consequences of their choices. A fully private entity is constrained directly by its survival impulse. A fully public entity is constrained only via the mechanism of the political bureaucracy, and thus very indirectly, by the vote.

      1. That is a better defense of Hayek.

  14. “Voters in the United States and Europe took seriously the arguments about the dangers of big government and reversed course after the 1980s.”

    Um, I don’t think that means what you think that means…

  15. Fuck this guy and his yama.

    He thinks we just need master-debaters like him in charge.

Please to post comments

Comments are closed.