The Mad Dream of a Libertarian Dictatorship

The long-lived, utterly insane idea of an autocrat imposing freedom

In her 1926 book Concerning Women, the libertarian writer Suzanne LaFollette had some surprisingly sympathetic words for the Bolshevik regime in Russia. She nodded briefly to the Soviets' "alleged mistreatment of political dissenters," but she concluded that "Whether or not the Soviet Government succeeds in getting beyond dictatorship to the establishment of economic justice in Russia is not really important." The important thing, she felt, was that "the idea released by the Russian Revolution will prevail over the combined forces of European and American imperialism."

There has long been a strand in the classical liberal tradition that dreams a temporary dictatorship could be a stepping stone, even a shortcut, to reform. The idea may go back as far as the French economist Turgot and his alleged fantasy of remolding his country from above—"Give me five years of despotism," he supposedly said, "and France shall be free"—and it continued with the liberal-minded intellectuals who put their faith in Napoleon. LaFollette wasn't the only pro-market writer with a soft spot for a dictatorship of the left: As late as 1970, you could see a future president of the Mont Pelerin Society writing kindly about Lenin, Tito, and Mao. Other classical liberals, alarmed at the realities of red rule, swung the other way and endorsed authoritarian governments of the right. Jorge Luis Borges, to give one infamous example, supported the Argentine military regime that seized power in 1976.

And then there are the admirers of Gen. Augusto Pinochet, iron-fisted ruler of Chile from 1973 to 1989. A new paper in the American Journal of Economics and Sociology, written by Andrew Farrant, Edward McPhail, and Sebastian Berger, explores the free-market economist F.A. Hayek's opinion of the Chilean dictatorship. Their article isn't necessarily the final word on the subject—the Hayek scholar Bruce Caldwell tells me he disagrees with the authors' interpretations on some points—but it does the most exhaustive job I've seen of tracking what precisely the Austrian intellectual said about Chile. Farrant and company debunk some of the claims that have been made against Hayek, but they make it clear that he combined an appreciation for Pinochet's economic policies ("From the little I have seen, I think it is no exaggeration to talk of a Chilean miracle") with a belief that a temporary dictatorship could be a salutory thing (Hayek said he would "prefer to sacrifice democracy temporarily, I repeat temporarily, rather than have to do without liberty, even if only for a while"). In Pinochet's Chile, Hayek predicted, "we will witness a transition from a dictatorial government to a liberal government…during this transition it may be necessary to maintain certain dictatorial powers, not as something permanent, but as a temporary arrangement."

That may not be full-throated praise, but it's an awfully sanguine way to talk about a state that tortured its opponents, censored the press, and imprisoned and murdered people for their political views. Hayek may have "prefer[red] to sacrifice democracy" if the alternative was "to do without liberty," but Pinochet restricted liberty in intolerable ways. The general wasn't even consistent in his commitment to economic freedom: He helped bring on a recession by fixing the peso's exchange rates; his regime's record is littered with bailouts, corruption, and other forms of crony capitalism; and he regulated labor tightly. (Pinochet initially banned unions altogether, and after they were legalized he still outlawed sympathy strikes, prohibited voluntary closed-shop contracts, and restricted what issues could be covered when unions negotiated with employers. And then there was his tendency to lock up labor leaders.) Hayek didn't defend those incursions on freedom, but there's no sign he expressed any concern about them either.

Needless to say, Hayek did not speak for every classical liberal. It isn't hard to find prominent libertarian individuals and institutions that condemned Pinochet's government while it was in power: Murray Rothbard denounced it fiercely, for example, and the Cato Institute published a series of angry exposés. And that tradition of criticism has continued into the present. Nonetheless, many myths about the dictatorship still circulate, mostly among conservatives but also sometimes among libertarians. I periodically hear it claimed, for example, that Pinochet was a reluctant ruler who stepped down from power of his own free will, a Cincinnatus who did what he must to set the stage for freedom. (Here's George Reisman: "General Pinochet was thus one of the most extraordinary dictators in history, a dictator who stood for major limits on the power of the state, who imposed such limits, and who sought to maintain such limits after voluntarily giving up his dictatorship.") In fact, when Pinochet lost a plebiscite that he had expected to win, the alleged Cincinnatus reacted by ordering his armed forces to impose martial law. His dictatorship ended because they refused to obey him.

Yet the legend persists. And it persists in part because of that fantasy of a benign temporary dictatorship—a "liberal dictator," in Hayek's phrase.

It is certainly true, as Hayek argued, that liberty and democracy are not the same thing. An intrusion on our freedom does not cease to be an intrusion when it is endorsed by a majority of voters. But dictatorships tend overwhelmingly to be illiberal as well as undemocratic; if you search for examples of liberal dictators, you'll come up almost entirely dry. Hayek cites Oliver Cromwell, who wasn't really all that liberal, and Ludwig Erhard, who wasn't a dictator. To qualify as a bona fide liberal dictatorship, a government must be unelected without being repressive; and to qualify for a classical liberal's defense, its officials should expand their subjects' freedoms. In the last century, the only figure I can think of who comes close to meeting those standards is John Cowperthwaite, the former finance secretary of Hong Kong; and his ability to do good without doing much evil was contingent on unusual historical circumstances that I do not expect to recur.

This paucity of examples should not be a surprise. As Farrant, McPhail, and Berger point out in their paper, Hayek's idea of a temporary liberal dictatorship was inconsistent with his other arguments:

Hayek's defense of transitional dictatorship appears to assume away a bevy of public choice warnings about the self-interest of political actors. Moreover, it is unclear why Hayek's argument about the supposed capture of the planning bureaucracy by "bad" planners would not similarly apply to the dictatorial bureaucratic machinery—supposedly a merely temporary expedient—that is created by Hayek's "liberal" dictator. Indeed, public choice reasoning suggests that any would-be "illiberal" dictator who can overthrow Hayek's "liberal" dictator will seize control over whatever dictatorial machinery is already in place (the bureaucracy and the military) and—once in power—nationalize vast swathes of the economy to squarely cement their position as dictator and to greatly strengthen their ability to extract rents from the private sector….

Indeed, Hayek took H.D. Dickinson—one of his opponents in the interwar socialist calculation debate—to task for defending the supposedly naive idea of a "transitional" socialist dictatorship….As Hayek tartly noted, any adoption of transitional socialist dictatorship would more likely culminate in a permanent regime akin to that of Hitler or Stalin than in the "beautiful and idyllic picture…of 'libertarian socialism'" painted by Dickinson.

It's not as though you need a dictatorship to expand liberty. Of the countries where market reforms were imposed from above, the most far-reaching changes came not in dictatorial Chile but in democratic New Zealand. More important, liberalization can come from below rather than above. Paul Gregory and Kate Zhou have made a strong case that one reason the retreat from a planned economy led to better results in China than in Russia is because the former country didn't impose reforms so much as it allowed them to happen: The peasants conducted what amounted to a civil disobedience campaign in the countryside, and the ruling class ratified the peasants' victories after the fact. Something similar is taking place in the DIY informal settlements of the Third World, even as the residents of those districts and their Actually Existing Markets sometimes find themselves at odds with governments pushing purported "market reforms."

The classical liberals who defended dictatorships often came to regret their enthusiasm. Borges finally signed a statement opposing the Argentine junta's habit of disappearing its opponents. LaFollette managed to move too far from her soft-on-the-Soviets stance, becoming a McCarthyist. But the dream of the liberal dictator persists in some corners of the libertarian universe. It is a dream that deserves to die.

Jesse Walker is a senior editor of Reason magazine.