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Thu Mar 28, 2013, 09:41 PM

As Republicans Hail Hayek, Their Plans Advance Friedman

As he undertook an American lecture tour in 1944, Hayek expressed frustration that many of his most ardent acolytes seemed not to have read the book. Although “The Road to Serfdom” expressed deep anxieties about central planning, it was also explicit about the positive role that government could play. “Probably nothing has done so much harm to the liberal cause,” Hayek wrote, as a “wooden insistence” on “laissez-faire.”

Hayek was quick to point out a number of areas where regulations might be beneficial, including the restriction of excessive working hours, the maintenance of sanitary conditions and the control of poisonous substances. And he argued that the price system became “ineffective” when property owners weren’t charged for the damages they caused; hence the need to regulate deforestation, farming, and the smoke and noise produced by factories. “In such instances,” he wrote, “we must find some substitute for the regulation by the price mechanism.”

Much of the contemporary animus against excessive regulation more closely resembles ideas first brought into general circulation by Milton Friedman. Where Hayek perceived a host of areas that might be improved by regulation, Friedman saw almost none.

In the 1960s, although very few among even his closest allies shared such views, Friedman advocated for the abolition of almost every regulatory arm of the federal government. He argued that the agencies with famous abbreviations -- the ICC, FCC, FDA -- should all be shuttered to grant greater discretion to consumers, whose actions Friedman viewed as the most reliable record of public opinion. If doctors and dentists would be allowed to practice without licensing requirements, he said, the cost of care would plunge, yielding benefits that far outweighed any dangers that uncertified practitioners might pose. (If one proved inept with a drill, Friedman reasoned, consumer preferences would soon take that into account.)


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Reply As Republicans Hail Hayek, Their Plans Advance Friedman (Original post)
unrepentant progress Mar 2013 OP
DBoon Mar 2013 #1
unrepentant progress Mar 2013 #2

Response to unrepentant progress (Original post)

Fri Mar 29, 2013, 12:13 AM

1. Advisor to Pinochet

Where humans were murdered so markets could be free

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Response to DBoon (Reply #1)

Fri Mar 29, 2013, 10:55 AM

2. Both Hayek and Friedman admired Pinochet

Corey Robin has written extensively about this.

Libertarians will blanch at that association: whatever resonance Hobbesian ideas may find in their writings, the Hobbesian state is a good deal more repressive than any government they would ever countenance. Except for the fact that it's not. As Greg Grandin points out in Empire's Workshop, Milton Friedman met with Chilean dictator Augusto Pinochet in 1975 to advise him on economic matters; Friedman's Chicago Boys worked even more closely with Pinochet's junta. Sergio de Castro, Pinochet's finance minister, made the observation, reminiscent of Hobbes and Berlin, that "a person's actual freedom can only be ensured through an authoritarian regime that exercises power by implementing equal rules for everyone." Hayek admired Pinochet's Chile so much that he decided to hold a meeting of his Mont Pelerin Society in Viña del Mar, the seaside resort where the coup against Allende was planned. In 1978 he wrote to the London Times that he had "not been able to find a single person even in much maligned Chile who did not agree that personal freedom was much greater under Pinochet than it had been under Allende."

"Despite my sharp disagreement with the authoritarian political system of Chile," Friedman would later claim, "I do not regard it as evil for an economist to render technical economic advice to the Chilean Government." But the marriage between free markets and state terror cannot be annulled so easily. As Hobbes understood, it takes an enormous amount of repression to create the type of men who can exercise their "Liberty to buy, and sell, and otherwise contract with one another" without getting stroppy. They must be free to move--or choose--but not so free as to think about redesigning the highway. Assuming an all-too-easy congruence between capitalism and democracy, the libertarian overlooks just how much coercion is required to make citizens who will use their freedom responsibly and not ask the state to alleviate their distress.

And then followed up on Hayek and Pinochet in a blog post last year.

It’s no secret that Friedrich von Hayek was a warm supporter of Augusto Pinochet’s bloody regime. As I wrote in The Nation a few years back. ... I had thought there wasn’t much more to say about Hayek in Chile, but a new article in the American Journal of Economics and Sociology—”Preventing the ‘Abuses’ of Democracy: Hayek, the ‘Military Usurper’ and Transitional Dictatorship in Chile?” by Andrew Farrant, Edward McPhail, and Sebastian Berger—provides some fresh details. ... Farrant et al demonstrate that Hayek’s support of Pinochet was not contingent or begrudging—an alliance of convenience due to Pinochet’s embrace of free market economics—but was rather the product of two longstanding ideas and commitments.

First, a belief that welfare/socialist states of modern democracies have a tendency toward totalitarianism. ... Second, a belief in the virtues of temporary dictatorships as a means of saving these totalitarian-bound democracies from themselves.

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