Daily Archives: November 23, 2021

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Hayek as Democratic Socialist?

Les Leopold has a Common Dreams essay entitled “Was Frederick [sic] Hayek a Bernie Sanders Socialist?” that checks off the many areas in which Friedrich A. Hayek favored social welfare “safety net” protections that are on a par with the policies advocated by many “progressives” today.

My friend Ryan Neugebauer shared the article on his Facebook Timeline (so a H/T to him!). And it prompted a productive exchange between us.

Ryan observes correctly that Hayek was “a strong proponent of governmental countervailing power within a capitalist economy,” much “closer in line with [Bernie] Sanders than … with Ayn Rand or [Ludwig von] Mises.” For Ryan, “as long as Statist Capitalism exists (the only form that has ever existed), some form of Social Democratic project is in order.” He therefore favors “a synthesis of libertarian and social democratic thought, … promoting bottom-up dual-power/mutual aid projects [that depend] on the state less and [that build] ‘an alternative society in the shell of the old.'” He argues, correctly in my view, that “it makes no sense to take away the crutches before you strengthen and heal the broken leg.”

Ryan points out further that it was the reactionary conservative “Otto von Bismarck who erected the modern welfare-regulatory state in response to Socialist revolutionaries agitating for change in Germany during 19th century Industrial Capitalism. When people are distressed by poor working conditions, poor pay, and see no end in sight, they agitate for radical change.” Though he embraces long-term anarchist goals, he argues that as long as you have “a situation where a nation state is … affected by crony interests and a distorted banking sector, having a form of social democracy is the preferable option in my eyes. … In contrast to many Progressives and State Socialists, I prefer polycentric systems and multiple option arrangements/escape potential.” He provides a key example:

I would prefer a situation where Trans individuals wouldn’t be dependent simply on the public system, which could restrict their options due to political control, and instead be able to access alternative private options if they should choose or are able to get support to access. I would prefer people being able to access different forms of schooling and not be forced to attend a public school system. Given that the political mechanism is often captured by right-wing interests, it does not make sense to crowd out alternatives, require “public only” arrangements, and simply count on always having “the right people in”, as many Progressives and State Socialists do. I gave a few examples, but I typically prefer having more options than less and power distributed as much as possible.

One can achieve that while maintaining a robust social insurance system. It just will likely always be up for grabs such as long as it is attached to a political system that is easily captured by nefarious interests.

In the Facebook discussion that followed, I wrote:

This is a very nice discussion about the kinds of alternatives that people—who favor freedom and flourishing—must face given the conditions that exist. While Hayek most assuredly was not a strict libertarian on matters of government “intervention”—and I put this in scare quotes because the state has always been intimately involved with all things economic—I think there are two important takeaways from The Road to Serfdom that advocates of more benign social-democratic measures forget at their peril.

The first is this: Politics in general and the state in particular have always been central to the constitution of class structures in society. The more political power comes to dominate social life, the more it becomes the only power worth having (which is why I applaud your support of bottom-up, polycentric, decentralized models of social decision-making). In Hayek’s view, however, the growth of political economy engenders a process in which “the worst get on top” necessarily. And “the worst” are, for Hayek, almost always those drawn from those predatory business-class interests within capitalism that had the most to gain from the regulatory, welfare-warfare state.


Given this reality, even the most benign of social-democratic “safety net” measures that Hayek favored could not escape a class character. Historically, as you suggest, “safety net” measures have often been enacted to not only benefit certain elements of the “ruling class”, but to undercut working class revolts (a la Bismark). (As an aside: I’d go so far as to say that historically, confrontational labor strikes and unrest have been intimately tied up with the depressionary phase of the boom-bust cycle, which both Marxists and Austrians root in the state-banking nexus. Pardon the plug, but on this, see my own undergraduate history honors thesis.


The second takeaway is Hayek’s view that extensive government control produces a socio-psychological alteration in the character of individuals within the larger culture. This social-psychological corruption is both a reciprocally related cause and effect of advancing political economy, a process of mutual reinforcement that undermines accountability, personal responsibility, and the autonomy of the individual’s moral conscience.

As a long-term alternative, Hayek advocated social change for sure, but with a dialectical sensibility; he believed that it could only occur through a slow and gradual change in cultural mores, traditions, and habits, which are often tacit. Like you, he argued that trying to impose such change “top-down,” without the requisite cultural foundations, is doomed to fail. And yet despite this almost Burkean emphasis on slow and gradual change, Hayek adamantly declared he was not a conservative. He embraced the essence of a radical approach. “We are bound all the time to question fundamentals,” he said; “it must be our privilege to be radical.”

I think this was a worthwhile discussion … and wanted to preserve it on my Notablog.