Engaging Enemies: Hayek and the Left - Hardcover

Simon Griffiths

Hardcover

ISBN 10: 1783481064 ISBN 13: 9781783481064

Publisher: Rowman & Littlefield International, 2014

Synopsis

Friedrich Hayek is a founding figure of the neo-liberalism that flourished in the 1980s; his work influenced policy on the right and was at odds with contemporary socialism. So how did the left come to rethink Hayek s work? And is that significant to today s post-crisis politics? Engaging Enemies thoroughly examines the surprising response of the British left to the rise of Hayek s pro-market theory. It explores the importance of attempts by the British left to rethink Hayek, and even to co-opt elements of his thought, and reveals how this encounter disrupts the link between markets and the right, and the state and the left. The book goes on to show how the left s engagement with Hayek influenced New Labour, providing the tools to pursue a pro-market, pro-social justice agenda. Beyond its historical narrative, the book highlights the lessons we can learn from the left s engagement with Hayek s work as the faith in pro-market arguments collapses during economic crisis. The limits of the left's engagement with Hayek and other neo-liberals before 1997 contain important warnings for today s thinkers.

About this title

About the Author

Simon Griffiths is Senior Lecturer in Politics at Goldsmiths University of London. He was previously a Visiting Research Fellow at the Centre for Political Ideologies in Oxford. He divides his time between academia and public policy and was formerly Senior Policy Advisor at the British Academy and Senior Research Fellow at the Social Market Foundation. He has written numerous policy reports and published journal articles in Contemporary Politics and Journal of Political Ideologies.

Excerpt. © Reprinted by permission. All rights reserved.

Engaging Enemies

Hayek and the Left

By Simon Griffiths

Rowman & Littlefield International, Ltd.

Copyright © 2014 Simon Griffiths
All rights reserved.

ISBN: 978-1-78348-106-4

Contents

Acknowledgements, xi, 
1 Hayek and the left: A paradoxical claim?, 1, 
2 The rise and fall of market socialism, 23, 
3 Revisionism revised, 49, 
4 Social movements and pluralism: 'A new kind of knowledge', 69, 
5 The revival of liberalism: 'Comrade Hayek' or 'Citizen Gamble'?, 95, 
6 Responses to the new right: The significance of the engagement, 121, 
Notes, 145, 
Bibliography, 175, 
Index, 185, 

CHAPTER 1

HAYEK AND THE LEFT

A paradoxical claim?

Between the fall of the Berlin Wall and New Labour's election in the United Kingdom, the political economist Andrew Gamble wrote that 'Hayek has much to contribute to the renewal of the socialist project'. Gamble's claim is surprising. Friedrich Hayek dedicated most of his long life to fighting socialism, declaring in the late 1970s that it was 'high time for us to cry from the rooftops that the intellectual foundations of socialism have all collapsed'. Hayek was an important influence on the new right and on senior figures in the British Conservative Party. Margaret Thatcher praised the 'powerful critique of socialist planning and the socialist state' found in his 1944 book, The Road to Serfdom. Waving his later tome, The Constitution of Liberty, published in 1960, Thatcher is said to have told an audience, 'This is what we believe'.

While Gamble's attempt to claim elements of Hayek's work for the left at the end of the twentieth century was relatively rare, it was not unique. In 1994 Hilary Wainwright, the founding editor of the radical left-wing magazine Red Pepper, argued that 'Reading Hayek' should 'contribute to new foundations for the left'. In fact, from the late 1980s onwards several authors produced left-wing reinterpretations of Hayek's work. For some on the left, the engagement with Hayek was limited to a tentative discussion of arguments that were closely associated with him—such as his case for the market and against socialist planning. For others, the engagement involved a thorough and careful investigation of his work. In this book I focus on the work of four thinkers on the left who engaged significantly in different ways with Hayek's ideas: David Miller, Raymond Plant, Hilary Wainwright and Andrew Gamble. I look at how their different attempts to reinvent the left are influenced by that engagement.

This book is an attempt to explain the unusual engagement with Hayek, and to reflect upon its significance. I argue that what these authors were doing is worth examining for several reasons. First, the engagement provides one example of how ideologies change, and particularly the importance of enmity and context in shaping and transforming ideology. The various authors discussed here were responding in different ways to common contextual shifts: the perceived failure of the Keynesian consensus, the electoral success of Thatcherism and the collapse of 'actually existing' socialism after 1989. These events led to a period of re-evaluation on the left. The engagement with Hayek only occurred with the collapse of the relationships of enmity that dominated political thought for much of the twentieth century: the divisions between socialism and communism; planning and markets; and the Soviet Union and the United States, for example.

Second, the engagement with Hayek provides a case study that allows reflection on the fate of socialism. Did socialism survive the twentieth century? Did it collapse as Hayek claimed? Or did it transform into something else, and if so what? I argue that the authors examined in this book are part of a wider transformation of socialist thought. This has occurred as a result of a wide variety of new engagements, reevaluations and new discoveries—the engagement with Hayek was just part of this larger story. Taken together, however, by the end of the twentieth century socialism had ceased to exist in the forms that had been dominant earlier that century, which were statist and paternalist. Socialism now largely survives as part of a hybrid ideology—its components found, for example, in liberal, pluralist or feminist varieties. In the conclusion, I reflect on the broader fate of socialism in the early twenty-first century.

Third, the debate about ideological change raises questions about historical periodization: was the engagement with Hayek part of a wider end to a long period of political thought? Was there an ideological continuity in the twentieth century that did not survive its ending? The thinkers examined in this book offer a variety of attempts to rethink the left. They reject the forms of socialism that had dominated the twentieth century. In doing so, they often draw on libertarian and anti-paternalist themes neglected within mainstream socialist thought or upon aspects of liberalism and pluralism. Often their engagement with Hayek evokes—implicitly or explicitly—debates that were prevalent in the nineteenth and early twentieth centuries. As such, the thinkers discussed here reflect a wider claim: that political thought in Britain at the end of the twentieth century had more in common with debates that had existed eighty years before than it did to discussions from the middle of the twentieth century.

Finally, the engagement with Hayek was significant because it had an influence on party politics, particularly on the 'modernization' of the Labour Party after the electoral failure of 1983 and on the later development of New Labour. The debate also raises wider questions on the role of the market for the left today. In particular, it shows how the left is vulnerable if it bases its strategy on market-led growth, something that has become far clearer since the financial crisis of 2007–2008 and the subsequent global recession.

It is this limited and surprising engagement with Hayek's work, involving only a handful of figures on the left, which provides the thread that runs through the book. Hayek was not the only thinker to undergo a radical reinterpretation at the end of the twentieth century: the British left's engagement with the ideas of the German legal theorist Carl Schmitt—a onetime Nazi—is perhaps more remarkable. (I explore the rediscovery of Schmitt in more detail in the book's final chapter.) Nor was Hayek a lone voice on the right. For example, John Anderson's article, 'The Servile State', published in 1943, anticipated many of the arguments found a year later in Hayek's The Road to Serfdom. However, although other fascinating engagements occurred at the end of the twentieth century, there is a more compelling case for examining the engagement by the left with Hayek than there is over any other figure.

First, Hayek was one of the main intellectual inspirations for the changes that occurred in Britain after 1979. His influence on Margaret Thatcher and on the wider Conservative Party has already been noted. Thatcher was explicit on Hayek's influence, arguing that her Secretary of State 'Keith Joseph gave the best political analysis of what was wrong, and what had to change. But behind him lay the wisdom of people like Friedrich Hayek, bodies like the Institute of Economic Affairs, and a host of thinkers who had swum against the tide of collectivism which at one time threatened to sweep away our national foundations'. As such, for those authors on the left seeking to understand some of the intellectual foundations of Thatcherism and her critique of socialism, Hayek provides the best starting point.

Second, Hayek was rare in the relative consistency of his beliefs throughout his long academic life and as such his work marks a relatively stable point from which to view a changing world. There were changes in emphasis and tone—but from early adulthood until his death there was remarkable steadiness. The political theorist John Gray argued that Hayek's overall consistency means that one should avoid 'periodizing his intellectual career into distinct phases'. Hayek's conclusions were, from early adulthood until his death, consistently against socialism and in favour of a limited state and a free market.

In the first half of this chapter, I give a brief overview of Hayek's life and the reception his arguments received on the left up to the final decade of the twentieth century—a period when in the main part the left only discussed Hayek as a symbol of what they opposed. I then provide a brief outline of the main arguments set out in this book, introducing those thinkers on the left who engaged with Hayek in more detail towards the end of the twentieth century.

Hayek as a straw man

Hayek was eighteen at the time of the Russian Revolution, and lived long enough to see the Soviet Union disintegrate, much to his glee. Hayek was born in 1899 to a wealthy, intellectual family in Vienna. He was old enough to fight during the last months of the First World War, but the experience did not seem to affect him greatly. (He later claimed that his only lasting memory of the conflict was of trying to recapture a bucketful of eels meant for the soldiers' breakfast, which he had knocked over in a dewy field.) Hayek returned to Vienna at the end of the First World War to witness a period of instability: the Austro-Hungarian Empire in which he was born collapsed; there was economic chaos marked by hyperinflation—at one stage Hayek's salary was increased two hundred times in eight months to keep up with prices—and communist revolution seemed a real possibility. Béla Kun led a short-lived Soviet Government in neighbouring Hungary in 1919 and there were several revolts in Vienna. In November 1918 Hayek entered the University of Vienna. His interest was in psychology, but the war had left no one to teach it. Instead he received doctorates in law in 1921 and political science in 1923. He graduated from university the possessor of 'moderate, Fabian socialist views' which were not to survive the next decade of his life.

The most obvious intellectual influence on Hayek's thought in the 1920s was the Austrian economist, Ludwig von Mises (1881–1973). After Hayek's graduation, Mises gave Hayek a civil service position in the temporary government economic office. At the interview Mises commented that he had not seen Hayek at any of his lectures at the University of Vienna. Hayek thought it unwise to reply that he had looked in on them, but had found Mises' views antithetical to his own mild socialism of the time. It was while attending weekly discussion groups in Mises' office that Hayek encountered, and was largely converted to, Mises' critique of socialism, found in its fullest form in Mises' 1922 book, Socialism: An Economic and Sociological Analysis.

During the 1920s Hayek became established as an economist. His work was mainly concerned with monetary theory, and between 1929 and 1931 he combined his duties as a civil servant with teaching in economics at the University of Vienna. In 1931 Hayek was invited to lecture in London by the economist Lionel Robbins (1898–1984). Largely on the strength of the lectures, Robbins arranged for Hayek to be appointed Tooke Professor of Economic Science and Statistics at the London School of Economics (LSE) where he remained until 1950. It was during the 1930s that Hayek made the contributions that established his reputation as an economist. He was also to publish work that hinted at the more overtly political and philosophical approach that marked his later work, in particular, his edited collection Collectivist Economic Planning, published in 1935. This piece took Hayek towards much wider issues in political thought than his early narrower study of economics allowed.

Hayek became a naturalized British subject in 1938, a few weeks before German forces moved into Austria. (Hayek's British critics stressed his foreign roots, referring to him by his aristocratic Germanic name, 'Friedrich von Hayek'. In later life, particularly after being appointed a Companion of Honour in 1984, he preferred the Anglicized 'Frederick Hayek'. In this book I use 'Friedrich Hayek' as an attempt at neutrality and for consistency with other thinkers.) He would most likely have stayed in London for the rest of his life had not an unpleasant divorce (after which Hayek was cut off by several close friends—including Robbins who hardly spoke to him for almost two decades) led him to take up a position at the University of Chicago. Late in his life, Hayek was to remark that the Reform Club on Pall Mall, which he would visit on the way from his home in Hampstead to LSE, was the 'only real home' he had known for years.

While at LSE, Hayek became friends with John Maynard Keynes (1883–1946). Their friendship is often overlooked given the antagonism of their followers during the post-war period. Keynes' views on Hayek are summed up in a diary entry: 'Hayek has been here for the weekend,' Keynes wrote to his wife, Lydia, in March 1933. 'I sat by him in hall last night and lunched with him at Piero's today'—the Italian economist Piero Sraffa. 'We get on very well in private life. But what rubbish his theory is'. When war was declared in 1939, Hayek was too recently naturalized as British to be called into government service, in contrast to most of his fellow economists. He commented afterwards that working for the government corrupted economists, and war service had won them over to planning. During a stay in wartime London, Hayek joked that he jumped every time the BBC reported the number of 'Hayek-splosives' dropped by the Luftwaffe on the capital. When LSE was evacuated, it was Keynes who arranged for Hayek to take up residence at King's College, Cambridge, so that he could continue his work.

Unlike Hayek's earlier work, The Road to Serfdom, published towards the end of the war, was an 'explicitly populist tract'. It brought its author worldwide fame. Most readers probably came to know it through an abridged Reader's Digest version, prepared by the former American leftist, Max Eastman, of which over a million copies were distributed through the American Book of the Month Club. It was even distributed in cartoon form by General Motors. Hayek's argument was that democracies risked going the same way as Nazi Germany, because their intellectuals and politicians had fallen for the idea that an economy could be centrally planned, as much of it was in the UK during the war, and that the idea would soon be put into practice in the name of post-war reconstruction. For Hayek, central planning led, via cumulative attempts to mend its inevitable failures, to 'a servile state' (the metaphor is most obviously derived from Hilaire Belloc's 1912 book of that name, although it also owes something to Herbert Spencer and Alexis de Tocqueville). Moreover, attempts at even moderate planning, such as the 'middle way' advocated at the time by the Conservative politician and later Prime Minister Harold Macmillan,25 would set the democracies on a slippery slope that would end, just as surely, in serfdom. This explains Hayek's dedication of the book 'TO THE SOCIALISTS OF ALL PARTIES'. To Hayek, the free market was not only more efficient economically, but it was also indispensable for a free society.

Hayek began The Road to Serfdom with the claim that 'This is a political book', and despite its apparently non-partisan dedication, its reception was shaped by party politics. In 1979, commenting on the book's publication, Hayek noted that 'Some of my more leftish acquaintances (with considerable cheek) gave me to understand that in their opinion I had ceased to be a scientist and had become a propagandist'. Alvin Hansen, the American Keynesian economist, provided one example when he wrote in The New Republic, 'This kind of writing is not scholarship. It is seeing hobgoblins under every bed'. The publication of the book, shortly before the 1945 General Election, is said to have influenced Winston Churchill's controversial election broadcast warning of the threat of a 'Gestapo' under socialism. No one who had seen or heard the mild-mannered Labour leader Clement Attlee found the claim particularly convincing. (Churchill himself is—perhaps apocryphally— said to have characterized Attlee as 'a sheep in sheep's clothing'. 30) After the broadcast, Attlee made a withering reference to Churchill's rehashing of the 'secondhand ideas of an Austrian professor Friedrich von Hayek'.

'In the 1940s', wrote Samuel Brittan, 'Hayek became a hate figure to those on the political left', who overwhelmingly rejected his warnings. Herman Finer described Hayek's book as the 'arsenal of the conservative counter-offensive' and argued that:

Hayek's The Road to Serfdom constitutes the most sinister offensive against democracy to emerge from a democratic country for many decades. In writing this answer, I am not interested in winning an argument. That is far too easy. My grave anxiety is to keep the way open for democracy to make its own free, creative choices of public policy in the future. To build conservative barricades, altogether unamenable to change, as Hayek proposes, is to foment a violent explosion. Hayek and his courtiers have mistaken the nature and the temper of the times.

Other critics were more courteous, but no less convinced of Hayek's errors. In a second book-length response, Freedom under Planning, published in 1945, Barbara Wootton reiterated the left's faith in state planning, and attempted to show how it could be combined with a free society. However, she did concede that successful planning depended upon the moral decency of the planner. She argued that democratic decentralization within a socially and economically more equal society provided safeguards against totalitarianism: 'It is the citizens of a wisely planned society who are least likely themselves to fall victim to the dangers of planning ... and it is the responsible, the alert, the active, the informed, and the confident men and women in the street who hold the key positions'. The economist and post-war Labour minister, Evan Durbin, described Hayek's book as 'a sincere, eloquent, and influential work' but rejected his argument on the grounds that it gave an outdated account of economic planning; that there is a far greater role for reason and science in social affairs than Hayek accepted; and that he did not establish a causal link between his historical narrative of the rise of economic and political freedom.

(Continues...)

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Edition details

• Publisher: Rowman & Littlefield International
• Publication date: 2014
• Language: English
• ISBN 10: 1783481064
• ISBN 13: 9781783481064
• Binding: Hardcover
• Number of pages: 176