The Constitution of Liberty
by F. A. Hayek
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Book Reviews of The Constitution of Liberty
Book Review: Shows why there is no elsewhere elsewhere
Summary: 5 Stars
This is a book that can be right in ways that confound all expertise, a basic text of political economy, brilliant enough to summarize all the mistakes of the twentieth century while they were still happening. With an author born in Europe, aware of a society with classes based on great wealth, where culture was largely the activity of a few thousand incredibly intelligent people, but, due to a bestseller of his own, exposed to the dynamic economic growth of postwar America, teaching in an offbeat center like the University of Chicago, concerned about liberty, law, "The Decline of Socialism and the Rise of the Welfare State," Social Security, and utterly convinced of his main point: the necessity for taxation to pay for whatever benefits a government can contrive.Most people are still far from appreciating the economic basis for THE CONSTITUTION OF LIBERTY by Hayek, which stands as a political argument so solidly made, it has a quality that might be considered crazy. Published in 1960, the amounts of money being discussed in this book are ludicrously small for people who do not live in China. In an economic system which was striving to become global in character, Hayek was concerned about majority thinking on incomes reaching some maximum limit, which might be imposed by progressive taxation (which was worse then in America and Great Briton than it is now), as an end to economic growth.
"Where this may lead is illustrated by a recent proposal, only narrowly defeated, of the National Planning Commission of India, according to which a ceiling of $6,300 per annum was to be fixed for all incomes (and a ceiling of $4,300 for salary incomes). . . . Can there be much doubt that poor countries, by preventing people from getting rich, will also slow down the general growth of wealth? And does not what applies to the poor countries apply equally to the rich?" (p. 322, Chapter Twenty, Taxation and Redistribution).
These amounts still might be in the ballpark for what people in some parts of the world could be willing to work for, if they had the opportunity, but the nature of economics has changed so much, the idea that people anywhere could be spending any of their time for such small change, while the American military is getting a billion dollars a week to look for whoever could be inflicting some real damage on the American economy, like September 11 did, is more than enough to make people wonder what Iraqis would do with freedom if they had it. Some rewards have been offered to Iraqis for the kind of information that what make the Americans there happy. The American way seems to be designed for managers who can figure out how to get to the top so they can retire with a deferred compensation package in the neighborhood of $139 million, like the recently resigned president of the New York Stock Exchange, who was in danger of handing out favors to people in that ballpark.
If millions of dollars can provide a reasonable opportunity to give a person the freedom to enjoy himself, it is surprising that spending a billion dollars a week to support the American military in Iraq is not as much fun as complaining about it. My favorite complaint can be found in the Index of Subjects under Experts (democracy and, social security).
"3. The extreme complexity and consequent incomprehensibility of the social security systems create for democracy a serious problem. . . . As a result, the expert has come to dominate in this field as in others. . . . But, almost invariably, this new kind of expert has one distinguishing characteristic: he is unhesitatingly in favor of the institutions on which he is expert. This is so not merely because only one who approves of the institution will have the interest and the patience to master the details, but even more because such an effort would hardly be worth the while of anyone else: the views of anybody who is not prepared to accept the principles of the existing institutions are not likely to be taken seriously and will carry no weight in the discussions determining current policy." (pp. 290-291).
Hayek implies that his own position has no place in the councils of the high and mighty, but there is plenty of support for his view that the future is easily diminished by the system of financing which is being relied on to provide the benefits of such institutions.
"Does anyone really believe that the average semiskilled worker in Italy is better off because 44 per cent of his employer's total outlay is handed over to the state or, in concrete figures, because of the 49 cents which his employer pays for an hour of his work, he receives only 27 cents, while 22 cents are spent for him by the state?" (p. 294).
Obviously, Italy has been operating its scheme long enough to produce benefits that rival the amount which workers get. Similarly, it seems the American government has an acute interest in having work done overseas, to avoid American workers earning the right to retirement under a social security system which might soon be as costly for American workers. Hayek was writing before a large portion of American social security contributions were dumped into U.S. bonds to produce the trillion dollar surpluses that were never real. It was truly amazing that America was able to balance the books for so long with such shaky maneuvers, but the plan was to produce a system like "that in Germany, where about 20 percent of the total national income is placed in the hands of the social security administration." (p. 294). With what America is spending on the military, it is never going to be able to turn that much money over to a privatized administrator.
Book Review: An Exposition of a Theory of Liberty
Summary: 5 Stars
Hayek's "The Constitution of Liberty" is a comprehensive work of political philosophy. It sets forth, defends, and applies an important view of the nature of human liberty, government, and economics that is worth considering, at the least, and that has much to commend it. The book is carefully written and argued with extensive and substantive footnotes and with an "analytical table of contents" that is useful in following the details of the argument. The book is highly erudite. It is also passionately argued. Hayek believed he had an important message to convey.Hayek's states his theory in part I of this book, titled "The Value of Freedom". He seeks to explore the nature of the ideal of freedom (liberty) and to explain why this ideal is valuable and worth pursuing. He finds the nature of freedom in the absence of coercion on a person by another person or group. He argues that in giving the broadest scope of action to each individual, society will benefit in ways that cannot be forseen in advance or planned and each person will be allowed to develop his or her capacities. Hayek summarizes his views near the end of his book (p. 394):
" [T]he ultimate aim of freedom is the enlargement of those capacities in which man surpasses his ancestors and to which each generation must endeavor to add its share -- its share in the growth of knowledge and the gradual advance of moral and aesthetic beliefs, where no superior must be allowed to enforce one set of views of what is right or good and where only further experience can decide what should prevail."
The book focuses on issues of economic freedom and on the value of the competitive market. Hayek has been influenced by writers such as David Hume, Edmund Burke, and John Stuart Mill in "On Liberty."
Part II of the book discusses the role of the State in preserving liberty. It develops a view of law which sees its value in promoting the exercise of individual liberty. The approach is historic. Hayek discusses with great sympathy the development of the common law and of American constitutionalism -- particularly as exemplified by James Madison.
In Part III of the book, Hayek applies his ideas about the proper role of government in allowing the exercise of individual liberty to various components of the modern welfare state. Each of the chapters is short and suggestive, rather than comprehensive. Hayek relies on technical economic analysis, and on his understanding of economic theory, as well as on his philosophical commitments, in his discussion. What is striking about Hayek's approach is his openness (sometimes to the point of possible inconsistency with his philosophical arguments). He tries in several of his chapters to show how various aspects of the modern welfare state present threats to liberty in the manner in which he has defined liberty. But he is much more favorably inclined to some aspects of these programs than are some people, and on occasion he waffles. This is the sign of a thoughtful mind, principled but undoctrinaire.
I think there is much to be learned from Hayek. He probably deserves more of a hearing than he gets. For a nonspecialist returning to a book such as this after a long time off, it is good to think of other positions which differ from Hayek's in order to consider what he has to say and to place it in context. For example, in an essay called "Liberty and Liberalism" in his "Taking Rights Seriously" (1977) the American legal philosopher Ronald Dworkin discusses Mill's "On Liberty" with a reference to Hayek. Dworkin argues that for Mill, liberty meant not the absence of coercion but rather personal independence. Mill was distinguishing between personal rights and economic rights, according to Dworkin. Thus Dworkin would claim that Hayek overemphasizes the value of competitiveness and lack of state economic regulation in the development of Hayek's concept of liberty.
The British political thinker Isaiah Berlin seems to suggest to me, as I read Hayek's argument, that there are other human goods in addition to liberty, as Hayek defines liberty. Further, Hayek does not establish that liberty, as he understands it, is always the ultimate human good to which others must give place. It may often be that good, but there may also be circumstances in which other goods should be given a more preeminent role when human well-being is at issue. In thinking about Hayek, it would also be useful to understand and to assess his concept of liberty by comparing and contrasting his approach to that of John Rawls in his "A Theory of Justice."
Hayek's book is important, thought-provoking and valuable. Probably no writer of a book of political philosophy can be asked for more. It deserves to be read and pondered. It has much to teach, both where it may persuade the reader and where it encourages the reader to explore competing ideas.
Book Review: Hayek--Orwell's Mentor
Summary: 1 Stars
At the height of socialist popularism in England, cir. 1944, George Orwell, a leading proponent of socialism, believing in its promises as did many,if not most of Eurpose's leading intellectuals and politicians, wrote a review of Hayek's famous book, "The Road to Serfdom." Orwell wrote the review in the "Observer," London April 9,1944.
Hayek, mentions this fact as a footnote in chapter 17 of his classic book, "The Constitution of Liberty" published in 1960, as evidence of the disillusionment of socialist intellectuals, when they were confronted with the observation that individualism and socialism were mutually exclusive. Those same intellectuals had not accepted the proposition when advanced by Karl Mannheim in his book, "Man and Society in an Age of Reconstrucion" (1940). Mannheim had been a long opponent of socialism, but Orwell had only been converted after being exposed to "The Road to Serfdom." By 1960, when Orwell had become a world renowned author and staunch opponent of Big Brother doublespeak, Hayek recognized that the political proponents of socialsm which was dying as a political ideal, were now introducing the concept of the welfare state.
While virtually everyone alive today have been effected by Orwell's works and his prescient warnings about Big Brother, how many of us are aware of Hayek's infulence on him?
"The Constitution of Liberty" provides its readers with an enormous wealth of knowledge, of which this one footnote is only a small example. Each reader is bound to be effected in one way or another by the knowledge imparted to them, and this is one of the main lessons to be learned about "liberty" which requires the "rule of Law" to exist in today's society, but that Rule of Law must be understood. The failure of today's inteligencia is to fail to fully comprehend the meaning of liberty and its necessity in a world full of confusion from the confrontation of competing civilizations.
Unfortunately, Hayek is no longer alive to help guide us through the new millenium. Fortunately, he has left us a large volume of work, perhaps more relevant today than it was when written years ago. While "The Constitution of Liberty" is voluminous in itself, it should be kept as a reference book. Hayek's other works, "The Road to Serfdom" and his last published volume, "Fatal Conceit-the Evils of Socialism" published in 1980 is a magnificent continuation of Hayek's life long discertation on the evolution of mankind's growth from a tribal, familial society which did not require man to understand or protect Liberty, to a group of city-states that prospered because of the Liberties protected in Athens, but only moderately understood, so that such a great and wise philosopher as Aristotle would believe that freedom could only exist as far as a man could yell.
Hayek's understanding that Western Civilization has prospered from individualism, that it has grown and prospered from the freedom to travel, to trade, to exchnge property, material, real and intellectual. He explains why man must be humble, that humans progress from trial and error, not from conceited belief that one way or another way is correct. That to be free and liberated is to be free to make mistakes and government should exist to protect individuals'rights to make mistakes while they attempt to profit in their own ideals and beliefs.
Book Review: You don't have to be a socialist, even at 20
Summary: 5 Stars
There is an old saying "If you are not a socialist at 20 you don't have a heart. If you are not a conservative at 40 you don't have a brain". Many people who are young at heart feel that the dreadful alternative to left-liberalism is some kind of cynical, crusty conservatism. Some conservatives reinforce that impression by their rigid and authoritarian views. The best part of this book is the essay at the end titled "Why I am not a conservative" because it dissolves that confusion of thought.
Differences within the "non-left" arise especially in two areas: (a) the use of state power to enforce moral principles and (b) the domain of economic policy. In each case the nub of the issue is the extent of state intervention that is appropriate.
Some economic liberals may need to be reminded that we do not live by bread and technology alone. Our lives gain meaning and purpose from the myths, moral values and traditions which constitute our non-material heritage. Economic liberals may sometimes appear to have little interest in these spiritual and cultural matters but this is not entirely true and the impression arises because they seldom see these things as part of the agenda of state policy. Here a basic principle is at stake because they do not aim to impose religious or cultural values, instead they wish to sustain "a type of order in which, even on issues which to one are fundamental, others are allowed to pursue different ends", as Hayek put it.
Turning to economic policy we find much conservative apprehension about the push for wholesale deregulation and privatisation. Socialists and many conservatives share a distrust of capitalism due to their failure to appreciate the function of markets and the nature of competition in the marketplace.
Over the last century or two, liberals of the classical (non-socialist) variety were forced into ad hoc alliances with conservatives to resist the socialist thrust of the Left. Consequently market liberalism became identified as a reactionary movement and hence the importance of this essay as a corrective to that view. Due to the compromises required for the liberal/conservative alliance in practical politics, the spirit of classical liberalism has languished to the point of death because no major political party in the Western world sustained it in a pure form.
The Rule of Law is a principle that conservatives might be expected to hold dear. But Hayek drew attention to "the characteristic complacency of the conservative toward the action of established authority and his prime concern that this authority be not weakened rather than that its power be kept within bounds. This is difficult to reconcile with the preservation of liberty". Some conservatives tend to share with socialists a willingness to recruit the power of the state to coerce others where the liberal would allow freedom of choice. Conscription for military service is a case in point.
In this book Hayek addresses a wide range of social and political issues to provide alternatives to traditional socialist and conservative views. But the real sting is in the tail, in the essay which relaxes the crippling requirement for young people to go through a phase of socialism to demonstrate that they have a heart.
Book Review: Homo Sapiens, not homo economus
Summary: 5 Stars
For an economist, Hayek is a remarkably accessible author, and this is perhaps his most summarily expressive book. It's not only a treasure of Hayek's finest theses, but an excellent overview of human relations, the raison d'etre for a constitutional system, the importance of the rule of law, the radical notion of the separation of powers, and why the free market, while not flawless, remains the best economic system in the allocation, conservation, and efficiency of resources.Hayek is often appropriated by Libertarians as one of them, but I find this claim unpersuasive. Hayek is a Republican in the sense of Lincoln, Roosevelt, and Goldwater, and hardly a disciple of Libertarian reductionism to a single rule that is inherently circular and contradictory! I know Libertarianism, and Hayek is no Libertarian.
He is, however, an excellent proponent of positive and negative freedoms within a rule-based society, wherein the rule of law is not the Rule by Laws. He finds all forms of anarchy, arbitrariness, and single powers inherently bent against the truest sense of freedom. Freedom itself is not an absolute law, as in the case of being the means rather than the end, but that a world of spontaneous associations under the rule of law and contract is the most liberating of all constitutions.
Anyone who enjoys philosophy, politics, economics, sociology, and social psychology will be immediately attracted to this author and this particular book. It is copiously endnoted to substantiate numerous positions taken, but the quotes are so eloquently woven into the prose that they barely stand out as "quotes." As with other books by Hayek, this is very accessible to most college-level educated citizens, and even those who have a fervent interest in the subject matters without the paper to prove it.
This profound book is not a startling provocation, but a reasoned exposition. He nutures each subject and sentence with clarity and grace, and yet, despite his obvious erudition, he constantly engages the reader. I found that this book was one of those "life-changing" reads, not because of some extraordinary insight, but because of its ordinary insight. Concerns and matters that occupy our minds are addressed in an impeccible order, without being redundant nor tart nor extra-phenomenal. Rather, it's a kind of "eureka" one experiences when all the right and usual information is presented in the right and usual manner, but takes us one step beyond to see how this view actually comports with our most basic instincts.
Finally, the author addresses a very broad audience with a plethora of subjects, each taking on a coherent whole, while artfully crafted within a network that seems obvious upon reading, but less artfully crafted without it. This is a book you'll not only read with zeal, but return to often, no matter what your stripes.