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Home | Library | The End of Hystery? Francis Fukuyama's Review of The Constitution of Liberty

The End of Hystery? Francis Fukuyama's Review of The Constitution of Liberty

June 24, 2011

Tags Free MarketsInterventionismOther Schools of Thought

F.A. Hayek (left) and Francis Fukuyama (right)

The New York Times, needing a hit man to "review" a new edition of F.A. Hayek's The Constitution of Liberty, turned to Francis Fukuyama, author of The End of History. Who better than a neocon to misunderstand a classical liberal?

In The End of History, Fukuyama argued that democracy has emerged as the culminating end state of the world, surpassing all other forms of government, such as traditional monarchy and authoritarianism. To be sure, democratic government has grown so that today about 60 percent of the human race lives in countries that rely on processes that are at least nominally democratic for selecting their government officials. But there are two fundamental flaws in Fukuyama's argument.

The first flaw is mistaking the triumph of democracy over authoritarianism associated with the fall of the Berlin Wall as settling, once and for all, which form of government would rule forever. It is now clear that all the fall of the Berlin Wall settled was whether Soviet Communism would overtake the Western democracies. Today, new rivals to democratic government have arisen, including the Chinese form of fascism and the Iranian form of theocracy.

The second and more fundamental flaw was lumping all democratic countries together, as though one form of democracy is essentially the same as another. If Fukuyama had read The Constitution of Liberty before writing The End of History, or at least before he wrote his New York Times review, he would have seen the distinction between different forms of democratic government developed in the chapter entitled "Majority Rule." Nowadays, the study of the implications of democratic decision making is known as "public choice" in economics and its affiliated social sciences. Indeed, Hayek named the book The Constitution of Liberty in order to explore how government should be structured so as to preserve and further develop liberty in the sense understood by a classical liberal.

Fukuyama presents two criticisms of Hayek, neither of which is particularly new or repackaged so as to fit even an expanded definition of a book review. The first concerns the initial distribution of wealth and power, and the second concerns moral relativism. Fukuyama says that Hayek ignores the potential of government to address initial inequities in the distribution of wealth and power. For example, the government might free the slaves. My question is, throughout the course of history, how did so many people become slaves?


"Governments are the cause of
slavery and the cause of war."

According to Fukuyama, governments free slaves who presumably "happen" in the private sector; this makes government a good thing. But what if — as I suspect — it was government that reduced people to bondage in the first place, from the pharaohs of Egypt in ancient times to the kings of Europe in more modern times? Then freeing the slaves isn't the government undoing the harm of the private sector, but government undoing some of the harm that government itself has caused. Claiming that governments are good because they put an end to slavery is like claiming governments are good because they put an end to war. Governments are the cause of slavery and the cause of war.

According to classical liberals, there are two forms of inequality: inequality due to oppression and inequality due to what might be characterized as the randomness of life (e.g., differences in innate ability, accidents and illness, and opportunities that come along or the lack of those opportunities). With regard to inequality due to oppression, classical liberals typically point to the progress that people are able to make when they are free. Over the course of just three or four generations (which, in the long march of history, is a short period), the vestiges of past oppression can be eliminated. With regard to the randomness of life, classical liberals will typically talk about the roles of the family, charity, and insurance in a free society.

On the issue of insurance, Fukuyama completely mangles Hayek's discussion in the chapter "Social Security" so as to make him appear to endorse Obamacare. This is intellectually dishonest. If Fukuyama had read beyond section 1 of the chapter, he would have found, in section 2, that what Hayek opposes is requiring individuals to participate in an unfunded, redistributionist, and single-payer system such as the current Social Security program in the United States. Obamacare approximates such a system via its extensive regulation of private health-insurance companies.

Chile's system is a good example of the kind of mandatory but private, fully funded, and actuarially fair system of social insurance that is arguably consistent with Hayek's analysis. The Chilean system not only provides social security (the only concern of the redistributionists) through the accumulation of wealth by all who work regularly; it also provides the capital needed to finance rapid economic growth and political support for capitalism that is so needed in a democracy.

Fukuyama's second criticism of classical liberalism is its moral relativism. Fukuyama, being a neocon, doesn't see the strategic role of liberty in encouraging individuals to lead virtuous lives, and in enabling society, under swiftly changing conditions, to continually rediscover what virtue actually means. What this means is that he is not competent to review Hayek's book. His review is like a color-blind critic disagreeing with a painter's choice of colors.

Instead of dismissing what he describes as the moral relativism of classical liberalism out of hand, Fukuyama might criticize it on the basis of economic theory or historical analysis. Well, he might if he could, but he can't. For socialism is, as Hayek puts it in his concluding work, the fatal conceit. It is a belief in something that can't be true and has never been true — that a few people can know what is good for society.

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Instead of relying on reason and evidence, Fukuyama might alternatively say that he disagrees with classical liberalism because he dogmatically opposes any philosophy of life that justifies the pursuit of happiness by all persons. Perhaps he believes in self-denial, or perhaps he believes that only an elite portion of the human race should be allowed to pursue happiness (and that the masses should turn control of their lives over to this elite). I suppose, writing in the the New York Times, this dogmatic belief is simply understood.

There is a reason many neocons and socialists assert a deontological source of morality. It is because they want to divorce consequences from choices. In a free society, individuals prosper or suffer according to the choices they make. Morality, then, consists of discovering and codifying rules to guide choices and help one achieve what one values. For example, one might create a rule limiting one's consumption of alcohol.

Thus, for a classical liberal, if people are free, they will discover how much alcohol under what conditions is most conducive to a life of productivity and happiness.

But what if you're a redistributionist? What if you believe that somebody else owes you everything you need? In that case, individuals as such would have no self-interest in developing self-control in the use of alcohol. Indeed, the more pathetic you make yourself in terms of abusing alcohol, the more needy you become, and the greater the claim you have on others. Redistributionism rewards the irresponsible and makes fools of those who exercise self-control.

But that's not the end of it. Because society could not long survive the irresponsible behaviors promoted by redistributionism, governments that practice redistributionism will have to deny their people freedom in the use of alcohol. So the reason why you shouldn't abuse alcohol, if you're allowed to use it at all, is because the government has decided that it's immoral. Whatever is good will be mandatory, and whatever is bad will be prohibited.

And that brings me to why Fukuyama and the neocons and socialists of the world say the slavery of the relatively recent past was bad. That form of slavery was bad because it involved the private ownership of some by others. When, at the end of the road to serfdom, the government owns us, slavery will be good. Indeed, being a slave to the government will be the very definition of freedom and morality.

Such was Hayek's belief in freedom that he dedicated The Constitution of Liberty "to the unknown civilization that is growing in America." At the time, almost all the intellectuals of the world were socialists of one form or another. There was a time when I felt Hayek was a bit naïve about this country's future. Then came the fall of the Berlin Wall, and the spread of democratic government and — I will add — market-oriented economies in the world; and Hayek looked prescient, not naïve. But such is the march of history that it is difficult to see around two corners.

Who can say what the future now holds for this country? Will we, in succumbing to democratic forces unfettered by the Constitution, be reduced to a mere lesson from which other countries might learn? Or will we, challenged by these democratic forces, rediscover our Constitution?


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