Mises Daily Articles
Confidential Memo on Hayek's "Constitution of Liberty"
January 21, 1958
To the Volker Fund:
F.A. Hayek's Constitution of Liberty is, surprisingly and distressingly, an extremely bad, and, I would even say, evil book.14 Since Hayek is universally regarded, by Right and Left alike, as the leading right-wing intellectual, this will also be an extremely dangerous book. The feeling one gets from reading it is the same sort of feeling I would have gotten if I had been a U.S. senator when Taft got up to support the Wagner public housing bill, or any of his other compromises: i.e., that this tears it.15 For when the supposed leader of one's movement takes compromising and untenable positions, the opposition can always say: "but even Taft (Hayek) admits … " Hayek is the philosophic counterpart. The only tenable conclusion is that any Volker Fund or any other support for this book will be self-destructive in the highest degree.
In my letter of October 23, 1956, I criticized Hayek's Claremont lectures, which summarized this book, and reference to the letter would be helpful. However, there I wrote that Hayek is a "composite of brilliant things, and very wrong things … a mosaic of confusion." In the full-fledged book, the picture and impact change greatly; for the brilliant things fade dismally into the background, and all of Hayek's care and elaboration go into the terribly wrong things. Indeed, this book is a fusion of bad tendencies in his previous books, but which there had been only minor flaws in the product; here the flaws are magnified and raised to the status of a philosophic system. In all the 400 pages, I found only chapters 1 and 10 as agreeable chapters, and all the rest a veritable morass of error and evasion, with almost nothing to relieve the tragedy.
Hayek begins very well by defining freedom as absence of interpersonal coercion and rejecting other definitions. But, in chapter 2, he begins to define coercion, and the descent into the abyss begins. For instead of defining coercion as physical violence or the threat thereof, as we would, he defines it to mean specific acts of one person with the intent of harming another. He says, for example, that the reason why A is firing B, in the free market, is not coercion is because A fires him not because he dislikes B, but because keeping him on is uneconomic. The implication is very strong that if A fired B because he hated him, then this would be coercion, and the government would have a very strong case for stopping this.
Further, Hayek explicitly states that if a government act is laid down as a general rule in advance, so that the subject can predict its coming, then, whatever it is, it is not coercion. He explicitly applies this to the draft: since everyone knows in advance that he will be drafted, it is not coercion! Dr. Harper mentioned this in his comments, but didn't attribute the importance that it has for Hayek. Of course, this also means that if everyone knew in advance that he would be tortured and enslaved one year out of every three, neither would this be coercion. From this ensues Hayek's inordinate passion for the rule of law and equality under the law, which he reveres to the exclusion of all other (and more important) aspects of liberty. If everyone were prohibited from drinking or from blaspheming Allah or forced into slavery one out of three years, then Hayek could not say for a moment that this would be coercion or unjustified.
His entire historical section then becomes a mass of distortion, since he interprets the whole libertarian movement as simply a narrow advance toward equality under the law, which is only one, and a minor, aspect of libertarianism. Hayek is enabled to do this by his brusque and cavalier dismissal of the whole theory of natural law (natural rights — the great libertarian deduction from natural law — is not mentioned once in the Hayek discussion) as "intellectually unsatisfying." Since natural law is dismissed as some sort of unimportant quirk, then obviously only the form of law can be discussed, rather than the content: i.e., would everybody be equal under whatever law there is? Granted, this restriction of form would, in fact, restrict the content of tyranny to some degree, but Hayek sees only the equality under the law as a value. And not only does he brusquely dismiss natural law and natural rights from his consideration, he acts as if the seventeenth- and eighteenth-century libertarians were not really concerned about it either.
Tied up with his dismissal of natural law is Hayek's continuous and all-pervasive attack on reason. Reason is his bête noire, and time and time again, from numerous and even contradictory standpoints, he opposes it. The true rationalist theory was, and is, that reason can discover the natural law of man, and from this can discover the natural rights of liberty. Since Hayek dismisses this even from historical consideration, he is left with only two choices for the formation of a political ethic: either blind adherence to custom and the traditions of the "social organism," or the coercive force of government edict. The former, to Hayek, is the "evolutionary," irrationalist, empirical (and really, pragmatic) tradition, and is good; the latter is the evil, rationalist, "French" tradition.
In short, for Hayek, reason and rationalism are synonymous with government coercion, and coercion can only be attacked by also attacking reason, and saying, over and over again, that we need to do so, despite the fact that we do not know what we are doing or why. Not realizing that reason is in fact the very opposite of coercion, that force and persuasion are antitheses, and that this was so considered by the rationalist libertarians, Hayek constantly confuses traditions and concepts. Also, he doesn't seem to fully realize the paradox of using reason, as he tries to do, to attack reason.
Because he lumps all systematic rationalists together, he can say, with the Jacobins, that reason leads to tyranny, and a few pages later, attack rationalism that leads to "extreme" laissez-faire, and even anarchism. He explicitly attacks laissez-faire for being the product of "French" rationalism — and he is right that it is such a product — but out of what masterpiece of gigantic confusion can he link this up with tyranny? Confusion is compounded when he identifies Locke as an "empiricist," and Jefferson and Price and Priestley as terrible rationalists, even though Jefferson, Paine, et al. were taking their doctrines squarely from Locke.16 He lumps the libertarian Physiocrats together with the tyrant Rousseau. Later on, he praises Jefferson on the U.S. Constitution without fully realizing that the Constitution, which Hayek admires, is precisely an example of systematic rationalist design and the deliberate changing of society.
He points to Bentham as a terrible example of French rationalist influence without pointing out that Bentham was indeed terrible, but why? Precisely because his "rationalism" was a false one, for it rejected and attacked the true rationalist tradition of natural rights. It was because Bentham attacked natural rights and substituted the utilitarian doctrine that morality cannot be found by right reason, that he permitted the State to define morality and employ coercion. Since Hayek doesn't see any significance to natural law or rights, he confuses the whole thing completely.
Joseph Priestley (1733–1804), a prolific writer and innovative thinker, distinguished himself in the fields of theology, political theory, pedagogy, and science. He was a Unitarian, and in 1775 he became minister of the small Presbyterian parish of Needham Market in Suffolk, although his theological stance did not please his parishioners. We later find Priestley teaching literature at the Dissenting Warrington Academy. Then, in 1767, he became a Dissenting minister in Leeds. His attacks on the official Church, his demonstrated support for the French Revolution, and his insistence on the need for parliamentary reform in an age of disorder and fear created the image of Priestley as a threat to order and orthodoxy. This fear led to the Birmingham Riots of 1791 (sometimes referred to as the Priestley Riots). It was during this rioting that Priestley himself, and other Dissenters were attacked, their homes burned, and many of their writings destroyed. In the spring of 1794, he moved to the United States, where he continued his work. He wrote An Essay on the First Principles of Government (1768), Disquisitions Relating to Matter and Spirit (1777), Doctrine of Philosophical Necessity (1777), and Some Considerations on the Poor in General (1787). One of the themes of An Essay on the First Principles of Government was opposition to any state role in the field of education, in which he thought pluralism and competition should rule.
And, of course, he fails to mention, since it is inconvenient for him, that libertarianism — laissez-faire — reached its apogee in the French rationalist works of Bastiat, Molinari, etc., in the middle and late nineteenth century.17 Bentham erred in being too empirical and pragmatic, just as were Hayek's other heroes, such as Burke. It is ironic that it was Burke who led both the bloody and murderous war against the French abroad and the tyrannical, liberty-destroying suppressions at home — while it was Price and his Radical friends who defended both domestic liberty and foreign isolationism.
Philosophically, Hayek, much as he denies it, is a conservative, in the sense that he believes we must blindly follow traditions even if we can't defend them. He differs from Kirk, et al., largely in a bad way, i.e., by adopting the opposite fallacy that the case for liberty rests on the fact that we know nothing, or very little, and must therefore keep the roads open so that we can learn something. In short, Hayek explicitly rests his case on man's ignorance, differing from Kirk who believes that at least tradition gives us some knowledge. This is the J.S. Mill, H.B. Phillips, Gerald Heard argument.18 Of course, such a puny argument means that, as civilization advances, and we get to know more and more, the case for liberty becomes weaker and weaker. To evade this conclusion, Hayek employs two contradictory stratagems: (1) using the absurd and self-contradictory bromide that "the more we know, the more we know how little we know," and (2) saying even if we do know more, we still know less than we don't know, i.e., we still know less than 50 percent of what there is to be known. How he knows this is, of course, in the lap of the gods.
Both the Kirkian worship of the past and the Mill-Phillips emphasis on man's ignorance have one thing in common: their attack on man's reason. But how else could Hayek combine two contradictory fallacies? In an interesting way: through his knowledge of the free market. For to Hayek, the market is an example of a social institution that works better than any individual knows and is needed because of each person's ignorance. But while subtle, this too is a fallacious argument. For there is nothing really mysterious about the market: the fact that Hayek can explain its workings shows that reason can comprehend it; and since every single transaction benefits both parties and rewards rationality, it is not surprising that the sum of all market transactions is a beautiful and rational instrument. In short, if irrational entrepreneurs lose money and rational ones make profits, it is not surprising that a profit-run economy will be rational.
To deprecate human reason by saying that none of us is or can be omniscient is absurd, for it takes an impossible standard as the judge of a possible and real condition. All of our knowledge we get from the exercise of our reason; to say that no man can be God and know everything is to take an irrational standard of evaluation.
There are countless other examples of tortuous fallacies — for example, Hayek's denial that a free market allocates income in accordance with merit. Here he tries to make a vague and absurd distinction between "merit" and "value," and, of course, his denial plays into the hands of the egalitarians. For Hayek attacks the very idea that justice can be known by man or that it could be applied, and says, see, since we can't be just and reward according to merit, you'd better accept the free market. Will a man thirsting for justice accept this dictum — or that of the socialists, who promise him justice and reason? In fact, Hayek, almost incredibly, seems to identify merit with pain; if somebody enjoys achieving something, he is not meritorious, but if he suffered while doing so, then he is meritorious. To take pain as one's standard of the good is hair-raising indeed.
On democracy, Hayek is again confused; he begins by separating liberalism neatly from democracy and finally ends by confusing them, talking of democracy as also a good, etc.
Finally, even on his revered rule of law, equality under general rules, which Hayek establishes to the exclusion of more important contentual doctrines of liberty, Hayek backtracks so much as even to eradicate that. First, he upholds the von Gneist19 thesis of "administrative courts" as being competent to exercise judicial review of administrative agencies; in thus throwing over the jurisdiction of ordinary courts on the ground that these courts wouldn't be expert enough to judge, Hayek in effect throws over the rule of law and accepts administrative tyranny. For the reason why ordinary courts should rule is precisely that they can be governed by a common libertarian law: that the government should not infringe on liberty and property; the fact that some other courts are to be set up on some other basis concedes the essence of the struggle to administrative discretion. Further, Hayek also concedes that his rule of law should be breached in war or other serious emergencies, and even concedes that this vaunted rule cannot be meaningfully defined.
I have not yet seen Hayek's final chapters on specific economic applications, but I can predict that I will have plenty to complain about there. In the light of this book, we cannot simply continue to regard F.A. Hayek as a good fellow who is against coercion, and against egalitarianism, and favors a reasonable amount of freedom. For any good aspects are far overshadowed by his predominant tone, which is this:
We must accept traditional social institutions on blind faith and without adequate reason; reason is impotent to discover moral principles or justice, but to the extent that we can discover merit it is based on pain, and the free market must violate it; the argument for freedom rests on ignorance; this freedom really means equality under the law, which means general, predictable rules, whatever their content; laissez-faire is bad because it is wicked and extreme and tyrannical French rationalism — our proper course is to employ general rules, but to find these rules only in empirical, pragmatic, one-step-at-a-time fashion — and we must follow these rules except where emergencies present themselves.
And a further point: Hayek rests his case for his principles not on individual rights or welfare, but on "social" considerations: society is better off if some people discover things, etc. So that individual"liberty" is only a grant from society.
This then, is the face that F.A. Hayek will present to the world in his Constitution of Liberty. It is a face such that, if I were a young man first getting interested in political questions, and I should read this as the best product of the "extreme Right," I would become a roaring leftist in no time, and so I believe would almost anyone. That is why I consider this such a dangerous book and why I believe that right-wingers should attack this book with great vigor when it appears, instead of what I am sure they will do: applaud it like so many trained seals. For (1) Hayek attacks laissez-faire and attacks or ignores the true libertarians, thus setting up the "even Hayek admits … " line; and (2) his argument is based on a deprecation or dismissal of both reason and justice, so that anyone interested in reason or justice would tend to oppose the whole book. And because of Hayek's great prominence in the intellectual world, any failure by extreme right-wingers to attack the book with the implacable vigor it deserves will inordinately harm the right-wing cause that we all hold dear.
Such are the partisan biases that stem from Hayek's lack of sound principle, and which vitiate, and more than offset, the various good passages and sections in the economic sections of the book.
- 14. F.A. Hayek, The Constitution of Liberty (Chicago: University of Chicago Press, 1960). In this Memorandum, Rothbard refers to the first fourteen chapters of Hayek’s manuscript. The Volker Fund had provided a grant for Hayek’s work and Rothbard was asked to give his opinion of it.
- 15. Robert A. Taft (1889–1953) was a U.S. Senator from 1939 to 1953. Known as “Mr. Republican” for his frontline role in the eponymous party, he was a strong opponent of Roosevelt’s New Deal. In 1947 he supported the Taft-Hartley Labor Relations Act. He was against the United States’ entry into the Second World War and he further opposed many of the measures adopted during the Cold War period. The Wagner Act (1937) took its name from Senator Robert F. Wagner (Democrat), who was responsible, as a result of the law that bore his name, for the United States Housing Authority, a government agency with the responsibility of providing low-cost housing. In 1949, the question of the right to housing was addressed once again, and the Housing Act was passed—extending the legislation on public housing—with Taft’s support.
- 16. Richard Price (1723–1791), a dissenter of Arian convictions, was a great supporter of both American Independence and the French Revolution (it should be noted, however, that he died before the end of the latter). In 1758 he became a minister of the Presbyterian Church in the Newington Green community. He was a member of the Royal Society and of the Pennsylvania Society for Abolishing Negro Slavery. He was also part of numerous intellectual circles; one of his favorites was the Honest Whig club. Price’s political philosophy came directly from the moral theory of the autonomy of the individual, according to which an individual, in order to be virtuous, had to be free; and any constraint whatsoever on individual con science was an arbitrary exercise of power. One of his famous speeches was “On the Love of Our Country,” given in 1789 to the Society for the Commemoration of the Glorious Revolution, in which he expressed his unreserved approval for the French Revolution. This speech led Burke to publish his Reflections on the Revolution in France, and it opened a wide debate on the events in France. Amongst Price’s works worthy of note are A Review of the Principal Questions and Difficulties in Morals (1758) and Observations on the Nature of Civil Liberty (1776). Joseph Priestley (1733–1804), a prolific writer and innovative thinker, distinguished himself in the fields of theology, political theory, pedagogy, and science. He was a Unitarian, and in 1775 he became minister of the small Presbyterian parish of Needham Market in Suffolk, although his theological stance did not please his parishioners. We later find Priestley teaching literature at the Dissenting Warrington Academy. Then, in 1767, he became a Dissenting minister in Leeds. His attacks on the official Church, his demonstrated support for the French Revolution, and his insistence on the need for parliamentary reform in an age of disorder and fear created the image of Priestley as a threat to order and orthodoxy. This fear led to the Birmingham Riots of 1791 (sometimes referred to as the Priestley Riots). It was during this rioting that Priestley himself, and other Dissenters were attacked, their homes burned, and many of their writings destroyed. In the spring of 1794, he moved to the United States, where he continued his work. He wrote An Essay on the First Principles of Government (1768), Disquisitions Relating to Matter and Spirit (1777), Doctrine of Philosophical Necessity (1777), and Some Considerations on the Poor in General (1787). One of the themes of An Essay on the First Principles of Government was opposition to any state role in the field of education, in which he thought pluralism and competition should rule.
- 17. Frédéric Bastiat (1801–1850) was orphaned at the age of nine and then raised by relatives. Sometime later he became involved in the family’s exporting business. He then went to Spain and Portugal to try, without success, to establish an insurance company. In 1825, he returned to France after inheriting his grandfather’s estate. He began his career as a writer, publishing some articles in the Journal des economists. Among these was the “Lettre ouverte à M. de Lamartine sur le droit au travail,” a criticism of socialist theories. He was enthusiastic about Richard Cobden’s opposition to the Corn Laws in England, about which he wrote Cobden et la ligue, ou l’Agitation anglaise pour la liberté des échanges. He published a series of articles in which he attacked protectionism, highlighting the problem of the unintended consequences of government policies. Some of his writings were published in Sophismes économiques (1845–1848). In 1846, he founded the Association pour la liberté des échanges in Paris. In addition, because of his writings and speeches he was appointed to the finance commission. Also see his Harmonies économiques. Gustave de Molinari (1819–1912) was one of the most important proponents of laissez-faire and liberalism in France. Against protectionism, statism, militarism, colonialism, and socialism, he continued to fight for liberal ideals right up until the eve of the First World War, when he was in his nineties. In 1840, he moved from his native Belgium to Paris to start work as a journalist and economist. His liberalism was based on the theory of natural rights. He supported laissez-faire in economics and minimum state intervention in politics. In 1849, in the Journal des économistes, he published “De la production de la sécurité,” in which he maintained that private companies working under a regime of competition, along with insurance companies, could supply policing and national security services more efficiently, more economically, and in a more moral way than the state. He contributed a series of articles to the Dictionnaire de l’économie politique (1852–1853). During the reign of Napoleon III, he returned to Belgium where he became a professor of political economy. See also his works L’Évolution économique du dix-neuvième siècle: théorie du progress (1880) and L’Évolution politique et la revolution (1884).
- 18. Gerald Heard (1889–1971). A historian and philosopher, Heard studied at Cambridge and briefly taught at Oxford before moving in 1937 to the United States. He briefly taught at Duke University before founding Trabuco College in 1941. He was well known for his evolutionary theory of human consciousness. See his works The Ascent of Humanity (1929), The Source of Civilization (1935), and The Five Ages of Man (1963).
- 19. Rudolf von Gneist (1816–1895) was a German jurist and lib- eral politician. He was the author of fundamental works on English constitutional and administrative law. He had a particularly important role in the reform of the Prussian administration (1868–1875) and in building an autonomous administrative justice system in Germany. See Das heutige englische Verfassungs- und Verwaltungsrecht (1857) and Englische Verfassungsgeschichte (1882).