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Hoisted from the Archive: Friedrich Hayek's "Shut Up and Be Grateful You Are Alive!" Argument - Grasping Reality with Both Hands

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Hoisted from the Archive: Friedrich Hayek's "Shut Up and Be Grateful You Are Alive!" Argument From July 8, 2003: Note: Hayek and Democracy: I have long been of the opinion that Friedrich Hayek saw more deeply into why the market economy is so productive--the use of knowledge in society, competition as a discovery procedure, et cetera--than neoclassical economics, with its Welfare Theorems that under appropriate conditions the competitive market equilibrium (a) is Pareto-Optimal or (b) maximizes a social welfare function that is the sum of individual utilities in which each individual's weight is the inverse of their marginal utility of income. I have also long been of the opinion that Karl Polanyi saw more deeply than Hayek into what the necessary foundations for a well-functioning and durable market economy-and good society--were. But last night I ran into a passage that makes me wonder whether Hayek in his inner core believed that democracy had any value--even any institutional value--at all. It came on pp. 171-2 of Friedrich Hayek (1979), Law, Legislation and Liberty: The Political Order of a Free People vol. III (Chicago, Il.: University of Chicago Press: 0226320901): Egalitarianism is of course not a majority view but a product of the necessity under unlimited democracy to solicit the support even of the worst.... It is by the slogan that 'it is not your fault' that the demagoguery of unlimited democracy, assisted by a scientistic psychology, has come to the support of those who claim a share in the wealth of our society without submitting to the discipline to which it is due. It is not by conceding 'a right to equal concern and respect’ to those who break the code that civilization is maintained‌ Now it is certainly true that of the trio "Prosperity, Liberty, Democracy," Hayek puts http://delong.typepad.com/sdj/2010/08/hoisted-from-the-archive-friedrich-hayeks-shut-up-and-be-grateful-you-are-alive-argument.html

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Hoisted from the Archive: Friedrich Hayek's "Shut Up and Be Grateful You Are Alive!" Argument - Grasping Reality with Both Hands

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prosperity first and liberty second--or, rather, that freedom of contract needs to be more closely safeguarded than freedom of speech, for if there is freedom of contract then freedom of speech will quickly reappear, but if there is no freedom of contract than freedom of speech will not long survive. But the passage above makes me wonder whether democracy has any place in Hayek's hierarchy of good things at all. Sam Brittan wrote somewhere that Hayek is an odd combination of market libertarian and social conservative--that his "free people" are always "submitting to the discipline" required by society's current moral conventions. Indeed, there are places where Hayek goes further and limits what a "free people" can do even more--where his idea of "freedom" seems to be freedom to (a) transact at the market's current prices, and (b) shut up and be grateful. Witness Friedrich Hayek (1976), Law, Legislation and Liberty: The Mirage of Social Justice vol. II (Chicago, Il.: University of Chicago Press: 0226320839), p. 93: While in a market order it may be a misfortune to have been born and bred in a village where... the only chance of making a living is fishing... it does not make sense to decribe this as unjust. Who is supposed to have been unjust?-especially... if these local opportunities had not existed, the people in question would probably never have been born at all‌ [for lack of] the opportunities which enabled their ancestors to produce and rear children... It seems to me that this "shut up and be grateful you were ever born" proves far too much, and is far too powerful an argument to be true, for it can be used in defense of any imaginable social order: While in a feudal order it may be a misfortune to have been born and bred a serf owing three days a week of labor on the lord's demesne... it does not make sense to decribe this as unjust... if feudalism had not existed, the people in question would probably never have been born at all... While under the Roman Imperium it may be a misfortune to have been born a slave to Marcus Porcius Cato... it does not make sense to decribe this as unjust... if the Roman Imperium had not existed, the people in question would probably never have been born at all... While in the American colonies it may be a misfortune to have been born a slave to Thomas Jefferson... it does not make sense to decribe this as unjust... if Virginia slavery had not existed, the people in question would probably never have been born at all... Brad DeLong on August 23, 2010 at 08:18 AM in Moral Responsibility, Philosophy: Moral, Utter Stupidity | Permalink Favorite

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Hoisted from the Archive: Friedrich Hayek's "Shut Up and Be Grateful You Are Alive!" Argument - Grasping Reality with Both Hands

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Comments John said... Thomass Jefferson XD XD XD Yeah, if it hadn't been for his peculiar approach to the peculiar institution, I imagine quite a few of his slaves never would have been born! Reply August 23, 2010 at 08:41 AM Graydon said... It looks to me as though Hayek has got prosperity confused with money (the accounting system or rationing system, depending on how you want to look at it) with which prosperity is currently usually mediated. Prosperity is having choice; it's relative to your society, and it moves up Maslow's hierarchy (there's a point in the development of agricultural societies where "don't you ever get tired of onions?" "tired of food!?" isn't a joke) but the appropriate social goal is the increase of generally realizable access to choice in the future.[1] Market prosperity measures don't address that; talking about the market is talking about how mechanically efficient the rationing system might be. "You could be dead!" as an argument is totally tautological; of course you could be dead. That isn't an answer to even questions of the mechanistic efficiency of the rationing system. It's certainly not an answer to "what is society for?" [1] The future is full of surprises; the more generally realizable access of choice the society has, the more likely someone comes up with a useful response to the surprise. Reply August 23, 2010 at 09:03 AM JK said... No, I think there is a difference. In market society workers are genuinely free. This point was of course emphasised by Marx: 'For the conversion of his money into capital, therefore, the owner of money must meet in the market with the free labourer, free in the double sense, that as a free man he can dispose of his labour-power as his own commodity, and that on the other hand he has no other commodity for sale, is short of everything necessary for the realisation of his labour-power. 'The question why this free labourer confronts him in the market, has no interest for the owner of money, who regards the labour-market as a branch of the general market for commodities. ... One thing, however, is clear — Nature does not produce on the one side owners of money or commodities, and on the other men possessing nothing but their own labour-power. This relation has no natural basis, neither is its social basis one that is common to all historical periods. It is clearly the result of a past historical development, the product of many economic revolutions, of the extinction of a whole series of older forms of social production. ' http://www.marxists.org/archive/marx/works/1867-c1/ch06.htm It seems to me that this Hayek-Marx dispute over the meaning of 'coercion' goes to the heart of the dispute between libertarianism and liberalism as much as Marxism. Certainly workers in a capitalist society are freer than in a slave or feudal society. I http://delong.typepad.com/sdj/2010/08/hoisted-from-the-archive-friedrich-hayeks-shut-up-and-be-grateful-you-are-alive-argument.html

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Hoisted from the Archive: Friedrich Hayek's "Shut Up and Be Grateful You Are Alive!" Argument - Grasping Reality with Both Hands

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don't think Marx or liberalism would dispute that, or that this is a good thing. (I guess some post-modern 'anti-capitalist' fools who believe we are slaves to advertising might, but they are not very important.) The question is, is this freedom and this freedom alone the essence of liberty and justice? This is related to a point Hayek makes at the beginning of The Constituion of Liberty. He explains that liberty refers only to freedom from coercion by other people. Freedom not to starve is clearly a good thing, he says, but is nothing to do with liberty. He then sets it to one side. Sadly I have never got through the whole book. I suspect, however, that he never comes back to this crucial point. If anyone knows, please enlighten me. I prefer Trotsky's formulation that the ultimate good consists in decreasing power over other people and increasing power of people as a whole over nature (or as Lenin put it more concretely, Soviet Power and Electrification). This brings in the necessity for material prosperity which Hayek misses. You need both. For Hayek you can be starving to death, stuck on a desert island, and be perfectly free. Perhaps. But if so it suggests that this concept of liberty makes a poor basis for organising society. Reply August 23, 2010 at 09:34 AM Peter Belenky said... Not expressing any sympathy for Hayek's economics or politics, but you make an uncharacteristically weak argument. You contrast Hayek's statement with three ostensible analogies suggesting that his position is equivalent to saying workers should be grateful for any form of rule, no matter how exploitative. What he said, however, was that workers should not accuse anyone of injustice for their being born in a community producing something that allows them to purchase the means of subsistence, even if the terms of trade are very unfavorable. There are many proposals for changing the world, but those that are not authoritarian and violent emphasize improving the productivity of the poor, rather than expropriating the exploiters. Reply August 23, 2010 at 10:01 AM hartal said... In his recent critique of neo-liberalism Raymond Plant focuses on the claim that a situation of manifest inequality of opportunity still cannot be described as unjust if that situation is brought about, on the whole, without injustices being committed by individuals against other individuals or, roughly, through free contractual relations. Hayek wants to debunk the mirage of social injustice, and Plant demolishes his argument. Wish I had time to get into this today, and while I turn to Plant and Andrew Gamble for the critique of Hayek (I don't think we Americans have written critiques of similar quality), I must say that I think there is something to Hayek's critique of the Keynesian variant of underconsumptionism. Reply August 23, 2010 at 10:37 AM Jeffrey Davis said in reply to JK... "It seems to me that this Hayek-Marx dispute over the meaning of 'coercion' goes to the heart of the dispute between libertarianism and liberalism as much as Marxism." So many questions depend upon the point at which you begin the debate. Hayek starts so far down the road that his argument is simply aimed at the cheap seats. Reply August 23, 2010 at 11:16 AM Nico S said... http://delong.typepad.com/sdj/2010/08/hoisted-from-the-archive-friedrich-hayeks-shut-up-and-be-grateful-you-are-alive-argument.html

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Hoisted from the Archive: Friedrich Hayek's "Shut Up and Be Grateful You Are Alive!" Argument - Grasping Reality with Both Hands

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Hayek makes no bones about the fact that he sees democracy purely instrumentally, as a means to keep power out of the hands of a few. For Hayek democracy really has no intrinsic worth, because ultimately he is someone who believes that wealth = legitimate power, or in Platonic/Gramscian terms, he is an 'organic intellectual' of oligarchic/plutocratic government. We shouldn't fool ourselves and abstract from Hayek his class bias. Indeed, Hayek's actual political praxis - supporting Pinochet with advice and even having a conference of leading neoliberals in Chile in the 1970s highlights that he prioritizes market transaction and private property as the sources of freedom in a society, not democracy. Defending capitalism against the egalitarian bias of democracy - as noted by DeTocqueville with his notion of the 'democratic revolution' - as Hayek does, requires some pretty immoral thoughts and practices. My thoughts on this very issue can be read here: http://perspectivos.blogspot.com/2010/04/democratic-revolution-andneoliberalism.html Reply August 23, 2010 at 11:32 AM L2P said... "What he said, however, was that workers should not accuse anyone of injustice for their being born in a community producing something that allows them to purchase the means of subsistence, even if the terms of trade are very unfavorable." Oddly, again, nothing here seems inconsistent with feudalism or a communist dictatorship. A serf is (literally) born into a community producing something that allows him to purchase the means of subsistence. The point being, we would not defend Feudalism because although being a serf sucks, at least they got a loaf of coarse black bread a day. Why would we defend capitalism because although being a subsistence fisherman sucks, at least your dead end job, to which your kids are also condemned by (insert whatever reason you want), gives you a bowl of fish head stew? And that's what Hayek appears to want; he seems OK with owing your soul to the company store, if that's the deal you were born into. Seems a little odd to defend on an equality principle, doesn't it? Reply August 23, 2010 at 11:43 AM cervantes said... I'm really glad you mentioned Polyani, who is not read enough these days. From The Great Transformation: "[T]he fount and matrix of the [19th Century world] system was the self-regulating market. It was this innovation which gave rise to a specific civilization. The gold standard was merely an attempt to extend the domestic market system to the international field; the balance-of-power system was a superstructure erected upon and, partly, worked through the gold standard; the liberal state was itself a creation of the self-regulating market. The key to the institutional system of the nineteenth century lay in the laws governing market economy. Our thesis is that the idea of a self-adjusting market implied a stark utopia. Such an institution could not exist for any length of time without annihilating the human and natural substance of society; it would have physically destroyed man and transformed his surroundings into a wilderness. Inevitably, society took measures to protect itself . . ." How soon we forget. Reply August 23, 2010 at 11:59 AM http://delong.typepad.com/sdj/2010/08/hoisted-from-the-archive-friedrich-hayeks-shut-up-and-be-grateful-you-are-alive-argument.html

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Hoisted from the Archive: Friedrich Hayek's "Shut Up and Be Grateful You Are Alive!" Argument - Grasping Reality with Both Hands

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JK said... Peter Belenky wrote 'There are many proposals for changing the world, but those that are not authoritarian and violent emphasize improving the productivity of the poor, rather than expropriating the exploiters.' True enough any scheme to genuinely improve the world must emphasise improving the productivity of the poor. But why leave out the rich? The poor will be more important, just because there are more of them. But the productivity of the rich needs to be improved too. Sometimes it is below even that of the poor... Reply August 23, 2010 at 12:30 PM David Lentini said... "I'm really glad you mentioned Polyani, who is not read enough these days." Amen! We need someone like Polyani to balance the absurdities of Hayek and Friedman. The self-serving (or self-serfing) example he gives just sweeps the capacity for capitalism and laissez-faire economics to create injustice and misery. The point isn't where you're born; it's whether your neighbor should be allowed to put his foot on your throat. The idea that a free market is just because it gives equal opportunity but not result is a poor bromide (and a sick joke) when the rich can give their children many more opportunities---and load the dice---than the middle class and poor. Just look at George W. Bush. Anyone else with Bush's long history of academic failure, alcohol and drug abuse, and psychological disturbances would never get into Yale or Harvard Business School; and they certainly would not have been given preferential treatment to join the Texas Air National Guard to avoid fighting in Viet Nam. How can Hayek account for "W" by waiving his hands? Just as he does in his book---By saying "Shut up and get back on the plantation!" Reply August 23, 2010 at 01:37 PM JS said in reply to Graydon... Unfortunately, his approach was in no way peculiar, but rather commonplace. Reply August 23, 2010 at 01:46 PM Davis X. Machina said... "But the productivity of the rich needs to be improved too. Sometimes it is below even that of the poor..." This is why there are tennis coaches... Reply August 23, 2010 at 02:01 PM Davis X. Machina said... "Shut up and be grateful you are alive" inevitably recalls John Holbo's review of David Frum's "Dead Right", and what he calls ‘dark satanic millian liberalism’: http://examinedlife.typepad.com/johnbelle/2003/11/dead_right.html "The thing that makes capitalism good [ed. to Frum], apparently, is not that it generates wealth more efficiently than other known economic engines. No, the thing that makes capitalism good is that, by forcing people to live precarious lives, it causes them to live in fear of losing everything and therefore to adopt – as fearful people will – a cowed and subservient posture: in a word, they behave ‘conservatively’. Of course, crouching to protect themselves and their loved ones from the eternal lash of risk precisely won’t preserve these workers from risk. But the point isn’t to induce a society-wide conformist crouch by way of making the workers safe and happy. The

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point is to induce a society-wide conformist crouch. Period. A solid foundation is hereby laid for a desirable social order. Reply August 23, 2010 at 02:17 PM DrDick said... This would seem to confirm my position that Libertarianism exists simply to give philosophical and ethical cover to sociopathy. Reply August 23, 2010 at 05:06 PM Peter Principle said... "It is by the slogan that 'it is not your fault' that the demagoguery of unlimited democracy, assisted by a scientistic psychology, has come to the support of those who claim a share in the wealth of our society without submitting to the discipline to which it is due." That's pretty ironic, given that it pretty much sums up the current Republican Party's entire political strategy (I'd call it a philosophy, but that would be going too far). Except their pitch is aimed at society's wealthiest parasites, not its poor ones. Reply August 23, 2010 at 06:28 PM historianofeconthought said... Hayek said that democracy is the only mechanism ever invented for the peaceful transfer of power. That's what Hayek thought. Reply August 23, 2010 at 08:32 PM historianofeconthought said... "It seems to me that this "shut up and be grateful you were ever born" proves far too much" So obviously only an uncharitable attack would carve out this tiny fraction in isolation and exclude all the other points and arguments Hayek assembles in favor of his conclusions. This is the sort of "argumentation" against Hayek that makes talk radio seem like a Platonic dialogue. Reply August 23, 2010 at 08:37 PM historianofeconthought said... This could only be because you are a very poor student of Hayek. "But the passage above makes me wonder whether democracy has any place in Hayek's hierarchy of good things at all." Reply August 23, 2010 at 08:38 PM historianofeconthought said... Note well. Hayek's case against _UNLIMITED_ democracy is in any shape or form a case against democracy, e.g. limited democracy. The Founder's also had a powerful case against unlimited democracy, and provided powerful arguments in favor of limited democracy. Your uncharitable reading of Hayek seems deliberate. Reply August 23, 2010 at 08:41 PM Tomas said... Hmm. If Hayek thought that democracy was the only method of peaceful transfer of http://delong.typepad.com/sdj/2010/08/hoisted-from-the-archive-friedrich-hayeks-shut-up-and-be-grateful-you-are-alive-argument.html

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Hoisted from the Archive: Friedrich Hayek's "Shut Up and Be Grateful You Are Alive!" Argument - Grasping Reality with Both Hands

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power I am sure that a huge number of dynasties would disagree. If that is the only point in favor of democracy that Hayek can come up with his ought to be very limited in his support for democracy. Reply August 24, 2010 at 12:47 AM Tomas said... Hmm. If Hayek thought that democracy was the only method of peaceful transfer of power I am sure that a huge number of dynasties would disagree. If that is the only point in favor of democracy that Hayek can come up with his ought to be very limited in his support for democracy. Reply August 24, 2010 at 12:47 AM Trumpit said... Thank you, thank you for being a working, yet underpaid intellectual and doing the leg work for me to understand the other sides politics and economics. I don't have the time do it on my own; I'm one of those idiots who has to work for a living. Reply August 26, 2010 at 11:45 AM Trumpit said in reply to historianofeconthought... Sorry, whoever you are, and whichever history book you may have read, but our government/democracy is broken. Obama, and both houses of congress are Democratic and the minority Republicans can halt the government at will. By filibuster or mere threat of filibuster they can block any legislation. I want Obama to call out their threats and let them filibuster; he must overcome his cowardice, and be the man instead of the boy. You call Delong uncharitable; that's a joke. He's pointing out how uncharitable Hayek was at heart. We need more democracy, not less, especially at the highest levels of the federal government. Be more charitable yourself; find a way to do it. Reply August 26, 2010 at 06:19 PM Antonio Marques Mendes said... Hayek made a clear distinction between liberty and democracy, the first being a fundamental means to the second. To quote from The Road to Serfdom: "Democracy is essentially a means, a utilitarian device for safeguarding internal peace and individual freedom". I am sure he meant Representative Democracy, not unlimited or direct democracy. He says in the same book that: "While democracy seeks equality in liberty, socialism seeks equality in restraint and servitude". For a clarification of the meaning of liberalism see my post on: http://marques-mendes.blogspot.com/2010/04/misuseof-words-liberalism-and.html. The same line of reasoning can be applied to clarify the many meanings of democracy. Reply August 27, 2010 at 02:17 AM Antonio Marques Mendes said in reply to Antonio Marques Mendes... Sorry, as you may have guessed I meant the second ... to the first. Reply August 27, 2010 at 02:19 AM Comments on this post are closed.

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Economics 210a Weblog Archives DeLong Hot on Google DeLong Hot on Google Blogsearch August 23, 2010 The Semi-Daily Journal of Economist J. B...

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