Examining an Economic Expert
By Glenny Brock
Friedrich Hayek's warnings against the dangers of government intervention have won the late economist a new following. But Hayek's views are more complex than many of his fans realize, says UAB philosopher and economist Erik Angner.
Austrian economists are hot these days. In 2010, The Road to Serfdom by Friedrich A. Hayek, which was originally published in 1944, rocketed to the top of Amazon’s list of bestselling nonfiction books—propelled in part by praise from commentator Glenn Beck. Hayek’s warning against the dangers of government intervention has earned him renewed attention in recent years, but his ideology was far more nuanced than many of his fans may realize, says Erik Angner, Ph.D., UAB assistant professor of philosophy and economics, director of the UAB Center for Ethics and Values in the Sciences, and author of the book Hayek and Natural Law (2007: Routledge). Here, Angner offers a closer look at a man who is often described as one of the key economists of the 20th century.
Opposition to Intervention
Unlike many contemporary authors who write about Friedrich Hayek, UAB's Erik Angner (above), says he approaches his subject as a scholar rather than a proponent or critic.
Angner explains that contemporary conservatives like Hayek for his opposition to government intervention in the marketplace. They emphasize three main tenets of his philosophy:
1. Government intervention leads to increased debt and inflation, particularly when the government spends money it doesn’t have.
2. Economic control is, in effect, political control. For instance, monetary policy defined by a central banking authority represents government encroachment on overall freedom.
3. Individual freedom is a precondition for prosperity. “Hayek believed that the price system fulfilled a critical function in society, and the price system only works if people can choose freely what to buy and at what price” Angner explains. Consequently, Hayek opposed government monopolies and price ceilings or floors that limit consumer choice. Moreover, Hayek believed that interference with the price system could be the first step toward government intervention in other aspects of people’s lives.
Conflict and Context
But the conservative reading of Hayek is a highly selective one, Angner suggests. When he wrote The Road to Serfdom in the aftermath of the Great Depression and during World War II, “Hayek was against national socialism, Soviet-style communism, and Keynesians, all of whom argued that government should have a major role in the market,” Angner says. (John Maynard Keynes was a British economist who advocated aggressive government spending during recessions.) “But as a classical liberal, Hayek was anti-conservative. He even had a book chapter titled ‘Why I Am Not a Conservative.’”
Friedrich A. Hayek
• Born 1899
• Died 1992
• Won the Nobel Memorial Prize in economics in 1974
• Won the U.S. Presidential Medal of Freedom in 1991
Why Wasn’t He a Conservative?
“While Hayek did believe that government intervention in the price system could take us from free-market governance toward totalitarianism, he also endorsed an extensive system of social services,” Angner explains. In fact, Hayek advocated a limited system of wealth redistribution. “He said that he was in favor of a minimum income for every person in the country,” Angner explains. “There’s a much more multi-faceted vision there, but it’s not acknowledged by people trying to emphasize particular aspects of Hayek’s philosophy.”
Ideas in Vogue
Angner says that Hayek’s star turn isn’t unusual. Philosophers and economists—along with the ideas they promote—wax and wane in popularity, which can be pumped up by government leaders and tastemakers. Angner compares the recent focus on Hayek’s anti-government intervention concepts to the fixation on Adam Smith’s “invisible hand,” a familiar metaphor created by the 18th-century philosopher to describe the self-regulating movement of markets. “The idea of the invisible hand is all that most people know about Adam Smith, so they put it forward as if it’s his only idea,” Angner explains. “What’s happening with Hayek is comparable.”
Angner doesn’t know if Hayek’s newfound fame has made an impact on the sales of his own book on the economist. “I see myself as a scholar rather than an activist,” he says. “A lot of people who write about Hayek are followers or proponents or critics, but I am not one of those. For me, it’s about getting ideas right.”