Hayek: A Collaborative Biography

Part XIII: 'Fascism' and Liberalism in the (Austrian) Classical Tradition

Robert Leeson

• Publisher: Palgrave Macmillan
• Year: 2018
• Print ISBN:
  9783319913575
• eBook ISBN:
  9783319913582
• Topic: Economics
• Subtopic: Economic History
• Index: Economics

Hayek claimed that he always made it his rule 'not to be concerned with current politics, but to try to operate on public opinion.' However, evidence suggests that he was a party political operative with 'free' market scholarship being the vehicle through which he sought – and achieved – party political influence. The 'main purpose' of his Mont Pelerin Society had 'been wholly achieved'. Mises promoted 'Fascists' including Ludendorff and Hitler, and Hayekians promoted the Operation Condor military dictatorships and continue to maintain a 'united front' with 'neo-Nazis.' Hayek, who supported Pinochet's torture-based regime and played a promotional role in 'Dirty War' Argentina, is presented as a saintly figure. 

 

These chapters place 'free' market promotion in the context of the post-1965 neo-Fascist 'Strategy of Tension', and examine Hayek's role in the promotion of deflation that facilitated Hitler's rise to power; his proposal to relocate Gibraltarians across the frontier into 'Fascist' Spain; the Austrian revival of the 1970s; the role of (what was presented as) 'neutral academic data' on behalf of the 'International Right' and their efforts to promote Franz Josef Strauss and Ronald Reagan and defend apartheid and the Shah of Iran

Part IOrigins

© The Author(s) 2018

Robert Leeson (ed.)Hayek: A Collaborative BiographyArchival Insights into the Evolution of Economicshttps://doi.org/10.1007/978-3-319-91358-2_1

Begin Abstract

1. Introduction: ‘How We Developed a Consistent Doctrine and Some International Circles of Communication’

Robert Leeson^{1, 2}

(1)

Stanford University, Stanford, CA, USA

(2)

Notre Dame Australia University, Fremantle, WA, Australia

Robert Leeson

Email: [email protected]

End Abstract

The ‘Thing Taking Over’: Climate Change

Outlining his deceitful ‘rule,’ Friedrich ‘von’ Hayek (1978) told Jack High that the

Intellectual movement is wholly in the right direction. But it will take another twenty years before they will have any influence on policy, and it’s quite possible in the meantime that the politicians will destroy the world so thoroughly that there’s no chance of the thing taking over. But I’ve always made it my rule [emphases added] not to be concerned with current politics, but to try to operate on public opinion. As far as the movement of intellectual opinion is concerned, it is now for the first time in my life moving in the right direction.¹

The evidence suggests that he was a party political operative—he targeted cabinet ministers for Margaret Thatcher to sack (Leeson 2017). ‘Free’ market ‘scholarship’ was the vehicle through which he sought—and achieved—party political influence.

No other Nobel laureate has recruited the ‘worst inferior mediocrities’ to do his ‘bidding’:

Of course, scientists are pretty bad, but they’re not as bad as what I call the intellectual, a certain dealer in ideas, you know. They are really the worst part. But I think the man who’s learned a little science, the little general problems, lacks the humility the real scientist gradually acquires. The typical intellectual believes everything must be explainable, while the scientist knows that a great many things are not, in our present state of knowledge. The good scientist is essentially a humble person. (Hayek 1949, 1978)²

Bruce Caldwell (2010), the fifth official (and ‘definitive’) biographer, informed readers of The Washington Post: ‘Hayek himself disdained having his ideas attached to either party.’³ This was part of the Mont Pelerin Society (MPS) ‘consistent doctrine’—Ralph Harris and Arthur Seldon informed the 1992 MPS meeting that Hayek ‘remained scrupulously aloof from politics.’⁴ But at the 1984 MPS meeting, Hayek (1985, 8) stated: ‘Of course each of us has a duty as a citizen of his particular country to take part in political programs.’

Policy advocates often co-align on multiple fronts: market failure deniers (and climate change deniers in particular) are often proponents of ‘free’ market ‘liberty’ for the financial sector. Hayek referred to the Greens as the new barbarians in our midst⁵; and informed a correspondent that had he been a younger man, he would have concentrated on exposing Greens, instead of focusing almost exclusively on exposing Reds.⁶

The Nazi penal code stated that the ‘first condition for the new legal order must be that henceforth no Jew, Negroes, or other coloured people can be absorbed into the German blood’ (cited by Gilbert 1964, 78). Hayek (5 March 1975)—whose obsession with his own Ahnenpass (ancestor passport) predated Hitler’s—told the Liberty Fund’s Neil McLeod that he didn’t want non-whites to touch his money—his Chicago bank had ‘gone negro’ and he needed to find an alternative.⁷ Caldwell’s (2004, xi, 344, n. 16) Hayek’s Challenge was funded by the John W. Pope Foundation and the Liberty Fund (who hosted a conference to discuss a preliminary draft of the volume). According to its 2013–2014 Annual Report, Duke University’s Centre for the History of Political Economy (CHOPE) was ‘founded in 2008 with a significant grant from the John W. Pope Foundation’ (Caldwell 2014); and in fiscal year 2014–2015, CHOPE received $175,000 from the Pope Foundation.⁸

According to its mission statement, ‘The Pope Foundation supports organizations that work to advance free enterprise—the same system that allowed Variety Wholesalers to flourish—for future generations of Americans. To achieve those ends, the Pope Foundation supports a network of organizations in North Carolina that advocate for free markets, limited government, individual responsibility, and government transparency.’ With regard to ‘Education support,’ the ‘Pope Foundation believes that Americans have a duty to teach the next generation about the blessings of liberty.’⁹

The Pope Foundation is the sixth largest contributor to what Robert Brulle (2014, 681, 687, Fig. 1) described as the ‘Climate Change Counter Movement’ (CCCM). Referring to private sector transparency, Bruelle reported that ‘there is evidence of a trend toward concealing the sources of CCCM funding through the use of donor directed philanthropies.’ In December 2013, Whitney Ball, the president of the Donors Trust and Donors Capital Fund, ‘said the organisation had no say in deciding which projects would receive funding. However, Ball told the Guardian last February that Donors offered funders the assurance their money would never go to Greenpeace’ (Goldberg 2013). Instead, they are committed to ‘Building a Legacy of Liberty.’¹⁰ Lawson Bader, Ball’s successor as president of both DonorsTrust and Donors Capital Fund, was formerly president of the Competitive Enterprise Institute and Vice President at the Mercatus Centre, George Mason University (GMU).¹¹ In recent years, DonorsTrust have received more than $3.2 million from the ‘Knowledge and Progress Fund,’ which is chaired by Charles Koch (Bennett 2012).¹² In fiscal year 2014–2015, the Pope Foundation provided the Institute for Humane Studies (IHS) with $655,000.¹³

According to The New Yorker, between 2007 and 2011 the Koch brothers

donated $41.2 million to ninety tax-exempt organizations promoting the ultra-libertarian policies that the brothers favor—policies that are often highly advantageous to their corporate interests. In addition, during this same period they gave $30.5 million to two hundred and twenty-one colleges and universities, often to fund academic programs advocating their worldview. Among the positions embraced by the Kochs are fewer government regulations on business, lower taxes, and skepticism about the causes and impact of climate change. (Mayer 2013)

In 1991, the Soviet Union collapsed and the anti-Pigouvian, Ronald Coase (who had been repeatedly nominated by Hayek) was awarded the Nobel Prize for Economic Sciences. But Pigouvians continued to exert influence: in 1992, the United Nations Framework Convention on Climate Change aimed to ‘stabilize greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system.’ According to Murray Rothbard (1992)—Hayek’s co-leader of the fourth generation Austrian School of Economics—this was the work of a ‘few left-wing hysterics’: ‘most real scientists have a very different view of such environmental questions.’

In addition to organizing the 1974 Austrian School revivalist conference and teaching at GMU, Edwin Dolan played a major role in creating the ‘free’ market climate of opinion that drove post-communist reconstruction: ‘State Finance Academy (Moscow, Russia, 1990–1991), Moscow State University (Moscow, Russia, 1992), American Institute of Business and Economics (Moscow, Russia, 1993–2001), National Bank of Kazakstan (Almaty, Kazakstan, staff training, 1996), Stockholm School of Economics (Riga, Latvia, 1999–2013), Central European University (Budapest, Hungary, 2002–2003), International Graduate School of Business (Zagreb, Croatia, 2003), American University in Bulgaria (Blagoevgrad, Bulgaria, 2004), University of Economics (Prague, Czech Republic, 2005–2008) and Tallinn Technical University School of Business (Tallinn, Estonia, 2008).’¹⁴ In his Ludwig von Mises Institute F. A. Hayek Memorial Lecture on ‘Environmental Economics: Theory and Practice,’ Dolan (2014)—invoking two authorities—declared that ‘three components of the Austrian paradigm lead naturally to policy prescriptions that envision a minimal role for government.’ Dolan’s first authority was Graham Dawson (2011, 19), who asserted in the un-refereed Libertarian Papers that if, for example, Bangladesh disappears its former inhabitants can appeal to the courts for compensation: the ‘policy implication’ is that government has

no cause to intervene in market exchange where property rights have been allocated and legislative procedures exist that that make it possible for the victim to take legal action against the polluter … The Austrian or libertarian policy must therefore be to privatise ‘climate change policy,’ repealing all existing climate change legislation … There simply should not be a public policy towards ‘climate change.’ Instead, the courts should build up a body of common law and establish precedents to guide the actions of the users of fossil fuels.

Dolan’s second authority was Art Carden (2013, 30), who asserted in the Quarterly Journal of Austrian Economics that ‘Tradable permits and Pigovian taxes are market-like, but they still rest on a planner’s conceit that the optimal amount of a particular activity can be known.’ Carden is an Associate Professor of Economics at Samford University’s Brock School of Business and a Senior Research Fellow with the Institute for Faith, Work, and Economics which is devoted to ‘making a positive, sustainable difference in the world for the flourishing of all mankind and the glory of God!’ by offering a ‘refreshing biblical perspective about the importance of work and how it helps accomplish God’s plan for people and the planet.’¹⁵

Referring to the ‘very great achievement’ of Hayek’s (2007a [1941]) The Pure Theory of Capital, G.L.S. Shackle (1981, 253) insisted that a scholar ‘must be seized by faith.’ In cults, rules and morals are for ‘secondhand’ followers—not for ‘original’ leaders. Hayek (1978) objected to

rationalism telling people, ‘Don’t believe anything which cannot be explained to you.’¹⁶

But personally, Hayek (1978) was a rationalist:

Quite frankly, at a very early stage when I tried [to get] people to explain to me what they meant by the word God, and nobody could, I lost access to the whole field. I still don’t know what people mean by God. I am in a curious conflict because I have very strong positive feelings on the need of an ‘un-understood’ moral tradition, but all the factual assertions of religion, which are crude because they all believe in ghosts of some kind, have become completely unintelligible to me. I can never sympathize with it, still less explain it.

When Robert Chitester asked ‘Do you get questions about religion? I would assume a lot of people confuse your interest in a moral structure with religion’; Hayek (1978) replied

Very rarely. It so happens that an Indian girl [Sudha Shenoy 1943–2006], who is trying to write a biography of myself, finally and very hesitantly came up with the question which was put to Faust: ‘How do you hold it with religion?’ [laughter] But that was rather an exceptional occasion. Generally people do not ask. I suppose you understand I practically never talk about it. I hate offending people on things which are very dear to them and which doesn’t do any harm.

When Hayek fills

out the form I say ‘Roman Catholic,’ merely because this is the tradition in which I have grown up. I don’t believe a word of it. [laughter]¹⁷

Presuppositionalist pub...

Table of contents

• Cover
• Front Matter
• Part I. Origins
• Part II. Revival
• Back Matter