Hayek: A Collaborative Biography

Part XII: Liberalism in the Classical Tradition, Austrian versus British

Robert Leeson

• Publisher: Palgrave Macmillan
• Year: 2018
• Print ISBN: 9783319745084
• eBook ISBN: 9783319745091
• Topic: Economics
• Subtopic: Economic History
• Index: Economics

F.A. von Hayek (1899-1992) was a Nobel Prize winning economist, famous for promoting an Austrian version of classical liberalism. The multi-volume Hayek: A Collaborative Biography examines the evolution of his life and influence.

Two concepts of civilization revolve around power – should it be separated or concentrated? Liberalism in the non-Austrian classical tradition remains fearful of power concentrated in the hands of government, labour unions or corporations; Red Terrorists sought to monopolize power to liquidate enemies and competitors as a prelude to utopia (the 'withering away of the State'); and behind the 'slogan of liberty, ' White Terror promoters (Mises and Hayek) sought to concentrate power in the hands of a 'dictatorial democracy' where henchmen would liquidate enemies, and – 'guided' by 'utopia' (the 'spontaneous' order) – follow orders from their social superiors. This volume, Part XII, examines the 'free' market Use of Knowledge in Society; examines the foundations of 'free' market educational credentials; and asks whether those funded by the tobacco industry and the carbon lobby should be accorded 'independent policy expert' status.

Part ITwo Competing Neoclassical Traditions

© The Author(s) 2018

Robert LeesonHayek: A Collaborative Biography Archival Insights into the Evolution of Economicshttps://doi.org/10.1007/978-3-319-74509-1_1

Begin Abstract

1. ‘Austrian Thought and Fascism’: ‘The Victory of Fascism in a Number of Countries Is Only an Episode in the Long Series of Struggles Over the Problem of Property’

Robert Leeson^{1, 2}

(1)

Department of Economics, Stanford University, Stanford, CA, USA

(2)

Notre Dame Australia University, Fremantle, Australia

Robert Leeson

Email: [email protected]

End Abstract

1.1 Hypothesis to Be Tested

Just before the outbreak of World War II, Hayek (1997 [1938], 183) appeared to encourage his readers to focus—not on the Nazi threat (which he referred to as ‘fascism’) but—on ‘the problems which begin when a democracy begins to plan’: we may be

witnessing one of the great tragedies in human history: more and more people being driven by their indignation about the suppression of political and intellectual freedom in some countries [Germany and Austria?] to join the forces which make its ultimate suppression inevitable. It would mean that many of the most active and sincere advocates of intellectual freedom are in effect its worst enemies and far more dangerous than its avowed opponents, because they enlist the support of those who would recoil in horror if they understood the ultimate consequences. (emphasis added)

Two years later, Mises (2009 [1978 (1940)], 30) provided some definitive mythology: ‘The Austrian School of economics was Austrian in the sense that it emerged from the soil of an Austrian culture that National Socialism would trample down.’ And in their ‘definitive’ ‘Friedrich Hayek and His Visits to Chile,’ Caldwell and Leonidas Montes (2014a, 3; 2014b; 2015, 263) complained about (unspecified) attempts to ‘establish links between Austrian thought and fascism.’ The evidence, however, reveals that the Austrian School of Economics is synonymous with both anti-Semitism and the promotion of political ‘Fascism.’

This Archival Insights into the Evolution of Economics (AIEE) series provides a systematic archival examination of the process by which economics is constructed and disseminated. All the major schools will be subject to critical scrutiny; a concluding volume will attempt to synthesise the insights into a unifying general theory of knowledge construction and influence. But two decades as an historian of economic thought was an inadequate preparation for the 2009-planned two-volume Hayek: A Collaborative Biography.

Eight years of research later, an unambiguous conclusion emerges: the ‘free’ market Austrian School of Economics is a not a school of economics—it is a franchised pyramid scheme, a ‘bullet train to financial freedom’ for frauds, paid sycophants, public stoning theocrats, white supremacists and those with blind faith in the assertions made by socially ‘superior’ fellow-travellers (Chapters 5 and 8). ¹

To survive, feudalism and neo-feudalism require ‘spontaneous’ deference to intergenerational entitlements programmes (and the titles by which the government-chosen ones identify themselves). Which school of economics—or any other discipline—embraces ascent into the upper reaches of the income and wealth distribution in return for accepting the self-identifying title of ‘worst inferior mediocrities’ and ‘secondhand dealers’:

what I always come back to is that the whole thing turns on the activities of those intellectuals whom I call the ‘secondhand dealers in opinion,’ who determine what people think in the long run. If you can persuade them, you ultimately reach the masses of the people. (Hayek 1978, Chapter 2, below)? ²

After the President of Hayek’s Mont Pelerin Society (MPS), Bruno Leoni (1913–1967), was hacked to death by an underworld business associate, Hillsdale College President, George Roche III (1935–2006), emerged as the premier ‘free’ market fund-raiser and morality-promoter. Roche became a fund-raising liability when his daughter-in-law, Lissa Jackson Roche, was either murdered or committed suicide after confessing to George Roche IV that she had been having sex with his father for nineteen years (Rapoport 2000).

Caldwell—who replaced Roche as the premier ‘free’ market fund-raiser—may have made a million dollars for himself in a single month on the back of Glenn Beck’s Fox News promotion of the Definitive Edition of Hayek’s (2007 [1944]) The Road to Serfdom (Leeson 2015a). Caldwell (2010) then informed readers of The Washington Post that ‘Hayek himself disdained having his ideas attached to either party.’ ³ Yet both the Hayek Archives (which Caldwell seeks to monopolise) and the public record reveal that Hayek was a party political operative for the Conservative Party, the Republican Party and the no-party Operation Condor dictatorships.

This ‘free’ market influences the public and public policy through a variety of sources including Rupert Murdoch’s Times, Sunday Times, Fox News and Wall Street Journal editorial pages; plus inflammatory right-wing radio celebrities such as Rush Limbaugh. The History of Economics Society (HES) is the vehicle through which Austrian ‘free’ market ‘scholars’ seek academic credibility. According to Caldwell, ‘Friedrich Hayek and His Visits to Chile’ was the ‘Winner of the Foundation of [sic] Economic Education (FEE) 2015 Best Article Award’ ⁴ : an institution described by Hayek as a ‘propaganda’ set-up. ⁵ And at the 2016 Duke University HES conference, it was awarded the ‘Craufurd Goodwin Best Article in the History of Economics Prize.’ ⁶ Caldwell is a Past HES President.

Charles Koch’s ‘academic efforts’ have received ‘widespread acceptance—in universities like Brown, Dartmouth, and Duke’ (Glassman 2011). Goodwin (1988)—the long-time Duke University History of Political Economy editor (1969–2009) who in conversation expressed concern about the Austrian colonisation of his community—is the author of ‘The Heterogeneity of the Economists’ Discourse: Philosopher, Priest, and Hired Gun.’ Boettke (2014)—who describes the HES community as ‘gullible’: they play ‘ideological checkers’ while he plays ‘scholarly chess’—is the ‘Charles Koch Distinguished Alumnus, The Institute for Humane Studies.’ ⁷

Assertions made on behalf of the ‘free’ market are true because they are made—not by angry callers to right-wing talkback radio but—by ‘Dr’-Professors of Economics and ‘think’ tank Fellows or Senior Fellows (regardless of how those titles were acquired). But economic science rests on evidence—not dressed-up assertions.

1.2 Second Generation ‘Austrian Thought and Fascism’

• Ritter von Bawerk
• ‘Freiherr von’ Wieser

The academic and senior Federal Reserve economist, J. Herbert Fürth (26 February 1992), reported to his brother-in-law, Gottfried Haberler, that Wieser was anti-Semitic. ⁸ According to Eugen-Maria Schulak and Herbert Unterköfler (2011, 42), Wieser was labelled a ‘Fascist’ because his magnum opus Gesetz der Macht (The Law of Power 1983 [1926]) contains ‘anti-Semitic statements and an abstract Führerkult … as well as sources indicating the contrary.’ ⁹

Wieser (1983 [1926], 226) reflected on the consequences of the ‘Great’ War: ‘When the dynastic keystone dropped out of the monarchical edifice, things were not over and done with. The moral effect spread out across the entire society witnessing this unheard-of event. Shaken was the structure not only of the political but also of the entire social edifice, which fundamentally was held together not by the external resources of power but by forces of the soul. By far the most important disintegrating effect occurred in Russia.’

Four years after Mises (1922, 435) asserted that ‘The Lord of Production is the Consumer’ (‘Der Herr der Produktion ist der Konsument’), Hayek (1952 [1926], 555, 567) revealed an attitude that is inconsistent with disinterested scholarship: Wieser

inspired an admiration coming close to worship among all who came under the spell of his powerful personality. Readers of his work cannot fail to be impressed by his human greatness and universality … The form of exposition raises this favorite child of the great man [Menger] far above the rank of ordinary scientific literature. Wieser’s [1983 (1926)] last book is a fitting demonstration of the general truth that a work which is carried by a great idea assumes the characteristics of a great piece of art. Having as its architect a sovereign master of science, it reaches a towering height above all indispensable detail and becomes related to artistic creation. In this last work, where Wieser shakes off the fetters of specialization and disciplinary methods, his unique personality emerges in all its greatness, combining a universal interest in all fields of culture and art, worldly wisdom and experience, detachment from the affairs of the day, sympathy for the fellow-man, and freedom from narrow nationalism. In him the civilization of old Austria had found its most perfect expression. (emphasis added)

If ‘God’ sanctioned the ‘entire social edifice’ of Wieser’s ‘monarchical’ hierarchy, what would legitimise its replacement? The ‘Fascists’ that Mises (1985 [1927], 49, 51) praised overthrew democracy in Italy (1922) and then in Spain (1923). Wieser (1983 [1926], 371) praised both: ‘In Mussolini, Fascism had a leader of electrifyin...

Table of contents

• Cover
• Front Matter
• Part I. Two Competing Neoclassical Traditions
• Part II. Seeing the Utopian ‘Theory of the Order as a Whole’ to ‘Make Politically Possible What Today may be Politically Impossible’
• Back Matter