On Individualism:
He distinguished two types of individualism: true—stemming from England and Scotland, emphasizing the insignificance of individual reason; and false—having roots in Cartesian rationalism—stressing the
importance of individual reason. Of true individualism, the "first thing
that should be said," Hayek stated, "is that it is primarily a theory of society, an attempt to
understand the forces which determine the social life of man, and only in the second instance a set of
political maxims derived from this view of society. Its basic contention is
that there is no other way of understanding social phenomena but through our
understanding of individual actions. . . . The
next step in the individualistic analysis of society
is the contention that by tracing the combined effects of
individual actions, we discover that many of the institutions on which human
achievements rest have arisen and are functioning without
a designing and directing mind.
And the second on Federal Debt:
He was greatly concerned about
United States federal government budget deficits. In a letter to the Times,
he wrote "Sir, you would do a public
service if you displayed in capital letters the elementary truth that IF THE
UNITED STATES GOVERNMENT BORROWS A LARGE PART OF THE
WORLD'S SAVINGS TO FINANCE CURRENT EXPENDITURE, THE CAPITAL AVAILABLE ANYWHERE
FOR INVESTMENT MUST BECOME SCARCE AND EXPENSIVE."This
was not the first time he wrote to a newspaper recommending the use of capital
letters. In 1978, he wrote a letter-to-the-editor to the Wall
Street Journal, "Could you print in front of
every issue in headline letters the simple truth that INFLATION IS MADE BY
GOVERNMENT AND ITS AGENTS: NOBODY ELSE CAN DO ANYTHING ABOUT IT. It might do some good!" though he noted in his scrapbook that the letter was
published only once and in small print.
In 1983, Hayek was asked by the
news magazine the Economist to
participate in a centenary critique on Keynes. His final word on his old
Cambridge friend was contained in the June 11
edition. There he wrote that he was "claiming that perhaps the most
impressive intellectual figure I have ever encountered and whose general
intellectual superiority I have readily acknowledged
was wholly wrong in the scientific work for which he is
chiefly known." He
was a bit kinder in an earlier newspaper interview, when he responded to the
question, "Are there any similarities between your economic theory and
that of Keynes?" "No. I think basically Keynes was also a free trader and an economic liberal. But with many qualifications and
restrictions. He was never quite consistent. We were personal friends but we
rarely agreed on economics."
Hayek saw the element of individualism along with the extravagance of debt as two key factors in the evolution of the United States. First preserving individualism in the sense of the Scottish Enlightenment and second tamping down the stupidity of explosive debt.
First the lack of a designing and directing mind is the lack of a Government in central control. Just look at what has been happening when that is tried.
Second, one wonders what Hayek would say of the explosive debt we now see. Yes, he thought highly of Keynes but:
the most impressive intellectual figure I have ever encountered and whose general intellectual superiority I have readily acknowledged was wholly wrong in the scientific work for which he is chiefly known
Seems to say it all.
Posts
