What Rule of Law?

Bear Stearns? Sure! Fannie Mac? You got it. Freddie Mac? Yep. Lehman Brothers? Sorry pal. AIG? Oh fine.

The Rule of Law thus implies limits to the scope of legislation: it restricts it to the kind of general rules known as formal law and excludes legislation either directly aimed at particular people or at enabling anybody to use the coercive power of the state for the purpose of such discrimination. It means, not that everything is regulated by law, but, on the contrary, that the coercive power of the state can be used only in cases defined in advance by the law and in such a way that it can be foreseen how it will be used.

--F. A. Hayek, in The Road to Serfdom.

Too big to fail?

"They're too big to fail"
"The economy needs more liquidity"
"If we don't intervene, the market will crash"

F. A. Hayek takes a close look at the positions of those defending the egregious actions of the federal government over the last several months:

That principle that the end justifies the means in individualist ethics is regarded as the denial of all morals. In collectivist ethics it becomes necessarily the supreme rule; there is literally nothing which the consistent collectivist must not be prepared to do if it serves “the good of the whole,” because the “good of the whole” is to him the only criterion of what ought to be done. The raison d’état, in which collectivist ethics has found its most explicit formulations, knows no other limit than that set by expediency—the suitability of the particular act for the end in view. And what the raison d’état affirms with respect to the relations between different countries applies equally to the relations between individuals within the collectivist state. There can be no limit to what its citizen must be prepared to do, no act which his conscience must prevent him from committing, if it is necessary for an end which the community has set itself or which his superiors order him to achieve.

So far, it's just money (via taxes and inflation) that we citizens are being called upon to commit, in order to do the bidding of our superiors. How about tomorrow?

Sole control

The Road to Serfdom, F. A. Hayek:

Economic control is not merely control of a sector of human life which can be separated from the rest; it is the control of the means for all our ends. And whoever has sole control of the means must also determine which ends are to be served, which values are to be rated higher and which lower—in short, what men should believe and strive for.

Hell on earth

F. Holderlin, quoted in The Road to Serfdom, by F. A. Hayek:

What has always made the state a hell on earth has been precisely that man has tried to make it his heaven.

Younger generation

The Road to Serfdom, F. A. Hayek:

We cannot blame our young men when they prefer the safe, salaried position to the risk of enterprise after they have heard from their earliest youth the former described as the superior, more unselfish and disinterested occupation. The younger generation of today has grown up in a world in which in school and press the spirit of commercial enterprise has been represented as disreputable and the making of profit as immoral, where to employ a hundred people is represented as exploitation but to command the same number as honorable.

Our generation

The Road to Serfdom, F. A. Hayek:

Perhaps the best guides through some of our contemporary problems will still be found in the works of some of the great political philosophers of the liberal age, De Tocqueville or Lord Acton, and, to go even further back, Benjamin Constant, Edmund Burke, and The Federalist papers of Madison, Hamilton, and Jay—generations to whom liberty was still a problem and a value to be defended, where ours at the same time takes it for granted and neither realizes when the danger threatens nor has the courage to emancipate itself from the doctrines which endanger it.

Review: The Road to Serfdom

Elsewhere I've talked about some of the impact that F. A. Hayek's The Road to Serfdom has had on me, but this little book has a long history of influencing thought throughout the West. Originally published in England in early 1944 as the Allies began to have success against Germany, the book was published in the US later that year. A Reader's Digest version was published in 1945, exposing hundreds of thousands of readers to Hayek's ideas.

But even though the book got people talking on both sides of the Atlantic, Milton Friedman in 1971 wrote that "its message is no less needed today than it was when it first appeared" and that "the same collectivist fallacies are abroad and on the rise today." All that changed, he said, was that "the immediate issues are different and so is much of the jargon." "Central planning" was no longer popular, but replacing it were attempts to eliminate "urban poverty" and make businessmen "socially responsible." Friedman continued:

Unfortunately, the check to collectivism did not check the growth of government; rather, it diverted its growth to a different channel. The emphasis shifted from governmentally administered production activities to indirect regulation of supposedly private enterprises and even more to governmental transfer programs, involving extracting taxes from some in order to make grants to others—all in the name of equality and the eradication of poverty but in practice producing an erratic and contradictory melange of subsidies to special interest groups. As a result, the fraction of the national income being spent by governments has continued to mount.

In 1994, Friedman similarly wrote:

Today, there is wide agreement that socialism is a failure, capitalism a success. Yet this apparent conversion of the intellectual community to what might be called a Hayekian view is deceptive. While the talk is about free markets and private property [...] the bulk of the intellectual community almost automatically favors any expansion of government power so long as it is advertised as a way to protect individuals from big bad corporations, relieve poverty, protect the environment, or promote "equality." [...] The intellectuals may have learned the words but they do not yet have the tune.

So Hayek's critique of collectivism seems to have had some impact, in that few serious collectivists now talk about central planning and state-run industries. But as Friedman says, all that has changed is the vocabulary—government continues to become more powerful and freedom more scarce.

In his book, Hayek addressed a similar consistency of ideas disguised by distinct vocabulary, but then, the dividing words were "central planning" and "naziism." Hayek saw a significant "similarity of much of current English political literature to the works which destroyed the belief in Western civilization in Germany and created the state of mind in which naziism could become successful." And while "few people, if anybody, in England would probably be ready to swallow totalitarianism whole, [...] there is scarcely a leaf out of Hitler's book which somebody or other in England or America has not recommended us to take and use for our own purposes." Then, as now, the battle was over words, not ideas—the notion of the desirability of government control remained constant. Indeed, Hayek warns:

We should never forget that the anti-Semitism of Hitler has [...] turned into his enemies many people who in every respect are confirmed totalitarians of the German type.

Collectivists today think of Fidel Castro and Che Guevara just as collectivists of the 1940s thought of Hitler: "Yes, I have problems with some of the things they did, but many of their ideas were good!" Now, as then, "most of the works which are preparing the way for a totalitarian course in the democracies are the product of sincere idealists and often of men of considerable intellectual distinction." It's telling when the supporters of one sincere idealist in particular seem to also have an affinity for El Che.

Still relevant, thus, is Hayek's systematic demonstration that collectivism inevitably leads to corruption, arbitrary rule, tyranny, discrimination, individual irresponsibility, and the destruction of morality. Though the jargon is now "universal health care" and "Patriot Act" and "a living wage," nothing has changed—government continues to grasp for more power.

Hayek learned the lessons of those who thought they could make the world a better place by using the government for good. He saw that their real accomplishments were the destruction of liberty and the rule of murderous dictators.

Sadly, most of our society seems intent on repeating history.

The "moral" state

The Road to Serfdom, F. A. Hayek:

As soon as the particular effects are foreseen at the time a law is made, it ceases to be a mere instrument to be used by the people and becomes instead an instrument used by the lawgiver upon the people and for his ends. The state ceases to be a piece of utilitarian machinery intended to help individuals in the fullest development of their individual personality and becomes a “moral” institution—where “moral” is not used in contrast to immoral but describes an institution which imposes on its members its views on all moral questions, whether these views be moral or highly immoral. In this sense the Nazi or any other collectivist state is “moral,” while the liberal state is not.

Thus, the collectivist state becomes moral at the expense of individual morality, while the liberal state avoids morality and thereby gives individuals the opportunity to be moral.

Essence of morals

The Road to Serfdom, F. A. Hayek:

Freedom to order our own conduct in the sphere where material circumstances force a choice upon us, and responsibility for the arrangement of our own life according to our own conscience, is the air in which alone moral sense grows and in which moral values are daily re-created in the free decision of the individual. Responsibility, not to a superior, but to one's conscience, the awareness of a duty not exacted by compulsion, the necessity to decide which of the things one values are to be sacrificed to others, and to bear the consequences of one's own decision, are the very essence of any morals which deserve the name.

Anglo-Saxon virtues

The Road to Serfdom, F. A. Hayek:

There is one aspect of the change in moral values brought about by the advance of collectivism which at the present time provides special food for thought. It is that the virtues which are held less and less in esteem and which consequently become rarer are precisely those on which Anglo-Saxons justly prided themselves and in which they were generally recognized to excel. The virtues these people possessed--in a higher degree than most other people, excepting only a few of the smaller nations, like the Swiss and the Dutch--were independence and self-reliance, individual initiative and local responsibility, the successful reliance on voluntary activity, noninterference with one's neighbor and tolerance of the different and queer, respect for custom and tradition, and a healthy suspicion of power and authority. Almost all the traditions and institutions in which democratic moral genius has found its most characteristic expression, and which in turn have molded the national character and the whole moral climate of England and America, are those which the progress of collectivism and its inherently centralistic tendencies are progressively destroying.

Unwavering faith

The Road to Serfdom, F. A. Hayek:

If we are to succeed in the war of ideologies and to win over the decent elements in the enemy countries, we must, first of all, regain the belief in the traditional values for which we have stood in the past and must have the moral courage stoutly to defend the ideals which our enemies attack. Not by shamefaced apologies and by assurances that we are rapidly reforming, not by explaining that we are seeking some compromise between the traditional liberal values and the new totalitarian ideas, shall we win confidence and support. Not the latest improvements we may have effected in our social institutions, which count but little compared with the basic differences of two opposed ways of life, but our unwavering faith in those traditions which have made England and America countries of free and upright, tolerant and independent, people is the thing that counts.

Liberalism, defined

A commenter brought up the issue of vocabulary--after all, the meaning of the word "liberal" in this blog's title does not match today's typical definition of the word. Instead, I've taken a page from Milton Friedman and identified myself with the great classical liberals of past centuries. The distinction between the two types of liberalism is described by Friedman in Capitalism and Freedom:

The nineteenth-century liberal regarded an extension of freedom as the most effective way to promote welfare and equality; the twentieth century liberal regards welfare and equality as either prerequisites of or alternatives to freedom. In the name of welfare and equality, the twentieth-century liberal has come to favor a revival of the very policies of state intervention and paternalism against which classical liberalism fought.

And again:

Jealous of liberty, and hence fearful of centralized power, whether in governmental or private hands, the nineteenth-century liberal favored political decentralization. Committed to action and confident of the beneficence of power so long as it is in the hands of a government ostensibly controlled by the electorate, the twentieth-century liberal favors centralized government.

Both classical liberals and modern-day liberals claim to be on the side of "liberty," but as their goals are diametrically opposed to each other, this isn't possible without playing with the meaning of the word. In The Road to Serfdom, F. A. Hayek explains that the difference between liberals comes from their different definitions of "liberty" and "freedom":

To the great apostles of political freedom [the classical liberals] the word had meant freedom from coercion, freedom from the arbitrary power of other men, release from the ties which left the individual no choice but obedience to the orders of a superior to whom he was attached. The new freedom promised [that of modern-day liberals], however, was to be freedom from necessity, release from the compulsion of the circumstances which inevitably limit the range of choice of all of us, although for some very much more than for others. Before man could be truly free, the "despotism of physical want" had to be broken, the "restraints of the economic system" relaxed.

Freedom in this sense is, of course, merely another name for power or wealth.

Indeed, it is the modern-day liberals who have perverted the English language, first redefining "liberty" to mean "wealth," and then claiming to be "liberal" when in fact they support making people equally wealthy (through methods completely impossible in systems where individual liberty exists).

Classical liberals value equality, but not in the same way, as Friedman explains:

The [classical] liberal will therefore distinguish sharply between equality of rights and equality of opportunity, on the one hand, and material equality or equality of outcome on the other. He may welcome the fact that a free society in fact tends toward greater material equality than any other yet tried. But he will regard this as a desirable by-product of a free society, not its major justification.

Tocqueville, in Democracy in America, argues that the struggle between individual liberty and equality plagues all democratic peoples, and that our natural tendency is unfortunately to prefer equality:

Democratic peoples have a natural taste for liberty. Left to themselves, they seek it out, love it, and suffer if deprived of it. For equality, however, they feel an ardent, insatiable, eternal, invincible passion. They want equality in liberty, and if they cannot have it, they want it still in slavery. They will suffer poverty, servitude, and barbarity, but they will not suffer aristocracy.

This "ardent, insatiable, eternal, invincible passion" must be conquered. History has demonstrated the superiority of true liberalism in bringing wealth, political freedom, and happiness to mankind, and has likewise shown that collectivism, by any name (including today's "liberalism"), results in poverty and tyranny.

Some say that Confucius said that "when words lose their meaning, people lose their liberty." Whether he did or not, surely this is doubly true when the word "liberal" itself loses its meaning. Modern-day collectivists have bastardized the term and assigned it to themselves, hoping to give credibility to their debunked system of political thought. On this blog, however, I refuse to allow such destruction of language to go unchecked, and defend liberty--both the word and the ideal.

The essence of individualism

The Road to Serfdom, F. A. Hayek:

This is the fundamental fact on which the whole philosophy of individualism is based. It does not assume, as is often asserted, that man is egoistic or selfish or ought to be. It merely starts from the indisputable fact that the limits of our powers of imagination make it impossible to include in our scale of values more than a sector of the needs of the whole society, and that, since, strictly speaking, scales of value can exist only in individual minds, nothing but partial scales of values exist--scales which are inevitably different and often inconsistent with each other. From this the individualist concludes that the individuals should be allowed, within defined limits, to follow their own values and preferences rather than somebody else's; that within these spheres the individual's system of ends should be supreme and not subject to any dictation by others. It is this recognition of the individual as the ultimate judge of his ends, the belief that as far as possible his own views ought to govern his actions, that forms the essence of the individualist position.

Neither goodness nor badness

The Road to Serfdom, F. A. Hayek:

Outside the sphere of individual responsibility there is neither goodness nor badness, neither opportunity for moral merit nor the chance of proving one's conviction by sacrificing one's desires to what one thinks right. Only where we ourselves are responsible for our own interests and are free to sacrifice them has our decision moral value. We are neither entitled to be unselfish at someone else's expense nor is there any merit in being unselfish if we have no choice. The members of a society who in all respects are made to do the good thing have no title to praise.

The blunting of moral sense

The Road to Serfdom, F. A. Hayek:

What are the fixed poles now which are regarded as sacrosanct, which no reformer dare touch, since they are treated as the immutable boundaries which must be respected in any plan for the future? They are no longer the liberty of the individual, his freedom of movement, and scarcely that of speech. They are the protected standards of this or that group, their “right” to exclude others from providing their fellowmen with what they need. Discrimination between members and nonmembers of closed groups, not to speak of nationals of different countries, is accepted more and more as a matter of course; injustices inflicted on individuals by government action in the interest of a group are disregarded with an indifference hardly distinguishable from callousness; and the grossest violations of the most elementary rights of the individual, such as are involved in the compulsory transfer of populations, are more and more often countenanced even by supposed liberals.

All this surely indicates that our moral sense has been blunted rather than sharpened.

Morality requires liberty

A movement whose main promise is the relief from responsibility cannot but be antimoral in its effect, however lofty the ideals to which it owes its birth.

Experience has made [liberal Germans] wiser and sadder men: they have learned that neither good intentions nor efficiency of organization can preserve decency in a system in which personal freedom and individual responsibility are destroyed.

These little passages, combined with the rest of the excellent 14th chapter of The Road to Serfdom by F. A. Hayek, have changed my way of thinking of the relation between liberty and morality. I've never been able to resolve the conflict in my head between liberal thought and social conservatism, and there are still areas of conflict, but it's now clear to me that liberalism is the foundation for morality—without it, morality cannot exist.

I've recognized for a long time that collectivism (in all its incarnations--big government, welfare state, socialism, communism, fascism, etc.) is A Bad Thing, since it must use coercion to achieve arbitrary ends. Forcing individuals to pay for the healthcare, retirement, vocational training, and recreation of others is folly. Worse, as Hayek points out elsewhere, collectivism breeds arbitrary rule, making tyranny even more unbearable. In the U.S., we see unchecked government bodies creating rules and regulations that impact the lives of millions of Americans, without direct oversight from elected officials, and it's worse in most other countries.

I've also known, especially since reading Democracy in America, that collectivism kills personal responsibility, because it leads people to rely on government to solve problems and take care of them:

What good does it do me, after all, if an ever-watchful authority keeps an eye out to ensure that my pleasures will be tranquil and races ahead of me to ward off all danger, sparing me the need even to think about such things, if that authority, even as it removes the smallest thorns from my path, is also absolute master of my liberty and my life; if it monopolizes vitality and existence to such a degree that when it languishes, everything around it must also languish; when it sleeps, everything must also sleep; and when it dies, everything must also perish?

Indeed, Hayek agrees:

The virtues which are less esteemed and practiced now--independence, self-reliance, and the willingness to bear risks, the readiness to back one's conviction against a majority, and the willingness to voluntary cooperation with one's neighbors--are essentially those on which the working of an individualist society rests.

But while I've known this, I never made the connection that Hayek makes in the quotes at the top of this post: that as collectivism kills individual freedom and responsibility, it simultaneously kills morality. How? Because morality requires a choice. It's not "moral" for me to pay the medical bills of a stranger if I'm forced to by an IRS agent with the power to put me in jail. It's only a good deed if I make a donation voluntarily. All government coercion is like that--it eliminates the morality of every decision that it touches. As Hayek says, "only when we ourselves are responsible for our own interests and are free to sacrifice them has our decision moral value."

Eliminating the morality in a decision isn't always a bad thing, however, because some people have no qualms about being immoral to the extent that they endanger civilization. Thus, it's essential to have a government capable of enforcing laws against theft and murder, for example. But when moral choices are increasingly replaced by coercion, the result is a society of robots, the polar opposite of the type of men God created us to be. "Man’s chief end is to glorify God, and to enjoy him forever," but without the power of moral choice, glorifying and enjoying God becomes impossible except in punishment and death at the hands of the state. I can't glorify God with my money if the government takes it all away from me. I can't glorify God with my talents if the government forces me into an occupation outside my skill set, through excessive regulation, price floors, or price ceilings. The overall effect of this government intervention may not be ultimately bad (though it almost certainly will be), but it is still antimoral, because it forbade me the chance to be moral with the gifts God gave me.

Thus, the fight for liberty is more than a rebellious teenager's fight for the freedom to do what he wants without authority telling him what to do. Without individual liberty, it is impossible to glorify God. That's why liberty must be defended.