Hayek’s Cowardice

Many interpret Hayek’s The Road to Serfdom as arguing for the inevitability of socialism in a world open to interventionism. In a previous post (“Hayek’s Road to Serfdom“), I shared Bruce Caldwell’s — Hayek’s biographer — thoughts. Here are Frank Chodorov’s,

Mises (Hülsmann)For staunch defenders of liberty, Hayek’s neo-liberalism was of course far too soft on government. The positive program of The Road to Serfdom left the government in control of economic life. The economy was still to be a planned one, with the government in charge of all the planning. Hayek merely suggests that this planning be for competition rather than the detailed control of all market participants. This was a naïve approach from any realistic political point of view, and some thought it was indefensible from an intellectual point of view as well. Commenting on Hayek’s program, Frank Chodorov exlaimed: “How Silly!” and made it clear that he thought the program verged on intellectual cowardice.

— Jörg Guido Hülsmann, Mises: The Last Knight of Liberalism (Auburn: Ludwig von Mises Institute, 2007), p. 842.

At the end of the excerpted paragraph, there is a citation that reads: Frank Chodorov, “What This Country Needs is Guts,” Analysis 2, 3 (1946).

I’m not endorsing this particular take on Hayek’s 1944 book. Rather, I’m more interested in how some see it as too extreme and others — those who embody the extremism that “moderates” fear — think it wasn’t extreme enough. As it concerns the motivations of Hayek, I think the latter are more correct than the former (except, I’m not sure how defensible the charge is that The Road to Serfdom advocated central planning).

Interestingly, the way Hülsmann describes Mises’ reservations about the book, it seems as if they go in a completely different direction,

Mises was very happy about the success of the book. However, he too thought that Hayek had made his case in misleading terms. Hayek had singled out economic planning as the root cause of the various policies that threatened political and economic freedom. But there is no danger in planning per se. The real question is: who should do the planning, and how should the plans be applied?

— pp. 842–843.

Nevertheless, Mises wrote to Selma Fuller, “The positive program developed by Hayek matters little when compared with these virtues of his book. However, it is very comforting fact that your friends were shrewd enough to see the contradictions in this program” (p. 843, ftn. #10).

11 thoughts on “Hayek’s Cowardice

  1. Malthus0

    “Hayek had singled out economic planning as
    the root cause of the
    various policies that threatened political
    and economic freedom. But
    there is no danger in planning per se.
    The real question is: who should do the planning, and how should the
    plans be applied?”

    That is more then interesting it is
    weird. Hayek was plenty clear on making the point in chapter 3 –
    Individualism & collectivism p85. “Everyone who is not a complete fatalist is a planner” “But it is not in this sense that the modern enthusiasts for planning use the term”
    “What our planners demand is a central direction of economic
    activity according to a single plan”.

    Even cutting out some of Hayek’s verbiage for brevity the point is clear.

    1. JCatalan

      That’s a good catch. I wonder how Mises could not have considered this. Or, I wonder if Hülsmann misunderstood the argument whatever letter he dug that from (I don’t remember specific instances right now, but there are points where I think Hülsmann botched some of the arguments).

    2. Current

      I think the point is that he doesn’t say it so clearly in “The Road to Serfdom” itself.

      When I read Hayek I get the impression that he wanted to seem more moderate in his political works than in his more technical economic works. With his political works he wants to push quite a broad audience in his direction. With his economic works he assumes that the economists he’s talking to share his views to a large degree, and he looks to inform them.

      He assumes his fans will read him more carefully than his detractors. This is most obvious in “Constitution of Liberty” where the endnotes are much more libertarian than the rest of the text.

      1. Malthus0

        “I think the point is that he doesn’t say it so clearly in “The Road to Serfdom” itself

        My quotes are from The Road to Serfdom, chapter
        3, p85 (definitive edition). I am not going to disagree with your
        points. But the point under question is quite specific. Does Hayek
        fudge the general economic planning of individuals &
        organisations with that of a central planning board?

        Anyone reading that page of the RTS can’t help but get the message that
        planning & central planning are not the same. I still see people
        saying things like “you wouldn’t get on a plane that wasn’t
        centrally planned” & “we all plan so why not the
        government?”. So in a time of greater socialist popularity
        & naivety it would have been a major oversight undermining the
        whole point of his book not to challenge that perception.

  2. Robert Roddis

    From “Meet the Press” 1975:

    Shanahan:”Professor von Hayek, your fellow Nobel laureate, Professor Leontief, is an advocate of planning, and two of our prominent senators, Humphrey and Javits, have introduced legislation to implement his idea, which is largely a matter of study by various government agencies and recommendations — nothing compulsory. Do you see in that kind of planning the same dangers that you see in a more mandatory form?”

    Hayek:”Well if it’s really nothing compulsory, it would also be completely ineffective and therefore would do no harm. I think there’s a very simple answer. He really imagines that somehow people are being made to do what he is planning.”

    Shanahan:”The thought, I believe, that they have expressed is that such things as foreseeing shortages of industrial productive capacity could be highlighted, and the industries encouraged to go ahead with building new plants, that sort of thing. Do you encompass that in your thought that it would be completely ineffective?”

    Hayek:”But why call that planning? If you can give industry better information, by all means do.”

    Shanahan:”Can we then say you would support that legislation, despite your fears of planning?”

    Hayek:”Well, there’s nothing to do with planning.”



  3. Robert Roddis

    Perhaps you are not as easily outraged as I am. Last week, I decided to listen to a podcast by a certain Phillip Pilkington of London, England on “Neoliberalism and Hayek’s Delusion”.


    This article gives you a sense of the “insight” of Mr. Pilkington:

    In the 1920s Hayek was still within the fold of pure economics, publishing papers and works that were taken seriously by the discipline. However, by the 1930s Hayek’s theories had started to come apart at the seams. Exchanges between Hayek and John Maynard Keynes and Piero Sraffa show Hayek as confused and even somewhat desperate. It was around this time that Hayek discontinued making any substantial contributions to economics. Not coincidentally this overlapped with the time when most economies, mired as in Great Depression, demonstrated that Hayek’s theories were at best impractical, at worst a complete perversion of facts.

    So, Hayek turned instead to constructing political philosophies and honing a metaphysics rather than engaging in any substantial way with the new economics that was emerging. When pure logic and empirical reality ceased to support Hayek’s emotionally charged ideology he turned, to the more malleable sphere of meaning and metaphysics. He became concerned with watery terms like “freedom” and “liberty”, which he then set out to impregnate with a meaning that would support his dreams. The most famous result of this period of conversion, which resembled less St. Paul on the road to Damascus and more so an alcoholic who had hit rock bottom, was Hayek’s 1944 work The Road to Serfdom. In a very real way it was this book that marked the close of Hayek’s career as a serious economic thinker and set him on the path of the political propagandist, agitator and organiser.


    It was so embarrassing, I assumed no one in the USA would mention it. Wrong again. The great “Lord Keynes” is today promoting it:


    “Lord Keynes” writes:

    Notice how Hayek never even seriously bothered to refute the General Theory.

    By the time of Road to Serfdom he was endorsing Keynesian stimulus in a depression (whether honestly or tactically to avoid looking like a lunatic, as he had in the early ’30s), and even his realisation that Walrasian GE theory was flawed was essentially moving him in the direction of Keynes’s ideas, though Hayek persisted in dogmatic worship of extreme free market theology despite this.

    1. JCatalan

      Yea, based on these excerpts, both Phillip Pilkington and “Lord Keynes” have absolutely no idea what they’re talking about. We all know about LK, though. The worst is Pilkington who obviously doesn’t even hold command over Hayek’s contributions to economics and political philosophy (as if Hayek stopped writing on economics during the 1930s).

  4. Robert Roddis

    I had never heard this claim before:

    From the 1971 Preface by Arthur Seldon to “Tiger By the Tail”:

    Long before The General Theory Professor Hayek wrote a critique of Keynes’s 1930
    Treatise on Money. In the last 40 years he has written periodic criticisms of the Keynesian system, although at one stage he withdrew from the debate on monetary policy because he considered that Keynes, and the Keynesians, were not discussing the aspects that seemed to him fundamental.

    1. JCatalan

      Sheldon might be referring to the fact that by the late 1930s Hayek started focusing on the problems of dynamism and disequilibrium, because he felt that he and his detractors were talking from two different points of view. But, it’s true that Hayek did critique Keynes’ The General Theory, even if not in a dedicated review. Hayek’s Ricardo Effect can be interpreted as a counter to the multiplier, and Hayek’s work on interest rate theory in The Pure Theory of Capital can be seen as a counter to Keynes’ liquidity preference theory of interest.


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