The reception of Hayek in Australia understands, and constructs him, to be a liberal. Hayek is seen to provide the intellectual fire power for the economic rationalism of the 1970s 1980s-1990s, sometimes known as the New Right. This economic liberalism endeavoured to roll back the regulation of, and constraints on, the free market, which had been put in place by collectivist social liberals during the 20th century. What was to be challenged and overthrown was the Australian settlement between capital and labour, to set the economy free.
Economic rationalism can be understood as a political movement advocating largely market mechanisms to improve economic growth rates in Australia; as trusting the self-regulating forces of the market to bring about the required adjustments to new conditions; the classical liberal belief that moral and religious values are not proper objects of coercion; limited government; and a market order as the basis of a free society.
Presumably this reception of Hayek is based on The Road to Serfdom (text also here) and Why I am not a Conservative. It is an economic reading of some of Hayek's texts. Their Hayek is the symbol of economic liberalism, liberty, and the spontaneous order. They reworked Hayek's arguments against socialism, central planning and totalitarianism to use them to challenge and roll back the welfare state--that historic social democratic compromise between capitalism and socialism.
The task of the statesman is to remove the obstacles to the spontaneous development of the market order. However, Hayek affirms the need for rules to govern the spontaneous order (cosmos). Liberty is to be constrained.
You rarely hear the economic liberals talk about democracy and citizenship. They do talk about leadership of the executive ongoing economic reform, the wilful Senate blocking reform, and the particular interests of undemocratic minority groups ensnarred by emotion holding the country to ransom. Etc etc. You sense both the anti-democratic ethos and the lurking authoritarianism of running the country as if it were a company(Australia Unlimited) directed by a strong CEO.
However, this pathway of criticism (the understanding of the political in economic rationalism) is not considered in the standard taxonomy of the critics of economic rationalism in Australia.
We can read Hayek in terms of political philosophy and our concerns about deepening democracy, the need for more political deliberation in the context of a dominant executive controlling both the House of Representives and the Senate. You rarely hear about this (latter) Hayek in Australia. This is the Hayek who was no democrat, as he would sacrifice democracy to safeguard (economic) liberty. So what does he say?
The latter Hayek is the Hayek of Law, Legislation and Liberty. He is a constitutional liberal, who understands that the constitution of liberty is intended to safeguard the individual against all arbitrary power by preventing the government in the modern state from becoming unlimited.
Hayek safeguards constitutional liberalism by reviving, and working in, the tradition of Hume and Burke. He places an emphasis on the authority of tradition; relies on a wise elite to govern to preserve, and protect, the basic essentials of the market order; restricts the electoral franchise; has a formal conception of democracy as a mechanism for choosing governments whilst degutting the substantive content (eg., the doctrine of popular sovereignty); and reduces the power of the Senate (the legislative assembly) so that it becomes a conservative body that maintains the market order and the institutions of liberal civilization.
This Hayek devalues participation by individuals in politics whilst valuing the participation of individuals in markets; subordinates the public sphere (taxis) to the spontaneous order of the market (cosmos); limits and restricts the participation of individuals in politics as much as possible; blocks the public deliberation of citizens in the public sphere; sees democracy as having a tendency to demagoguery and totalitarianism; and accepts the idea of an intellectual vanguard.
So democracy is seen as a threat to the market order. Hence it must be constrained and limited so as to protect the spontaneous order of the market.
In the political conflicts of the '80s and '90s we should not forget that economic rationalism was as much against 'vested interests' as ideological collectivists. This is one of the critical reasons that Labor governments were onside - either anti-competitive rules served no social good at all (eg two airline policy) or had costs exceeding their benefits (eg tariffs, banking regulation).
As for democracy, Hayek - having been born in German-speaking Europe at the end of the 19th century - was perhaps more sceptical of and fearful of the masses than his ideological descendants whose experience is of the West in the late 20th century.
But I think we share with him a view of democracy at the instrumentalist end of the spectrum; that democracy is principally a means of restraining whatever elites are in power, and that democratic participation is not a good that should be privileged above others. We really only need a few % of the population to be politically engaged for the system to work.
Posted by: Andrew Norton on December 11, 2004 03:17 PMAndrew
alas you read a mangled and truncated post. Most of it was lost whilst posting.
You write:
"we share with him [Hayek] a view of democracy at the instrumentalist end of the spectrum; that democracy is principally a means of restraining whatever elites are in power..."
Hayek defended the wise elites running the country to protect the market order in opposition to the tastes, opinions and concerns of the majority.
Secondly, Hayek's account of democracy as an instrument (and your account?) downplays the principle of popular sovereignty and would not accept it as equally important as the liberal principle of freedom.
Thirdly, democracy is important to Hayek (and you?) only if it produces liberal decisons. Non-liberal decisions endanger the market order.
Fourthly, democracy for Hayek (and you?) has no content itself. If liberal constitutionalism is a doctrine about what the law ought to be,then democracy is a procedural device for determining what the law will be.
Fifthly, democracy for Hayek (and you?) needs to be constrained by liberal principles.
So democracy is only tolerable if it remains in strict bounds because it represents a threat to individual liberty.Therefore, there may be circumstances when it is necessary to suspend democracy to prevent an assault on liberty.
Would you go along with this? Or would you put some substantive content into democracy as you do with the market as an institution?
Posted by: Gary Sauer-Thompson on December 11, 2004 03:19 PMGary - The Left has been trying to run this argument - and regularly bringing out the same old Hayek quotes - since the 1980s. The first article I ever wrote on 'economic rationalism' , back as an undergraduate in about 1988, was a debunking of it.
Australian liberalism is not a movement based on sacred texts. Some of Hayek - mainly the work on markets as discovery mechanisms and spontaneous orders - is in my view very interesting. Much of the rest of his writing is derivative, dated, or in the case of some of his ideas about democracy, eccentric. I don't subscribe to it and off the top of my head can only think of one person here who has found something worthwhile in it. It is not the source of any political agenda.
No serious person in Australia opposes democracy. Equally, no serious (or indeed sane) person could believe that all democratic decisions are good decisions. But we accept that the law prevails until such time as we can get it changed. Liberals may dispute the wisdom of Australian democracy, but not its legitimacy.
Isn't 25 years of attempting to persuade people of the merits of change rather than overthrowing democracy enough evidence?
Rather ironically for your defence of social liberalism, social liberals do have a partially anti-democratic agenda in their support for a constitutional bill of rights. I oppose bills of right because I believe the courts lack legitimacy (not being elected) to make what will end up as policy decisions, and have even less policy competence than the executive branch.
The left also regularly infringes the rights of others to make political statements through protest designed to 'shut down' various events and speakers they do not agree with.
But they are only nuisances, not threats to democracy. There are no real threats to the overall democractic system from left or right. We all pursue our substantive agendas through the democratic system.
Andrew,
I was a bit put out by Rafe's polemical remarks in his 'Four groups who muddied the waters on economic rationalism' over at Catallaxy that:
"The left generally has not risen to the intellectual challenge of the economic rationalists. For the most part the critics have circulated misleading rumours, with generous quantities of personal abuse."
So I'm not trying to rerun old and tired debates of Hayek versus the left.
I am trying to understand the scenario of a centralizing Howard government having control of the House of Reps and the Senate after June 2 30th 2005; and it legitimising its extension of powers in the name of parliamentary sovereignty and its electoral mandate of the will of the people.
I'm doing this by bringing two strands of liberalism (liberal constitutionalism and social liberalism) together around democracy to see what they say--to unpack their content. I'm not speaking for social liberalism--that is represented by Margo Kingston's Webdiary.I'm a classical republican for what it is worth.
Oh, I agreethat a lot of what of what hayek writes is ecccentric--eg.,his intellectual history.However, unlike you I take Hayek's writings on democracy seriously.
He is dealing with genuine political problems.He understands the political in a way that many economic rationalists do not.Many of these mathematical Platonists cannot see beyond the horizons of their utopian markets. So what they say about our political system is cliched.
Posted by: Gary Sauer-Thompson on December 12, 2004 12:55 AM
Gary
I share Hayek's and Andrew's instrumentalist view of democracy. One doesn't have to agree with Hayek's more eccentric proposals for constraining democracy (e.g. the age-based third chamber) to agree with his substantive critiques and the more general point that democracy should be constrained in some way - how adequate those constraints are is a matter of judgement but one can be a Hayekian in this sense and believe that existing constraints that all mainstream liberals (including social liberals) support are adequate (e.g. a role for the Senate, federalism, constitutional protections, including perhaps a Bill of Rights). If agreeing with hayek's general critiques and fear of unconstrained democracy is anti-democratic, then so is supporting a Bill of Rights (which I do, and Andrew doesn't). More importantly one can agree with these Hayekian critiques and scepticism without advocating overthrow of a democratic government as a viable solution to any possible outbreak of illiberalism anytime soon. There is simply no alternative to democracy is one does not believe in hereditary rule and the weight of historical experience suggests that for all their faults, democracies are preferable to hereditary rule. given this, the only alternative to democracy as a procedure for succession is some form of even more destabilising conflict - thus as a Hayekian liberal I can value democracy solely for its instrumental value as providing a peaceful means of succession.
Jason,
As I understand it constitutional liberalism implies that democracy(based on the principle of popular sovereignty) is constrained by the rule of law grounded in the Australian constitution.
The guardian of the constitution is the High Court, and it resolves the disputes either between governments, or between citizens and governments, over the limits of the powers defined by the Constitution.
Som questions:
1.if democracy is an instrument what it an instrument to achieve? Individual liberty? That is constrained by rule of law.
2.Is the market an instrument? If so, then it is an instrument to achieve what? Individual liberty? But that too is constrained by the rule of law of the liberal order.
3.So is democracy an instrument to preserve the liberal order?
Posted by: Gary Sauer-Thompson on December 12, 2004 09:52 PMNeither democracy or the market are necessarily intended to achieve precisely pre-determined things (though we can readily think of a list of general categories - peace, prosperity, happiness etc). The same institutions can achieve very different results at different times and in different places.
Posted by: Andrew Norton on December 13, 2004 07:15 PMAndrew,
Well, yes and no.
yes to "The same institutions can achieve very different results at different times and in different places."
No to "neither democracy or the market are necessarily intended to achieve precisely pre-determined things."
I would say they have been created and shaped by human beings in order that we can live a better kind of life rather than a worse one. Otherwise, what is the point?
But I would dump precisely predetermined,since what constitutes a better kind of life than the one we have know is deeply contested.
Posted by: Gary Sauer-Thompson on December 16, 2004 05:11 PM