Sunday, 7 April 2013

Mongrel ascendancy - how democracy can enshadow Hayekian freedom

Some more thoughts of Hayek's position on the extreme desirability of freedom.  Having read the Road to Serfdom I decided that the biggest weakness was in dealing with the possibility of mixed political systems.  Clearly he ought to have been aware that collectivist systems could survive for potentially quite long times, at the very least.  That is, he accepts that they're not inherently and immediately unstable.  Given this, why is he so weak on the possibilities inherent in mixed styles, somewhat Hayekian, somewhat collectivist?  I pointed out he makes a William Paley-like blunder in alleging the necessary starkness of this choice by the populace, assuming of course the populace have been afforded a voice.

I'd like to take a leaf out of Hayek's book on argumentative style and describe a possible society where collectivism wins every time at the ballot box, and Hayek would need to decide whether democracy is allowed to win in that case, or whether he can find a way for his form of freedom to win.

The set up actually contains two independent societies and in each case the electorate votes always for collectivism.  Society one is what I'll call the post-liberal society.  Imagine a society where a large majority people support a welfare state, where the government runs large fractions of industry, where a persistent and recalcitrant underclass are politically alienated, dulled, and distracted by other parts of their culture.  Where even those who are doing well depend on the state for education, health of poorer family members, support for the many many times in their careers that they lose their job.  For the purposes of the argument, I'm agnostic on how the culture got itself into that state (i.e. whether this was the effect, as Hayek might argue, of creeping collectivism's insipid effect on human culture, whether this was the effect of a cruel and unequal capitalism driven by corporate cabals expropriating increasing fractions of output in the name of capital, leaving labour less secure) or even whether this state is necessarily a bad thing.  That is, despite how I described it, I am happy to remain morally neutral on the desirability of this culture for the purposes of this argument.  Now imagine a range of political parties which vie for the votes of the masses.  One subset of those parties are pro-Hayek and another subset pro-collectivism.  It is entirely possible that for centuries, perhaps even for millennia, the populace would vote consistently for a party from the collectivist subset.  Despite all arguments made by the pro-Hayekian subset.  This was likely on Hayek's mind when he wrote the Road to Serfdom.  Democracy will have defeated that form of nineteenth century freedom Hayek prefers, and if, by hypothesis, those parties fail to persuade, the idea of Hayekian freedom is indefinitely defeated.  

OK.  Now society two.  A society of Hayekian tactical voters.   Let's imagine that a majority of them are in a similar position of government dependence as society one, but that they're all politically engaged.  And, by hypothesis, they all thought about it and decided that, in their own heads, they accepted Hayek's point about the corrosive effect on freedom that this kind of collectivism imposes.  With the extra wrinkle that, from a purely self-interested point of view, they continue indefinitely to vote for one or other collectivist parties.  The Hayekians made all the right arguments, won over all the hearts and minds, and still they chose to vote for the status quo due to a particular brand of rationalist calculation which weighed the cost of the transition to the new order too expensive relative to their present state.  Perhaps their utility function has a very steep discount curve which dramatically devalues future worth steeply, who knows.  This is either logically possible to imagine, or not.  I guess the Hayekian would argue that it was logically impossible, but I'm not so sure.  In any case, what else could the committed Hayekian do - he's won all of the arguments but finds self-interest of the mass producing a series of collectivist variants of political parties which, for generations, retain power and replicate the status quo.
Real Hayekians cannot ban collectivist parties.  Imagine Norway, year 2200.  Several generations of superb sovereign wealth fund investment decisions followed by a series of further discoveries of commodity resources just offshore have effectively allowed Norwegians to idle in relative comfort at the support of the state.  The state in turn has amassed enough capital to ensure a fairly decent standard of living for non-workers.  They lock down their borders. Those who don't like it either leave or somehow manage to run or work in private enterprises. The population growth is manageable.  Norwegian industry becomes hopelessly unproductive when compared with other nations.  They become, in effect, a rent seeking nation living off the diversified capital owned by the state.  Every Norwegian party which gets to power promises to maintain this status quo, among other things.  All the Hayekian Norwegian parties win over the populace in theory concerning the long term benefits of freedom.  But Norwegians become Augustinian in their love of it - endless deferring to a time in the future when they feel ready to switch, but never switching.

Another point missed by Hayek in his insistence that no political regime can be somewhat Hayekian, somewhat collectivist.  That in multi-party democracies where the current incumbents on occasion get ejected produces a series of striped Hayekian, then collectivist, then Hayekian, then collectivist political regimes.  This is also, in a sense, a mixed political regime.  The legislature will be similarly striped by both forms of policy approach.  The various government departments likewise will exhibit battle scars indicating the endless flip-flopping into and out of collectivist and minimal government regimes.  Assume Hayek is right. Then this regime switching is necessarily less efficient than a permanently Hayekian one.  Assume the social democrats are right.  Likewise this regime switching is necessarily less efficient than a permanently social democratic one.  The desired pattern of behaviour of democracy, namely that incumbents occasionally get defenestrated, would then, no matter who was right, result in less efficient societies.  Unless, of course, the most efficient regimes were mixed regimes.

Anyway, where do political parties come from anyway?  In particular, their policy variability?  Imagine a Hayek victory.  A party in power which implements Hayekian hegemony.  Collectivist parties lose the voter base.  For democracy to survive, the likely outcome is a series of similar, but somewhat different generally Hayekian parties.  But I would argue that you can rank all the broadly Hayekian parties which thrive and survive in this hypothetical society with respect to the degree of collectivism implicit in their manifestos.  Hayek himself saw a wide and important role for the state.  A family of Hayekian parties surely would vary in ways which could be characterised as more or less government controlled.  More or less collectivist.  Even in Hayek's wildest dreams, surely he has to face up to mixed regimes and the bare possibility that they may be better?