Friedrich Hayek Foreshadows ObamaCare

Ed Feulner, president of the Heritage Foundation, was kind enough to send me a copy of a booklet Heritage has published. It is a pocket-sized abridged version of Friedrich Hayek’s The Road to Serfdom.

It has been quite a few years since I read the book so it was interesting to have this reminder, especially in today’s context. Though this condemnation of central planning was published almost seventy years ago (in 1944), it is like he was describing ObamaCare today. See if any of this seems familiar to you.

Hayek writes:

Most planners who have seriously considered the practical aspects of their task have little doubt that a directed economy must be run on dictatorial lines, that the complex system of interrelated activities must be directed by staffs of experts, with ultimate power in the hands of a commander-in-chief whose actions must no be fettered by democratic procedure.

Let’s see — today we have a president who governs by Executive Order, bypassing the Congress, and advised by dozens of “policy czars” who skip over the confirmation process.

Hayek adds:

… the legislative body will be reduced to choosing the persons who are to have practically absolute power.

Sound a bit like the Independent Payment Advisory Board (IPAB) of 15 unelected bureaucrats who will arbitrarily determine Medicare payment rates?

He goes on:

The planning authority cannot tie itself down in advance to general rules, which prevent arbitrariness. (Rather, it) becomes an institution, which deliberately discriminates between particular needs of different people, and allows one man to do what another must be prevented from doing.

Does this put you in mind of Kathleen Sebelius’ issuing of compliance waivers, based on no standards whatsoever, just her own personal whim?

Hayek quotes Sidney and Beatrice Webb on Soviet enterprises:

Whilst the work is in progress, and public expression of doubt that the plan will be successful is an act of disloyalty and even treachery because of its possible effect on the will and efforts of the rest of the staff.

How many quotes from Nancy Pelosi spring to mind? Certainly, “We have to pass the bill so you will know what’s in it,” and in answer to a question of its constitutionality, “Are you kidding me? Are you kidding me?”

And, in order to steamroll central planning through the process, it is necessary to demonize any opposition:

The enemy may be internal, like the “Jew” in Germany or the “kulak” in Russia, or he may be external

Or it may be the “Tea Party” in the United States.

And on it goes. Hayek even predicts the politicization of sports in order for the new rulers to prevail. Kind of like how dodge ball is being banned from elementary schools because it is too competitive and children are given trophies, not for winning but merely participating. The “New America” cannot have children thinking competition is a good thing, only “cooperation.”

There is one area where Hayek is off the mark. He expected totalitarians would need a mass movement to support their power grab, and he expected that movement would come from the bottom. He wrote:

… the higher the education and intelligence of individuals become, the more their tastes and views are differentiated. If we wish to find a high degree of uniformity in outlook, we have to descend to the regions of lower moral and intellectual standards where the more primitive instincts prevail.

Alas, that may have been the case in 1944, but it no longer is. The real conformity and immorality today will be found among college graduates. “Higher education” today has become “higher indoctrination,” where people are trained to parrot the words of leftist professors rather than think for themselves, and religion and morality has been all but abolished.

Resistance to totalitarianism today will come not from the elites, but from the working people who faithfully raise their children, go to church, and believe in the American dream. Not incidentally, these folks are also likely to be well-armed hunters and outdoorsmen — the “bitter clingers” that so exasperated Mr. Obama.

Comments (19)

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  1. Paul H. says:

    Interesting Hayekean perspective on Obama.

  2. John Polgar says:

    Despite the failures, just in recent history, of central planning and command economies they prove irresistable. Everyone thinks Stalin and Mao couldn’t possibly happen here. Well, neither do I–at least, not right away–but even small doses of central planning have exponentially damaging effects on any economy. There’s no better example than the economies of Soviet satellite states with planned economies and the more decentralized systems they now have.

  3. Edgar D. says:

    “Serfdom” is as relevant today as it was sixty eight years ago.

  4. wintercow20 says:

    Don’t forget that Sebellius and the goons sent threatening letters to Wellpoint and Humana for merely discussing costs with their own private clients and for having the temerity to raise premiums (Wellpoint) … or how about the governor of Massachusetts threathing insurers for raising premiums due to mandates placed on them by the government of Massachusetts.

  5. Don McCanne says:

    Another quote from Friedrich Hayek’s “The Road to Serfdom”:

    “There is no reason why, in a society which has reached the general level of wealth ours has, (the certainty of a given minimum of sustenance) should not be guaranteed to all without endangering general freedom; that is: some minimum of food, shelter and clothing, sufficient to preserve health. Nor is there any reason why the state should not help to organize a comprehensive system of social insurance in providing for those common hazards of life against which few can make adequate provision.”

  6. Brian says:

    One of the best economics books of all time. Hayek knew what was coming.

  7. Eric says:

    @Don Interesting quote, though I doubt we’d hear any of the self-described Hayek acolytes bringing up this passage.

    Greg,
    I often disagree with you on health care topics, but respect your knowledge, viewpoint, and analytical ability. This post, however, strikes me as overly dramatic, rich in right-wing platitudes, and selectively ignorant of recent history.

    “Let’s see — today we have a president who governs by Executive Order, bypassing the Congress and advised by dozens of “policy czars” who skip over the confirmation process..”

    I can’t speak for earlier presidents, but George W. Bush used hundreds of executive orders as well as signing statements to attempt to influence legislative language, hardly new or novel to the Obama administration. He also greatly expanded the number of czars (33 compared to just 8 in the Clinton administration, while Obama has 38). Bush seems to be the outlier here rather than Obama.

    “Hayek adds:
    ‘… the legislative body will be reduced to choosing the persons who are to have practically absolute power.’
    Sound a bit like the Independent Payment Advisory Board (IPAB) of 15 unelected bureaucrats who will arbitrarily determine Medicare payment rates?”

    IPAB’s recommendations are not binding, and subject to overrule by Congress, so I hardly see how that is “absolute power”. At least you had the good sense not to use the tired and fallacious “rationing board” meme, considering IPAB is not legally allowed to ration care.

    “‘Whilst the work is in progress, and public expression of doubt that the plan will be successful is an act of disloyalty and even treachery because of its possible effect on the will and efforts of the rest of the staff.’
    How many quotes from Nancy Pelosi spring to mind? Certainly, “We have to pass the bill so you will know what’s in it,” and in answer to a question of its constitutionality, “Are you kidding me? Are you kidding me?”

    Once again, parallels to the Bush administration come to mind, particularly regarding the PATRIOT act, torture, and the war in Iraq (criticizing anti-war protestors as not being supportive of the troops and thus unpatriotic).

    “The real conformity and immorality today will be found among college graduates. “Higher education” today has become “higher indoctrination,” where people are trained to parrot the words of leftist professors rather than think for themselves, and religion and morality has been all but abolished.”

    Replace “leftist professors” with Rush Limbaugh, Bill O’Reilly, or Glenn Beck and I think you have an accurate description of many people on the American right. I’m not disagreeing that this phenomenon exists on the left, but there does seem to be a severe lack of critical thinking on both sides of the aisle (abandoned at the expense of adhering to partisan loyalty).

    Your assessment of the state of American higher education is, quite frankly, a pretty unsubstantiated overgeneralization (common on the right, particularly those who did not attend or failed to graduate college) that seems more focused on discrediting people who disagree with you rather than taking their arguments seriously.

    Also, you seem to be equating morality with religion here (unless I’m misunderstanding you, in which case, please enlighten me) because I can’t see how the “educated classes” are in any way less moral as a whole than the “working people who faithfully raise their children, go to church, and believe in the American dream.” Once again, this comes across as a tired attempt to paint people with whom you disagree with a broad, inaccurate, unflattering brush.

  8. Frank Timmins says:

    Eric, where can I find a list of Bush’s 30 “Czars”?

    With regard to higher education and the notion of “indoctrination”, perhaps you miss the point. Limbaugh, O’Reilly, and Beck are political commentators and advertise themselves as such. I’m afraid that is not the same thing as left wing academia to which young people are exposed without choice (and who are by normal standards not supposed to be political). To play the “you are merely putting down the people that disagree with you” card is hardly a worthy point here. If you choose to debate the presumption that left wing academia does not influence young people politically, that would be a worthy (but fruitless)argument.

  9. Greg Scandlen says:

    Hi, Eric,

    Your comment is a hoot. I haven’t laughed so hard in months. Thanks. This might be the best of the collection. You write —

    “Your assessment of the state of American higher education is, quite frankly, a pretty unsubstantiated overgeneralization”

    And then you say –

    “common on the right, particularly those who did not attend or failed to graduate college”

    And you complete the trifecta with this –

    “that seems more focused on discrediting people who disagree with you rather than taking their arguments seriously.”

    Wow! I wish I had gotten the same education you did, so I, too, could contradict myself twice in each sentence and not even be aware of it.

  10. Greg Scandlen says:

    Hi, Don,

    Thanks for posting that quote. Perhaps some day the United States will be enlightened enough to provide the poor with food assistance, housing assistance, child care assistance, medical insurance, and old age retirement insurance, as Hayek wanted.

    Wait, my producer is talking into my ear piece. Uh, huh, uh huh, really?

    He tells me we’ve been doing that for decades. Gosh I had no idea.

  11. Donna Baver Rovito says:

    These are an extremely entertaining way to learn more about Hayek vs Keynes:

    “Fear the Boom and Bust” a Hayek vs. Keynes Rap Anthem
    http://www.youtube.com/watch?v=d0nERTFo-Sk

    Fight of the Century: Keynes vs. Hayek Round Two
    http://www.youtube.com/watch?v=GTQnarzmTOc

  12. Don McCanne says:

    Greg,

    Please thank your producer for reminding us that for decades we have had welfare programs for the destitute, even if some of them haven’t worked all that well. But Hayek was writing about social insurance.

    Let’s see if we can find another quote from him about social insurance.

    Oh yes. In his classic, “The Constitution of Liberty,” Hayek wrote, “There is little reason why the government should not also play some role, or even take the initiative, in such areas as social insurance and education…”

    It is difficult for me to interpret Hayek’s two comments on social insurance as representing a departure from standard definitions of social insurance – implying somehow that social insurance would apply only to the poor. In this quote, he surely does not suggest that the government should limit its role in education exclusively to education programs for the poor. Likewise, for social insurance.

    Wait. My producer is trying to tell me something. Frank Luntz? Oh yes, he says if facts don’t deliver your message, then dump the facts and shift to “government-run” or “death panel” type rhetoric that invokes passion instead – passion that will be more effective in selling your message.

    Let me try that.

    Hayek says that only the poor should have health insurance. I know it’s true because noted authority Greg Scandlen says so.

    (Disclaimer: The last paragraph was not submitted to FactCheck.org.)

  13. Eric says:

    @Greg

    Glad you enjoyed that, I aim to please. A fair critique of my last few sentences, I realize that irony is hard to get across on the Internet, and I probably should hav specified that I was speaking based on personal experience rather than making overly broad generalizations (if it came across that way, I apologize). I stand by my other critiques though.

    @Frank
    Here’s the list I found http://en.wikipedia.org/wiki/List_of_U.S._executive_branch_czars

    I realize wikipedia is far from an authoritative academic source (I guess I was able to learn something in school despite all the left-wing brainwashing) ), but it was the best thing I could find while I was writing my comment.

    @Don
    Well said. When the facts aren’t on your side, appeal to emotions and try to make people scared/angry. Both sides are certainly guilty of this, which cheapens our political discourse, reducing it to battles over straw men rather than real substantive discussions of the important policy issues of the day.

  14. Frank Timmins says:

    Eric, not to overly deal with minutia, but in the interests of intellectual integrity (which seems to be what this is all about), your source actually lists 28 “czarist” positions for G Bush in his 8 years in office. Mr. Obama in his 3 years in office has already set up 34 “czarist positions. Moreover, it seems Bush was careful to avoid naming any Communists or other radicals with little if any real world experience in the area of consideration as advisors. Obviously that cannot be said of Obama.

    Even more importantly, Bush’s advisors (czars if you wish) were actually pretty much that (advisors). As far as I know, other than the the Homeland Security office, these people exercised little power, unlike the modus operandi of the present administration.

  15. Greg Scandlen says:

    Okay, Eric, apparently you would like to have more of a discussion. I appreciate it, though your snarkiness is not confined to the little bit I responded to. You started right out with – “This post, however, strikes me as overly dramatic, rich in right-wing platitudes, and selectively ignorant of recent history.”

    I agree that Bush used executive orders and had czars. But, as you point out, Obama has had a lot more. I didn’t like it when Bush did it and I like it less now that Obama is doing it even more. Ditto with deficits, btw. Bush had big ones but Obama has taken it to a whole new level that we can never recover from. Seriously. I have yet to hear any economist anywhere explain to me how we will ever pay back $15 trillion in debt, even in theory. If you can come up with an explanation, I am all ears.

    Overall, I don’t understand the whole “Bush did it first” argument. I thought you didn’t like Bush, so in what way does that excuse Obama?

    Without doing a tit-for-tat on your comments, the passage of the ACA was the most corrupt example of law making I have ever witnessed, and perhaps in the history of the Republic. And the implementation is even worse.

    I notice, for instance, that you didn’t defend Sebelius’ waivers. Do you support a process that says, “everyone must obey the law except for those I decide don’t?” And based on no criteria whatsoever? Is this really what you had in mind when you voted for this fellow?

    Blind fealty is really unbecoming.

  16. Robert says:

    Greg,

    Good to see the Austrian school of economics penetrating to the level of policy “debates” here on NCPA. I find it somewhat disquieting that, although the ACA is just another in a long, long series of power grabs by federal legislators, there seems to be little understanding of the depth and breadth of the Levithan’s nefarious intent.

    While I agree with your general conclusion relating to resisting totalitarianism, each new piece of legislation passed by the State (federal, state or local) diminishes the social power of citizens and puts all members of civil society at risk of slavery.

    Ludwig von Mises wrote eloquently about Socialism in the early decades of the 20th century. Mostly unheeded then, von Mises and by proxy Hayek carried the torch of classical liberalism forward through the tumult of the insanity of the progressive era.

    Now, as we reenter the fray with even more ridiculous notions of social justice and State sanctioned definitions of “shared sacrifice”, prepare for fruit to be born through every “crisis” ordained, as such, by the said same mechanism originally designed to govern a “free” people.

    My primary point is that there is little heat and certainly no light to be gotten from a discussion of a plan devised to enslave the members of society if they themselves are unable or unwilling to sense the immediate threat.

    I like your regular contributions here and read NCPA often. You are on the right track with your analyses…keep it going.

  17. Eric says:

    @Greg

    Fair enough, I’ll try to tone down the snark. My point is that it’s somewhat hypocritical to be complaining about czars and executive orders now if you weren’t making similar complaints while Bush was doing the same thing while he was in office. I’m not pointing a finger at you specifically because maybe you were as vocal in railing against Bush’s use of executive orders and czars as you have been toward Obama (I haven’t been following your work for very long), but many politicians and commenters on the right seem to be very selective in their outrage.

    Similar story with deficits. I agree they are definitely a huge problem now, but very few people on the right (except perhaps Ron Paul) seemed to be very concerned when Bush turned the biggest surplus in the history of our country into what was at the time the biggest deficit by getting involved in several wars and giving a big tax cut that largely benefitted the wealthy. From what I remember, many people on the right supported Dick Cheney when he said (to treasury secretary O’Neill) “You know, Paul, Reagan proved deficits don’t matter.” To put the blame for the current deficit problem entirely on Obama is fairly absurd though, given the continued terrible state of the economy and the previous deficit situation. Maybe you have more faith in the president’s power to affect the economy than I do, but it seems to me that much of the crisis was out of his control.

    Believe me, I have plenty of quarrels with Obama, and readily admit that the ACA is far from a perfect bill (though likely for different reasons than you). I was also not particularly enamored with the way the bill was passed, though I do believe that Republican obstructionism played a substantial role in determining the course of the negotiations. Obstructionism as a political strategy is in large part a reason for the need for an institution such as IPAB and a lot of the policy czars, since Congress has again and again shown itself to be incapable of making certain tough decisions (especially about controlling health care costs).

    As for the waivers, the seeming arbitrariness of the process is a little bothersome, but I guess I am willing to give some benefit of the doubt rather than automatically assuming malevolent motives. If that makes me a bit naive, then so be it.

    I guess my point is that we need less knee-jerk partisan hysteria when it comes to discussing these complex policy issues.

  18. frank timmins says:

    Donna Rovito, thanks for the links – very funny indeed.

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