Hayek, Friedrich

Assigned: Hayek, Friedrich A. From The Constitution of Liberty, Chapter 6. “Equality, Value, and Merit”(1081-95). Also read the editors’ introduction (1079-81).

From The Constitution of Liberty (1960)

Chapter 6. Equality, Value, and Merit

1. On 1081-82 (“1. The great aim of the struggle for liberty…”), Friedrich Hayek argues that “Equality of the general rules of law and conduct […] is the only kind of equality conducive to liberty…” (1081) and defends the existence of various kinds of inequality in a free society. On what principle does Hayek defend classical liberalism’s insistence on the government treating all people equally in terms of their legal rights; i.e., in terms of “the general rules of law and conduct” (1082)? On what principle does he also defend the existence of various kinds of inequality?

2. On 1082-84 (“2. The boundless variety of human nature…”), why does Hayek believe it is crucial to oppose “the widely held uniformity theory of human nature” (1083 top) and instead to support the great variety in people’s “individual capacities and potentialities” (1082)? What is lost both individually and collectively, according to Hayek, when we assume that everyone is the same in potential and ability? On what grounds, too, does he oppose “the use of coercion in order to bring about a more even or a more just distribution” (1083) of wealth and position? How does he distinguish between “[e]quality before the law” and “material equality” (1083) and find the latter not only inadvisable as a demand but even constitutive of a fundamental threat to liberty?

3. On 1084-86 (“3. Our contention rests on two basic…”), what two “basic propositions” does Hayek set forth, and what inferences does he draw from them? Furthermore, why, according to Hayek, are “egalitarians” (1084) wrong to dwell upon whether an individual’s advantages stem from innate personal superiority or from environmental factors like being born into a wealthy, privileged family? How does Hayek defend the common practice of handing down advantages (he later names these as having to do with “morals, tastes, and knowledge,” 1086 top) through family traditions, connections and so forth—what social benefits does this kind of generational advantage confer?

4. On 1086 (“4. Many people who agree that the family…”), why, according to Hayek, is it a bad idea to prevent parents from passing along their material wealth to their kids? Why, in his view, is allowing inheritance a more efficient and just way to go about things than to pass a prohibitive estate tax or altogether prevent families from passing along their wealth from one generation to the next?

5. On 1086-88 (“5. Though inheritance used to be the most…”), Hayek argues against what he says is a new demand vis à vis education that goes far beyond classical liberalism’s insistence only that government should “make available to all on equal terms those facilities which in their nature depended on government action” (1087) and veers into egalitarian territory. Why does Hayek oppose the notion that everyone—regardless of their differences of whatever kind—must receive an education that eliminates inequality of results and assures equal prospects for future success? What unpleasant and destructive feeling does Hayek apparently believe underlies such egalitarian demands in education?

6. On 1088-90 (“6. While most of the strictly egalitarian demands…”), Hayek argues against what is today sometimes called “meritocracy”; he writes that “in a free system it is neither desirable nor practicable that material rewards should be made generally to correspond to what men recognize as merit…” (1088). What is the basis for Hayek’s opposition to the demand that reward should be determined and distributed on the basis of merit in the sense of praiseworthiness or moral desert? What assumptions detrimental to liberty must be made, according to Hayek, if we choose merit of this sort over what he calls “the value of the achievement” (1089)?

7. On 1090-91 (“7. The incompatibility of reward according to merit…”), how does Hayek further support his preference for “value” over “merit” (1090) as the arbiter of people’s choices and efforts? Why does he insist that the public, in the form of the “market” (1091), must be allowed to judge the results of someone’s efforts for their usefulness rather than simply rewarding the people making the effort on the basis of their supposed merit? How, according to Hayek, would doing the latter strip many people of a rational basis for making any effort at all, or pursuing any potentially valuable (if risky) social goal?

8. On 1091-93 (“8. Though most people regard as very natural…”), Hayek continues his defense of usefulness or “value” over “merit” in determining who gets what amount of money and benefits in a given society. How does he drive home the idea that it is in fact presumptuous for anyone to assume they know another person’s true moral worthiness? What argument does Hayek advance to support his view that the “value” standard would, overall, result in a happier, freer and more prosperous society? In what sense does his reasoning here and elsewhere with regard to merit’s inadequacy as a standard amount to praise for what critics of capitalism such as Thomas Carlyle and Marx & Engels might call “the cash nexus” or “cash payment” as the great decider among people in their social and economic lives?

9. On 1093-94 (“9. Justice, like liberty and coercion…”), Hayek argues that calls for “distributive justice” (1094) attendant upon a thoroughgoing meritocratic principle would unfailingly lead to an authoritarian society in which “authority decided what the individual was to do and how he was to do it” (1094). Why so? How would this kind of income (and privilege) redistribution, according to Hayek, lead a given society to become less and less free, and finally not free at all?

10. On 1094-95 (“10. In conclusion we must briefly look…”), Hayek takes aim at another argument in favor of egalitarian income redistribution; namely, the idea that “membership in a particular community or nation entitles the individual to a particular material standard that is determined by the general wealth of the group to which he belongs” (1094). Why does he oppose this—what harmful effects would supposedly flow from putting into execution such an assumption or idea? Hayek is not arguing that wealthy societies would be wrong to provide their least fortunate members with assistance; what, then, is he suggesting with the argument he advances? Why does he consider it necessary carefully to limit the extent of the demands for “rights” that every citizen may level against his or her fellow citizens?

11. General question: In Chapter 6 of The Constitution of Liberty, neoliberal theorist Friedrich Hayek repeatedly invokes and demolishes arguments demanding not simply equal treatment under the law (which he supports) but equality of prospects and outcomes. This would seem to be a case of argument by extremes: Hayek’s overarching opponent is state-based communism around the middle of the twentieth century. But in a capitalist order like the United States and the countries of Western Europe around 1960, does this argument seem entirely relevant? Who in the United States was really demanding “equality of outcomes” or communist-level redistribution of incomes? (The tax rates on huge incomes were actually very high in comparison to today, but there were also loopholes.) Is Hayek arguing against a straw man here or making unnecessary slippery slope arguments, or can you defend him from these commonly leveled charges? Explain.

12. General question: If you can’t defend Friedrich Hayek from the charge of making straw man or slippery slope arguments in Chapter 6 of The Constitution of Liberty that don’t take into account material realities, what more nuanced way of analyzing American and Western European capitalist societies might be available? Isn’t it the case, for example, that today’s Western economies (and a lot of non-Western ones as well) are essentially “mixed” in that they combine limited socialist principles with predominantly market economics? For example, America’s Social Security program is socialist-inspired, and most developed economies have something like “socialized medicine” whereby healthcare access is granted to all and paid for through taxation. If Hayek is right, how is it that such societies have retained their civil liberties and have not gone the way of communist tyranny?

13. General question: the notion of “meritocracy” against which Friedrich Hayek argues in Chapter 6 of The Constitution of Liberty is by no means gone today; indeed, it seems to be a major factor in the Republican Party’s thinking going at least back to the 1980s, when President Reagan emphasized the need to help mainly the “deserving poor” instead of all unfortunate Americans. Today, it is common to hear conservatives imply that wealth and moral worth are closely allied. Democrats, for their part, often call for greater taxation of the wealthy and income redistribution to the “hardworking middle class” (the very poor are not often spoken of by today’s Democrats—a stark change from the attitude that prevailed during Franklin Roosevelt’s New Deal of the 1930s), which is exactly the sort of appeal to meritocracy that Hayek finds unacceptable. What do you think Friedrich Hayek would say about America in the Age of Donald Trump? How would he assess the current state of American conservatism in particular, and how would he parse the principle or principles that seem to drive the contemporary Republican Party? Explain.

Edition: Leitch, Vincent B. et al., eds. The Norton Anthology of Theory and Criticism. 3rd ed. New York and London: W. W. Norton & Company, 2018. ISBN-13: 978-0-393-60295-1.

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