Why Rudd is wrong about Hayek
Friedrich Hayek argued that human beings are "almost exclusively self-regarding", says Kevin Rudd. In contrast, modern Labor "argues that human beings are both ‘self-regarding’ and ‘other-regarding’." But what Hayek actually argued was that human beings naturally tend towards other-regarding sentiments such as altruism and solidarity. Surprisingly, he believed that modern civilization depends on our ability to suppress these sentiments.
Rudd’s Hayek is a cardboard cutout — a stereotypical neo-liberal who believes that human beings are innately selfish and who wants to turn everything into a commodity to be bought and sold in the marketplace. For Rudd, Hayek is the intellectual heir of Thomas Hobbes.
According to Rudd:
Neo-liberals speak of the self-regarding values of security, liberty and property. To these, social democrats would add the other-regarding values of equity, solidarity and sustainability. For social democrats, these additional values are seen as mutually reinforcing because the allocation of resources in pursuit of equity (particularly through education), solidarity and sustainability assist in creating the human, social and environmental capital necessary to make a market economy function effectively.
The self-regarding values are the values of the marketplace — the institution neo-liberals place above all others. According to Rudd, neo-liberals refuse to tolerate the intrusion of other-regarding values into market relationships. This leads to the erosion of the kinds of institutions that conservatives value. Family, church and community all suffer when they come into conflict with the market’s demands. Labour market deregulation, for example, exacerbates the tension between a person’s obligations as a worker and their obligations as a spouse, parent or carer.
Rudd may be right about the way free markets create conflict with other institutions, but he’s wrong about Hayek’s stance on human nature. Hayek that the only way that we could make "a market economy function effectively" was to suppress our innate desire for altruism and solidarity.
Like Rudd, Hayek did not believe that human beings are "almost exclusively self-regarding". Instead, he thought that we instinctively lean towards other-regarding values like altruism and solidarity. Unlike Rudd, however, he thought this was a problem.
In his last book, The Fatal Conceit: The Errors of Socialism, Hayek argued that our values are the product of two separate evolutionary processes. The first biological and the second cultural.
Biology and emotion
According to Hayek, our species has adapted to its environment by developing instinctual responses. Like many other animals, early humans survived by living together in small groups. These groups relied on shared aims and perceptions to coordinate their activities:
These modes of coordination depended decisively on instincts of solidarity and altruism — instincts applying to the members of one’s own group but not to others. The members of these small groups could thus exist only as such: an isolated man would soon have been a dead man. The primitive individualism described by Thomas Hobbes is hence a myth. The savage is not solitary, and his instinct is collectivist. There was never a ‘war of all against all’ (p 12).
This ‘natural morality’ survives even though our circumstances have changed. According to Hayek, civilization depends on our ability to suppress our natural emotional responses.
Culture as a ‘second nature’
If human beings had insisted on treating everyone in the same way as they treated members of their small group, the free trade would never have taken root. Hayek argues that, "An order in which everyone treated his neighbour as himself would be one where comparatively few could be fruitful and multiply" (p 13). Over time, people learned how to cooperate with others who were not members of their own small group and who did not share their aims and loyalties. They did this by agreeing on abstract rules:
These rules are handed on by tradition, teaching and imitation, rather than by instinct, and largely consist of prohibitions (‘shalt not’s’) that designate adjustable domains for individual decisions. Mankind achieved civilisation by developing and learning to follow rules (first in territorial tribes and then over broader reaches) that often forbade him to do what his instincts demanded, and no longer depended on a common perception of events. These rules, in effect constituting a new and different morality, and to which I would indeed prefer to confine the term ‘morality’, suppress or restrain the ‘natural morality’… (p 12).
For Hayek, these rules developed in much the same way as language. Morality was a human creation in the same way as language was a human creation. Nobody invented right and wrong. Instead, moral rules developed through a process of trial and error.
For those of us in the industrialised West, morality includes rules about respect for private property, keeping promises, and paying our own way. These are the values which have made market society possible. Undermining them places everyone’s material well-being at risk.
The dangers of emotion and rationalism
Even though market society allows us to live much more comfortable lives, Hayek believed that most of us struggle to live according to market morality. It is part of our nature to want to belong to a community whose members are united by common goals and shared loyalty. As a result:
Constraints on the practices of the small group, it must be emphasised and repeated, are hated. For… the individual following them, even though he depend on them for life, does not and usually cannot understand how they function or how they benefit him (p 13-14).
Ordinary people often find market society alienating. They find its demands heartless and inhuman. Why, they ask, should drought force farmers off their land when the government could simply make other citizens share? Why should rich parents be allowed to buy their children places in university when more smarter, more hard working students miss out? The democratic state is constantly under pressure to run society as if it were a tribe — sharing out resources and enforcing conformity with shared norms.
According to Hayek, these instinctive, emotional reactions are often encouraged by leftist intellectuals. While ordinary citizens struggle emotionally, leftist thinkers struggle intellectually. Intellectuals often regard traditional moral rules as irrational. Just as engineers want to replace traditional building practices with science and technology, intellectuals want to reconstruct morality according to rational principles. But according to Hayek, the results are usually no more successful than attempts to construct new and more rational languages.
What about the family?
Altruism and solidarity still have a place in society. According to Hayek there still exist:
…many, often overlapping, sub-orders within which old instinctual responses, such as solidarity and altruism, continue to retain some importance by assisting voluntary collaborations, even though they are incapable, by themselves, of creating a basis for the more extended order. Part of our present difficulty is that we must constantly adjust our lives, our thoughts and our emotions, in order to live simultaneously within different kinds of orders according to different rules (p 18).
Hayek admits that if "were always to apply the rules of the extended order to our more intimate groupings, we would crush them" (p 18). Like Rudd he saw the importance of other-directed values. But unlike Rudd, he never seriously considered the effect that the expansion of the market sphere might have on institutions like the family, church and community — or on environmental problems like climate change. Evolution has no purpose or end point, so there’s nothing to stop an unregulated market taking us out on a limb that’s unable to support our weight.
Was Hayek right?
Hayek worried that if we allowed the morality of the family and small group to intrude into the marketplace, we would end up destroying the economy and plunging society into poverty. But across Western Europe social democratic governments have incorporated values of altruism and solidarity into institutions like the welfare state without the destroying the market. If there is a road to serfdom, it is a much longer and twistier road than Hayek imagined.
And apart from the threat of chaos and starvation, Hayek has no real reason for favouring classical liberalism over social democracy. In fact, he is unable to mount an argument in favour of modern civilization over the kind of pre-modern hunter gather life advocated by the most extreme environmentalists. For Hayek, there is no reason to prefer one way of life to another. And worse still, Hayek has no answer to people who place more value on solidarity and honour than they do on their own survival.
Postscript: Why Don was wrong about Rudd
I’ve been unfair to Kevin Rudd in this post. In his article for the Monthly — ‘Howard’s Brutopia’ — he does come to grips with Hayek’s arguments about solidarity and altruism. I wrote this post based on Rudd’s op-ed piece — before I’d had a chance to read his article. Rudd’s discussion relies heavily on David McKnight’s book Beyond Right and Left. McKnight’s book is worth reading if you want a concise but well informed account of Hayek’s views from a left perspective.
If you’re interested in Rudd’s claim that there’s a contradiction between the right’s commitment to both family and market individualism you might also want to read Anthony Giddens’ 1994 book Beyond Left and Right. Giddens argues that:
If one is going to advocate individualism and individual initiative in the economic sphere, it makes no sense not to extend these to other domains as well, including that of the family. There is a damaging contradiction at the core of neoliberal thought. On the one hand in encouraging the free play of market forces, neoliberal political philosophy unleashes detraditionalizing influences of a quite far -reaching kind. On the other hand, the very traditional symbols which these influences help to dissolve are held to be essential to social solidarity. It is not surprising that New Right doctrines mix liberal freedoms and authoritarianism — even fundamentalism- — in an uneasy and unstable fashion (p 40).
Links: Kevin Rudd, ‘Howard’s Brutopia’ (pdf)