Did Hayek support a basic income guarantee?

A recent Swiss proposal for a basic income guarantee has sparked interest from commentators on both the left and right. In a discussion of libertarian arguments for the proposal, Bleeding Heart Libertarians blogger Matt Zwolinski suggests that the classical liberal economist Friedrich Hayek supported a basic income guarantee. He relies on a quote from Volume 3 of Hayek’s Law, Legislation and Liberty:

The assurance of a certain minimum income for everyone, or a sort of floor below which nobody need fall even when he is unable to provide for himself, appears not only to be a wholly legitimate protection against a risk common to all, but a necessary part of the Great Society in which the individual no longer has specific claims on the members of the particular small group into which he was born (p 395).

A number of writers, including Zwolinski, his fellow blogger at Bleeding Heart Libertarians, Kevin Vallier and Julie Novak of the Institute of Public Affairs seem to interpret this as a proposal for the government to pay every citizen a basic income, regardless of their income, assets or willingness to work. I think this is a misinterpretation of Hayek’s position. What Hayek actually proposed was a means tested scheme restricted to those who are unable to earn a living in the market.

What is a basic income guarantee?

Unlike most current welfare or social assistance payments, a basic income guarantee is both universal and unconditional. For those prepared to live on the low income it provides, the basic income guarantee offers an alternative to paid work. In a post at the Cato Institute’s Libertarianism.org, Zwolinski writes:

A Basic Income Guarantee involves something like an unconditional grant of income to every citizen. So, on most proposals, everybody gets a check each month. “Unconditional” here means mostly that the check is not conditional on one’s wealth or poverty or willingness to work.

Zwolinski says ‘something like’ because some basic income proposals like Charles Murray’s come with restrictions. In Murray’s plan, recipients must be 21 or over and not be in prison.

Hayek’s guaranteed minimum

While it’s true that Hayek supported a minimum income as a safety net for people who are unable to earn a living in the market, there is no reason to think he supported a universal or unconditional payment. The guaranteed minimum Hayek had in mind would be means tested and targeted to widows, the elderly, people with disabilities and others who were unable to earn a living through paid work.

Hayek’s rationale for a guaranteed minimum is to provide citizens with security against destitution. In Volume 3 of Law, Legislation and Liberty, Hayek argues that in pre-market societies people lived as members of small groups that shared resources. A large scale market society separates people from these groups and makes them vulnerable to misfortunes such as illness and disability. In the paragraph immediately before the one Zwolinski quotes, Hayek writes:

The problem here is chiefly the fate of those who for various reasons cannot make their living in the market, such as the sick, the old, the physically or mentally defective, the widows and orphans— that is all people suffering from adverse conditions which may affect anyone and against which most individuals cannot alone make adequate provision but in which a society that has reached a certain level of wealth can afford to provide for all (p 395).

So when, in the next paragraph, he refers to the "assurance of a certain minimum income for everyone" he isn’t suggesting that government pay every citizen a basic income regardless of their ability to provide for themselves. Instead he is suggesting that government provide every citizen with an assurance that their income will not fall below a certain minimum for reasons beyond their control.

Perhaps the clearest evidence that Hayek intended the guaranteed minimum for people who are unable to work, rather than those who choose not to, appears in an appendix to his last book, The Fatal Conceit (1988). Complaining that socialism "has taught many people that they possess claims irrespective of performance, irrespective of participation", he writes:

I do not question any individual’s right voluntarily to withdraw from civilisation. But what ‘entitlements’ do such persons have? Are we to subsidise their hermitages? There cannot be any entitlement to be exempted from the rules on which civilisation rests. We may be able to assist the weak and disabled, the very young and old, but only if the sane and adult submit to the impersonal discipline which gives us means to do so (p 153).

Given this statement it seems unlikely that Hayek would have supported an unconditional payment that supported people who chose not to work. In a much earlier work, The Road to Serfdom (1944), he argued that wealthy societies could provide citizens with security against severe physical privation but questioned "whether those who thus rely on the community should indefinitely enjoy all the same liberties as the rest."

Later on Hayek also argued against universal support. For example, in his 1960 book The Constitution of Liberty, he insisted that services and payments should be targeted on the basis of need:

The assurance of an equal minimum for all in distress presupposes that this minimum is provided only on proof of need and that nothing which is not paid for by personal contribution is given without such proof. The wholly irrational objection to a "means test" for services which are supposed to be based on need has again and again led to the absurd demand that all should be assisted irrespective of need, in order that those who really need help should not feel inferior.

… There can be no principle of justice in a free society that confers a right to "non-deterrent" or "non-discretionary" support irrespective of proved need (p 303-304).

Hayek’s position on the guaranteed minimum was consistent throughout his career

Rather than interpreting the comments in Volume 3 of Hayek’s Law, Legislation and Liberty about the "assurance of a certain minimum income for everyone" as a call for basic income guarantee, I think it makes more sense to read them as a restatement of a position he developed much earlier. Hayek outlined his position on a guaranteed minimum in his 1944 book The Road to Serfdom, clarified it in a 1945 radio interview and restated in The Constitution of Liberty (1960) and in Volumes 2 and 3 or Law, Legislation and Liberty (1976 & 1979).

In The Road to Serfdom Hayek writes that "there can be no doubt that some minimum of food, shelter, and clothing, sufficient to preserve health and the capacity to work, can be assured to everybody." In a 1945 radio interview he clarified his position by saying he supported the assurance of a minimum income rather than a guarantee of particular things. He also suggested that Unemployment Insurance largely achieved this. (p 114).

Hayek argued that government needed to give individuals security against destitution in order to preserve the free market system. As he wrote in The Road to Serfdom, "Some security is essential if freedom is to be preserved, because most men are willing to bear the risk which freedom inevitably involves only so long as that risk is not too great" (p 137).

In the The Constitution of Liberty he restated an argument he made in The Road to Serfdom — that there are two kinds of security and that government can provide only one:

The first of these is security against severe physical privation, the assurance of a given minimum of sustenance for all; and the second is the assurance of a given standard of life, which is determined by comparing the standard enjoyed by a person or a group with that of others. The distinction, then, is that between the security of an equal minimum income for all and the security of a particular income that a person is though to deserve.

In Volume 2 of Law, Legislation and Liberty, Hayek restated his support for a minimum income guarantee:

There is no reason why in a free society government should not assure to all protection against severe deprivation in the form of an assured minimum income, or a floor below which nobody need to descend. To enter into such an insurance against extreme misfortune may well be in the interest of all; or it may be felt to be a clear moral duty of all to assist, within the organized community, those who cannot help themselves. So long as such a uniform minimum income is provided outside the market to all those who, for any reason, are unable to earn in the market an adequate maintenance, this need not lead to a restriction of freedom, or conflict with the Rule of Law (p 249).

In 1978, the same year Hayek completed Volume 3 of Law, Legislation and Liberty, Hayek restated his position in an interview:

… once you have reached a certain level of wealth, I think it’s in the common interest of all citizens to be assured that if their widows or their children by some circumstances become unable to support themselves, they would be assured of a certain very low minimum, which on current standards would be miserable but still would secure them against extreme deprivations. But beyond that I don’t think we can do anything.

It’s clear from this and other comments that Hayek meant the guaranteed minimum to protect people from absolute poverty. In Volume 2 of Law, Legislation and Liberty Hayek suggested that, thanks to classical liberalism, 19th century England had already reached the stage where it could guarantee a minimum level of support. In a footnote (p 340) he quoted from an 1850 article by Nassau Senior:

… to guarantee subsistence to all, to proclaim that no man, whatever be his vices or even his crimes., shall die of hunger or cold, is a promise that in the state of civilisation of England, or of France, can be performed not merely with safety, but with advantage, because the gift of mere subsistence may be subjected to conditions which no one will voluntarily accept (p 275).

It may be that Hayek believed that the guaranteed minimum needed to be low in order to prevent people from dropping out of the labour market. Or it could be he imagined that people claiming the minimum income would have to provide evidence that they were making an effort to find work or were unable to work. If so, his guaranteed minimum would not be all that different to the social assistance schemes operating in many developed nations today.

Did Hayek support a basic income guarantee?

Zwolinski is right to argue that a basic income guarantee is compatible with the kind of classical liberalism Hayek supported. But it seems unlikely that Hayek himself supported a basic income guarantee.

Hayek’s goal is to protect individuals from absolute poverty that occurs for reasons outside their control. Hayek argued that in a well functioning free market system, the labour market would protect almost everyone who was capable of work. In Volume 2 of Law, Legislation and Liberty he argued that: "Nobody capable of useful work need today lack food and shelter in the advanced countries" (p 297). Unemployment insurance could protect workers from short term loss of income due to job loss, leaving the guaranteed minimum to take care of people who are unable to work.

So it seems to me that Hayek’s proposal for a guaranteed minumum is closer to current social assistance schemes than it is to the Swiss basic income proposal. Hayek did not support a basic income guarantee.

Note on references: Page numbers refer to the following editions of Hayek’s works:

The Road to Serfdom, Routledge Classics, London (2001)

The Constitution of Liberty, Chicago University Press, Chicago (1960)

Law, Legislation and Liberty: A new statement of the liberal principles of justice and political economy, Routledge Classics, London (2013)

The Fatal Conceit: The errors of socialism (The collected works of Friedrich August Hayek Volume I), Routledge, London (1988)

Hayek on Hayek: An autobiographical dialogue, University of Chicago Press, Chicago (1994)

40 thoughts on “Did Hayek support a basic income guarantee?

  1. Why is it so important to determine precisely what Hayek meant by the passage?

    Unless, of course, one takes a quasi-biblical approach to political economy, where the correct policy position is determined by whatever position the Holy Book(s) and/or Great Prophet(s) are said to have advocated. Is demonstrating strict adherence with the tenets of Hayek now a prerequisite for getting baptised or married in an orthodox Libertarian Church? ;)

  2. GMI was around when I was at Uni, back in the 1980′s. I took it to mean, that it was given to all, with no means test.

    Not as generous as it appears at first glance.

    The claw back, comes within the taxation system.

    The need for pensions and other benefits are removed.

    One needs this to be, to make it cheap and simple to administer.

    It also means that many social service benefits one gets now can be dumped.

    Cut out the need for many PS we now have.

    If one is happy to survive on what will be a very low income, that is their choice.

    Once you start means testing etc, the benifts gained will be lost.

    • The claw back, comes within the taxation system.

      Yes, exactly… at the end of the day things must necessarily be paid for by someone. Thus, if I’m a well to do businessman, collecting my “basic income guarantee” then in order for that income guarantee to exist at all, I must always be (on nett) a payer of tax so that someone else can (on nett) be a receiver of wealth transfer. It is literally impossible for such a system to work any other way.

      I’m absolutely sure that Hayek understood this.

      Thus in terms of the difference between some sort of means-tested payment and some sort of automatic invariant payment, well there is no difference other than at which stage in the process the means testing is applied. It may be operationally more convenient to organize things one way or another way, but that’s only an implementation detail.

      In The Road to Serfdom Hayek writes that “there can be no doubt that some minimum of food, shelter, and clothing, sufficient to preserve health and the capacity to work, can be assured to everybody.”

      Personally I would prefer that our society made food available very cheaply (or even for free in limited quantities) rather than handing out money to buy food. There is a qualitative difference because money to buy food can just as easily get spent on the pokies or on drugs, while offering someone a place to sit down and have a meal guarantees that what they took was really a meal. Also, if the meals you offer are good enough but not wonderful, then the well to do will self-select and choose buy something classier, so you don’t have to waste energy on means testing.

      You can test this next time someone asks you for money in the street, offer them food instead.

      Religious charity used to work this way all the time, until governments came along and decided they would do better.

      • Love the idea of a basic unconditional income for everyone as the Swiss movement is proposing.
        I was a little taken aback by the amount they proposed – $A 3000 a month( and rising !) Interestingly that exceeds the median( would need to check but it will be close) and average incomes in the area I live.
        In exchange for this would we then see wholesale howling directed at more punitive demands re criminal sentencing?
        30 years ago I remember having a long chat about this with some earnest friends who felt the only condition that should be attached was to obey the law.

  3. You quote Hayek:

    “… There can be no principle of justice in a free society that confers a right to “non-deterrent” or “non-discretionary” support irrespective of proved need.”

    Fine. Then inherited wealth must be unjust.

    OTOH… If inherited wealth is somehow thought to be just (I don’t know what that principle would be, but if it is) then our society has a certain wealth which we have inherited. It would follow that it would be just for us to inherit it as a guaranteed minimum income.

  4. ” Then inherited wealth must be unjust.”

    If this is true, how does one fix the injustice. Could those old fashion death duties be needed?

  5. What Tim said. A pretty pointless exercise. Who cares what Hayek thought? What are the arguments for and against a guaranteed minimum wage?

  6. What Tim said. A pretty pointless exercise. Who cares what Hayek thought?

    The answer is obvious, I would’ve thought. Many libertarians name drop Hayek as a deistic figure and you can shoot them down in flames if you can demonstrate that you understand Him (capitalisation intended) better than they do.

    • Mel,

      Many prominent libertarian thinkers advocated for a guaranteed minimum income, Milton Friedman and Ludwig Von Mises for example. They mostly understood it as a more efficient way of delivering welfare than through government-provided services. I don’t know how this understanding shoots libertarians down in flames.

      Ravi

    • Sorry Mel, but Shakespeare has you covered:

      “Mark you my words Bassanio. The devil can quote scripture for his purpose”.

      Libertarians are impervious to even Hayekian sanity.

  7. And speaking about Libertarians – although what more is there to say? – it was a brilliant idea for RN to put Julie Novak on this morning to discuss her ‘economic’ theories. It is becoming increasingly clear even to the economically illiterate how naked, pale and so very ‘cold’ those theories are.

    I was so interested in a woman Libertarian that I even went to that famous libertarian and centre right blog to read some of her stuff. Waste of time, all the focus is on the dreaded devil of Socialism. They have this idea that collectivism is an ideological stance.

    They seem to be failing to understand that there is evidence, things like facts from research and a rational argument to show that collectivism is efficient and I don’t understand their way of defining efficient.

    • Julie
      ” individualism is the best and not the worst foundation upon which to build up collective discipline”: John Monash .

      It is simply a matter of undeniable historical fact that socialist collectivism based as it was in totalising , we know best ,do as your told , just get used to it, was/is murderously inefficient and wasteful.

        • Julie,
          You are right that communism (of the historical kind) is not likely to see a serious revival. The question that is most relevant in the majority of the developed world is ‘to what extent should government intervene in the economy.’ There are good arguments and evidence on both the libertarian (deadweight loss and economic calculation particularly) and social democrat (marginal utility and market failures) side. Your comment seemed to imply that libertarian views had no basis in evidence.

          Ravi Smith

        • Julie
          what do you mean by “collectivism” and how do you define efficient? :
          “They seem to be failing to understand that there is evidence, things like facts from research and a rational argument to show that collectivism is efficient and I don’t understand their way of defining efficient.”

  8. John, I don’t think that anything that matters can be satisfactorily defined or explained but it’s interesting to talk about.

    The collective I imagine is not a thing that can be defined; it is perhaps more a thing that emerges when people are co-operating. Co-operation is essential for a good society and of course competition is essential for a good economy but we all know that. The economy gets so much attention from both right and left.

    But on social stuff what do we get from the right, from the Libertarians and Conservatives or whatever they really are? Nothing except ‘traditional family is all good and no bad’ from the Cory Bernardi and nothing from Libertarians except the ‘belief’ that when everyone competes all will be well.

    Sorry for the off topic Don Arthur but I’m over Hayek. He lost me somewhere on The Road to Freedom when he described two sorts of people and the ones he said were no good people, sounded just like me. I got a bit offended and threw the book away.

    He also quoted Benjamin Franklin – who said that those who give up essential liberty to purchase a little temporary safety deserve neither liberty or safety – and again, there’s me relegated to the dustbin because as a woman I have had to do that all my life. :)

    • Julie,
      Since when have libertarians considered ‘family values’ to be ultimate? This is one of the primary differences between conservatives and libertarians. Also, the market is one means of cooperation. Billions of people all cooperate to fulfill each others desires based on the price system. You can claim that a centrally planned economy or a local economy based on obligation are more humane, but all are ultimately forms of cooperation. For libertarians, competition is the means of restraining the privilege of the few. Planned economies use independent experts for the same purpose. A more prudent question would be how do different economic systems tackle privilege?
      Ravi Smith

      • Ravi you misunderstand me and that isn’t an unusual occurrence so no worries, but it is my complaint that Libertarians have nothing – zero zilch etc – about family values and that is the problem.

        The market may be one means of cooperation but it doesn’t work because it does not take into account the actuality of human nature.

        Libertarians may well claim to see – reference? – competition as the means of restraining the few but it clearly doesn’t work and it is all BS about government regulation being the reason that pure Libertarianism doesn’t work.

        Your theory doesn’t work because you know nothing about the ‘other’ people like me who don’t want what you want and find your version of freedom is slavery to the weak and meek.

        I totally agree that the question is how to tackle privilege but the answer to that question goes back to the first point, which is that Libertarians have nothing to offer about how family values and a good society are the only way to tackle privilege.

        • Ravi—
          “the market is one means of cooperation. Billions of people all cooperate to fulfill each others desires based on the price system.”

          Libertarians like to claim cooperation because they are salesman (can be persons but are mostly men) and cooperation is a positive selling point. But it is like saying bees cooperate with flowers. Or trees cooperate with animals by breathing carbon dioxide. Sort of true but it degrades the word to meaninglessness. If you want to call haggling over price “cooperation” then you’d need another word for the sort of genuine cooperation that Julie would accept.

          I don’t think Read uses “cooperation” in “I Pencil” which is to his credit. Friedman in associated comments does. It’s gilding the lily.

          For all the libertarian principles, participants in the market are human and they often do genuinely cooperate. Sometimes they get caught and are fined millions.

          Julie—

          Actually libertarians should be big on family values. The family relationship is like a market relationship in the sense that it is hard to enter and easy to exit. It is an environment which facilitates the monitoring of reputation and trust (vital to libertarians) and the reciprocation score (the favours done, returned, repudiated) is kept for decades.

          The left, on the other hand, tends to reject the family. All men should be brothers. Left religions often use family terms for office holders and because the intrinsic exclusivity of the genetic family is anathema, it is quite usual for them to require that recruits break with their family.

          One reason the free marketeers are big on family is that this is basically the only purpose in life for them. The left has the grand vision, the ultimate utopia, but the only conceivable purpose in a libertarian life is to give your children a better start than your neighbour’s children.

        • Julie,
          Sorry for the misunderstanding. Thanks for clarifying.
          1. What are your criteria for a system that works? Almost all developed nations utilize an economic system that is mostly market-based. The countries with the highest degree of economic freedom (Fraser Institute + Heritage), Hong Kong, Singapore, New Zealand, and Denmark tend to do well in a variety of other measures as well. Yes, Homo economicus is not an accurate depiction of human nature. But do you contend that self-interest plays no motivating role? Out of curiosity, what other system is better suited to human nature?
          2. This is a claim that is pretty central to libertarian ideas. These are from blogs that describe some of the claims: http://www.econlib.org/library/Enc/RentSeeking.html and http://www.themoneyillusion.com/?p=18644 Do you hold that competition doesn’t work at all? If so, are antitrust laws completely useless? When I lived in Australia, Telstra had a monopoly on telecommunications and prices were much higher than they are in Canada where there is greater competition. Is this a coincidence? Those who claim that pure Libertarianism would work if there was no regulation are making a claim that cannot be proved, so yes, it probably is BS. Many libertarians do not take such a position.
          3. Julie, you have the right to think as you see fit. To each their own. What happens to everyone who disagrees with your version of freedom? Hard-core libertarians usually cite the non-aggression principle as their definition of freedom. How do you define freedom?
          4. How do we prevent the build-up of privilege in society today? The government certainly has an important role to play. However, as predicted by public choice theory, the government itself is a major source of privilege. Combining the wealth creation of the market with the security of social insurance is a complex issue. I favor something along the lines of a liberalized market economy with money given to low income earners financed by a progressive consumption tax. What kind of society do you wish to have?

        • Mike,
          Thanks for the reply. Of course libertarians are trying to sell their ideas. That is true of any political philosophy. You are spot on in the sense that people tend to view cooperation as more personal interactions. The problem is that in large societies, one cannot know everyone that they have economic interactions with, so traditional ‘cooperation’ is not really an option. The market is a decentralised means of coordinating economic activity. The government is a centralized means. Neither is traditional ‘cooperation.’ Surely both have a meaningful role in a modern economy right? Also, almost all libertarians believe that voluntary civic institutions have a role in society along with the market.
          Ravi Smith

    • Julie
      ” I don’t think that anything that matters can be satisfactorily defined or explained but it’s interesting to talk about.”
      Does that mean that you, yourself, do not know what it is that you are talking about?
      “Precisely vague” definitely does not = it can be anything.

      BTW
      “the Collective” has bloody awful historical associations , if you mean: co-operation based in free association, then use the correct terms.

      • I do ‘know’ in one sense of the word to know, what I am talking about but I am pretty sure that I cannot put my ‘knowing’ into words that would have enough meaning for you to accept that I do know anything. :)

        And, yes I am totally ignorant – and I have admitted to having had a very ‘irrational’ upbringing and education so it’s not my fault – about the historical associations that the term ‘the collective’ has. I met a couple of socialists once a long time ago, but my dad said they are fools and Australia is not a country where that sort of thing is needed. Something like that, but of course that is me just remembering the way that I want it to be.

        I will rely on you to correct me about the appropriate term when you recognise that I have inadvertently used the wrong term. But how long until we can change the meaning of the term collective?

        For example, there is a debate going on at one of the evo psych blogs about whether it is okay to call women hysterical without some of us getting all hysterical and taking it personally as an insult. It was a nice discussion. So the meaning of the word hysterical can change but maybe ‘the collective’ a different sort of a word and won’t be changed?

        And really John, seriously I have to type all that ; ‘co-operation based in free association’? instead of collective? I will have to remember how to write a macro.

  9. John I do know that it was really awful. I did read Ivan Denisovich and lots of historical novels – reputable historical novels you know.

    Is there some reason that I ‘should’ know more about it; about the details? I don’t like to know the details of the horrors that men do to men. I don’t think I need to understand any more horror than I already know about, to live a good life and advocate for a society that will work for me and mine.

    But thanks for the link. The library is/are? sick of me asking for books all the time.

  10. So I thought that probably you are scoffing at my historical novel reading habit, John and I will provide you with a link to one of my favourite authors who writes about people – not real historical people but real people with real characters/psychologies – within an accurate historical setting.

    http://en.wikipedia.org/wiki/Dorothy_Dunnett

    But really my initial whinge was that I don’t understand the point of continuing to tell us how bad it was under ‘collectivism’ when everybody knows this. Can’t ‘they’ tell us something new?

  11. Mike yes and there needs to be some way of ‘reconciling’ – or something like that – all the best bits of all the knowledge that we, collectively, have developed about human nature and the types of societies in which we can flourish or ‘progress’. There are so many types of human ‘personalities’ and each of these types can understand how they need society to be structured so that it works well for them and their type of person.

    Now, the need is for us all to understand that human nature is diverse – it has to be or we would not be such an adaptable species – accept that we are the same in many ways but very different in other ways and some of us have different requirements or environments in which we will ‘prosper’ and the best society is going to be one that recognises that there is a value to be found in all human abilities.

    The main problem that I see is that Libertarians totally ignore the fact that women have the babies and that if we all chose freedom, there would be no babies.

    And one thing that has always bothered me about Libertarianism is that if I choose to procreate, I have to give up my freedom to live ‘free’; I have to find a partner who will support me through this time. Unless I am a woman of calibre of course, who can work while pregnant, but for a nurse or other servants of the wealthy who do manual work, continuing to work throughout the pregnancy can affect the outcome and so the choices for this most basic of human activities is simply ignored as an issue.

  12. Ravi

    “Julie, you have the right to think as you see fit. To each their own. What happens to everyone who disagrees with your version of freedom? Hard-core libertarians usually cite the non-aggression principle as their definition of freedom. How do you define freedom?”

    Nothing happens to those who dissagree with my version of freedom, I have no power to interfere with their lives. It is I as one of the stupid and lazy who has needed the state to support me and provide me with the necessities of life who things happen to because others have decided that I am worthless and cannot contribute to a decent society.

    Read Hayek – in the Road to Surfdom – on the two types of people and how the anxious and those who lack confidence are a waste of space. But that has not been my experience. I am one of them and I know lots of others just like me and that they are not stupid and lazy and do not make bad choices. I live among these anxious depressed angry resentful losers and love them for their difference, for not being greedy selfish asshat Libertarians.

    Freedom is another word for nothing left to lose. :)

    • Julie,
      1. Those who disagree with your version of freedom are forced to pay taxes to support you. This may be justified by their level of wealth, but it certainly must be taken into account.
      2. You hold many assumptions about libertarian beliefs that are not true. Libertarian philosophy doesn’t describe welfare recipients as stupid and lazy. Making gross generalisations about groups of people is immature, although people of all political stripes do this.
      3. You classify all libertarians as greedy and selfish. Yet, two of the most important libertarian policies, free trade and open borders, would dramatically decrease poverty. The massive decline in world inequality over the past 30 years has taken place almost entirely due to market liberalisations in Asia (do you disagree?) Open borders would also roughly double the level of wealth in the world (http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.25.3.83). Governments keep a lot of talented people in unproductive places.
      4. Government certainly has important contributions to creating a decent society. It is also directly responsible for a wide variety of inhumane actions Eg. War, immigration restrictions, occupational licensing laws that prevent the poor from working, protectionism etc. Libertarians are clearly not right about everything, but they can contribute a lot to the discussion on how to create a world with less human suffering.
      Ravi Smith

      • Ravi

        1. Yes I think there has to be a better way than ‘forcing’ people to pay tax to support me. Have to say that your use of ‘forcing’ is as annoying to me as my use of stupid and lazy and greedy and selfish are to you.

        So do you have any ideas about this problem? I keep asking you with the political theory tell me how I can be free to have and raise a child the way a child should be raised within a libertarian society – that doesn’t even exist? Or is providing children only to be done by women of calibre? Is that the idea?

        2. What words would you prefer me to use, rather than stupid and lazy, to describe the way you judge the people who are losers in your system?

        3. Libertarians do have policies that could contribute toward better societies.

        4. Your idea of what the state is or does is rigid and as unhelpful as is the idea of the collective being a bad thing.
        Surely, the state can be anything that the collective decides it will be. The collective in this case being the thing that emerges – like self-organisation – when free – and not that free – people get together and have a respectful problem solving session about how to make a free society.

        • Julie,
          1. Sorry, I’ll try to use less confrontational language. ‘The way a child should be raised’ is based on personal opinion. Do you want to raise your child in the city (expensive) or in the country (cheap)? How many children do you choose to have? When in your life do you start having children? These tradeoffs vastly change the amount of resources needed for raising a child. I would agree with Milton Friedman in proposing a negative income tax (giving money to low income households) financed through a (highly efficient) consumption tax. This would replace welfare with a small income that guaranteed the necessities of life. Also, yes, there are not fully libertarian societies. There are also no fully feminist or atheist societies. That doesn’t detract from the value of these philosophies.
          2. Loser means different things to different people. I have friends who have chosen to go into fields that are less lucrative because they are happier there. People should be free to do as they please with themselves and their property. Having different values doesn’t make someone ‘stupid and lazy.’
          3. Progressives and libertarians both have policies that would benefit society. Dialogue like this helps us understand the other’s point of view.
          4. Yes, the state can play a useful role in creating a free society. It can also act as a tool for elite’s to maintain power. Public choice theory details how this may occur. The main thrust is dispersed costs and concentrated benefits. This gives the rent-seekers a much greater incentive to protect their privilege than any voter has to fight against it. This dynamic limits what is possible for governments to do.

          I still hold that open borders, free trade, and third world market liberalisation offer far more benefits from a utilitarian perspective than the small increases in the welfare state that progressives frequently promote. At least if people born in foreign countries, like myself, have equal rights.

  13. Ravi your language – eg the typical way that libertarians use the term ‘force’ – is not confrontational, it is simply wrong because it closes down any discussion with anyone who sees the world differently.

    Which is what libertarianism does for any concept that ‘it’ can’t comprehend, which is why I am here; to point out to you what libertarianism lacks and why it cannot be taken seriously as an answer to the problem of how we humans are to live with each other in a society that provides each of us with the best chance of having a good life.

    Ravi I only want to talk to you about babies. This is where it all starts you know, with the child who becomes the ‘man’. Now you may not have noticed but having a baby is not a ‘choice’; it is reproducing the species. If we all choose freedom there would be no species.

    So you must deal with biology as we are all biological creatures; until the singularity occurs of course.

    So Ravi, If everyone has a right to a choice so how can we make a society in which a baby has a right to choose its parents?

    I would like an answer to my questions or for you to say something I don’t already know about libertarianism or we are done I think.

    • Libertarians favor a society that minimizes the use of violence or the threat of violence. Can you describe a society that ‘provides each of us with the best chance of having a good life?’
      Economic freedom highly correlates with women having fewer children (demographic-economic paradox). So yes, libertarianism sucks if it is measured solely by total fertility rate.
      If a child wants different parents, they can become emancipated and then adopted to parents who are willing to have them. If you think I am joking, this how I have my parents now. I do think this conversation is probably finished.
      Ravi Smith

  14. Libertarians favour a society in which they get more stuff than others who are less able than they are to succeed in that type of society. Read something outside your comfort zone, something that stretches your ability to imagine that there are other people who live on this planet who do not want what you have on offer.

    Your version of ‘freedom’ sucks for the most of us. I am so fckn happy to hear that libertarianism provides you with all you need to know about a good society. Well done dude, that is all that matters after all :)

    • Julie,
      You have simply redefined libertarianism to match your preconceived notion of it. Your argument has become a pure ad hominem attack. This conversation is indeed over.
      Ravi Smith

  15. Clearly Ravi Libertarians have nothing to add to any conversation that is going on in the world currently. The silence from libertarians – except your good self and you are very brave to attempt this conversation – to this post about Hayek’s ideas is quite significant.

    The problem is that like all of your type of personality, you are simply unable to think outside your own interests. Your sort of person seems unable to understand that there is a difference between self interest properly understood and the self interest that says, well libertarianism suits me and it made my life better so it must be great for everyone else also.

    Thank you Ravi it has not been an unpleasant experience for me. I hope you are not too offended with people like me who are being stepped on and made very unfree by your simplistic adolescent belief system and are now fighting back for a society rather than an economy in which to live.

    • Julie,
      Thank you for your time. Maybe my belief that libertarian policies offer the best chance of relieving human suffering on a global scale (open borders, trade, and liberalisation) is naive. Maybe my value system will change once I am no longer an adolescent. Until that happens, I will fight for what I considered to be the most just system. I wish you well in your fight for a just society as well.
      Ravi Smith

  16. Oh dear…Hayek was a closet Keynesian..the horror, the horror.
    Perhaps he realised, like Keynes, that too much pressure on the plebs could produce unintended consequences for the elite feeding off them, as the Romanovs found out in 1918.

  17. Thank you for this post. It seems that, of the following three government welfare positions, Hayek holds #3:

    1. Basic minimum income guarantee, without means-testing.

    2. Minimum income guarantees based on need, with “need” determined by administrative discretion.

    3. Minimum income guarantees based on need, with “need” determined by certain generalized legislative agreement.

    I think a reasonable argument can be made that option (3) is impossible without the legislature choosing a program like either option (1) or option (2). And I don’t know how Hayek would respond to that argument. But I do see his starting position as being option (3).

    • A basic income guarantee with monotonically non-decreasing marginal tax-and-clawback rates requires a lack of means testing. If you eliminated the bottom few tax brackets (the tax free threshold and above) you could crystallise their tax expenditure value into a certain basic income with a flat (or fewer-bracket) tax system on top of that.

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