Hayek Shrugged


Ayn Rand despised Friedrich Hayek. In a letter to Rose Wilder Lane she described him as "an example of our most pernicious enemy". At Thoughts on Freedom, Andrew Russell takes issue with some of my earlier comments on the Rand/Hayek dispute. In the comments thread Daniel Barnes joins the debate.

So why did Rand despise Hayek? I think Daniel gets it right — she believed that Hayek was guilty of compromising on moral principles. For Rand this kind of compromise was unforgivable. As the hero of Atlas Shrugged says; "In any compromise between food and poison, it is only death that can win" (p 965).

What did Rand say about Hayek?

Apart from some jottings in the margins of The Road to Serfdom, Rand’s comments on Hayek are confined to her letters — one to Leonard Read and the other to Rose Wilder Lane. In her letter to Read, Rand complained that respectable conservative newspapers, magazines and book publishers were:

…staffed with pinks who maintain a blockade against all real advocates of our side. Only the Hayeks and such other compromisers are allowed to get through, the kind who do more good to the communist cause than to ours (p 299).

When Lane wrote to her asking "Do those almost with us do more harm than 100% enemies?" Rand replied:

The standard of judgment here has to be the man’s attitude towards basic principles. If he shares our basic principles, but goes off on lesser details in the application of these principles, then he is worth educating and having as an ally. If his "almost" consists of sharing some of the basic principles of collectivism, then we ought to run from him faster than from an out-and-out Communist.

As an example of the kind of "almost" I would tolerate, I’d name Ludwig von Mises. His book, Omnipotent Government, had some bad flaws, in that he attempted to divorce economics from morality, which is impossible; but with the exception of his last chapter, which simply didn’t make sense, his book was good, and did not betray our cause. The flaws in his argument merely weakened his own effectiveness, but did not help the other side.

As an example of our most pernicious enemy, I would name Hayek. That one is real poison. Yes, I think he does more harm than Stuart Chase (p 308).

Rand believed that Hayek had compromised moral principles. He was a man who lacked integrity.

Reason and moral values

Rand believed that that every individual must discover their own purpose through conscious thought. Like a character in a Terry Goodkind novel, a Randian hero must first discover who they are before they can decide what they should do. Unlike David Hume, Rand did not believe that reason was the slave of the passions. An individual should never allow their life to be ruled by subjective preferences or whims. She called her philosophy Objectivism because she believed that " the good is an aspect of reality in relation to man — and that it must be discovered, not invented, by man" (p 22). As Leonard Peikoff explains:

Objectivism holds that value is objective (not intrinsic or subjective); value is based on and derives from the facts of reality (it does not derive from mystic authority or from whim, personal or social). Reality, we hold—along with the decision to remain in it, i.e., to stay alive—dictates and demands an entire code of values. Unlike the lower species, man does not pursue the proper values automatically; he must discover and choose them; but this does not imply subjectivism. Every proper value-judgment is the identification of a fact: a given object or action advances man’s life (it is good): or it threatens man’s life (it is bad or an evil). The good, therefore, is a species of the true; it is a form of recognizing reality. The evil is a species of the false; it is a form of contradicting reality. Or: values are a type of facts; they are facts considered in relation to the choice to live (in Fact and Value).

For an Objectivist there are two sources of evil. As Rand’s fictional hero John Galt explains:

An error of knowledge is not a moral flaw, provided you are willing to correct it; only a mystic would judge human beings by the standard of an impossible, automatic omniscience. But a breach of morality is the conscious choice of an action you know to be evil, or a willful evasion of knowledge, a suspension of sight and of thought (p 970).

This doctrine has important consequences for Rand’s followers. When a person disagrees with Rand’s philosophy because of ignorance they can be educated — it may still be worthwhile arguing with them. But those who turn away from the truth deliberately are not worth arguing with. To engage with them in any way is to sanction their opinions — to grant their views legitimacy and provide their cause with the oxygen it needs to succeed.

Rand believed that Hayek had compromised with the collectivists. He had given his sanction to their principles.

Doesn’t life require compromise?

For Rand there could be no compromise on principles. The heroes of The Fountainhead and Atlas Shrugged epitomise her ideal of integrity. She also went on to explain her position in two short essays ‘Doesn’t Life Require Compromise?’ and ‘The Anatomy of Compromise’.

In ‘Doesn’t Life Require Compromise?’ Rand distinguished between two kinds of compromise — one acceptable and the other unacceptable. The first kind of compromise is where the two parties agree on fundamental principles but disagree on how this works out in practice. For example, a buyer and a seller agree that the seller is entitled to be paid for what they have produced but they disagree on the price. By bargaining with each other they can reach a compromise — the seller receives less than they wanted and the buyer pays more.

The second kind of compromise is a compromise on principles. If a property owner bargains with a burglar over how much the burglar is entitled to take, then the owner has sacrifices not only their property but their rights. This is why, in Atlas Shrugged, Rand’s hero Hank Reardon insists that the government must seize his property by force — by giving it up voluntarily he would be giving his sanction to their depraved version of morality.

In ‘The Anatomy of Compromise’ Rand set out three rules:

1. In any conflict between two men (or two groups) who hold the same basic principles, it is the more consistent one who wins.

2. In any collaboration between two men (or two groups) who hold different basic principles, it is the more evil or irrational one who wins.

3. When opposite basic principles are clearly and openly defined, it works to the advantage of the rational side; when they are not clearly defined, but are hidden or evaded, it works to the advantage of the irrational side (p 145).

Unlike Rand, Hayek rejected the ideal of laissez-faire capitalism (p 18). He argued that it was legitimate for governments to regulate producers (provided they didn’t try to control prices and quantities) (p 38) and that governments should provide some social services (p 39). Hayek was in favour of a guaranteed minimum income and some form of social insurance (p 124-125).

For Rand, these policies were unconscionable concessions to the collectivists. For example, by allowing income support payments to the idle poor, Hayek had conceded the socialists’ principle that a person’s need gave them a legitimate claim over the property of productive citizens. Hayek was negotiating with looters.

Rand vs classical liberalism

The rift between Rand and classical liberals like Hayek was deep. Rand followed Aristotle. She believed that the key to understanding what was good and bad in an object was to understand its nature — to discover what kind of thing it was. Man-made objects are judged against the purpose for which they were made, for example, a good race car is one which is fast and handles well. But human beings are different. They are not created to serve somebody else’s ends — every person is an end in themselves. As a result:

The standard of value of the Objectivist ethics — the standard by which one judges what is good or evil — is man’s life, or: that which is required for man’s survival qua man.

Since reason is man’s basic means of survival, that which is proper to the life of a rational being is the good; that which negates, opposes or destroys it is the evil (p 23).

Most classical liberals reject this approach. Instead, they follow David Hume in thinking that "Reason is, and ought only to be the slave of the passions". On this view, a person’s preferences or passions are neither rational or irrational — they just are. A well-ordered society is one which enables individuals to satisfy their preferences to the fullest extent possible without interfering with other people’s attempts to satisfy theirs. If this means that the masses are content to be herded into shopping malls and fed fried potatoes, minced beef and fizzy sugar-water, then most classical liberals have no objection. If people don’t want to live an examined life then that’s their own business.

In A Treatise of Human Nature Hume argued against the idea "that virtue is nothing but a conformity to reason". Hayek agreed, and then went on to argue that moral norms are the product of cultural evolution rather than rational deliberation:

Like all other values, our morals are not a product but a presupposition of reason, part of the ends which the instrument of our intellect has been developed to serve. At any one state of our evolution, the system of values into which we are born supplies the ends which our reason must serve. This givenness of the value framework implies that, although we must always strive to improve our institutions, we can never aim to remake them as a whole and that, in our efforts to improve them, we must take for granted much that we do not understand (p 63).

This was an anathema to Rand. She believed that men and women who allowed their value framework to be dictated by tradition were little better than trained animals. For Hayek civilization depended on a delicate balance of moral innovation by the few and mindless conformity by the many. He rejected the rationalism of philosophers who believed that they could construct a new morality based on their analysis of human nature (p 64-65).

What did Hayek say about Rand?

Hayek didn’t have much to say about Rand or her work. Given that she never left any space in her margins so it’s unlikely that anybody’s going to find an annotated copy of Atlas Shrugged or The Fountainhead. According to one report he admired Atlas Shrugged but found Rand’s philosophy incomprehensible. Perhaps he was just being polite.


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15 Responses to Hayek Shrugged

  1. Jason Soon says:

    Great post as usual Don. And to help you along your thesis if you’re still writing it, I think as you follow the development of the LDP on the ALS blog, divisions between Hayekians and Randians will start to emerge over time and already are.

  2. Hi Don

    Good summary. In addition to the two essays you mention, Rand’s “The Cult of Moral Grayness” nicely captures her position – and her unique combination of inflammatory rhetoric and profound confusion. It is available in abbreviated form here:


  3. Don Arthur says:

    Thanks Daniel – I bought a copy of VOS recently (it cost $1) but I hadn’t read the essay on moral grayness until you mentioned it.

    Jason – What about the Hayek-hating Rothbardians?

  4. I don’t think Rand is confused, Daniel. She’s a good writer and puts her points across well. I just happen to think she’s wrong, and Hayek right.

  5. Jason Soon says:

    I don’t think there are any actual Hayek haters among Australian libertarians, Objectivist or otherwise Don. The intra-libertarian debate isn’t as polarised here.

  6. SL:
    >I don’t think Rand is confused, Daniel. She’s a good writer and puts her points across well.

    Hi SL

    As with a lot of her stuff, it seems clearer than it really is. The forcefulness of her style misdirects the reader (and I suspect herself) away from the underlying conflicts in what she says. For example, she writes:

    “There can be no justification for choosing any part of that which one knows to be evil….Gray…is merely a prelude to black”

    Pretty clear, right? But wait!

    “There are, of course, complex issues in which both sides are right in some respects and wrong in others — and it is here that the “package deal” of pronouncing both sides “gray” is least permissible.”

    So…there is “no justification” for any hint of “gray”…except when it is “permissible”? Gee, whatever happened to Either/Or…;-)

    The nub of the confusion is here:

    “And when a man has ascertained that one alternative is good and the other is evil, he has no justification for choosing a mixture.”

    Think about this sentence for a moment. Why would anyone actually do this? If something was obviously good and the other obviously bad, why would you choose a mixture? (unless you were entirely stupid or ignorant, in which case Rand grants you a hospital pass under the category of “errors of knowledge”). The whole point of the “morally gray” analogy is that very often there are no such clearcut alternatives – that obviously black and white issues are very rare, and the choice is between different shades of gray between these two hypothetical points. It’s like she hasn’t actually grokked the basic heuristic.

    More importantly, if we accept no shades of “gray” – if we follow her advice, and say Hayek is therefore just as black as Hitler – then we are actually avoiding the responsibility of judgement, not embracing it.

  7. Panelbeater says:

    I think Rand is right. Just a little extreme. Hayek ought not have compromised as far as he did except to say that we could have certain mitigating measures in the medium term.

    The reason that Hayek had been such a bigshot over at Catallaxy for example is not because of his pre-eminence in Austrian Economics. Its really because of his compromising status. And so that Jason could invoke him without fearing too much moral opprobrium from the left.

    But leftists will sniff that sort of thing out.

    Mises is the towering figure in twentieth century Economics. Not Hayek. I left off the Austrian qualifier on purpose.

    Notice that Rand didn’t take this extreme position in public. I only can remember her even referring to Hayek once. And even then I’d be only guessing she was referring to him since she didn’t use his name.

    Yeah great post Don. Its surprising that someone can have this stuff so well sorted and still be a committed thief. I could understand it if the idea of thieving went no further then Hayeks.

  8. 1) If the good is an aspect of reality in relation to man, then it should:

    a) be consistent across time
    b) be applicable, at least in some aspects, to classes of men

    For these reasons, a traditional understanding of the good ought not to be discounted. It must be considered possible that what applied to former generations might also apply to me, and that what applies to me might also apply to others in my society.

    2) There is no way that most people are going to individually apply their reason to discover “the good as an aspect of reality in relation to man”. If Ayn Rand had this expectation, then she had a poor understanding of human nature.

    This is another reason why it’s important that there be a healthy tradition of understanding ‘the good as an aspect of reality in relation to man’, since this is what will really influence people. If such a traditional understanding is overthrown, you don’t suddenly get 6 billion Socrates wandering the planet, you just get people influenced by pop culture.

  9. MR:
    >If Ayn Rand had this expectation, then she had a poor understanding of human nature.

    You may be interested in Greg Nyquist’s book (and my occasional blog) on this very subject.


  10. Rafe Champion says:

    Ayn Rand is fine on political economy which is essentially minimal state laissez faire, classical liberalism on steroids you might say. But when she gets into philosophy and psychology, she is just off the planet.

    I often think her as a speed bump on the road to serfdom because she has created so much confusion and dogmatism among her followers, complete with the schisms that you get in fundamentalist sects of all kinds. I call her a speed bump on the road because her supporters oppose statism and rampant state intervention, thereby slowing the growth of big government. But they cannot reverse the slide towards bigger government because that process calls for the recruitment of people like [name deleted] from their wishy washy Keynesian do-gooder nice guy welfare statism and social democracy to a leaner and (seemingly but not actually) meaner position.

    In other words we have to find arguments and evidence that will shift intelligent, reasonable and well-meaning people who currently suport the welfare state in broad terms, towards a more laissez faire viewpoint. However the dogmatic Randians cannot hope to do that, given the attitude that they adopt towards opponents even people like Hayek who are substantially on their side.

  11. Jason Soon says:

    The reason that Hayek had been such a bigshot over at Catallaxy for example is not because of his pre-eminence in Austrian Economics. Its really because of his compromising status. And so that Jason could invoke him without fearing too much moral opprobrium from the left.

    Uhh, no, it’s because Hayek has genuinely interesting ideas regardless of his policy conclusions. Far more interesting ideas than Mises.

    Yeah great post Don. Its surprising that someone can have this stuff so well sorted and still be a committed thief.

    Yeah, it’s surprising ainnit. Don can intellectually understand his kleptomania but he’s still emotionally committed to it. The reason is truly the slave of the passions :-)

  12. Panelbeater says:

    “Uhh, no, it’s because Hayek has genuinely interesting ideas regardless of his policy conclusions. Far more interesting ideas than Mises.”

    Here Jason only reveals that he has some homework to do.

    Because reading Mises in hard-wood copy is just a joy. And can be an eeire experience in terms of his prescience.

    I’ve seen predictions from Mises’ early works that if you read them late at night can be haunting.

  13. Rafe Champion says:

    Mises is the sleeping giant of the 20th century. It will be some time before we can take his full measure because his legacy (including errors) is guarded by the Mises Institute (which deflects criticism of the errors) and he is hardly read by anyone outside the charmed circle of Austrian economists and their campfollowers so that he remains almost completely unknown.

    One of my new year resolutions is to run a series of posts on Catallaxy to explore the thoughts of Mises and sort out the wheat from the chaff.

  14. Rafe:
    >One of my new year resolutions is to run a series of posts on Catallaxy to explore the thoughts of Mises and sort out the wheat from the chaff.

    I’ve been chipping away at ‘Human Action’ for the past year, so this is excellent news.

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