"Kill kill kill kill kill the poor tonight," sang the Dead Kennedys as they imagined slashing the welfare rolls by dropping neutron bombs on crime-ridden urban ghettos. The late-70s, early 80s punk band saw themselves as giving voice to a right wing fantasy — ridding the world of worthless parasites who drained their wallets and had no respect for an honest tax avoider’s hard-earned property.
Now a new report by Prince’s Trust is claiming that a generation of chronically jobless young people is costing Britain billions of pounds in welfare handouts, lost productivity and crime. The problem group are known as known as NEETs — not in employment, education or training. And according to the Trust’s chief executive, Martina Milburn, "These young people lack confidence and faith in themselves. They are disenchanted in their core."
In a recent piece for the Guardian journalist Edward Pearce strikes a Dead Kennedyesque note when he writes that "by the criteria of proper global free-market Hobbesery, the thoughtful response of the Neets would be to die."
Pearce blames Friedrich Hayek for this callousness. Thoughtful conservatives might want to extend a helping hand to those who aren’t coping in the free market — after all, this is what the welfare state was designed to do. However…
That was the serfdom against which Friedrich von Hayek warned, and from which so many people have clearly escaped. He never used the language of Ayn Rand, outraged that the fit should bend an atom to temper life to the unfit, but this soft-spoken man, stressing the creative capacity of an unconfined economy, made such talk respectable. Along a subtly graded spectrum, we can make our way from Hayek to Ivan Boesky, greed is good and its corollary: being poor is a crime.
It’s not hard to see how Rand might have encouraged her followers to despise the poor. In an essay titled ‘What is Capitalism?’ she makes it clear that she thinks there is no thing as a right to welfare — even for the disabled. "misfortune is not a claim to slave labor" she insists; "there is no such thing as the right to consume, control, and destroy those without whom one would be unable to survive."
For Rand, self esteem flows from ability and achievement. And except for a small number of disabled unfortunates, lack of achievement is a personal choice — a failure of will. It’s easy to imagine that Rand would rather have died than live life as an incompetent loser who survives on the ability of others. Nobody could ever accuse her of compassion (or of economic literacy).
But did Hayek share this view? While he never showed much concern for welfare recipients or low paid workers he does not seem to have blamed them for their lack of economic success. Instead he had a far more realistic view, arguing that:
It ought to be freely admitted that the market order does not bring about any close correspondence between subjective merit or individual needs or rewards. It operates on the principle of a combined game of skill and chance in which the results for each individual may be as much determined by circumstances wholly beyond his control as by his skill or effort (p 172).
As for the idea that greed is good, this seems to be a corruption of Adam Smith’s insight that "By pursuing his own interest" an individual "frequently promotes that of the society more effectually than when he really intends to promote it." Hayek certainly agreed with that. In a large scale industrial society, the market enables people to take care of strangers by consciously taking care only of themselves and their families. But Hayek also understood that a free market needs to be combined with a government safety net — a minimum below which nobody should fall. Unlike Rand he did not believe that poverty was always the result of choice or lack of talent.
So if Hayek is right about markets then how could it be that being poor is a crime?