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Ideas Matter: Pedro Schwartz
11 paragraphs found.
 

Intellectuals who in Europe extol competition, descry big government, defend free trade, and criticize state subsidies are felt to be a nuisance: if one wants to be accepted as a thoughtful and agreeable companion one has to defend the national film industry in France or praise Mittbestimmung in Germany or love the euro in Brussels. Equally in the United States, one should not oppose lifting the debt ceiling every so many years to pay public salaries and veterans' pensions, on pain of being classified as some kind of Mad Hatter at an Alice in Wonderland Tea Party. As Friedrich A. Hayek said in an essay I will return to:1

There can be few more thankless tasks at present than the essential one of developing the philosophical foundations on which the further development of a free society must be based. ("The Intellectuals and Socialism," page 191)

 

See the EconTalk podcast episodes Burgin on Hayek, Friedman, and the Great Persuasion and Acemoglu on Why Nations Fail for more on these topics. See also Public Choice, by William F. Shughart II, in the Concise Encyclopedia of Economics.

 

However, one should remark that the interest in claiming to be the first in a field of research is ancillary to the discovery of truth. Originality of ideas matters because truth matters—on the understanding that truth in science is unattainable and functions as a regulating ideal.7 In some cases dedication to truth goes well beyond personal interest. At the risk of his peace, Galileo insisted in showing the moons of Jupiter through his new glass to skeptical cardinals of the Church, because he wanted to show them that those moons were truly there. A less dramatic instance of an intellectual not obeying his narrow self-interest is shown in F. A. Hayek's preface to The Road to Serfdom. Let me quote him in full.8

I am as certain as anyone can be that the beliefs set out in it are not determined by my personal interests. I can discover no reason why the kind of society which seems to me desirable should offer greater advantages to me than to the great majority of the people of this country. In fact, I am always told by my socialist colleagues that as an economist I should occupy a much more important position in the kind of society to which I am opposed—provided, of course, that I could bring myself to accept their views.

 

Hayek is, I feel, somewhat richer and more interesting than Schumpeter or Keynes on the social role of 'intellectuals' (for good or for bad). As Wayne Leighton and Edward López point out in their fascinating new book, Madmen, Intellectuals, and Academic Scribblers13, Hayek distinguishes three different groups of people when he studies the influence of ideas: these are first discovered by the real scholars or experts; then, twisted and warped, they are diffused by the 'intellectuals'; finally, they are applied (properly or not) by businessmen and politicians. Two essays of Hayek's touch on this question: "The Intellectuals and Socialism" and "The Transmission of the Ideals of Economic Freedom"14. The first of these is downbeat and pessimistic. He there separates the contribution of the original thinker or the true expert from that of the 'intellectual', whose usual inclination towards socialism or protectionism he laments. The typical intellectual need be neither an original thinker nor a scholar or expert in a particular field of thought: "he need not possess special knowledge of anything in particular, nor need he even be particularly intelligent, to perform his role as intermediary in the spreading of ideas". ("The Intellectuals and Socialism," page 179) With few exceptions, these vulgarizers follow the latest intellectual fashion, for instance, the fashion of equality, which sets beyond criticism any measure promoting it. Further, Hayek complains that practical men will listen to little else.

[T]he main task of those who believe in the basic principles of the capitalist system must frequently be to defend this system against the capitalists. (page 192)

 

Though one must remember that that this essay was written in 1949, when liberal ideas were at low ebb, its tone may strike one as despairing in excess. The second essay is more hopeful. In it Hayek traces the story of the survival of liberal ideas in Europe in the interwar years and during and after World War II—surprisingly in Germany under Hitler or by thinkers having fled the Nazi and Communist menace for England or the United States. For those of us who are familiar with the history of the Mont Pèlerin Society, Hayek is in fact recounting what led him to found the Society in 1947 and how he helped rescue a distinguished band of original thinkers and specialists from loneliness and how successful that group was in passing on the torch of freedom to younger generations. On reading the list of some of its founders,15 one may think that these scholars did win some of the battles of ideas and thus have had more influence than could be foreseen in 1947.16

 

Unfortunately these kinds of lessons take time to be learnt. As Hayek stressed, we live in a radically uncertain world. Societies and their institutions will evolve in unpredictable ways. Hence, the effects of public interventions and the consequences of freeing markets may not be foreseeable in detail. In that case, "citizens will not instantaneously become confronted with the loss of private autonomy which results the enlargement of public activities".21Scholars will only be able to describe in general terms what will happen if an economy is planned or if the welfare state continues to expand. It took from 1920 to 1989 for the failure of central planning to become evident.22 And the effect of the welfare state on civilization, forewarned by Hayek in 1944, is still not fully deployed.

 

Hayek, Friedrich A. (1949): "The Intellectuals and Socialism", in Studies in Philosophy, Politics and Economics, Routledge and Kegan Paul, London, 1967.

 

Hayek, Friedrich A. (1944): The Road to Serfdom. 1976 edition. Routledge and Kegan Paul. London.

 

Hayek, Friedrich A. (1951): "The Transmission of the Ideals of Economic Freedom", in Studies in Philosophy, Politics and Economics, Ch. 13. Routledge and Kegan Paul, London, 1967.

 

Participants at this first meeting included Hayek, Milton Friedman, Maurice Allais, Henry Hazlitt, Bertrand de Jouvenel, Frank Knight, Fritz Machlup, Ludwig von Mises, Michael Polanyi, Karl Popper, Leonard Read, Lionel Robbins, Wilhelm Roepke, and George Stigler.

 

Oskar Lange (1936-7) and Abba Lerner (1938) twisted economic theory to show that Mises and Hayek by their criticism had in fact helped to make centralized planning workable. The reality of the Soviet economy proved spectacularly wrong.