The New York Times has thought it important to do a review of Friedrich Hayek's half-century-old The Constitution of Liberty. It's worth noting for the review's wrongheadedness, and because Hayek's one major insight that the reviewer catches, he doesn't understand he's hit on Hayek's main Achilles' heel.
On Hayek and liberty, as the reviewer writes,
With the passage of time, however, many of the ideas expressed in “The Constitution of Liberty” have become broadly accepted by economists — e.g., that labor unions create a privileged labor sector at the expense of the nonunionized; that rent control reduces the supply of housing; or that agricultural subsidies lower the general welfare and create a bonanza for politicians. His view that ambitious government-sponsored programs often produce unintended consequences served as an intellectual underpinning of the Reagan-Thatcher revolution of the 1980s and ’90s. Now that the aspirations of that revolution are being revived by Tea Partiers and other conservatives, it is useful to review some of the intellectual foundations on which it rested.
By economists! How about by the entire political class, both Democrat and Republican, and the NYT. But the reviewer unknowingly hits on Hayek and the entire Libertarian Achilles' heel:
He argued that most of the knowledge in a modern economy was local in nature, and hence unavailable to central planners. The brilliance of a market economy was that it allocated resources through the decentralized decisions of a myriad of buyers and sellers who interacted on the basis of their own particular knowledge. The market was a form of “spontaneous order" which was far superior to planned societies based on the hubris of Cartesian rationalism.
To argue, with the massive control the mega-corporations exerted over the economy in 1960, that "markets" were "spontaneous order," is, to say the least, incredulous. For anyone to say it in 2011, when the grip of the mega-corporation on the economy and government has tightened to the point of strangulation, is nothing more than propaganda. Yet, that's what we hear from the political class... "markets, markets, markets." Meanwhile, the supposed "socialism" of the Democrats and Obama is nothing else than the ceding of more and more power to the mega-corporations.
Hayek is not wrong about the importance of decentralization and liberty, but he was too much of a European of his era, fighting the last strains of landed aristocracy, the recent horrendous experience of fascism, and the then-present disaster of Stalin's centralization on his eastern border to have any serious democratic experience, which, as Jefferson noted, is inherently decentralized. Instead, it was this semi-mystical thing known as the "market" that would save us all from serfdom. Hayek had nothing to say about corporate serfdom, which doesn't exist in his theory. Nonetheless, there's the reality of 2011.
Joe Costello was communications director for Jerry Brown’s 1992 presidential campaign and was a senior adviser for Howard Dean’s effort in 2004.