Thoughts on economics and liberty

Hayek’s HIMALAYAN BLUNDER – his advice to Anthony Fisher. There is ZERO correlation between think tanks and liberty.

As everyone knows, I admire Hayek’s work. That doesn’t at all mean that he is any kind of “god” to me. I mostly agree with his economics, but his politics was abysmal.

It is also important to note that my agreement with his economics is post-facto, well after I had formed my own views about economics.

Hayek’s work is never taught in any economics course (I had started my economics studies at the post graduate level – which is purely mathematical: and in the three continents I studied, there was no mention of Hayek in any standard economics textbook). My understandings about economics – including about the price system – were formed in almost total ignorance about the very existence of Hayek.

Yes, one of my teachers at USC cited Hayek’s article, The Use of Knowledge in Society – to illustrate his maths. I found Hayek’s article well written and around three years later became the first to get permission from the AER to publish it on the internet (in 1998). Although I had become incidentally aware about Hayek, I never had any time till well after my PhD to read his work. Even the formal course that I took to study classical economists did not include any consideration of either Mises or Hayek.

Despite all this, I hold Hayek in great esteem for his excellent understandings about law and economics.

But Hayek has proved to be a dismal failure and, indeed, a nuisance when it comes to the spread of liberty across the world. (Yes, I later came to know about Mont Pelerin, etc. but its influence on the real world is grossly over-rated).

The discovery and spread of liberty across the world for the past 330 years or so had little or nothing to do with Hayek. There are hundreds of illustrious names that contributed. ALL the real contributors to liberty have always been POLITICALLY active – e.g. Hobbes, Locke, Jefferson, Maddison, Franklin, Burke, Macaulay, JS Mill. See The Discovery of Freedom.

Hayek’s contributions to actual human liberty are next to minimal. When a person like me had not even heard about him (and I note that not a single professionally trained economics graduate from an average university in the West has heard about him) it is hard to conceive of Hayek as having advanced liberty in any meaningful way.

HAYEK’S GREAT BLUNDER: HIS ADVICE TO ANTHONY FISHER

Hayek’s advice to Fisher has set back liberty across the world by decades. It has given a short cut to lazy “liberals” in countries like India to avoid engaging in the political process.

What was this advice? You can read about it here. I’ve also uploaded Hayek’s letter to Fisher here.

I first heard about this advice from Parth Shah when I first met him (in San Francisco) in 1999.

Now, since February 1998, I had unambiguously (and without any prompting from anyone – nor any awareness of others in India who might support liberty) chosen the path of political action. I wanted a party that is founded on the principles of liberty and good economics. I had no doubt whatsoever in my mind that this was an urgent necessity in India.

Parth said that, in accordance with Hayek’s views, he believed that there needs to be a think tank in India to promote liberty. We agreed to disagree on this. In my view then (and today) there can be NO change in India without political action, and think tanks are not the vehicle for political action.

Indeed, it puzzled me that Hayek (or anyone in his right senses) thought that Thatcher was in any way “CREATED” by Fisher. Thatcher would have mocked this utterly preposterous idea. Thatcher was a creation of her own understandings and beliefs – let this basic fact never be even remotely confused by anyone. It is fundamentally wrong to imagine any chain of causality between the IEA and Thatcher.

ALL change is ALWAYS political. And politics is about beliefs, commitment, social engagement and persuasion. It is extremely personal and human. No one can be a politician without fire in their belly, and that fire is not let by some random think tank article/s.

If Fisher had any real calibre, he would have transformed England politically in the 1960s itself. Of course, he chose the easy way out and started IEA. Running think tanks is a short cut, and can NEVER work.

Time and again I’ve been proven right on this fundamental point. The USA has tens of liberty-oriented think tanks, yet we get some really hopeless politicians (and policies) in the USA. That’s because doing politics is hard, and doing think tanks is easy. I find that a lot of self-aggrandising think tanks and academics run down American politicians in their writings, but these “better than thou” writers don’t understand how hard and complicated real politics is. They are therefore always unpleasantly surprised with real life. They are nuts to imagine that they can EVER influence American politics.

All the think tanks of the world, together, can’t put Humpty Dumpty together again. Doing that requires BEING in politics.

Empirically, there is ZERO correlation between think tanks and liberty. All ADVANCE IN LIBERTY HAS BEEN (AND WILL BE) POLITICAL. PERIOD.

My great regret is that although I’ve been involved in trying to get a liberal party up and running in India since the past 20 years, not ONE person from (or trained by) ANY Indian think tank has stepped forward to fight for political liberty in India. Most of these people have, instead, licked the boots of socialists and foreign donors for their survival. Foreign funding in matters related to liberty is particularly obnoxious.

Nonetheless, Parth seemed to be reasonably willing to try out a liberal political party idea – at least at first. In 2000, Parth let me hold a small meeting in his place where I discussed the prospect of India’s first liberal party being established (no, Swatantra was not a truly liberal party: let me make that clear once again).

Then in May 2002 he published an article saying that India does need a liberal political party. It appears he had realised by then that running a think tank was not going to work.

To a small extent he provided some assistance when, in 2004, the liberals (whom I’d invited to a 5 day workshop) supported Sharad Joshi’s Swatantra Bharat Party. But since then there has been close to zero contribution of CCS to any liberal political work. Parth’s write-up on a liberal party was clearly the typical hot air that such think tank “intellectuals” spout: meaningless nonsense. Lazy words.

For 20 years I have come across an abundance of “liberals” in India who have cited Hayek’s advice to Fisher as a reason to do NOTHING about liberty in India. Apparently, India doesn’t need a liberal political party and some random think tanks (that have ZERO impact on politics) can do the work.

That’s pure tripe.

Let this remain on public record – that HAYEK WAS FUNDAMENTALLY WRONG on this matter. Anyone who cites Hayek on this issue is fooling himself/herself and is NOT a supporter of liberty or doesn’t understand what it means. He/she should stay away fro me. Much appreciated.

Btw, I had written about what classical liberalism really means here – and it is ALL political.

ADDENDUM

My FB comment here:

It is extraordinarily easy to point fingers at problems, extraordinarily difficult to do even the smallest thing about them.

A lot of “liberals” and “academics” spend their life in elitist and remote criticism, as if they are spectators and as if the world is in any way beholden to their views.

Let them try to create even the smallest organisation of men to address the problems they rail about. Getting teams of men together is so hard, most people will fall flat on their face at their first attempt. And yet, only through organisation can any real change occur.

Abraham Arsalan’s response, here:

Every change is political. There are no two ways about it. No ‘think-tanks’ or ‘advocacy groups’ can bring change. They, at best, can catalyse the process through awareness. If you do not have a political representation, you will be trampled on in this dubious system we call “democracy”. You will be short-changed via “government schemes” and you can rue your fate in a safe-space.

Sanjeev Sabhlok

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One thought on “Hayek’s HIMALAYAN BLUNDER – his advice to Anthony Fisher. There is ZERO correlation between think tanks and liberty.
  1. Melroy C.F.Fernandes

    Very educative. Thank you.

    Coming at a time when I am just reading “road to serfdom” and that again is thanks to your sharing.

    I absolutely agree :
    Quote
    It is extraordinarily easy to point fingers at problems, extraordinarily difficult to do even the smallest thing about them.
    Unquote

     

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