Saturday, April 24, 2010

Friedrich Hayek on Free Markets and Materialism

From an article entitled "The Moral Element in Free Enterprise" (courtesy of The Freeman)

I do not wish to deny, I rather wish to emphasize, that in our so­ciety personal esteem and mate­rial success are much too closely bound together. We ought to be much more aware that if we re­gard a man as entitled to a high material reward that in itself does not necessarily entitle him to high esteem. And, though we are often confused on this point, it does not mean that this con­fusion is a necessary result of the free enterprise system—or that in general the free enterprise sys­tem is more materialistic than other social orders. Indeed, and this brings me to the last point I want to make, it seems to me in many respects considerably less so.

In fact free enterprise has de­veloped the only kind of society which, while it provides us with ample material means, if that is what we mainly want, still leaves the individual free to choose be­tween material and nonmaterial reward. The confusion of which I have been speaking—between the value which a man’s services have to his fellows and the esteem he deserves for his moral merit—may well make a free enterprise society materialistic. But the way to prevent this is certainly not to place the control of all material means under a single direction, to make the distribution of material goods the chief concern of all com­mon effort, and thus to get poli­tics and economics inextricably mixed.


Surely it is unjust to blame a system as more materialistic be­cause it leaves it to the individual to decide whether he prefers ma­terial gain to other kinds of ex­cellence, instead of having this de­cided for him. There is indeed little merit in being idealistic if the provision of the material means required for these ideal­istic aims is left to somebody else. It is only where a person can him­self choose to make a material sacrifice for a nonmaterial end that he deserves credit. The de­sire to be relieved of the choice, and of any need for personal sac­rifice, certainly does not seem to me particularly idealistic.

I must say that I find the at­mosphere of the advanced Welfare State in every sense more ma­terialistic than that of a free en­terprise society. If the latter gives individuals much more scope to serve their fellows by the pursuit of purely materialistic aims, it also gives them the opportunity to pursue any other aim they re­gard as more important. One must remember, however, that the pure idealism of an aim is ques­tionable whenever the material means necessary for its fulfill­ment have been created by others.

With respect to my political philosophy, these days I find myself more and more inclined to call myself a "Hayekian liberal," or in some sense, as Hayek would put it, an Old Whig.

Which surprises me a little bit, because lately I've been very much influenced by Catholic and other Christian political thoughy that argues for more socialist economics.

(Now, if we can just get over the popular connotations of the word "socialist," it will be plain that I mean no offense by using the word. I simply mean to draw a distinction between state-led economic development and free markets. Indeed, demonizing socialism has had the unfortunate effect of making us completely unable to criticize it without sounding like right-wing lunatics. So let me make it clear that I don't wish to demonize socialism, but rather to engage it seriously as a legitimate strain of political thought in our culture.)

Yet whatever the intended benefits of socialism, I think they are outweighed by the costs. I concede that if the Church were to have full control of the State, we might argue from biblical principles that we are required to distribute material goods equitably, i.e. build a strong Welfare State. But there are good reasons to keep control of State out of the hands of the Church, just as there are good reasons to fight the increasingly intolerant secularism which seeks to dominate our current political system.

What the Church ought to understand is that a free market system allows it to influence society in a way more in line with how Jesus began to rule his Kingdom. I understand full well that this is a highly controversial statement, but my reasoning is as follows. Jesus' moral demands were decidedly not external, and indeed they were often individual, rather than corporate, in nature. Although he actually heightened the requirements of the law regarding matters of the heart (see especially the Sermon on the Mount), he had the tendency to overthrow traditions of external obedience, such as ritual washings, food ordinances, and Sabbath regulations. Thus he fiercely rejected the idea that God's Society could be marked out by external regulation, and taught instead that, in the words of the Apostle Paul, "a person is not a Jew who is one outwardly.... Rather, a person is a Jew who is one inwardly, and real circumcision is a matter of the heart." (Rom. 2:28-29)

What I am saying, then, is that Jesus knew that God's Society could only exist on the basis of human freedom, with transformation starting at the very core of our being. (Paul talks often enough about freedom in Christ to make this point, I think.) Jesus' rhetoric is very much in economic terms: "Do not store up for yourselves treasures on earth, where moth and rust consume... but store up for yourselves treasures in heaven.... For where your treasure is, there your heart will be also." The political philosophy of Jesus seems to be this: the Messiah can only rule effectively by enticing the human heart to desire God's treasure more than the treasures of the world.

In the same way, the Church cannot expect to be the strong arm of Jesus in the world. We cannot expect that by imposing certain well-intentioned economic restrictions we will actually achieve any sort of justice in the world. Having studied what actually happens when we try this, I have found that the unjust always win. That is, the powerful always find a way to profit from zealous government regulations, while it is actually the honest hard-working people who suffer. (For instance, doesn't anyone wonder why health insurance companies haven't spent much money opposing the recent health care bill? It doesn't take a lot of thought to put two and two together.)

Rather, the Church ought to focus its attention on the human heart--not as a means of ensuring some future salvation that has no relevance in the present life, but, on the contrary, affecting the here and now in highly significant ways. In a free society, the influence of the Church ought to be very strong--and at least in America, it is quite strong, strong enough to be seen as a threat to many secular ideologues. But our influence ought to derive from enticing the world with something better than what it has, not by passing laws to impose outwardly Christian customs on our society. (For instance, I see no point in devoting massive political effort to passing a Constitutional amendment to define marriage, nor do I see anything particularly Christ-like about pushing for socialized medicine.)

Now, I do understand that many Christians feel frustrated with this mantra: "Those are just your personal religious beliefs; they don't belong in the public sphere." Hayek basically says the same, and I can understand why that would frustrate Christians. But before we act on this frustration, let's consider how it is that we actually want to have public influence. Is our goal a mere outwardly Christian nation, one that follows customs we find respectable because we impose laws that dictate such customs? I think this question applies just as much to the Christian Left as to the Christian Right. The desire to see wealth redistributed is every bit as superficial as the desire to pass a federal gay marriage ban.

(The abortion issue is entirely different, as it pertains to the very basis of freedom, namely the value of human life. It is precisely because human life is sacred that we ought to impose restrictions on the government's power of human beings. If the sacredness of human life is relativized, which is required for abortion to be made legal, then the very basis for human freedom is compromised. Thus the abortion issue is at the very heart of human freedom.)

I would rather live in a free society in which the Church's influence is found in its power to entice the human heart with something better than the things of this world--which is essentially an economic activity. In our culture the word "economic" is clouded by all kinds of bad connotations. Surely "economic activity" refers to nothing more than Mammon! This is nonsense. Economic activity takes place every time you decide what to do with your time, your talents, or your possessions; hence all Christian piety is economic activity. In a system of free enterprise, the Church has an opportunity to have tremendous influence simply by shaping the economic activity of people in our society.

I have no interest in reviving the "Christian Right"--that's the kind of conservatism that Hayek would criticize, and so would I. On the other hand, I suppose it would be easy to criticize me for attempting to reconcile Christianity with liberal modernist political philosophy. But at the moment I am wondering if that's such a bad thing. It's not as if all Enlightenment-era thinking was inherently secular. And besides, if I see a good idea out there, I feel entitled to incorporate it into my own philosophy if I feel I can do so coherently.

I have added a significant bit of my own opinions to those of Friedrich Hayek, and for that I apologize, because mine are considerably less informed than his. However, it's nice to be able to organize some of my thoughts as I continue to grow in my political outlook. There are some authors who just seem to inspire me, even after I've read a mere essay or two. Hayek is definitely one of them, and at some point I'll have to get around to reading his major works.

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