Page 43 - Šolsko polje, XXIX, 2018, no. 1-2: The Language of Neoliberal Education, ed. Mitja Sardoč
P. 43
m. olssen ■ neoliberalism and laissez-faire: the retreat from naturalism
(1944: p. 72), and “refuses to recognize various autonomous spheres in
which the ends of individuals are supreme” (p. 72). As such the plan em-
bodies general substantive goals linked to the “‘the general welfare’, or the
‘common good’, or the ‘general interest’” (p. 72). Yet, it is Hayek’s view
that the welfare of people “cannot be adequately expressed as a single end”
(p. 73) for to have such a conception of the general welfare requires a “com-
plete ethical code,” which would require knowledge of everything. The
difference between the two kinds of approach, says Hayek, is like the dif-
ference between the “‘Rules of the Road’, as in the Highway Code, and or-
dering people where to go” (1944: p. 91).
A Critique of Hayek’s Concept of Planning
Hayek acknowledges that while his distinction between formal rules,
and planning “is very important…at the same time [it is] most difficult
to draw precisely in practice” (1944: p. 91). This, it seems to me, under-
states what is problematic about his argument. While his points about
the need for general rules that are formal, and apply to all, are high-
ly important, his characterization of planning is largely a caricature,
and his arguments against it do not stand serious scrutiny. Indeed, it
would seem, as many economists in his own Department at the LSE be-
lieved, that any serious analysis of Hayek’s arguments leads us straight to
Keynesian conclusions.4
Hayek’s arguments against central planning have been seriously
challenged.5 What is conflated in his treatment is a failure to distinguish
‘central planning’, as exemplified by the model of the Soviet Union, and
aspects of planning in general, as adopted routinely in western democra-
cies.6 While his arguments may be persuasive against the idea of highly
centralized decision-making for the entire economy, beyond this the as-
sessment of his legitimate empirical arguments are difficult to untangle
from what is the deeply ingrained ideological nature of his opposition to
social democracy or socialism. Certainly the emergence of highly central-
ized economies of Eastern Europe from the 1920s could be seen to inhibit
the emergence of Schumpeter-styled entrepreneurs, and to erode possibil-
ities for enterprise and initiative. As developed in the Soviet Union after
4 Hicks, Kaldor, Lerner. Scitovsky, and Shackle, all deserted Hayek, and became Keynesi-
ans in the 1930s.
5 See, for instance, Gray (1984), Hindess (1990), Tomlinson (1990), Gamble (1996).
6 It can be claimed as a bold conjecture at the outset that empirical research has not revealed
any significant erosion of democracy in a country like Britain during the period after the
inception of the welfare state. Leaders like Asquith claimed that the state was in fact nec-
essary to safeguard freedom.
41
(1944: p. 72), and “refuses to recognize various autonomous spheres in
which the ends of individuals are supreme” (p. 72). As such the plan em-
bodies general substantive goals linked to the “‘the general welfare’, or the
‘common good’, or the ‘general interest’” (p. 72). Yet, it is Hayek’s view
that the welfare of people “cannot be adequately expressed as a single end”
(p. 73) for to have such a conception of the general welfare requires a “com-
plete ethical code,” which would require knowledge of everything. The
difference between the two kinds of approach, says Hayek, is like the dif-
ference between the “‘Rules of the Road’, as in the Highway Code, and or-
dering people where to go” (1944: p. 91).
A Critique of Hayek’s Concept of Planning
Hayek acknowledges that while his distinction between formal rules,
and planning “is very important…at the same time [it is] most difficult
to draw precisely in practice” (1944: p. 91). This, it seems to me, under-
states what is problematic about his argument. While his points about
the need for general rules that are formal, and apply to all, are high-
ly important, his characterization of planning is largely a caricature,
and his arguments against it do not stand serious scrutiny. Indeed, it
would seem, as many economists in his own Department at the LSE be-
lieved, that any serious analysis of Hayek’s arguments leads us straight to
Keynesian conclusions.4
Hayek’s arguments against central planning have been seriously
challenged.5 What is conflated in his treatment is a failure to distinguish
‘central planning’, as exemplified by the model of the Soviet Union, and
aspects of planning in general, as adopted routinely in western democra-
cies.6 While his arguments may be persuasive against the idea of highly
centralized decision-making for the entire economy, beyond this the as-
sessment of his legitimate empirical arguments are difficult to untangle
from what is the deeply ingrained ideological nature of his opposition to
social democracy or socialism. Certainly the emergence of highly central-
ized economies of Eastern Europe from the 1920s could be seen to inhibit
the emergence of Schumpeter-styled entrepreneurs, and to erode possibil-
ities for enterprise and initiative. As developed in the Soviet Union after
4 Hicks, Kaldor, Lerner. Scitovsky, and Shackle, all deserted Hayek, and became Keynesi-
ans in the 1930s.
5 See, for instance, Gray (1984), Hindess (1990), Tomlinson (1990), Gamble (1996).
6 It can be claimed as a bold conjecture at the outset that empirical research has not revealed
any significant erosion of democracy in a country like Britain during the period after the
inception of the welfare state. Leaders like Asquith claimed that the state was in fact nec-
essary to safeguard freedom.
41
