Page 49 - Šolsko polje, XXIX, 2018, no. 1-2: The Language of Neoliberal Education, ed. Mitja Sardoč
P. 49
m. olssen ■ neoliberalism and laissez-faire: the retreat from naturalism
– retreated to Keynesianism under the influence of the Cambridge Model
in the 1930s. Shackle reasoned that given Hayek’s conception of history
emphasizing as it did the limits to reason, uncertainty, spontaneous un-
predictable choices, as well as the unpredictability of unintended effects at
any single point in time we can have little faith in the logical coherence of
market equilibrium over time to ‘self-regulate’ unless we believe in a met-
aphysic of nature as functionally optimal at the economic and social lev-
els, or as tending towards the functionally optimal. If the market cannot
be relied upon, then what mechanism can guarantee socially optimal con-
sequences for distribution and for the continuance of the market mecha-
nism as a predictable framework in terms of which economic interactions
between humans can be guided? Further, what mechanism can guarantee
that the effects of the market are not dysfunctional in relation to the so-
cial and physical environment? In Shackle’s view, these ideas suggest a co-
ordinative mechanism is required, not to substitute for the rational deci-
sions for individuals, but to ensure distribution, security and liberty and
to undertake collective action in areas where individuals are unable to ad-
dress. For Shackle, and his fellow Keynesians at least, planning was clear-
ly back on the agenda.
Keynes had argued something similar to this in his theoretical justi-
fications for the welfare state. In Keynes view, as a general consequence of
our ignorance of the future, planning was an essential feature of the wel-
fare state. In a letter he wrote to Hayek while on the ocean liner en route to
Bretton Woods Conference in June 1944, after reading Hayek’s book The
Road to Serfdom, in what could possibly be seen as a case of classic under-
statement, Keynes (1980: pp. 385–8) raises the issue that he regards Hayek
as not addressing or resolving:
I come finally to what is really my only serious criticism of the book.
You admit here and there that it is a question of knowing where to draw
the line. You agree that the line has to be drawn somewhere [between
free markets and planning], but that the logical extreme is not possible.
But you give us no guidance whatever as to where to draw it. In a sense
this is shirking the practical issue. It is true that you and I would proba-
bly draw it in different places. I should guess that according to my ideas
you greatly under-estimate the practicality of the middle course. But as
soon as you admit that the extreme is not possible, and that a line has
to be drawn, you are, on your own argument, done for since you are
trying to persuade us that as soon as one moves an inch in the planned
direction you are necessarily launched on the slippery path which will
lead you in due course over the precipice. I should therefore conclude
47
– retreated to Keynesianism under the influence of the Cambridge Model
in the 1930s. Shackle reasoned that given Hayek’s conception of history
emphasizing as it did the limits to reason, uncertainty, spontaneous un-
predictable choices, as well as the unpredictability of unintended effects at
any single point in time we can have little faith in the logical coherence of
market equilibrium over time to ‘self-regulate’ unless we believe in a met-
aphysic of nature as functionally optimal at the economic and social lev-
els, or as tending towards the functionally optimal. If the market cannot
be relied upon, then what mechanism can guarantee socially optimal con-
sequences for distribution and for the continuance of the market mecha-
nism as a predictable framework in terms of which economic interactions
between humans can be guided? Further, what mechanism can guarantee
that the effects of the market are not dysfunctional in relation to the so-
cial and physical environment? In Shackle’s view, these ideas suggest a co-
ordinative mechanism is required, not to substitute for the rational deci-
sions for individuals, but to ensure distribution, security and liberty and
to undertake collective action in areas where individuals are unable to ad-
dress. For Shackle, and his fellow Keynesians at least, planning was clear-
ly back on the agenda.
Keynes had argued something similar to this in his theoretical justi-
fications for the welfare state. In Keynes view, as a general consequence of
our ignorance of the future, planning was an essential feature of the wel-
fare state. In a letter he wrote to Hayek while on the ocean liner en route to
Bretton Woods Conference in June 1944, after reading Hayek’s book The
Road to Serfdom, in what could possibly be seen as a case of classic under-
statement, Keynes (1980: pp. 385–8) raises the issue that he regards Hayek
as not addressing or resolving:
I come finally to what is really my only serious criticism of the book.
You admit here and there that it is a question of knowing where to draw
the line. You agree that the line has to be drawn somewhere [between
free markets and planning], but that the logical extreme is not possible.
But you give us no guidance whatever as to where to draw it. In a sense
this is shirking the practical issue. It is true that you and I would proba-
bly draw it in different places. I should guess that according to my ideas
you greatly under-estimate the practicality of the middle course. But as
soon as you admit that the extreme is not possible, and that a line has
to be drawn, you are, on your own argument, done for since you are
trying to persuade us that as soon as one moves an inch in the planned
direction you are necessarily launched on the slippery path which will
lead you in due course over the precipice. I should therefore conclude
47
