Date: Sat, 28 Sep 1996 02:09:25 -0800
From: djones-AT-uclink.berkeley.edu (rakesh bhandari)
Subject: Re: *Marx, Hayek, and Utopia*


I have read through Chris S' stimulating book but have not made a careful
study yet. Hans D's thoughtful posts are appreciated.  I just thought that
I would mention that there is a fascinating review by Schumpeter of Hayek's
*Road to Serfdom* in *Journal of Political Economy* LIV, 3 (June 1946):
269-270.

Here Schumpeter seems to be jabbing at Hayek's utopianism and
over-formalism. Schumpeter reads Hayek as a Gladstonian liberal in an era
where modern developments have catapuluted  into power the masses who,
alas,  do not respect the "principles of individual initiative and
self-reliance", principles of a "very limited class." Of course what
Schumpeter may have considered one of history's jokes in poor taste is the
fact that it has not been due to labourism but due to Reaganism on the
behalf of that quite limited class of the wealthiest people that
(government) interventionism has been expanded. (Would have Schumpeter ever
admitted that his cherished principles are more likely to be embraced in
actual practice by the uncouth masses, not the masters of mankind?)

Schumpeter also suggests that Gladstonian liberalism is no longer
necessarily optimal at this point in the history of capitalism as the
state could actually now draw some lessons from state "socialists" in order
to carry out the policy which would rev up the capitalist engine and thus
protect "mankind's cultural inheritance" (read: bourgeois society).

For example, Schumpeter writes "It is, no doubt, economically possible, in
the United States at least, to remove from the life of the workman
everything that is felt to be a grievance by any considerable body of
public opinion *without impairing the efficiency of the capitalist engine
and without destroying the bases of our civilization*....[A new program]
would have to replace the capitalist penalties on subnormal performance by
other sanctions, which Socialists (and they deserve praise for this, not
blame) are ready enough to contemplate for the Socialist regime, but which
nobody--certainly not Hayek--is prepared to accept within the capitalist
order."

(It is not clear to me whether here Schumpeter is referring to and
defending Soviet socialism or National Socialism as it is the latter which
seems to have been more ruthlessly efficient in the elimination of
"subnormality" in the form of the petty bourgeoisie from its capital
structure and in the form of value-less people from society as a whole; at
any rate, Schumpeter does defend what Hayek is criticizing as
totalitarian.)

Hayek is criticized not only for his inability to present a politically
effective program in the event that a disciple moved to power but also for
the obstacles which his positive political theory may put in the way of
economically progressive state programs.  Since I do not have a copy of
*The Road to Serfdom* in front of me, I do not know what to make of
Schumpeter's defense of the English conservatives dismissed by Hayek on p.
182 as socialists; Schumpeter actually defends their "socialist
proclivities".  Who were these conservatives; what was  socialist about
their proclivities? What are we to make of Schumpeter's and Hayek's
definition of socialism and  their differing assessments of these
conservatives?  (I'll try to find a  copy of *Road to Serfdom* soon.)

By the way, this essay is very strong evidence that it is quite incorrect
to interpret Schumpeter as a champion of laissez faire--indeed he seems to
criticize Hayek's theory as an anachronistic and thus utopian defense of
this ideal, though Schumpeter ultimately blames modernity and the rise of
the masses for making the expansion of the state inevitable while Marxists
would explain said expansion as a mediation of the contradictions of a late
capitalism.

Rakesh





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