Hayek’s Zombie Idea

I’m paying close attention to Amazon rankings just now[1], and it’s striking that both the #1 and #2 spots in “Economics-Theory” are held by FA Hayek’s Road to Serfdom. Whatever your view of Hayek’s work in general, this is truly bizarre, and indicative of the kind of disconnection from reality going on on the political right. On the natural interpretation, shared by everyone in mainstream economics from Samuelson to Stigler, this book, which argued that the policies advocated by the British Labour Party in 1944 would lead to a totalitarian dictatorship, was a piece of misprediction comparable to Glassman and Hassett’s Dow 36000. So what is going on in the minds of the buyers? Are they crazy? Do they actually think that Hayek was proven right after all? Is there a defensible interpretation of Hayek that makes sense?

The answers are “Yes”, “Yes” and “No”. The current sales of Hayek’s book are being driven by Glenn Beck, who claims that Britain is indeed a socialist dictatorship of the kind predicted by Hayek (or was, until the recent election), and that Obama is propelling the US along the Road to Serfdom by making medical care marginally more affordable.

Until the right went completely crazy, the most common claim in support of Hayek was that his predictions had somehow been vindicated by Thatcher’s reaction against the welfare state. Leaving aside the fact that Thatcher’s remodelling of the British economy in the image of the City of London looks a lot less appealing today than it did only a few years ago, this totally misses the point of Hayek’s book. If he had wanted to argue that social democratic policies would reduce the rate of economic growth, and to throw in a bit of hyperbole, he could have called it “The Road to Destitution” or something similar. Hayek wanted to make the much stronger claim that the attempt to implement Labor’s policies would necessarily lead to a loss of personal and political freedom.

The most plausible attempt to extract a defensible claim from The Road to Serfdom is to suggest that it applied to policies of comprehensive and centralised economic planning, which might, on an extreme reading, have been imputed to the Labour Party of 1944. Fortunately, on this account, Labour saw the folly of such ideas and did not attempt to implement them. Even on this charitable account, a book warning against hypothetical policies that might have been, but weren’t, adopted in the early postwar period, and aren’t advocated by anybody nowadays, would be of fairly marginal historical interest. But, as Ed McPhail and Andrew Farrant have shown (I’ve linked to a summary since the article seems to be paywalled) this view can’t really be defended.

Depressingly, most of the rest of the “economic theory Top 20” list, including Wealth of Nations, Free to Choose and the writings of Peter Schiff, suggest that the buyers are the same people buying (if perhaps not reading) Hayek. If people actually read Smith, particularly the Moral Sentiments they might gain something, but these purchases look more like an affirmation of tribal identity than an attempt to learn something.

fn1. Zombie Economics briefly made it into the Economics-theory Top 20, but is now slipping out again.