Discussion about some papers and books by Friedrich Hayek, about classical liberalism, socialism

1. F. Hayek, The Constitution
of Liberty and other works
Bienvenido “Nonoy” Oplas Jr.
Pres., Minimal Government Thinkers
Fellow, SEANET
Open House forum by UP Libertad
UP NCPAG, Diliman, QC
20 May 2016

2. OUTLINE
I. Friedrich Hayek, econ and political papers
II. The Constitution of Liberty
III. Liberalism, socialism and conservatism
IV. Policy implications

3. I. Friedrich A Hayek, prolific
writer, author of many books,
manuscripts
A. Economic papers
1931. “Prices and Production”. London:
Routledge & Sons. Second revised edition,
London: Routledge & Kegan Paul, 1935.
1933a. “Monetary Theory and the Trade Cycle”. London: Jonathan Cape.
1933b. "The Trend of Economic Thinking." Economica 13: 121-37. Reprinted in
Hayek, 1991, pp. 17-34.
1937. "Economics and Knowledge." Economica N.S. 4: 33-54. Reprinted in Hayek,
1948a, pp. 33-56.
1939. "Price Expectations, Monetary Disturbances, and Malinvestments." In Hayek,
Profits, Interest, and Investment. London: Routledge and Kegan Paul, pp. 135-56.

4. 1941. The Pure Theory of Capital. Chicago: University of Chicago Press.
1963. "The Economics of the 1930s as Seen from London."
"Personal Recollections of Keynes and the 'Keynesian Revolution.'"
1968a. "Competition as a Discovery Procedure.“
1975. "Two Types of Mind." In Hayek, The Trend of Economic Thinking. Edited by
W. W. Bartley III and Stephen Kresge. Vol. 3 of The Collected Works of F. A. Hayek.
1976. Denationalisation of Money : An Analysis of the Theory and Practice of
Concurrent Currencies. London: Institute of Economic Affairs.
1978a. "Coping with Ignorance." Imprimis 7, no. 7 (July): 1-6. Reprinted in
Champions of Freedom. Hillsdale, Mich.: Hillsdale College Press, 1979.
1978b. New Studies in Philosophy, Politics and Economics. Chicago: University of
Chicago Press.
Hayek, F. A. 1991. The Trend of Economic Thinking: Essays on Political Economists
and Economic History. Edited by W. W. Bartley III and Stephen Kresge. Chicago.
A. Economic papers

5. B. Political papers
1944. The Road to Serfdom. Chicago: University of Chicago Press.
1945. "The Use of Knowledge in Society." American Economic Review 35, 519-30.
1948a. Individualism and Economic Order. Chicago: University of Chicago Press.
1948b. "The Meaning of Competition."
1952. The Sensory Order. Chicago: University of Chicago Press.
1956. "In Honour of Professor Mises."
1960. The Constitution of Liberty. Chicago: University of Chicago Press.
1968b. "The Confusion of Language in Political Thought."
1973-79. Law, Legislation, and Liberty. Three volumes. University of Chicago Press.
1988. The Fatal Conceit: The Errors of Socialism. Edited by W. W. Bartley III. Vol. 1 of
The Collected Works of F. A. Hayek. University of Chicago Press, 1989.
1992. The Fortunes of Liberalism. Ed. Peter G. Klein. Vol. 4, Collected Works of Hayek.

6. ―If in the first attempt to create a world of
free men we have failed, we must try
again. The guiding principle that a policy of
freedom for the individual is the only truly
progressive policy remains as true today
as it was in the nineteenth century.
The power which a multiple millionaire,
who may be my neighbour and perhaps
my employer, has over me is very much
less than that which the smallest
functionaire possesses who wields the
coercive power of the state, and on whose
discretion it depends whether and how I
am to be allowed to live or to work.‖

7. ―The problem of a rational economic order is
determined precisely by the fact that the
knowledge of the circumstances of which we must
make use never exists in concentrated or
integrated form but solely as the dispersed bits of
incomplete and frequently contradictory
knowledge which all the separate individ. possess.
One reason why economists are increasingly apt to forget about the
constant small changes which make up the whole economic picture is
probably their growing preoccupation with statistical aggregates, which
show a very much greater stability than the movements of the detail.
The comparative stability of the aggregates cannot, however, be
accounted for—as the statisticians occasionally seem to be inclined to
do—by the "law of large numbers"

8. The Pretence of Knowledge
Nobel Prize lecture, December 11, 1974
―To act on the belief that we possess the
knowledge and the power which enable us to
shape the processes of society entirely to our
liking, knowledge which in fact we do not
possess, is likely to make us do much harm.
―If man is not to do more harm than good in
his efforts to improve the social order, he will
have to learn that in this,… he cannot acquire
the full knowledge which would make mastery
of the events possible.
―The recognition of the insuperable limits to his knowledge ought indeed to
teach the student of society a lesson of humility which should guard him
against becoming an accomplice in men‘s fatal striving to control society – a
striving which makes him not only a tyrant over his fellows, but which may
well make him the destroyer of a civilization which no brain has designed
but which has grown from the free efforts of millions of individuals.‖

9. ―The curious task of economics is to
demonstrate to men how little they really
know about what they imagine they can
design.
―The disdain of profit is due to ignorance,
and to an attitude that we may if we wish
admire in the ascetic who has chosen to
be content with a small share of the riches
of this world, but which, when actualised in
the form of restrictions on profits of others,
is selfish to the extent that it imposes
asceticism, and indeed deprivations of all
sorts, on others.
―The creation of wealth is not simply a physical process and cannot
be explained by a chain of cause and effect. It is determined not by
objective physical facts known to any one mind but by the separate,
differing, information of millions, which is precipitated in prices that
serve to guide further decisions.‖

10. II. The Constitution of Liberty
2005, “The Constitution of Liberty in Asia”, roundtable discussion whole
day about the book, Phuket, Thailand. Sponsored by the Atlas Economic
Research Foundation (USA) and Friedrich Naumann Foundation for
Freedom (FNF). Moderated by famous modern classical liberal scholar,
Leonard Liggio (RIP) of Atlas.
Among the participants
were “Hayek of China” Liu
Junning, “Hayek of
Korea” Chung-ho Kim,
others from Japan,
Pakistan, Vietnam, India,
Georgia, Malaysia,
Cambodia, Phils.

11. ―While the uses of liberty are many,
liberty is one. Liberties appear only
when liberty is lacking. Difference
between liberty and liberties -- that
which exists between a condition in
which all is permitted that is not
prohibited by general rules and one in
which all is prohibited that is not
explicitly permitted…‖ (Ch. 1)
"Liberty is essential in order to leave
room for the unforeseeable and
unpredictable. Because every
individual knows so little that we trust
the independent and competitive
efforts of many to induce the
emergence of what we shall want
when we see it.― (Ch. 2)

12. ―The aim of assigning responsibility is to make man
different from what he is or might be… The knowledge
that he will be held responsible will influence a person‘s
conduct in a desirable direction. Assigning of responsibility
makes people observe certain rules.‖ (Ch. 5)
―In the long run, the existence of
groups ahead of the rest is
clearly an advantage of those
who are behind, in the same
way that, if we could suddenly
draw on the more advanced
knowledge which some other
men on a previously unknown
continent or on another planet
had gained under more
favorable conditions, we would
all profit greatly.‖ (Ch. 3)

13. ―By ‗law‘ we mean the general rules that apply equally to
everybody…
Even general, abstract rules, equally applicable to all, may possibly
constitute restrictions on liberty. But this is unlikely. The chief
safeguard is that the rules must apply to those who lay them down
and those who apply—that is, to the government as well as the
governed – and that nobody has the power to grant exceptions.‖
(Ch. 10)
―The great aim of the struggle for
liberty has been equality before
the law… Equality of the general
rules of law and conduct,
however, is the only kind of
equality conducive to liberty and
the only equality which we can
secure without destroying
liberty… (which) is bound to
produce inequality in many
respects… ― (Ch. 6)

14. ―That any law should apply equally to all. General and equal
laws provide the most effective protection against infringement
of individual liberty. It is this fact that all rules apply equally to all,
including those who govern, which makes it improbable that any
oppressive rules will be adopted.‖ (Ch. 14)
Recap:
* Liberty means absence of coercion.
* Freedom is inseparable from responsibility; fear of
responsibility is fear of freedom itself.
* Equality before the law; the law applies equally to unequal
people.
* Rule of law means no exception. No one is exempted and no
one can grant an exemption.

15. 3. Liberalism, Socialism and Conservatism

16. • Lao Tzu or Laozi (600 BC), considered
the first intellectual in China and the
world (he came earlier than Plato),
championed individual liberty.
• ―The more restrictions and limitations
there are, the more impoverished men
will be... The more rules and precepts
are enforced, the more bandits and
crooks will be produced.‖
• ―Through my non-action, men are spontaneously
transformed.
Through my quiescence, men spontaneously become
tranquil.
Through my non-interference, men spontaneously
increase their wealth.‖

17. “Every individual...generally, indeed, neither intends
to promote the public interest, nor knows how much
he is promoting it…. he intends only his own gain,
and he is in this, as in many other cases, led by an
invisible hand to promote an end which was no part
of his intention.” --TWN, Book IV Chapter II
“It is not from the benevolence of the butcher, the
brewer, or the baker, that we expect our dinner, but
from their regard to their own interest. We address
ourselves, not to their humanity but to their self-
love, and never talk to them of our necessities but of
their advantages.” -- TWN, Book I Chapter II
The whole, or almost the whole public revenue, is in most countries employed in
maintaining unproductive hands... Such people, as they themselves produce
nothing, are all maintained by the produce of other men's labour...
Those unproductive hands, who should be maintained by a part only of the spare
revenue of the people, may consume so great a share of their whole revenue… all
the frugality and good conduct of individuals may not be able to compensate the
waste and degradation of produce occasioned by this violent and forced
encroachment. -- TWN, Book II, Chapter III

18. "The characteristic feature of modern
capitalism is mass production of goods
destined for consumption by the masses.
The result is a tendency towards a
continuous improvement in the average
standard of living, a progressing
enrichment of the many. Capitalism
deproletarianizes the 'common man' and
elevates him to the rank of a 'bourgeois'.
"On the market of a capitalistic society the common man is the
sovereign consumer whose buying or abstention from buying
ultimately determines what should be produced and in what quantity
and quality...
Wealth can be acquired only by serving the consumers. The
capitalists lose their funds as soon as they fail to invest them in
those lines in which they satisfy best the demands of the
public.‖

19. "To cure the British disease with
socialism was like trying to cure
leukaemia with leeches.
We want a society where people
are free to make choices, to
make mistakes, to be generous
and compassionate. This is
what we mean by a moral
society; not a society where the
state is responsible for
everything, and no one is
responsible for the state.‖
―I came to office with one deliberate intent: to change Britain
from a dependent to a self-reliant society -- from a give-it-to-
me, to a do-it-yourself nation. A get-up-and-go, instead of a sit-
back-and-wait-for-it Britain.‖ (February 1984)

20. “Raison d’etre” (reason for
existence) of government is to
provide only services B or C, yet
government spent up to services D
and E, even if “zero stealing”
happened, it’s still corruption
because more tax money were
confiscated from the citizens to
spend on sectors that do not deserve
to be subsidized forever.
Chart from James Buchanan’s book, “The Calculus of
Consent” (1962).
IV. Policy Implications: Limited government