Hayek in America

Prime Time for Paul Ryan’s Guru (the One Who’s Not Ayn Rand):

Many of Ryan’s most famous proposals have clear Hayekian roots. His Roadmap for America’s Future includes calls for government to step out and let the market decide. His proposal to allow citizens to buy whatever health insurance they want, rather than use a government-promoted exchange, also seems to be embedded in the Austrian tradition. In other important ways, though, Ryan is anything but Austrian. While Hayek would laugh at an economic forecast for distant 2013, Ryan’s budget plan includes predictions about 2083. The congressman’s proposal for two separate tax systems — a flat-tax system and a loophole-filled tax system — is exactly the sort of contradictory governmental problem-solving that Hayek detested.

In actuality, Ryan is like a lot of politicians who merely cherry-pick Hayek to promote neoclassical policies, says Peter Boettke, an economist at George Mason University and editor of The Review of Austrian Economics. “What Hayek has become, to a lot of people, is an iconic figure representing something that he didn’t believe at all,” Boettke says. For example, despite his complete lack of faith in the ability of politicians to affect the economy, Hayek, who is frequently cited in attacks on entitlement programs, believed that the state should provide a base income to all poor citizens.

To be truly Hayekian, Boettke says, Ryan would need to embrace one of his central ideas, known as the “generality norm.” This is Hayek’s belief that any government program that helps one group must be available to all. If applied, Boettke says, a Hayekian government would eliminate all corporate and agricultural subsidies and government housing programs, and it would get rid of Medicare and Medicaid or expand them to cover all citizens. (Hayek had no problem with a national health care program.) Hayek also believed that the government should not have a monopoly on any service it provides; instead, private companies should compete by offering an alternative Postal Service, road system, even, perhaps, a private fire department.

LEITURA ADICIONAL: Paul Ryan’s Intellectual Muse de Richard Epstein:

Hayek exposed this fool’s mission by stressing how no given individual or group could obtain and organize the needed information about supply and demand conditions throughout the economy. The virtue of the price system was its use of a common unit of measurement—money—to allow various actors to compete for a given resource without having to lay bare why they need any particular good or service. The seller need only accept the highest bid, without nosing around in other people’s business. The interaction between buyers and sellers allows for constant incremental adjustments of both price and quantity. Old information gets updated in a quick and reliable way, thereby eluding the administrative gauntlet of the socialist state.