I’ve followed the debate on Hayek with interest, including contributions from Jason Soon, Tim Dunlop and Ken Parish, but I must say that I’m considerably less favorably inclined to Hayek than anyone who has written so far.
For me, any assessment of a political philosopher must look at actions as well as words. The obscurity of language in Heidegger can’t conceal the fact that he accepted the rectorship of Freiburg University from the Nazis and persecuted his Jewish colleagues. Given this fact, it’s necessary to read Heidegger’s thought in a way that brings out its antihuman and antidemocratic basis.
Hayek’s Freiburg is his support for the Pinochet regime in Chile, symbolised by the decision to hold the meetings of the Mont Pelerin society in Vina del Mar, Chile in 1981, at the height of the dictatorship. Hayek’s view was summarised in an interview he gave to the progovernment newspaper El Mercurio (there weren’t of course, any antigovernment newspapers at the time) in which he was reported as saying Mi preferencia personal se inclina a una dictadura liberal y no a un gobierno democrático donde todo liberalismo esté ausente. cited in Juan T. López, “Hayek, Pinochet y algún otro más”, El País 22 June 1999. A rough translation is ” My personal preference inclines to a liberal dictatorship and not to a democratic government where all liberalism is absent ”
I should say that, despite a fair bit of effort, I haven’t been able to verify this quote, but it’s been widely circulated and never denied, and the Mont Pelerin meeting in Chile certainly took place. My secondary source is here.
In reading this quote, we should note that ‘liberalism’ can only be understood in terms of free-market economic policies, since the Pinochet government was not in the least liberal in relation to freedom of speech and political action (in contrast, with, say, the undemocratic but generally liberal government of 18th century Britain).
With this clue, we can read Hayek’s work such as Constitution of Liberty and see that his support for liberal democracy in the ordinary sense of the term was weak and highly qualified. In relation to democracy, he argues:

“If only persons over 40, or income-earners, or only heads of households or only literate persons were given the vote this would scarcely be more of an infringement of the principle [of democracy] than the restrictions that are generally accepted. It is also possible for reasonable people to argue that the ideals of democracy would be better served if say, all the servants of government or all the recipients of public charity were excluded from the vote. If in the Western world universal adult suffrage seems the best arrangement, this does not prove that it is required by some basic principle.”

Treating the weasel words “it is also possible for reasonable people to argue” as a dishonest way of saying “I think”, it seems clear enough that Hayek is willing to countenance any abridgement of democracy that is likely to support the political outcomes he favours.
On liberty, Hayek reverses JS Mill, arguing that restrictions on intellectual freedom and freedom of speech are less important than restrictions on freedom of action, that is, intervention in markets. The natural implication is that, where speech endangers free markets it can legitimately be suppressed.
Two elements of Hayek’s thought are important here. First, his antirationalism leads him to discount Mill’s main argument for free political speech, namely that free discussion leads to better political choices. If order is spontaneous, talking about it is at best futile and at worst dangerous. Second, there is the (inverse-Marxist) materialism that emerges in full flower in public choice theory, where all political speech is mere camouflage for the nefarious activities of some interest group or other.

In conclusion, I think that Hayek’s support for Pinochet was a natural consequence of his system of thought and not an aberration. The same is true, in my opinion, of Thatcher, a similarly authoritarian free-marketeer.

I don’t want to argue, by the way, that any association with a dictatorial regime necessarily implies support for dictatorship. In some cases, particulary in relation to Stalinist Russia, there may be nothing more than foolishness involved. Gullible but well-meaning people like the Webbs were fooled into believing that the Soviet Union really was a workers paradise, based on the principles of liberty, equality and fraternity. At a more limited level, Milton Friedman defended the role of the ‘Chicago boys’ in Chile by arguing that he would give the same economic advice to any government, democratic or not, and that he had in fact advised the government of China. While this is dangerous ground, if you believe that you can make people better off by advising their government, it’s arguable that you should do so even if the government itself is a bad one. But I don’t think this kind of defence can be made for Hayek.

A former colleague of mine was on the plane that was crashed into the Pentagon. She was travelling to Australia with her husband and two small children to take up a visiting appointment. It’s as close as murder has ever come to me and, given the circumstances, it could just as easily have been me and my family. I am often haunted by thoughts of that flight and the horror of its final moments.
I know of course, that everyone killed by war or the unofficial war that is called terrorism is someone’s colleague, friend, parent, child. If we use the language of war, are we not justified in killing our enemies, regardless of their individual guilt or innocence? But I am no longer prepared to accept the easy conclusion that, in some sense, deaths in war aren’t murder. Some deaths may arise from self-defence or accident, but I have come to the conclusion that everyone involved in war, from presidents and prime ministers to privates and paymasters, should be answerable for their actions.
In the case of terrorists like Al-Qaeda, the implications are straightforward. Anyone involved in such groups is a murderer and should pay the penalty. Moreover, this penalty should be imposed under national or international law, not on the basis of ‘rules of war’ that implicitly justify war itself. If it is necessary to make new and retrospective laws to achieve this outcome, and to use doctrines of criminal conspiracy, this is preferable to a continuation of the international law of the jungle.
But what about ‘ordinary’ wars and the crimes of governments like those of Saddam and Suharto? In the world that prevailed in theory until the formation of the United Nations and in practice until the end of the Cold War, any notion of applying justice in these circumstances was nonsensical. At best, ‘victor’s justice’ could be applied to criminals on the losing side. In most cases, considerations of realpolitik meant that crimes went unpunished.
Today, however, liberal democracies dominate the world. If we are willing to apply the law to ourselves, we can impose it on everyone else. This means seeing armed forces as being like police forces, empowered to use deadly force, but answerable for the way they use it. It is a step which European countries are just about ready to take, but for which the United States is not yet ready.
One problem is that, for law to be effective, there must be a high probability that it will be applied. In the past, heads of state have enjoyed immunity for all but the worst crimes, as have rank-and-file members of armed forces acting under orders. In effect, middle-ranking officers have borne the brunt of criminal prosecution.
On the first score, the arrest and trial of murderers like Pinochet and Milosevic is a start, but there are still dozens of former dictators, and thousands of their top henchmen, enjoying comfortable retirements. On the second, there must have been hundreds of people directly involved the massacre at Srebenica, but only a handful have been tried or even indicted. A similar story could be told for other war crimes.
There may be cases, such as those of long-running civil wars, where the rights and wrongs are too complex for criminal law. Even so, we should not let bygones be bygones. The Truth Commission in South Africa, where those on all sides who had killed or tortured in support of ‘the cause’ were made to confess in return for amnesty, provides one possible model for responding to such situations.

Given the instant christening of September 11, 2001 as “the day everything changed”, it was just about inevitable that the most common observation on September 11, 2002 is that “nothing has changed”. Even if there had been big changes they would not have been significant on the scale of a century in which million-person death tolls were a tragic commonplace, in which technology changed the world beyond recognition and in which borders were drawn and redrawn repeatedly. But I have to admit that I’m struck by how little has changed, particularly in US politics. In terms of daily life, the impact has been far less than that of AIDS, which came similarly out of the blue. In world historical terms, I think September 11 will eventually rank equal in importance with the Balkans War, but well below Vietnam or the fall of Communism. Sadly, the deaths of hundreds of thousands of Rwandans will barely rate a footnote, since they died far from the nearest TV camera.
Of course, this analysis presumes that Al-Qaeda doesn’t manage a successful nuclear or bioweapon attack and that any war with Iraq doesn’t, as has been threatened, “open the gates of hell” in the Middle East. If either of these presumptions is wrong, things really will change.

Brad DeLong continues his defence of Greenspan’s failure to pop the bubble, saying:

“I don’t agree with Stephen Roach that the Federal Reserve should have made interest rates higher and tried to make unemployment higher in the late 1990s in order to diminish investment spending and collapse the stock market bubble. In my view, the time to deal with any problems created by the bubble’s collapse is when the bubble collapses–not before. Relative to a lower-stock prices, lower-investment, one-percentage-point-of-unemployment-higher bubble-popping path for the U.S. economy in the late 1990s, the actual path that we took gave us an extra $1 trillion of real production.

You can complain about how that $1 trillion was distributed. You can regret that a large chunk of it–$200 billion?–was spent on investments that have much lower social value looking forward than their social cost. You can fear the damaging consequences of banruptcy and fraud on the economy. But you have to argue that these drawbacks from the fallout are quantitatively very large for the cost-benefit analysis to go Stephen Roach’s way. ”

Coincidentally, I argued earlier this year that the real loss from bubble-related investments was close to $1 trillion. My February
opinion piece in the Fin, started with this:
” One trillion US dollars. A million million. It’s an unimaginable sum of money. It’s more than the US would spend in development aid in 100 years, and more than enough to fix many of the world’s problems once and for all.

Yet $US 1 trillion is a conservative estimate of the amount of real wealth that has been dissipated in bad investments during the ‘New Economy’ bubble of the last few years”

Admittedly, my estimate included $150 billion spent by Europeans on 3G licenses and other adventures. On the other hand, I didn’t look at the energy sector, where Enron alone dissipated tens of billions, or at excesses in the housing market.

Based on these numbers, and given that there are more failures still to come, I think that when the bills are all paid, the benefit to cost ratio will be will below 1 (that is, the bubble will turn out to be a bad thing).

For what it’s worth, I don’t think the big problem was not interest rate policy, but rather the failure to use other instruments, such as an increase in margin requirements for share purchases, and the fact that, after a brief expression of concern about “irrational exuberance”, Greenspan became a cheerleader for the boom. On top of this, there’s the more general loss of nerve arising from two decades of financial deregulation. Greenspan has been willing to adjust interest rates, but not to interfere with market outcomes.

Both Tim Blair and Professor Bunyip complain that Mark Steyn,columnist for the Spectator and Telegraph, doesn’t get enough of a run in the Australian media. One possible explanation is that Steyn’s columns rely heavily on gross distortions of the truth or outright factual errors.
For example, Tim cites a column, published inter alia in the Chicago Sun-Times under the headline Beware multicultural madness, in which Steyn writes of the 55-year jail sentence imposed on gang rapist X (now named as Bilal Skaf):
“But inevitably, it’s the heavy sentence that’s ”controversial.” ‘
In support of this claim he quotes a single letter to the SMH. As we know, he could also have cited a handful of lawyers and legal academics. A reader in Chicago would have no way of knowing that this sentence attracted the uniform support of politicians, the media and the vast majority of legal commentators (and bloggers), or that the handful of critics Steyn mentioned were more than outweighed by those calling for a stiffer sentence.

But this kind of distortion is par for the course in the commentariat. What really struck me was this schoolboy howler, cited with approval by Tim and also, as I recall, by Miranda Devine.

“Of the 20th century’s three global conflicts – the First, Second and Cold Wars – who was on the right side each time? Germany: one out of three. Italy: two out of three. For a perfect triple, there’s only Britain, America, Canada, Australia, New Zealand. ”

When writing or quoting this, Steyn, Blair and Devine didn’t manage to recall the phrase “in Flanders fields”. For others who don’t recall, Flanders is in Belgium, a country which bore the brunt of both World Wars and hosted the headquarters of NATO during the Cold War. It’s not a very big country, and easy to overlook. But there’s a bigger reason why Steyn and friends forgot about Belgium.
Its southern neighbour was also on the Allied frontline in both World Wars, and on the Western side in the Cold War. Steyn’s whole ideological position would collapse if he had to admit that France was on the side of the good guys. (I await lame quibbles about Petain and de Gaulle with weary expectation).

As far as I know, this Doonesbury strip is the first occurrence of a passing allusion to blogging in popular culture, as opposed to one of those “what are the geeks up to now?” articles we’re all sick of.

A big welcome to Peter Martin of SBS. I’ve added a bunch of links as well as deleting some that seem to be dead or (IMHO) brain-dead.

Phineas Finn by Anthony Trollope. The first of the “Palliser Novels”, which I plan to reread in sequence.
Battle Cry of Freedom, by James McPherson. The best one-volume history of the American Civil War, it certainly helps me to think about the question of a “just war”. I have formulated my own answer to the question of why the South lost. At least from mid-1862 and the Emancipation Proclamation, the war was one of liberation. The slave-based social system collapsed wherever the Union armies arrived. Hence, the South could not pursue the best military strategies for an independence movement, temporarily surrendering places to keep an army in the field. Even so, it was a near thing, and many of the gains were thrown away after the defeat of Reconstruction.

Like Ken Parish, I was struck by the good sense of Adele Horin’s piece on crime. As far as I can see, there’s very little evidence that prison sentences have much effect in either deterring crime or rehabilitating criminals. On the other hand, for hardened criminals, there’s a positive benefit to society from incapacitation alone – that is, the fact that while they are locked up, criminals can’t do much in the way of crime. The typical calculation, reproduced here, is that it costs $25 000/ year to lock up a criminal, but the social damage prevented is much greater. (This argument doesn’t apply to some sorts of crime, such as drug-dealing. The problem here is that, to the extent that drug dealers are removed from the trade, normal market processes will raise returns to drugdealing and attract new entrants.)
If this is right, then, once we reach the conclusion that someone is a professional criminal, the best thing to do is to lock them up until they’re too old for crime. But if we assume that this means 40 years or so behind bars, the cost is $1 million apiece.
If this reasoning is anywhere near right, the argument about being “tough on the causes of crime”, gains an incredible amount of force. For each kid we manage to save from becoming a career criminal, society is better off by $1 million (and that’s for the ones we catch – successful criminals are even more costly). We could pay for an awful lot of bleeding heart social programs with that kind of money. And, given that most juvenile institutions appear to be training grounds for adult criminals, there’s a strong case for second chances and slaps on the wrist for young offenders, based on the observation that a lot of them grow out of it naturally.

The latest special issue of the Scientific American deals with Time and Brad DeLong has some interesting thoughts on the same subject. Both Brad and the philosophers writing in SciAm find it very puzzling and problematic that, according to relativity theory, there’s no objective way of dividing time into past, present and future.
I must say I don’t find this problematic at all, at least at a fundamental level. Of course, it’s surprising and counterintuitive that if you send a person into space at the speed of light, they’ll come back younger than a twin who remained on earth. But that’s only surprising in the ‘isn’t science amazing’ way that a microwave oven is surprising the first time you see it. I wouldn’t have thought you could boil water while not heating the cup containing the water, but now I don’t give it a second thought.
As regards past, present and future, the observation that has had the most effect on my thinking was not made by Einstein or Feynmann, but by David Hume, a couple of centuries ago.When asked how he, as an atheist and nonbeliever in eternal life, could be unafraid of death and non-existence, he replied that no-one seemed to be worried about the uncounted centuries of non-existence that had passed before they were born.
When I think about this now, the division that’s real for me is not between past and future, but between those things I can remember and those I can’t. My past is the things I can remember. Of course, I assume that the same is true for everyone else, and that, in the manner of an archeologist with tree rings, we can patch together a consistent chronology from our joint memories, and an even better one with the aid of scientific instruments. But there’s nothing in this to make me think that this chronology should match up exactly with one generated at the other end of the galaxy or by someone moving at 100 000km/second.
There’s obviously a sense in which the past is accessible and the future is not. But I don’t know that even this is fundamental. I feel a lot less fundamentally uncertain about tonight’s episode of The Bill than I do about what life was really like for David Hume and his contemporaries or what’s happening right now (modulo relativistic effects) in the neighborhood of Alpha Centauri.