Category: Economics

The Philosophical Influences of F. A. Hayek

Friedrich Hayek receives the Nobel Prize in Economics, in 1974

Friedrich Hayek is perhaps best known as the father of neoliberalism, a quasi-messianic belief in markets as the prime source of a concept of value (and deliverance from totalitarianism), and the idea of spontaneous order, that things – all things – are not controlled, but ordered, spontaneously. His Nobel prize in 1974 was awarded in part for his ‘penetrating analysis of the interdependence of economic, social and institutional phenomena.’ In other words, he was no mere ‘financial’ economist, whatever that might mean. His was a big project, one that encompassed the ultimate political objective of protecting individual liberty, in a career that spanned over sixty years, and major works including The Road to Serfdom and The Constitution of Liberty.

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Hirschman and The Romantic Spirit

Albert Hirschman, 1915-2012

When we think of the romantics, at least in the Anglo-Saxon tradition, we often consider careful lovers in lace and ruffles, lovers primarily of love itself, as a noble, worthy aesthetic. We think of the poetry of Wordsworth (‘I wandered lonely as a cloud…’), Shelley (‘O wild West Wind, thou breath of Autumn’s being’) and Coleridge (‘In Xanadu did Kubla Khan / A Stately pleasure-dome decree…’), or of Edmund Burke’s concepts of the sublime and the beautiful. Situated in late eighteenth century Europe, however, and juxtaposed with Continental romanticism, the picture becomes altogether more political, theological, and – though fractured into myriad interpretations – more substantial. It becomes, in essence, a reaction to the Enlightenment, to the new scientism, a rejection of dogma.

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The Golden Calf and Trickle-Up Economics

When Moses went up Mount Sinai to get the Ten Commandments (Exodus, Ch. 19 ff.), he took a bit longer than expected. The people, concerned that Moses might not actually come back, decided to make their own God to worship, and created a golden calf, from the assorted gold of the people there gathered. ‘These are they Gods, O Israel, that have brought thee out of the land of Egypt,’ said Aaron, and by all accounts they had something of a party to celebrate. The story always made me think about the utility of the calf; it was very expensive. The economic cost of the thing was immense. And while the yield – being metaphysical – was literally incalculable (what price redemption and/or salvation!), surely there were cheaper ways to fashion a God? What about a nice painted papier-maché calf? That would have looked just as good.

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