Friedrich von Hayek: From Servitude to Liberty

By Lucia Santa Cruz

"El Mercurio" (p. D1-D2), 19 April 1981, Santiago de Chile

At 82 he shows no signs of age. Slim and agile in his movements, even if the passing of time has forced him to abandon most physical activities. An indefatigable mountaineer, and great walker, today he has to limit his energies to intellectual work. Even during his stay in Chile, despite his countless obligations, Friedrich von Hayek is using the time available to complete the final chapters of the third volume of Law, Legislation and Liberty. He shows us an index of the topics that this work will cover, among them: "The Ethics of Liberty and Property"; "The Evolution of the Market: Trade and Civilisation", "Poisoned Language", "Workers Exploiting Workers", "Statistics as Illusory Guides", "The Reactionary Character of the Socialist Conception", "The Megalomania of the Intellectuals".

Hayek's logical rigour makes reading him - whether or not you agree with his postulates - an intellectual pleasure. Euphemisms and mythologies have no place in his writings. Everything is called into question and there are no problems facing humanity which are not raised and scrutinized in the search for new solutions. Winner of the Nobel Prize for Economics in 1974, he is much more than a simple economist. He is a philosopher in the fullest sense of the word. His work "Road to Serfdom", published during World War II, may one day be a milestone in the history of political thought and the most solid attack ever on the effects on human liberty of the advance of socialism. In it he sets out the danger of totalitarianism infiltrating in cloaked form the democratic institutions of the West.

The thought of the father of modern liberalism, even if he shuns the classification of neo-liberal, is being disseminated, with the natural slowness of ideas, years after it was first formulated. An isolated prophet in the thirties and forties when Keynes reigned over intellectual and political circles in England and the United States, he is today a "respectable" figure with a following among young European and North American academics. Also among governments like those of Reagan and Mrs Thatcher, which acknowledge him as a major source of inspiration.

In Chile, in his capacity as Honorary President of the Centre of Public Studies, he allows himself to be interviewed with the modesty that only great figures appear to possess.

His speaking manner is calm. His English is perfect after years of living in Great Britain - where he obtained British nationality - though with a strong and melodic Austrian accent. Impeccably dressed, he sports a necktie with the effigy of Adam Smith given to its members by the Mont Pelerin Society, of which he is the founder.

At the beginning of his conversation with "El Mercurio", he quips: "Please sit to my right. I am deaf in my left ear which, as you will understand, lends itself to many political jokes."

He accepted the presidency of the Centre of Public Studies because the case of Chile interests him:

From the little I have seen, I think it is no exaggeration to talk of a Chilean miracle. The progress in recent years has been enormous.

I would draw attention, yes, to the importance of continuing on the same path:

It is necessary to retain inflation completely and to avoid price controls or trade union privileges of any kind. I am not against trade unions, but I am against the idea that they should be entitled to privileges which other citizens do not have, because they can ruin the economy.

Today nearly every political movement has liberty on its banner. This must partly be due to the fact that it conceals different and even antagonistic meanings, and not only shades of meanings but in the very essence of the concept. What do you understand by liberty?
I am talking about the freedom of the individual. It is an abuse of the term to believe that it refers to the liberty of a majority in a representative assembly. This is because if this assembly has unlimited powers, it will inevitably end up constraining the freedom of individuals. For the individual, liberty means knowing in advance the rules that he needs to obey in order not to be coerced by the government. In this way freedom is the absence of coercion. This calls for a framework of known standards, the same for everyone, so that everyone can develop sensible plans and pursue his own ends. This does not mean that the government may not hold other powers. Simply that it should not have other means of coercion. I believe that the government can do a lot of good by providing the necessary infrastructure, although here again it should not hold the monopoly. I would say that it should do only that which it effectively does better than others.

Is this a negative concept of liberty?
Yes, effectively. The concept of liberty is a negative one. What is referred to as positive liberty, which allows certain people to enjoy certain rights to do special things, is irreconcilable with the idea of equality before the law, with the obligation that all governments ought to have to treating every one in the same way.

Some people maintain that it would not be right to legislate in an equal way for beings who are equal in appearance only? What do you think?
It is possible that certain governments, in certain countries, need to ensure a minimum level below which no one can fall. However, if justice is conceived of as de facto equality, this is unachievable. People are different, and nothing would be more unjust than to make equal beings who are not equal. The only thing that can be equal, I repeat, is the treatment everyone receives from the government.

Strange as it may appear, faced with the retreat of liberty as a driving force of civilisation, we are forced to ask the question "Why is liberty necessary? What we generally hear are rhetorical arguments, but you appear to have empirical arguments for this...
Very, and indeed very empirical ones. Only the free market order enables us to feed the world's population. If we had never begun using the market, we would have continued a happy existence as savage collectors. But we have used the market and succeeded in increasing per capita productivity in order to keep alive a number of persons who, without the market, and without the division of labour that this permits, would have been unable to survive. The truth is that, unless we want to eliminate or kill off the excess population, we need to continue. We have created not only a civilisation, but also a population whose existence depends on maintaining the market order.

Might not these ends be achieved with planning?
I would say that today, and with the growing complexity of modern society, it is more impossible than ever before. It would be very easy if a single person or office could really have available to them all the information that is needed in order to take decisions. But it is not a question of the market adapting to facts that are known to everyone. It is a question of its functioning in a situation where nobody knows all the data in their entirety. We are dependent on the use of information which people bring into the market, which itself acts like a large computer, and it is the market results, the automatic signals that the market sends, which indicate what has to be done in every case. In this way the market acts as an essential guide, showing individuals how they can contribute in the best possible way to the whole. Other systems require us to dictate to people what they have to do and, worse still, without our really knowing what they ought to do.

Economic liberty is therefore vital?
It is impossible to separate economic liberty from other liberties. Liberty consists of being able to experiment, and people can experiment only if they can use all the resources to which they have access.

The distinction between economic freedom and intellectual or cultural freedom is an artificial one. There is no system which, after taking away economic liberty, has been able to guarantee intellectual liberty.

Do you believe that once the bases of a free economy are established, political liberty emerges automatically? Or can one conceive a situation of an authoritarian government remaining in power, which deprives citizens of many liberties but maintains a large degree of economic freedom?

This could be possible. It depends on what you mean by political liberty. If you are referring to the liberty of the majorities, yes, but if you wish to define political liberty as an absence of arbitrary powers, then this has to apply across the board. For this it is not necessary to list specific rights. It is enough to point out that the government does not have powers to coerce individuals, except by way of application of the same uniform rules applicable to everyone.

But do you not believe that said laws not only have to be uniform but they must also not be coercive in nature?
Laws that are the same for everyone are not, because they need to applied also to those who formulate them. I understand that restrictions may be necessary in a period of transition, but as a permanent state of affairs this would not be desirable.

One of the most common confusions in modern political theory appears to be the one between the concepts of democracy and liberty. You have already advanced this idea, but, could you specify more clearly in which sense these two concepts are different and even mutually hostile?
Liberty requires a certain level of democracy, but it is not compatible with unlimited democracy, that is, with the existence of a representative legislative assembly with all-embracing powers. Even so, for liberty to exist, it is vital that individuals be able to put an end to a government that is rejected by the majority. This is a major value. Democracy has what I would call a "hygienic" task, that of ensuring that political processes are conducted in a healthy way. It is not an end in itself. It is a procedural rule having as its objective to serve liberty. But in no way does it rank on a par with liberty. This latter requires democracy, but I would prefer to sacrifice democracy temporarily, I repeat temporarily, rather than have to do without liberty, even if only for a while.

Does any relationship exist then between individual liberty and democracy?
The only thing that liberty requires is for the individual to be able to do something to restrict the actions of the government. I do not believe that giving positive instructions to the government on what it is supposed to do is part of liberty. But the fact is that one cannot have liberty if we cannot exercise the right to prevent the Government doing certain things.

Nonetheless, it appears clear that democracy in the West is going through a credibility crisis. What, in your judgement, is this due to?
People supposed that democracy would be competent to legislate. This was in a time when legislating meant establishing general standards of individual conduct. But today we attach the name of law to everything emanating from authority, whether or not it has the character of law. Montesquieu's old precept of the separation of powers has been shattered. Once upon a time, when we spoke of legislation, this referred to something very different. Today the legislator's authority has become omnipotent. We lack any separation of powers, because Parliament has not only legislative powers, but can also administer, and use its full discretion in the process.

In other words, the problems are not intrinsic to democracy itself, but to the specific form in which it has come to function?
That is my belief. In my next book, the third volume of "Law, Legislation and Liberty", I propose a new organization of democratic government. This would consist of two Chambers with differing purposes. The first would be a genuine legislative body with its powers limited to establishing general rules, and the second would direct government as such. This government would, of course, be limited by the general rules established by the first assembly.

How would authority be generated in these Chambers?
By a system of elections, but a different system in each case. In the chamber having governmental tasks, representation could be based on distinct sectorial interests. In the legislative chamber, on the other hand, the need would be more for experts, wise and experienced men who know their subject areas. They would also be elected, but not on a party political basis - as could be the case in the legislative (I think there is a mistake in the original text - the context seems to want the word "governmental", Translator's Note) body - and also for longer periods. They would not be eligible for re-election, to avoid their being subject to party pressures. It goes without saying that the executive assembly would be subject to the general laws of the country.

Do you believe in natural law and that liberty and property, for example, are prior to the State?
No, in the traditional meaning, but yes in a certain sense. I believe that the best laws have been selected by an evolutionary process. They have not been constructed intellectually. Like other products of civilisation, one can legitimately say that there is more wisdom in tradition than in constructions that are the outcome of a process of deliberation. I do not want to say by this that all traditions are good. Tradition needs to demonstrate its goodness.

This can be measured by the success of the institutions it has produced, and in general it can be said that the tradition of law and of liberty has proved more successful than other traditions.

What relationship does this have, for example, with the right to property? Is this prior to the State or does it require it, as it is not mere possession, as Kant says.
The State is necessary to buttress law, but law is not a creature of the State. It is the product of an evolution that we deem to be good, not because it has been decreed by the State, but because it has created a sort of broad order which could never have been created by deliberation.

You have referred on other occasions to the apparent paradox that a dictatorial government may be more liberal than a totalitarian democracy. However, it is also certain that dictatorships have other characteristics which clash with liberty, even when conceived in the negative way you do...
Obviously there are major dangers in dictatorships. But a dictatorship can place limits on itself and a dictatorship that deliberately sets limits on itself can be more liberal in its policies than a democratic assembly without limits. I have to admit that it is not very likely that this will succeed, even if, at a particular point in time, it may be the only hope there is. It is not a certain hope, because it will always depend on the goodwill of an individual, and there are very few individuals one can trust. But if it is the sole opportunity which exists at a particular moment it may be the best solution despite this. And only if and when the dictatorial government is visibly directing its steps towards limited democracy.

You have written that liberty is the source and the precondition for improving moral values...
It is only when he enjoys liberty - and I refer, I insist, to individual liberty - that a person can behave in a moral manner. Only if this person has a sphere known to itself, within which it can choose, can it act morally, only if it is the person who decides how it should act.

What role does morality play in political theory?
As I have said, I believe that our moral beliefs are not the construction of our intellect. On the contrary, like other natural organisms they have been selected by an evolutionary process which is not directed by us. In order to understand why certain moral rules have, so to say, proved more successful, we need to understand what we mean by morally more successful. I have arrived at the conclusion that in the process of evolution we have managed to select those moral values that allow us to maintain the largest number of persons alive.

Morality - and in this I include property and contracts - need to be judged against the "calculation of lives". History has proved that one system of laws tends to more effectively keep alive a greater number of persons than others. Although this might shock some people, this has been proved by capitalism's creation of the proletariat, a set of persons who would not otherwise have survived. The people making up the proletariat would simply not exist other than through capitalism.

Do you believe that liberalism is morally neutral or that the objectives it pursues carry a hierarchy of values?
A free society demands the existence of certain morals that, in the last instance, boil down to the maintaining of lives; not the maintaining of all lives, because it could be necessary to sacrifice individual lives in order to preserve a greater number of other lives. In this way the only moral rules are those which lead to the "calculation of lives", that is, property and contract. I am deliberately remaining outside family and sexual morality because I am not an expert. In this field it is more difficult because certain innovations, such as birth control, have radically changed the foundations of family life. What is essential is that we recognize certain moral rules. I am convinced that we do not choose our morality, but that the tradition we have inherited regarding property and contracting is a necessary pre-condition for the existence of our current population. We can attempt to improve it, partially and experimentally.

To say that the right to property depends on a value judgement is equivalent to saying that whether or not to conserve life is a question of value judgement. From the moment that we accept the need to maintain alive everyone who exists today, we have no choice. The only value judgement refers to the estimates we make relating to the preservation of life.

Would you say that the Catholic Church has traditionally opposed liberalism?
Not necessarily. Only it opposed European rationalist liberalism, not the English currents of liberalism, because under the influence of the French revolution this rationalist liberalism became anti-church before the Church became anti-liberal.

Even so, relations have not always been harmonious.
In the 19th century the Church adopted a very anti-liberal attitude towards science. Right now there is a lot of hope of a reconciliation between science and the church. I have been involved in these efforts. Four months ago I was at a meeting in the Vatican along with a dozen other Nobel prize-winners to discuss the problems of the reconciliation of science and the Church. I do not know how far the Pope is ready to go. I have to say that I disagree with the extremely doctrinaire position on birth control. But on this occasion we were told that, apart from abortion - which remains outside discussion for the Church - we could talk freely about all the rest.

Even if the Church may not be anti-liberal, there have been ecclesiastical pronouncements against capitalism.
Listen. I don't like the word capitalism either, and I would be happy to change it. But I do not believe that the Church has come out officially against the market economy, and the old doctrines concerning interest are a thing of the past. Indeed, major Church representatives, including cardinals, and among them the primate of Germany, support the social market economy. There is no official opposition from the Church, it has simply abandoned a few restrictions. It has to be said, moreover, that priests' involvement in socialist movements is almost exclusive to Spanish-speaking countries.

Do you not believe that liberalism generates materialism?
No. Absolutely not. It puts within our reach the material means to satisfy our own objectives.

Tocqueville was perhaps the first to raise the question of the permanent tension between Liberty and Equality. What, do you believe, is the reason for the conflict which generally arises between the two?
The only feasible equality is equality before the law. As soon as you ask more than this, it immediately enters into conflict with liberty. If your intention is to create material equality, this can be achieved only by limiting liberty.

But, would you say that the idea of equality has contributed to transforming liberty from a privilege into a universal value?
Only in so far as it refers to equality before the law.

Do you not believe that it is essential to guarantee equality of opportunity?
This too is very difficult to achieve. The opportunities created by governments need to be equal, but it is not possible to ensure objective equality. People are very different. They have different parents, dissimilar levels of health, unequal biological constitutions.

But, for example, in the area of education, do you not believe it to be important not to have marked differences of opportunity?
Certain measures in this respect are useful. It is desirable that capable persons who are unable to finance their studies be aided, but I am not sure that we have not damaged worker families by depriving them of their most gifted elements.

And aspects like culture, where the law of supply and demand has historically safeguarded neither diversity or quality.
Previously I used to think that governments ought to do something here, but the Japanese experience, where all these leisure activities are in the hands of private enterprise, has convinced me that governments are not the most suitable players. They have never been. Neither in Greece, nor during the Renaissance, nor in the musical apogee of the 18th century. It is always patrons who have been the great instigators of culture. It is fitting for the moneyed classes to protect culture.

In our day, liberalism traditionally has been a mentality more than a rigidly structured doctrine, a pragmatic and empirical focus, an application of the principle of trial and error. There are people who believe that neo-liberalism is essentially distinct in this respect, because it offers a very solid structure which could be classified as a very consistent, global ideology. How can this be compatible, for example, with the idea of the great liberal Karl Popper that politics, like a scientific hypothesis, is no more than a conjectural proposition, without any value or ultimate truth.
Popper and I are in agreement in almost every respect. The problem is that we are not neo-liberals. Those who define themselves in this way are not liberal, they are socialist. We are liberals who are seeking to renew, because we belong to the old tradition which has room for improvement, but which cannot fundamentally be changed. The opposite is to fall into rationalist constructivism, into the idea that it is possible to construct a social structure conceived in men's minds and imposed according to a plan with no account taken of evolutionary cultural processes.

Do you not believe that in the case of Chile, for example, where an attempt is being made to apply a very consistent model in every sphere of national life, there are certain features of what you call constructivism?
I don't know the situation well enough to give an opinion. I know that the economists are solid.

But the model embraces more than the economy alone ...
It is possible that this is due to the enormous influence that positivism and utilitarianism have had in Latin America. Bentham and Comte have been major intellectual figures and liberalism has always been constructivist on this continent. Milton Friedman, for example, is a great economist with whom I agree on nearly every point, but we have our disagreements, and not only on the mechanical use of money supply (Corrupt text: The reading could be: "... with whom I agree on nearly every point, but with whom I disagree on the mechanical use of money supply", Translator's Note). I too am an economist, but I like to think that I am something more than that. I have always said that an economist who is no more than an economist, cannot even be a good economist. Yes, Friedman grew up in the tradition of the Bureau of Economic Research under Mitchel's influence. Mitchel maintains that since it is we that have created the institutions, we can change them as we wish. This is an intellectual mistake. It is an error. It is wrong. In this sense Milton is more constructivist than I am.

So in other words, a model which embraces all the institutions and which imposes itself without being generated by spontaneous forces, can, however much it pursues liberty, end up in conflict with liberty?
Yes

Talmon says that man finds himself struggling between two major aspirations: the desire for salvation by means of a creed that solves everything and encompasses everything, and liberty. I would add that it would be the simultaneous pursuit of both goals that leads inevitably to tyranny. Do you believe that the search of liberty that converts into an all-embracing, all-solving credo can in any event lead to certain forms of tyranny?
Yes, of course. Ultimately, when all is said and done, it is a problem of humility. That of being able to admit how little we know.

I would like to have your comments on the following judgement: Hegel, Marx and Freud are responsible for all the moral and intellectual dishonesty of the 20th century.
This is perhaps a somewhat exaggerated way of putting it. Let's just say they are the most conspicuous representatives of the mistaken path.

***

© "El Mercurio" — Santiago de Chile 1981, for the original Spanish text

© Institut Hayek 2004-2005, for the English translation

 Download this interview as a PDF file

Read also Friedrich von Hayek, Leader and Master of Liberalism, By Renée Sallas, "El Mercurio" (p. D8-D9), 12 April 1981, Santiago de Chile.