constitutionalism, economics, global imbalances, justice, pandemic, statism

Hayek versus Hegel in the Age of COVID

The current COVID-19-inspired crisis has yielded a golden opportunity to take a scientific look at underlying social forces. (By scientific, I refer here not to natural science, but to analysis, the objective appraisal from the proverbial 30,000 feet, which is of course scarcely possible for mortal flesh, but at least is an aspiration.)

What it has revealed is two basic orientations vying for supremacy. They can be labelled the Hegelian and the Hayekian. The one focuses on a top-down response, the other on a bottom-up one. And underlying these predilections are clusters of understandings. Let’s examine them.

Who/what is the Hegelian?

G. W. F. Hegel was a German professor of philosophy in the early 19th century, whose influence extends far beyond the classroom. In fact, he formulated the mindset that dominates a great swath of modern society, in particular many in leadership, but beyond that, all those, usually formally educated, who feel the need for intervention to stave off the doom scenarios born of unregulated, chaotic, every-man-for-himself behaviors. Hegel localized such behavior in civil society, which thrives on supposed egocentric self-interest; he saw its restoration in the “ethical substance” come into its own, the state.

For example:

In contrast with the freedom of trade and commerce in civil society, the other extreme is the provision as well as the determination of everyone’s labor through public operation, such as the ancient work of the pyramids and the other tremendous Egyptian and Asian works, which were brought about for public purposes without mediation of the individual’s labor in terms of his particular choice and particular interest. This interest calls for freedom against regulation from above, but the more blindly it is sunk in its selfish purpose, the more it needs to be brought back to the universal, and to mitigate its dangerous convulsions, shorten the intervals in which collisions are settled in terms of unconscious need.[1]

The state unites the individual to the universal. It is the realization of ethical life, by which civil society, the realm of freedom of action and association, is saved from the conflict in which it is mired. And so the state brings civil society to the fulfilled ethical condition by way of conscious intervention. In essence, the state is the conscious, purposive activity of the collective, against the blind unconscious activity of free actors pursuing their own ends.

And by extension, this state is not necessarily the democratic state ruling by consent of the governed. No – it being the higher consciousness of man, it rules over the governed. Democracy is something to be suffered when not surreptitiously superseded. Stahl put it succinctly:

[Hegel’s] desire is for reason to rule, for what is objective and necessary to occur…. But for him this reason is logical formalism, and as far as the institution through which it is to come into existence is concerned, Hegel is predominantly on the side of rule from above as opposed to building from the bottom up and from inside. His doctrine is as little ultraroyalist as it is ultraliberal; but it is ultra-governmental. Everything should be accomplished through ordered (objective) power, the government, while the people accept this consciously and thereby freely; but the reverse may not also take place, whereby a work is accomplished out of the free, innermost personal drives (subjectivity) of the individual, of associations, the people, the estates…. He is an opponent of the free movement which emerges from the unordered and unprepared into order and clear shape, and no less the inviolable rights the holders of which must be brought into connection with the jointly beneficial, through inner conviction. All of this is the necessary result of the system as a whole, which everywhere stands only on the impersonal, substantive, logically necessary, and pushes personality (subjectivity) down into a dependent moment, in itself without content, the only purpose of which is to reflect the former.[2]

This is the mentality. In history, it was carried forward by men like Henri de Saint-Simon and Auguste Comte, converted by them into a scientistic technocracy which would rule over the unreasoning passions of the common run.

That is one mentality ascendant in our society, but there is another: the Hayekian. The exemplar of this is Friedrich Hayek, Nobel prize winner for economics in 1974 for his “penetrating analysis of the interdependence of economic, social and institutional phenomena.”[3] Hayek’s vision of an interdependent society built upon the spontaneous expression of citizens pursuing goals of their own device, and in so doing generating symbiotic, synergetic order, is the polar opposite of Hegel’s.

The key device through which such order is made possible is the rule of law. Established rules made known to all enable them to compete and coordinate without subjection to a higher directing authority. The rule of law makes possible spontaneous order, as opposed to the consciously-planned and -imposed order of the Hegelian, which is the order of an overarching organization.

In the terms we have adopted this means that the general rules of law that a spontaneous order rests on aim at an abstract order, the particular or concrete content of which is not known or foreseen by anyone; while the commands as well as the rules which govern an organization serve particular results aimed at by those who are in command of the organization.[4]

Society is spontaneous order; it is not an organization. But this sticks in the Hegelian’s craw. The attempt to convert it into an organization is what drives him (or her).

The rationale behind social control has mutated through the generations. It was born in the time of the industrial revolution and indeed in response to it. So the first form was economic, as witness Marxism. Indeed, Marx is perhaps the most notorious member of the club of so-called Left-Wing Hegelians.

This spurred the drive for economic planning, which reached its zenith in the early and mid-20th centuries. The “planned economy” as exemplified first and foremost by the notorious Soviet Five-Year plans, slowly lost its allure, especially during the Cold War with the concomitant comparative analysis between the West and the communist powers, e.g., West and East Germany.

And so communism lost its bid for world power in favor of capitalism. This ushered in “The End of History.” Right? Wrong! With the collapse of the Berlin Wall, new bearers of the Hegelian mantle rushed in to fill the void.

Immediately picking up the baton was the environmental movement. Although its roots lie in the 19th century, this movement began in earnest in the 1960s, picked up headway with Earth Day 1970, and became the major proponent of an agenda of drastic social control in favor of world population reduction and curtailment of capitalist industry. By the 1980s it too had lost its way. That is, until global warming/climate change came along. As a result, for the past 30 years we have been subjected to massive top-down diktat to – get this – stop the world’s climate from changing.

Into the fray has sprung COVID-19. This virus has provided another pretext for the same agenda: social control.

To this end, the Hegelian is championing lockdown.

At the beginning of the crisis, it seemed the logical thing to do, and the vast majority of peoples and nations implemented some form of it.

But along with it has come economic devastation, the likes of which we have hardly begun to experience.

Yet many are oblivious. People seem to think, and the Hegelian does not seem averse to feeding the illusion, that consumption can be separated from production, that we can go on consuming without getting out there and producing. Just keep spending, congressional bill after congressional bill; a trillion here, a trillion there, pretty soon you’re talking big money (h/t Gary North).

The illusion that production and consumption can be separated was fostered by the abundance made possible by the Industrial Revolution. But that does not mean that it is actually feasible. The most basic law of economics is Say’s Law: supply creates its own demand. The corollary to that law is, if you don’t produce, you won’t consume. Production and consumption are inextricably linked. The modern globalist economic framework has gone far to pulling these apart from each other, the better to play the middleman and engross the surplus value which is made available in this way to those who command the heights of the world economy. But just as this system of trade imbalance only leads to indebtedness which is unsustainable in the long run, just as unsustainable is the mirage of consumption without production.

The driving force behind Marxism in all its economic forms is precisely the separation of production and consumption: “from each according to his ability, to each according to his need.” A wonderful expression of distributive justice. But a complete denial of the other, neglected form of justice, known as commutative.

Commutative justice is the justice of freedom and equality whereby spontaneous action is coordinated and integrated instead of being directed, subsumed in terms of an imposed purpose. It is the true social justice: for society is not an organization.

And it imperiously decrees the link between production and consumption. In fact, Say’s Law is its economic expression. Is it fair that what one produces, another consumes, without reciprocal recompense? Perhaps in the realm of distributive justice, but not in the realm of commutative justice.

Cancel commutative justice in favor of distributive justice? We may as well cancel pluralism, freedom of action, the pursuit of self-chosen goals as well. Commutative justice makes room for the pluralistic, associationalistic society which breaks with the groupthink of the monolithic group. The Hayekian, spontaneous order is precisely the expression of commutative justice. Or better, it is the order which comes about when distributive justice is incorporated within the framework of commutative justice. That is, the organizations and associations which, each in its own way, incorporate distributive justice, are themselves coequal partners, islands in the ocean which is the greater, spontaneous order. In this dialectic, Hayek subsumes Hegel.

It is the inevitable framework of a complex social order.

The more complex the order aimed at, the greater will be that part of the separate actions which will have to be determined by circumstances not known to those who direct the whole, and the more dependent control will be on rules rather than on specific commands. In the most complex types of organizations, indeed, little more than the assignment of particular functions and the general aim will be determined by command of the supreme authority, while the performance of these functions will be regulated only by rules – yet by rules which at least to some degree are specific to the functions assigned to particular persons. Only when we pass from the biggest kind of organization, government, which as organization must still be dedicated to a circumscribed and determined set of specific purposes, to the overall order of the whole of society, do we find an order which relies solely on rules and is entirely spontaneous in character [5]

Commutative justice there must be; it decrees that production and consumption are one. It is a dangerous illusion to believe that consumption can go on without production. It feeds the illusion that people can sit at home in some sort of lockdown and expect the supermarkets to remain full, the gas stations to keep pumping, the electricity to keep running, etc., as if all production is just there, like the sun and moon and stars. Not at all… the same people who consume have to produce. If you lock people up in their homes and don’t let them get back to work, soon not only they but everyone, even those in “essential” work, will start feeling the effect in the form of shortages and rationing – indeed, a wartime economy. Which is what the Hegelian has been after all along. Does it matter that in terms of productivity such an economy cannot come close to the levels achieved by the spontaneous order? Apparently not. And in the environmentalist vision, that is actually a point in its favor.

But is not this lockdown, this strangulation of the economy, being done in pursuit of a supreme goal, the preservation of life? We hear that we cannot survive this virus, or at least we cannot reduce the loss of the life, without resort to these draconian measures. And to ease them, lift them, suspend them, is the heighth of irresponsibility.

Is that so? Consider this: flattening the curve does not reduce the area under the curve. Which is to say, social distancing and economic shutdown do not eliminate the virus, they only stave off the point in time at which individuals will come in contact with the virus. They only delay the inevitable.

Even worse: what this enforced isolation does accomplish is the delay of the only surefire antidote to this affliction, and that is collective immunity. Once a sufficient level of immunity is achieved across society, viruses find themselves unable to sustain themselves, so they subside. And once that has been accomplished, the elderly and other vulnerable members of the population can come out of hiding. In the meantime, they and they alone should be sheltering. Barring the discovery of an effective, sure-fire vaccine – rather wishful thinking at this point – this is the only way out.

Does this solution sound like it dovetails nicely with the Hayekian approach? It does. Which explains the knee-jerk, froth-at-the-mouth reaction against it. But the fact of the matter is, the social organism will spontaneously rid itself of this threat. The Hegelian interventionist approach makes for great theater, but in the end accomplishes nothing. Except, that is, the destruction of the economy. The better to remake it in the planned technocratic, environmentalist image? Time will tell.

It may well be that the effort will end up backfiring miserably. One of the inevitable consequences to this crisis is that that world economic order is being upended. The nations will be reordering their economic relations, this time away from globalist just-in-time supply chains, and towards redundancy and domestic production. The time is ripe, not for a Hegelian, but a Hayekian reboot of the economic order – at least, if the effects of neo-Keynesian deficit spending can be shaken off (a big if).

In all aspects of this crisis, the Hayekian will move to the forefront, once the fetters of imprecise and overly draconian public health measures are cast off, by which flies are dropped with cannons, gnats are strained, and camels swallowed.

Stand aside, Hegelian.

[1] Grundlinien der Philosophie des Rechts [Outlines of the Philosophy of Law], §. 236.

[2] Stahl, Geschichte der Rechtsphilosophie [History of Legal Philosophy], pp. 475—476.

[3] The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 1974. Nobel Media AB 2020. Mon. 27 Apr 2020.

[4] Law, Legislation, and Liberty: Volume 1, p. 50.

[5] Law, Legislation, and Liberty: Volume 1, p. 50.