F. A. Hayek, Conservatism, And The Free Economy

I have spent my entire professional life promoting economic freedom. Most of this has been in the United States, where parties and groups labeled “conservatives” have favored the free economy. Various leaders and groups made some exceptions, usually for national security, education, health, and the environment, but by and large they always defended private property. The free economy is nothing more than allowing adults to use their private property as they please.

Although this is changing, outside the United States the term “liberal” usually describes those who emphasize economic liberty and private property. But here, after social democrats and interventionists appropriated the term “liberal,” the term “conservative” has come to mean something like classical liberalism.

Just as in the modern economy new technologies have allowed for extreme product differentiation, the world of ideologies has in recent times become very differentiated. In the same way you can pick your phone’s color, today you can choose your conservative brand depending on your personal and social values. As ideas impact economic policies, several of us who work in this field are studying the new scene and its potential effects on the economy’s future.

As the topic is so vast and is attracting considerable resources, the analysis deserves a long treatment, so I will tackle it step by step in several articles, starting with the definitions and foundations.

Let’s start with conservatism. I use the term conservative to describe the ideology, political philosophy, movements, and organizations grounded on the view of the human person as having a special dignity. This dignity makes each of us unique and individual creatures, with body and soul, social needs and inclinations, understanding and free will. I also regard as conservative those philosophies and organizations that defend the institutions that evolved to protect, nurture, and enhance human flourishing.

In most definitions of conservatism, you will find mention of the political and social philosophies that emphasize preserving established traditions, institutions, and values. As there is a variety of traditions, institutions, and values, especially across regions and countries, it is natural that there will be differences in what people want to conserve.

There are many colors of conservatism today in the United States and the world: Social Conservatives, National Conservatives, Constitutional Conservatives, Freedom Conservatives, and I could add to the list. The president of the Heritage Foundation, Kevin Roberts, recently published a piece, Unhyphenated Conservatism, which states that “the divisions today on the American right cannot be papered over.” After listing eight fundamental principles that should unite conservatives, Roberts states that the most important should be “individual freedom, grounded on moral virtue and interpersonal responsibility.”

Each of today’s “hyphenated conservative” groups has chosen to emphasize one or more aspects of the values and institutions that have led to the progress of civilization. Some focus on nation, others on values, others on tradition, and others, like the Freedom Conservatives, on freedom.

F. A. Hayek and Conservatism

F. A. Hayek’s contributions to the free society as a scholar and as an intellectual entrepreneur have been so influential that even most freedom-loving conservatives have commented on and analyzed the famous postscript chapter of his Constitution of Liberty, “Why I am not a Conservative.”

I do not use the term “conservative” in the way Hayek used it. In that essay, Hayek described himself politically as a “Whig.” The Whig Party in England emerged during the late 17th century and played a significant role in British politics until the mid-19th century. It then became the liberal party. Its counterpart, Toryism (Conservatives), became identified with a desire to retain the existing state of things, however bad it might be. I do not know, however, any conservative today who states that. On the other hand, the term “liberal” replaced Whig. “Liberal” also had different meanings, from moderate liberals to lukewarm conservatives, with some negative connotations.

On the topic of economics, like most conservatives until today, the Whigs generally supported policies that promoted trade, commerce, and economic growth. They were associated with commercial interests and the emerging industrial and merchant classes, favored free trade, and opposed protectionism. Whigs also championed individual liberties and civil rights and were strong proponents of freedom of speech, religion, and the press. Since the term “Whig” and the evolution of the party is little known on this continent, when speaking to Americans Hayek said that the writings of James Madison would best explain his political and economic philosophy.

James Madison (1751-1836), one of the Founding Fathers of the United States and the fourth president, is often considered a key figure in the development of American conservatism. Madison was a proponent of limited government and a strong advocate for individual rights and liberties. He was crucial in drafting the United States Constitution and authored most of the Bill of Rights. These first ten amendments to the Constitution protect fundamental rights such as freedom of speech, religion, and assembly. Madison was not a libertarian; he supported policies such as a strong national government and expanding federal powers. He advocated for establishing a national bank and supported the War of 1812, which involved using federal military power.

The James Madison Program is one of the most important efforts helping to bring serious academic conservative discourse to leading universities. It is directed by Robert P. George at Princeton University, one of the top conservative intellectuals in the United States. So, for most observers today, “Hayek the Madisonian” sounds like “Hayek the conservative.”

On the topic of tradition, an issue that comes up frequently when distinguishing conservatives from liberals, Hayek is clearly on the conservative side. “Paradoxically, as it may appear,” he wrote, “it is probably true that a successful free society, will always in a large measure be a tradition-bound society.”

Hayek is well known among libertarians for analyzing the importance of the individual’s knowledge and decentralized decision-making. He emphasized the emergence of spontaneous orders and saw conservatives, especially his contemporaries in the U.K., as more inclined to support government intervention in the economy to preserve societal stability and traditional values.

In his Road to Serfdom, Hayek mentions that in those times, 1940, the Conservative Party in England had drifted away from the free economy. In Constitution of Liberty, he quotes Harold Nicolson, a member of the establishment, who wrote that among the backbenchers of the Conservative party, “the most gifted . . . were all socialist at heart.” Hayek’s belief in the necessity of ongoing evolution made him distinct from conservative thinkers who might emphasize established structures and customs.

Frank S. Meyer (1900-1972) addressed Hayek’s “anti-conservative” confession. Meyer was a crucial figure among American conservatives. In the words of William C. Dennis, Meyer argued that conservatives “should not let factional ideological quarrels distract them from their duty to further their common heritage of liberty and to reduce the power of the Leviathan state.” Regarding Hayek, he acknowledged: “He is a Whig with all the moral and intellectual power of eighteenth-century Whiggism, infinitely superior to its French Revolutionary and Liberal successors.” However, Meyer continued, “he is a Whig with all the flaws of Whiggism, its fear of acknowledging the absolute transcendental values upon which its strength is founded.”

In “Conservatives and Libertarians: Uneasy Cousins,” an essay presented at the Philadelphia Society in 1979, Robert Nisbet, the noted sociologist professor at the University of Columbia, agreed with much of Hayek but not with his generalization that conservatives are reluctant to innovate and change. Nisbet provided several historical examples contra Hayek and concluded that there is no evidence that political conservatives are hostile to change.

Hayek doubted that “there can be such a thing as a conservative political philosophy.” He argued that “conservatism may often be a useful practical maxim, but it does not give us any guiding principles which can influence long-range developments.”

Despite this warning by Hayek, in addition to the eight points that appear in Kevin Roberts’s piece mentioned above, U.S. conservatives have been developing guiding principles. Different brands of conservatives coexisted well with a set of principles adopted by young conservatives on September 11, 1960, at the house of William F. Buckley, Jr. in Sharon, Connecticut. In our day another set of principles, this time prepared by the “Freedom Conservatives,” is gaining support from diverse sectors, from conservatives to libertarians and even establishment Republicans. I will focus more on these documents in a future piece, but here I will address the first points from each set of principles.

The Sharon statement starts with: “That foremost among the transcendent values is the individual’s use of his God-given free will, whence derives his right to be free from the restrictions of arbitrary force. That liberty is indivisible, and that political freedom cannot long exist without economic freedom.”

The Freedom Conservatives’ statement starts with: “Among Americans’ most fundamental rights is the right to be free from the restrictions of arbitrary force: a right that, in turn, derives from the inseparability of free will from what means to be human. Liberty is indivisible, and political freedom cannot long exist without economic freedom.”

I think that Hayek would have no difficulty signing the Freedom Conservatives’ document. Note that, unlike the Sharon statement, the statement does not provide an origin for freedom. I do not think that this would have been a problem for Hayek. He helped produce the Mont Pelerin Society (MPS) guidelines in 1947. Although different in scope, the MPS document is compatible with the Sharon and the Freedom Conservatives statement; it mentions human dignity, freedom, moral absolutes, and the essential moral nature of problems. However, consistent with Frank Meyer’s criticism, there is no mention of God, a Creator, or the origins of dignity and freedom.

The Founding Fathers of the United States mentioned the Creator as the origin of inalienable rights. Even though it leaves a void, the drafters of the Freedom Conservatives decided to avoid the controversy about the origins of freedom. But to be fair, even in the 1960s, the Sharon statement’s assertion that free will was God’s gift passed by a slim margin, 44 to 40.

Despite the differences in conservative positions, most acknowledge the free economy’s importance. The writings of F.A. Hayek, as well as his demeanor, dress, and life, which I witnessed on several occasions, fit well with conservative culture and several conservative positions, especially those of the Freedom Conservatives.