On my debate escapades, I encountered a person who says, “Without government, capitalism would crash and burn.” He also associates that saying with Hayek (aka, he thinks Hayek thought that without government, capitalism would crash, etc).
I don’t know anything about Hayek yet, as I’m still fairly new to the Austrian school, so I figured I’d run here and ask you lot about his remarks.
Just comments and such is all I ask :). I’m mostly asking whether Hayek thought that way, but I would appreciate some replies on his capitalism/government spiel (I expect many, “Good lord, he’s an idiot” responses :P)
Hayek was a minarchist and later moved on to embracing more substantial government intervention. He always supported a government to provide law and order and protection against fraud &c. So if he said something like that, that is what he meant. The idea that capitalism “needs” a state is more attributable to Marx than anyone else… even if Hayek did think so, it means little and is an appeal to authority, and the person still needs to prove it.
Capitalism could not have arisen without large-scale production of security associated with monarchical states, which is, arguably, itself a capitalistic enterprise.
If the government were to collapse tommorow, security would become an anarchic problem where local ties and allegiances would count for most. Capitalistic enterprise at any larger scale would have difficulty operating.
I’m reading Road to Serfdom now, and Hayek talks about the importance of government in enforcing the Rule of Law. He certainly seems to believe that there is a legitimate need of government for the purpose of ensuring property rights and protection against aggression. As the above poster says, this is basically minarchism, or a minimal government view point. So I think Hayek would agree with the idea that capitalism isn’t viable without an apparatus for enforcing the Rule of Law.
In the WORST case, without government there would be mafia-controlled capitalism, with this group acting aggresively to steal the majority. See any differences with a government?
The entire idea that one can a priori know what is the “worst case scenario” of a political system is abject nonsense; for one thing, our knowledge of the result of any political system will only come through experience.
What you speak about with respect to knowing the worst case scenario now does not match what you spoke before. Previously, you claimed the ability that anarcho-capitalism’s own worst case scenario would specifically be scenario a, but now you speak of the worst case scenario in the respect of what we fear the most from all systems.
OK, maybe I was not so clear. The worst possible scenario of every system is everyone against everyone. In that scenario, it’s highly likely that an organization will take the control of the society (unidirectional coercion). We can call that a government.
Neither Hayek nor Mises were Anarchists. But one can argue for Anarcho-Capitalism based on Mises or Hayek. This is not a contradiction, for they provided no logical refutation of it, nor did they provide a rational explanation of why the limited government can evade the socialist calculation problems. There is nothing in Mises or in Hayek that contradicts Anarcho-Capitalism. On the contrary, their economic theories seem to predict it.
Albert Einstein’s General Theory of Relativity predicted an expanding universe (not a static one), yet he refused to recognize this at the time. Only later did he realize he had greatly blundered.
