On Governing Well

Hayek

By Matthew Hamilton. 

The great intellectual battlefield of the 20th century took place in economics, between two philosophers who happened to be economists: John Maynard Keynes and F.A. Hayek.  The nuances and tensions between their ideas have governed politicians and policymakers ever since; however, the connection is not always conscious.  Consequently, today’s political climate has witnessed the distortion of the ideas of these two great thinkers to disastrous ends.

Hayek was skeptical of government planning; he asserted it was the path to tyranny; The Road to Serfdom. Keynes believed active government intervention could sustain healthy economies, namely by changing investment and tax levels to maintain price stability and full employment. Their ideas were rooted in developments and debates over economic theory, but they led to the manifestation of distinct political philosophies. Keynesian doctrine would guide a generation of policymakers as they rebuilt postwar Europe and facilitated the robust expansion of Western economies through active government planning. Hayek would be the intellectual father of Thatcher’s Britain and Reagan’s America – political experiments in limited governments that tempered the dominance of Keynesian economic policies. It is thus fitting that Keynes commented, “The ideas of economists and political philosophers…are more powerful than is commonly understood. Indeed, the world is ruled by little else.”

Some time in the last decade, this great debate over ideas – one that first emerged to save capitalism from its own wreckage following a World War and a Great Depression – has devolved into reckless fits of emotion. Some time in the last decade, these two competing political philosophies that set the stage for governance throughout the Western World in the second half of the Twentieth Century were usurped by the pettiness of passions. Both Keynesian and Hayekian principles emerged as attempts to undermine the expansion of fascism and communism. Historians, politicians and economists have dubbed both philosophies as competing notions of the “third way”; moderate but reformed capitalist alternatives to both communism and fascism at a time when these radical ideological experiments were being positioned throughout much of the world as the only viable alternatives to the old-order of capitalism. But, Keynes and Hayek’s balancing acts have now been positioned as mutually exclusive philosophies – Hayek as the father of the emergent brand of libertarianism and its absolute anti-government fervor; Keynes as the defender of the American political left and its policy prescriptions for active government planning to mitigate the recent recession.

Some would argue these contemporary interpretations of the competing ideologies are the purest manifestations of these two political philosophies. But, the story is more complicated. The current ideologies derived from Keynesian and Hayekian philosophies are oversimplifications of complex theories. Hayek, for instance, favored the existence of a welfare state. In fact, he believed in a universal health care system, which is ironically what his Tea Party disciples in Congress tirelessly work to stop. Keynes, on the other hand, wrote little on the welfare state. His belief in active government economic intervention to maintain healthy market economies did not necessarily translate into a belief in a widespread government safety net, and it should not be confounded as such. This does not mean that Keynes and Hayek shared similar philosophies. Rather, these complications suggest that their political philosophies are understood without their nuances and taken out of context in contemporary debate, oftentimes with perilous consequences. 

The current state of domestic political affairs can be viewed as an absolute belief in absolutism, a lack of faith in using compromise to secure progress. Two philosophies born out of the need for moderation are ironically now being misused to rationalize this refusal to compromise. While significant differences may arise out of ideology, ideology is not a sufficient explanation for the current levels of entrenched partisanship and paralysis in Washington. Indiana Representative Marlin Stutzman’s leadership doctrine is a more apt explanation. He commented, “We’re not going to be disrespected. We have to get something out of this. And I don’t know what that even is.” His attempt to vindicate the government shutdown does not address fundamental and irreconcilable differences between parties over the role of government – in fact, Stutzman does not even have a desired outcome in mind. Rather, he continues to hold the government hostage indefinitely because he feels “disrespected.”

The government shutdown has severe consequences: 800,000 government employees are now temporarily out of work, quarter four GDP could be lowered by an estimated 1.4 percent at a time when the economy remains in a precarious recovery, and the inability to compromise threatens to create an unnecessary economic, political and legal crisis over defaulting on our nations debt. In spite of these consequences, the proponents of the shutdown primarily root their logic in visceral and emotional reactions to the political process, rather than ideological differences. This suggests that our leaders have lost a language and a context to discuss the diverse ideas that compete to locate the proper role of government – and this has hindered substantive debate and perpetuated polarization. Keynes and Hayek are in tension, but they are not mutually exclusive. There is, therefore, no compelling ideological reason that their contemporary manifestations in the American left and right must be. Rather, the inability to compromise reflects a collapse of substantive political dialogue and serious problem solving efforts.

It was Keynes who wrote, “Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.” But, today it is the politicians who are increasingly defunct. This is not to say that politics has never been petty before. Politicians have often been too small for the incredibly large moments in which they have been called upon to govern. But, what is radically different now is the fact that the complex ideas surrounding the proper role of the government have been distilled into polarized, rigid and impermeable political boundaries. Compromising on these fundamental principles now illustrates weakness rather than thoughtful and mature attempts to make responsible decisions and facilitate tempered progress. We forget the political philosophies that so fundamentally shape the modern American left and right were both founded out of the need for moderation and compromise.

William Zissner’s seminal text – “On Writing Well” – claimed that “rewriting is the essence of writing well: it’s where the game is won or lost”. Governing well is not a far different task. At its essence, leaders with competing value judgments must take their ideas into debates. They must collaborate and compromise and revise. They must not hold out in absolutism and abstain from making necessary adaptations. The idea must be the starting point, rather than the ending point. 

How can society then replace – or update – ideas to make them relevant again? How can it prevent the straw man from rearing its ugly head? It begins with an understanding of the ideas that define current ideological divides – and with an understanding of how their nuances and contexts might be misunderstood in today’s debates. If leaders do not understand the ideas that define contemporary political and economic conditions, how can they use them to govern well? A better understanding of the ideas that shape modern political and economic discourse enables leaders to contextualize and adapt these ideas to evolving circumstances rather than oversimplify them. They can then use the ideas of Keynes and Hayek and others – in all of their complexity and richness – to govern well and enhance political dialogue rather than debauch it.




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