Bringing up the name of famous economists in order to try and give credibility to otherwise often fairly dubious ideas and theories is pretty common, and in terms of marketing it certainly works. Yet more often than not it seems that these ideas in fact run very much against what the economists that are used to supposedly enhance their credibility actually wrote and thought. Adam Smith’s “Invisible Hand” is probably the most wide-spread, misunderstood and misquoted one of them. From Marx to Keynes to Friedman, every famous economist has fallen victim to these wrongful association in the past, and I find the economics profession has been doing a fairly bad job at setting the record straight or even trying to do so.
The latest occasion that also leads me to write this post is the Free Market Road Show that is currently touring all of Europe and beyond. Some of the planned speakers are actually very interesting and knowleadgeable – Madrid’s event last week, for instance, featured Mark Klugmann who presented some ideas on “charter cities” (he is currently advising Honduras’ government on how to turn these into a reality), a topic that has fascinated me for a long time (and for which I started writing a blog post over a year ago, yet never finished). Another speaker at the event was Barbara Kolm, president of the Friedrich A. v. Hayek Institute – which is also what brings me back to my original topic.
From what I garner, and despite her connections to the Austrian FPÖ, Mrs. Kolm actually seems like a pretty smart if definitely hard-line person. While some would characterize her ideas as “neoliberal” (I have yet to find someone that can coherently explain what this is supposed to mean), not all of her ideas are totally unreasonable and, most importantly, she does at times offer valid criticism with regards to e.g. the EU. Yet, as president of said institute bearing the name of one of the greatest economists and political philosophers Austria has produced to date (whether you agree with his ideas or not), I cannot help but notice that a lot of what she and the institute advocates runs very much counter to Hayeks ideas, or is at least not consistent with them.
For instance, Kolm and the Institute are fairly critical of the Euro, and in general favor its abolition, yet they do so for reasons very much different from Hayeks. Hayek would almost certainly have been against the Euro, but mainly for the same reasons he was against any sort of governmental monopoly on the issuance of currencies. If she is for an abolition of all form of government-control currencies, that’s alright and she should say so, but to me it would seem her criticism is hardly different from Krugman’s – not very Hayekian. Kolm and the Institute are also very critical of the EU in general, and while Hayek would probably also have been, it is important to remember that he very much was for a Federal Europe (as he clearly stated in The Road to Serfdom and The Economic Conditions of Interstate Federalism). While I have read plenty of criticism of the EU from this side of the political spectrum, I have yet to read any well-articulated alternative set-up. One of the main reasons Hayek was for a federal Europe was to counteract the nasty elements of individual national states (such as rampant protectionism) – a political movement that explicitly wants to return to this sort of nationalism represents everything Hayek spent his life fighting against. Cherry picking the parts of Hayek’s writings that suit ones own ideology and than stamping his name onto them is simply intellectually dishonest.
I am not saying all of Hayeks ideas were good (in fact, I would disagree with a great lot of them, even though The Road to Serfdom should still be mandatory reading for any politically interested person, not just economists). Nor am I saying that the following of Hayekian tradition (or Austrian Economic tradition more in general) needs to carry the burdens of his not-so-good ideas – even though there are plenty of examples of intellectual consistency even in this regard (I personally always find libertarian blogs, such as Robert Murphy’s Free Advice, enlightening, if sometimes disturbing. Econlog should be on everyone’s bookmark list). Yet for an institute that clearly uses Hayeks name in order to try and give itself legitimacy, it appears that remarkably small attention to his original ideas is being paid. This is regrettable.