Bruce Bartlett held senior policy roles in the Reagan and George H.W. Bush administrations and served on the staffs of Representatives Jack Kemp and Ron Paul. He is the author of “The Benefit and the Burden: Tax Reform – Why We Need It and What It Will Take.”

Because the Republican presidential nominee, Mitt Romney, remains an enigma to almost everyone, those seeking insight into his core philosophy have focused on his choice of Representative Paul D. Ryan, who has been much more forthcoming about his intellectual influences, as his running mate.

Today’s Economist

Perspectives from expert contributors.

Mr. Ryan has credited a variety of people, from the Representative Jack Kemp to the libertarian novelist Ayn Rand, for his thinking. An article in this week’s New York Times Magazine credits another: the economist Friedrich von Hayek. Mr. Ryan mentions Hayek among his influences in the introduction to his Roadmap for America’s Future, which embodies his plan to slash the size of government.

Hayek has long been popular among conservatives mainly because of one book, “The Road to Serfdom,” published by the University of Chicago Press in 1944. Although written for a British audience – the Austrian-born Hayek was teaching at the London School of Economics when he wrote it – the book found its greatest success in the United States.

The New York Times had a great deal to do with the success of “The Road to Serfdom.” Its introduction was written by John Chamberlain, who had been The Times’s principal book reviewer in the 1930s. The Times’s book review was written by one of its editorial writers, Henry Hazlitt, who was effusive in his praise not only for the book’s substance but for its elegant style as well. It was featured on Page 1 of The Book Review on Sept. 24, 1944.

According to Hayek’s biographer, Alan Ebenstein, The Times’s review was the major reason that “The Road to Serfdom” became a best seller. Indeed, its influence continues, aided by recommendations from Representative Ron Paul, Republican of Texas, and the radio host Glenn Beck to members of the Tea Party movement.

Hayek’s basic thesis is that socialism inevitably transforms into totalitarianism. A key reason is that socialism cannot work economically, he believed. During the 1930s, Hayek was in the forefront of the socialist calculation debate, in which he, Ludwig von Mises and other economists proved that pure socialism had to fail because it lacked a true price system to guide efficient production and distribution.

The inevitable failure of socialism, Hayek thought, would eventually require authoritarian methods to try to make it work, as was the case in the Soviet Union and Nazi Germany. At the time he wrote his book, Britain, France and other European countries were adopting explicitly socialist policies, like state ownership of major businesses and industries.

Although there has never been much support for European-style socialism in America, World War II and the New Deal led to a great expansion of government. In 1944, it looked as if the United States were traveling rapidly in the same direction as Europe, and Hayek’s thesis was not implausible, given recent history.

The big problem for that those who continue to cite “The Road to Serfdom” as a guide is that they must essentially ignore everything that happened after 1944. Communism’s high-water mark occurred a few years later, and before long it became obvious that communism was not a path to prosperity. Nor has anything remotely like Nazism ever resurfaced.

By the 1970s, few reputable economists really thought that socialism was a good idea. Ironically, one of them was Gunnar Myrdal, with whom Hayek shared the 1974 Nobel in economic science.

In 1979, the conservative Margaret Thatcher, whom Hayek greatly admired, became prime minister of Britain and quickly began selling the state enterprises that had been acquired after the war. “Privatization” became a worldwide phenomenon, and the number of state-owned enterprises fell. Communism collapsed in 1989, and the Soviet Union dissolved in 1991.

Thus postwar history is exactly the opposite of what Hayek predicted. Liberalism did not beget socialism, which did not beget totalitarianism.

Another problem for conservatives like Mr. Ryan is that Hayek would have been likely to oppose many of their pet ideas, like abolishing Medicare. In “The Road to Serfdom,” Hayek explicitly endorsed social insurance:

Nor is there any reason why the state should not assist the individuals in providing for those common hazards of life against which, because of their uncertainty, few individuals can make adequate provision. Where, as in the case of sickness and accident, neither the desire to avoid such calamities nor the efforts to overcome their consequences are as a rule weakened by the provision of assistance – where, in short, we deal with genuinely insurable risks – the case for the state’s helping to organize a comprehensive system of social insurance is very strong.

In “The Road to Serfdom,” Hayek also endorsed state aid to victims of floods and earthquakes, government policies to regulate working hours and to control poisonous substances. In other writings and interviews, he endorsed antitrust laws, a minimum wage and even the Tennessee Valley Authority, long a right-wing bête noire. In a 1982 interview with The New York Times, Hayek was even skeptical of Ronald Reagan’s economic plan, calling it “a very risky thing to do.”

Moreover, Hayek was not doctrinaire about the importance of political freedom. In a 1979 interview with The Times, he defended the Chilean regime of Augusto Pinochet, which combined political repression with free-market economics, calling the results “absolutely fantastic.” Asked whether this view was inconsistent with his philosophy, Hayek replied, “You can have economic freedom without political freedom, but you cannot have political freedom without economic freedom.”

For such transgressions, some on the right have long viewed Hayek as a dubious ally. For example, the libertarian economist Walter Block wrote a detailed attack on Hayek in 1996 for being at best a lukewarm defender of the free market.

I suspect that in his heart, Representative Ryan is more attracted to the dogmatism of Rand than the complex, nuanced philosophy of Hayek, who told the Cornell political scientist Theodore Lowi that Rand angrily called him “a compromiser” on the only occasion they met.

Article source: http://economix.blogs.nytimes.com/2012/08/28/why-hayek-isnt-paul-ryans-guru/?partner=rss&emc=rss