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Morris Strong -- Peter Boettke ... Is Hayek's Argument for Liberal Government Incoherent?

Burgess COMMENTARY

Peter Burgess

Is Hayek's Argument for Liberal Government Incoherent?

I have been reading Stephen Elkin's Reconstructing the Commerical Republic (Chicago, 2006) and I find the book to be very challenging despite my ultimate disagreement with his criticisms of the classical liberal project as I envision it. I recommend it to all who think of themselves as doing constitutional political economy in the Hayek and Buchanan tradition.

An important argument in the book deals with what one may term constitutional maintenance. And Elkin argues that unless specific and powerful incentives are built into the system of restraint, constitutional maintenance will fail. He uses this argument to critique Hayek's project in The Constitution of Liberty and also Law, Legislation and Liberty. His argument against Hayek, he contends, also equally applies to the ideas of Richard Epstein, James Buchanan and Milton Friedman. Ultimately, what he suggests is that abstract formulations of the rule of law, principles of just conduct, and constitutional contract do not address the political realities of citizenship and political institutions. Hayek, Elkin argues, has no viable institutional theory of constitutional restraint on self-interested action, but instead simply relies on telling people to restrain themselves.

His criticism is deeper than this because it goes at the very nature of learning and feedback that citizens within a Hayekian liberal order are exposed to (or in his rendering not exposed to which means they don't have the opportunity to learn). Since the laissez faire classical liberals, Elkin argues, mistrust rule by the people in a democratic system of self-governance, it is now impossible for them to see the people themselves as part of the solution -- which they must be if we rely on constitutional maintenance through an understanding among the citizenry of the need for constitutional restraint. In short, Elkin sees the entire classical liberal project as non-robust. There very opposite of the argument I have made about Hayek (and Buchanan) effort to find an institutional design for a robust political and economic order.

I know many of my former students --- Chris Coyne, Pete Leeson, Ben Powell and Ed Stringham --- also came to the conclusion during our extended reading and often times heated discussions about Hayek and Buchanan's project that robust constitutions are nonsense, and instead that constitutions are at best focal points around which individuals in a particular society can coordinate. But the idea of constitutions as possessing any 'bite' in social and political affairs is an illusion. I contend that they are elusive for sure, but they are not an illusion. The idea of a constitutional order defined by a set of binding rules on those in power and the institutional checks and balances to enforce those rules of restraint on governmental action is still very much a live research program in political economy as far as I am concerned.

Curbing the predatory capacity of private as well as public actors is necessary for our collective efforts to live better together, and to realize the social gains from cooperation under the division of labor that modernity has presented us with. Without such binding rules, the productive capacity of mankind will not be realized and the gains from trade and the gains from innovation will be left lying on the proverbial sidewalk.

Hayek in Law, Legislation and Liberty refers to the constitutional project of the founding father's of the US as a nobel and inspiring project that ultimately failed. This is how I view Hayek's own intellectual efforts as well. The path way to radical libertarianism, I contend, is through the nobel and inspiring project of classical liberalism and the constitutional project of limited government. We must think creatively about a robust system of governance for a society of free and responsible individuals who can participate and benefit from a commercial society based on private property rights, free pricing, and profit and loss accoutning, and who live in, and are actively engaged in, caring communities that address the vagaries of life such as health, security and well-being. A reclamation of society from the state is required at a very practical level, but this reclamation project also requires philosophical reflection and theoretical justification. Time to put on our thinking caps, and Elkin's book does an excellent job of making us think about these questions of democratic self-governance, obligations of citizenship, and the question of constitutional maintenance.