George Mason University economist Tyler Cowen comments approvingly on the swing to fiscal austerity in the wake of financial bailouts and stimulus packages in the United States and other countries. He doesn’t mention the huge budget deficits of GW Bush, nor the fiscal conservatism of Bill Clinton.
“The Road to Serfdom,” the critique of socialism written 65 years ago by the Nobel laureate economist Friedrich von Hayek, was recently No. 1 in nonfiction sales at Amazon.com.
Many people, including the Fox News commentator Glenn Beck, have contended that growth of government power has, indeed, set us on such a road today. But the reality looks different. ….
While we can expect a larger public sector in America, the cause is mainly the aging of the population, and it will play itself out over the next 30 years with an increase in government transfer payments, mostly through Medicare. Furthermore, even Professor Hayek favored welfare spending and social insurance, so those programs will not alone bring us to serfdom.
Tyler Cowen, “Economic View: A Pendulum Swing Toward Austerity”, New York Times, 27 June 2010.
What if the US government were to make Medicare a universal entitlement, extending coverage to residents younger than the age of 65. Would that move the country toward Hayek’s serfdom? Tyler Cowen, by the logic of today’s column, would answer “No”. I agree. Government transfer payments – even transfers in kind, such as schooling and health care – are not the same as government ownership of the means of production.
But you’re obscuring the underlying issues by using convenient language:
1) Hayek and his mentor Mises were in staunch opposition to the bureaucracy. When conservatives say government they mean bureaucracy.
2) Medicare is insufficiently privatized to prevent the rise of bureaucracy.
3) Medicare as a proxy to force a shortage of services, or drive out market services, or to manage the scarcity of care such that the middle and upper classes cannot use their assets to purchase services, is not redistribution, or transfer payments — it is a managed economy and that is socialism.
And your argument that casts either conservatives or libertarians, and Hayek in particular against transfer payments rather than against the bureaucracy and loss of choice is either disingenuous or ignorant or both.
If I am overly harsh it is only to instill enough annoyance to encourage literacy.
@Curt doolittle, I appreciate your point. But government provision of basic health care need not prevent the middle and upper classes from purchasing non-essential medical care, e.g. plastic surgery or breast implants. And what about public schooling? Is there sufficient choice in the US school system to prevent the rise of bureaucracy?
- Larry Willmore