Monday, July 9, 2012

Hayek and Pinochet: Endless Love!

Someone left a link to this interesting article about Hayek’s praise of Pinochet on my last post:
Corey Robin, “Hayek von Pinochet,”, 8 July 2012.
I was particularly struck by this remark of Hayek which, I understand, he gave in an interview to a Chilean newspaper:
“[A]s long-term institutions, I am totally against dictatorships. But a dictatorship may be a necessary system for a transitional period. At times it is necessary for a country to have, for a time, some form or other of dictatorial power. As you will understand, it is possible for a dictator to govern in a liberal way. And it is also possible for a democracy to govern with a total lack of liberalism. Personally, I prefer a liberal dictator to democratic government lacking in liberalism. My personal impression. . . is that in Chile . . . we will witness a transition from a dictatorial government to a liberal government . . . during this transition it may be necessary to maintain certain dictatorial powers, not as something permanent, but as a temporary arrangement.”
So there we have it: when the chips are down, Hayek presumably preferred dictatorship to a state with the rule of law and a social democratic or democratic socialist economics.

One wonders whether, if in his day when pressed, he would have expressed preference for Pinochet’s Chile (where people where regularly “disappeared”) to social democratic Sweden?

By contrast, a fair point that Hayek makes is that a dictator can pursue “liberal” or laissez faire policies. This is perfectly true: Mussolini originally pursued standard free market, neoclassical policies:
“From 1922 to 1925, Mussolini’s regime pursued a laissez-faire economic policy under the liberal finance minister Alberto De Stefani. De Stefani reduced taxes, regulations, and trade restrictions and allowed businesses to compete with one another. But his opposition to protectionism and business subsidies alienated some industrial leaders, and De Stefani was eventually forced to resign.”
Sheldon Richman, “Fascism,” Concise Encyclopedia of Economics
It is perhaps with this in mind that we must view the remark by Mises on Mussolini’s fascism:
“It cannot be denied that Fascism and similar movements aiming at the establishment of dictatorships are full of the best intentions and that their intervention has, for the moment, saved European civilization. The merit that Fascism has thereby won for itself will live on eternally in history. But though its policy has brought salvation for the moment, it is not of the kind which could promise continued success. Fascism was an emergency makeshift. To view it as something more would be a fatal error.”
Mises, 1978 [1927]. Liberalism: A Socio-Economic Exposition (2nd edn; trans. R. Raico), Sheed Andrews and McMeel, Mission, Kansas. p. 51.
All in all, you don’t see the Austrians commenting much on these disgraceful remarks by either Hayek and Mises.


  1. I don't understand why you're assuming he's referring specifically to "laissez faire... free market economics", when the term 'liberal' is scarcely used with such specification. It is used rather, with a much broader scope, and more generally associated with social policy rather than economic policy. I extremely doubt Hayek would support any kind of violence or kidnapping against a populace by the state, that would seem to be exactly against almost everything he argues for in his philosophy.

  2. "I don't understand why you're assuming he's referring specifically to "laissez faire... free market economics", when the term 'liberal' is scarcely used with such specification. "

    You are mistaken: "liberal" or "classical liberal" has a long history of association with laissez faire economics.

    1. Being "associated" with laissez-faire does not mean it IS laissez-faire.

      Classical liberals were not, and are not, anarchists who take the laissez-faire principle to the area of security and protection as well.

      That alone makes it inevitable that classical liberals will eventually support SOME initiations of violence, somehow, somewhere, in some respects, against someone.

      It directly follows from the fact that classical liberalism is at its core statist, however "small" such statism is. It's still there.

      Contrast Hayek and Mises' classical liberalism as against Rothbard or Hoppe or David Friedman's anarchism, to see no chance of any affinity between true laissez-faire and statism.

    2. I think you have to see Hayek's and Mises' comments in the context that they believed that "democracy that governed with a total lack of liberalism" had a tendency to lead to direct Communist rule that would be illiberal in all senses of the word.

      I'm not saying they were justified in using that as a reason to support right-wing dictatorships - just trying to give some context.

      To suggest that Hayek would have supported a right-wing coup in Sweden is I think an idea with no merit.

    3. The classical liberals were (somewhat, but not all of them) laissez faire yes, but from Bentham and Mill onwards they also have a long history of championing social freedom, women's rights etc... Again, a classical liberal would NOT support violent suppression of speech.

    4. "Contrast Hayek and Mises' classical liberalism as against Rothbard or Hoppe or David Friedman's anarchism, to see no chance of any affinity between true laissez-faire and statism"

      The cult of Rothbard is far from "true laissez-faire" since its ignorant and mistaken view of fractional reserve banking requires coercion and violence against the private sector agents in engaging in callable mutuum loan contracts.

  3. I disagree with Hayek here, Although I'm a neo Friedmanite libertarian, I don't think the economic policies were worth the cost in human lives. But let me point out to you before you go Naomi Klein on Friedman, that Friedman never received any move from Pinochet, and we did not here a word of protest from social democrats when Friedman lectured in China and Eastern European countries.

    Its a little inconsistent wouldn't you say, Lord Keynes.

    P.S. I dont understand why both the left and the right somehow equate hard money with the liberal or "laissez faire" position. Im against the Austrian nutbags on this. Hard money was what probably caused problems in Italy, as it did in Germany during chancellor Bruning's term

  4. In Europe, "liberal" means "economic-liberal". In the US, it usually means "political-liberal". That's the origin of many confusions. Both liberalisms do not often go together. In fact, they seldom do. Austrian-school economists were economic-liberals... and advocated for fascism on occasion. Pinochet was supported by the Chicago boys, as this article reminds us...

  5. I've discussed this before: <a href=">Hayek's Chilean Affair</a>. But, it wouldn't be the first time Hayek makes questionable political commentary on inadequate information (and, remember, hindsight is 20/20).

  6. Friedman never received any money from Pinochet.

  7. This should shed some more light on Hayek, and for those of you defending Hayek here, pretending that "WE DON'T KNOW" that Hayek meant laissez-faire when he said the word "liberal", read this and please keep your mouth closed.

  8. LK.

    Hayek's prediction that Chile would transition from a dictatorship to a liberal democracy did hold true in history. The Chilean junta did not keep a permanent regime, but kept a temporary junta rule that transferred power to a democratic government. Due credit goes to Hayek in this regard as well.

    Interestingly, Chile's new democratic government retained many of the market reforms of the junta, and also liberalized further in some sectors. Some junta leaders were actually import substitution industrialists, and used such protections and subsidies for such industries. 26 core industries had also remained in government hands during junta rule. On the other hand, Chile's democratic government actually reversed such mixed economy policies of the junta. So Hayek may have been misguided in regards the fact that this dichotomy necessarily needed to hold.

    Either way, I find your statement "preferred dictatorship to a state with the rule of law and a social democratic...economics" interesting, because democracy and rule of law are not the same thing. Indeed, the democratically elected Allende subverted rule of law when he forcefully confiscated large swathes of land from landowners. Democracy does not imply rule of law will be upheld, and rule of law often requires reversing decisions of democratically elected leaders.

    1. "Hayek's prediction that Chile would transition from a dictatorship to a liberal democracy did hold true in history. The Chilean junta did not keep a permanent regime, but kept a temporary junta rule that transferred power to a democratic government. Due credit goes to Hayek in this regard as well."

      This is the most appalling re-rewriting of history: Pinochet fought tooth and nail to keep his dictatorship, and it was the opposition and civil society - as well as international opposition - that forced him to give up power:

      "According to the transitional provisions of the 1980 Constitution, a referendum was scheduled for 5 October 1988, to vote on a new eight-year presidential term for Pinochet. Confronted with increasing opposition, notably at the international level, Pinochet legalized political parties in 1987 and called for a plebiscite to determine whether or not he would remain in power until 1997. If the "YES" won, Pinochet would have to implement the dispositions of the 1980 Constitution, mainly the call for general elections, while he would himself remain in power as President. If the "NO" won, Pinochet would remain President for another year, and a joint Presidential and Parliamentary election would be scheduled.

      Another reason of Pinochet's decision to call for elections was the April 1987 visit of Pope John Paul II to Chile. According to the US Catholic author George Weigel, he held a meeting with Pinochet during which they discussed a return to democracy. John Paul II allegedly pushed Pinochet to accept a democratic opening of the regime, and even called for his resignation."

      Hayek deserves no "credit" whatsoever, only ridicule.

      And, yes: CODELCO (National Copper Corporation of Chile) was still nationalised under Pinochet: doesn't that under cut Hayek's claim that this dictatorship was a liberal regime?

    2. LK, firstly, I think we are both in agreement that Hayek was wrong in describing the Pinochet regime as liberal. That was a serious error on Hayek's part.

      However, I believe what Pinochet did to give up power - admittedly under pressure - was a lot more than what we have seen from Saudi and Gulf monarchs, Egyptian military rulers, Presidents-for-life in Central Asian republics, Castro regime in Cuba, and so on and so forth.

      That he went for a referendum at all is a major difference between the likes of Castro and the likes of him. If we were to describe Pinochet as **relatively** "liberal" dictator, he certain acted as such to a point - he could have done the kind of brutal crackdowns seen in Middle East and North Africa in the past 40 years. Instead, he conceded to the opposition.

      All this aside, the military junta of Chile did oversee the deplorable deaths of 3000 political prisoners. However, the democratic republic of Turkey slaughters more Kurds than that on a far more regular and continuous basis. And the democratic republic of United States has killed far more civilians in its wars in the past decade. So being a democracy or a dictatorship is hardly an indicator of how repressive the government is.

    3. Pinochet was liberal compared to Allende. Allende was working with Castro and the Soviets, allowing Marxist paramilitary organizations to enter and operate in Chile. Many rightly feared that this would lead to the same kind of totalitarian rule as in the Soviet Union and Cuba. Compared to that kind of dictatorship, Pinochet's regime was very mild, and liberal.

    4. "Pinochet's regime was very mild, and liberal."

      Except for the victims of his torture and mass murder.

      And whatever totalitarian tendencies Allende had, that did not by any means justify over 10 years of Pinochet's dictatorship.

      If you really believe Pinochet was so benign, why didn't he restore a liberal, democratic regime in 1975/1976? Why wait over ten years?

  9. Professor Greg Grandin NYU, also wrote excellent about Friedman,Hayek and Pinochet

  10. I find it appalling that many 'libertarians' seem to think installing a dictator was justified because a socialist was elected democratically.

    1. I can imagine it may be a hard point for a non-libertarian to get a handle on but I think many libertarians see individual rights as transcending concepts like "democracy" and "dictatorship", which they see as just forms of government which by definition are oppressive. Libertarians of the anarcho-capitalist variety put a very high store on property-rights so there is a logic in them seeing a dictatorship that honors property as better than a democracy that violates it. Now in the case of Chile where thousands were killed by Pinochet's regime perhaps they are forgetting that the most important "property right" is the right to self-ownership (which includes not being killed by the state), but in any case I think that its bigger than just thinking "installing a dictator was justified because a socialist was elected democratically"

  11. Hayek was opposed to democratic dictatorships. What he was after was INDIVIDUAL FREEDOM, and democracy can violate the rights of an individual just as much as a dingle dictator. America had slavery even under democratic rule in the first half of the 19th century. After the civil war, there was a short period of dictatorial like rule as a transition. Would you have preferred full democracy and a return to slavery?

    1. "democratic dictatorships. "

      A contradiction in terms.

      If a regime has become a dictatorship, it has ceased to be democratic.

      While even a democracy can certainly commit human rights abuses or crimes, the Austrian complaints about not enough "liberty" are usually derived from their idiotic natural rights ethics.

      And in point of fact even Hayek was quite clear his principal objection to democracy was possible economic intervention, not what people would normally think of as violations of liberty. E.g., progressive taxation that pays for universal healthcare or basic welfare is neither immoral nor inconsistent with a high degree or personal liberty.

    2. Wouldn't you say that the Athenians voting for the death of Socrates was democratic, but dictatorial?

      And why call natural rights theory idiotic? Is it because you have nothing but insults to offer?

      If you think those things are not inconsistent with personal liberty, ask a few doctors who find they have to obey government mandates and orders. How about the people who pay the higher taxes? Isn't taking the money they earned a violation of their personal liberty? They would have otherwise chosen to spend, save, or invest that money differently. How is preventing their free choice not an infringement of their personal liberty?

  12. The truth is that it was Allende that destroyed democracy in Chile, and it was Pinera that eventually allowed it to be restored.


    The Resolution, approved by almost two-thirds of the members (63.3 percent), accused President Allende's administration of 20 concrete violations of the Constitution and national laws. These violations included: support of armed groups, illegal arrests, torture, muzzling the press, manipulating education, not allowing people to leave the country, confiscating private property, forming seditious organizations, and usurping powers belonging to the Judiciary, Congress, and the Treasury. The Resolution held that such acts were committed in a systematic manner, with the aim of installing in Chile "a totalitarian system".

    1. "that [Pinochet?] eventually allowed it to be restored."

      LOL.. what after 10 years of dictatorship and after heavy domestic and international pressure?

      Tell us another fable.

    2. Name me one other dictator that relinquished control in response to "heavy domestic and international pressure", instead of a bloody revolution or coup.

      And you did not respond to my point that Allende was just as much a dictator, if not potentially worse, than Pinochet. It was Allende that destroyed democracy in Chile. It was the political party that elected Allende that voted for the resolution to have him removed.

  13. I think in 1927 von Mises was conflicted about fascism. The quote you mention where he praises fascism is accurate, but on the other hand, in the preceding paragraph he predicts that fascism represents a terrible threat:

    That its foreign policy, based as it is on the avowed principle of force in international relations, cannot fail to give rise to an endless series of wars that must destroy all of modern civilization requires no further discussion.

    And, from the previous page:

    The great danger threatening domestic policy from the side of Fascism lies in its complete faith in the decisive power of violence...The result must be a battle, a civil war.

    But regarding the quote you mentioned...yeah, it really is way too gushing given how we know things worked out.