Friday, May 23, 2014

Hayek - where are you when we need you?

F A Hayek's book The Road to Serfdom is credited by Prof Michael Hudson in his pithy series Insider's Economic Dictionary under R is for Rentier (5 April 2014), with being the 'ideological bible': 

'for subsequent neoliberals such as Margaret Thatcher to dismantle government authority and privatize the public domain....their efforts left a political vacuum, which has been filled by large financial institutions operating globally. Their mode of planning via the IMF, World Bank and Washington Consensus has turned out to be the new road to serfdom by loading down economies with unproductive debt, imposing economic austerity, and using the resulting financial crisis to assert dictatorial powers over government'.

However Hayek also said (Abridged Edition 1944. p.87): 

'Let a uniform minimum be secured to everybody by all means; but let us admit at the same time that with this assurance of a basic minimum all claims for a privileged security of particular classes must lapse.'

Unfortunately by merely letting the market dictate and no Hayekian counterbalancing fairness of a basic minimum income, (see Wikipedia) the new serfdom is approaching by courtesy of the debt that Hudson describes. 

Read The Free Lunch - Fairness with Freedom as to how this might be overcome.


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