This was a really interesting post over at FT Alphaville on Hayek, Rand and where Paul Ryan falls on his views of them. Cardiff Garcia highlights some quotes from Rand about Hayek showing a very deep schism between the two:
[Rand] thinks Hayek’s definition of a person’s “own sphere” in which his views are supreme could be narrowed down to “mere breathing”; Hayek’s rejection of “dogmatic laissez-faire attitude” gets him called “The God Damned abysmal fool”. When Hayek accepts that certain goods, like roads and pollution abatement, need to be supplied by government, he is “so saturated with all the bromides of collectivism that it is terrifying”. When Hayek talks of the “very defined limits” in which individualism “allows” people to follow their “own values and preferences rather than somebody else’s,” Rand thunders, “Oh God damn the total, complete, vicious bastard! This means that man does exist for others, but since he doesn’t know how to do it, the master will give him some ‘defined limits’ for himself”.
And then Hayek:
Afterward, [Hayek] took questions, which were mostly about Ayn Rand and “Atlas Shrugged.” The leading questions were “What was Rand really like?” and “What is your evaluation of ‘Atlas Shrugged’?”
Hayek’s responses took on the style of a confession. “Although I tried seriously to read the book, I failed, because there was no romance in it,” he said. “I tried even more diligently to read that fellow John Galt’s hundred-page declaration of independence, and I knew I’d be questioned on all that, but I just couldn’t get through it.”
As for Rand, he said he had met her only once, quite recently, at a party given in their honor — “and you should never have two lions at the same party.” The host eagerly brought the two together for the introduction. Here are the results, to the best of my memory: “We had a very brief exchange. She swelled in anger and spun away, remaining only long enough to say, ‘You are a compromiser.’ ”
I never knew the divide in their views was so extreme. Even to the point of there being very real animosity between the two. And then the kicker from Garcia:
Rand believed that progress is made on the backs of Great People. An individualist, capitalist system is best because it gives persons of exceptional brilliance and work ethic the space to produce. These people haven’t just earned whatever monetary rewards come their way, but also the gratitude of lesser people for the civilisational advancements they make possible.
Hayek’s view was that the market process is mysterious and unpredictable; there are too many variables whose interactions are too complex to grasp. And yet the outcomes yielded by a setting of free competition and undistorted price signals are superior to those of central planning. Government encroachment is to be resisted precisely because it would distort the price mechanisms that govern this process.
More relevant to this post, an extension of Hayek’s thinking is that the achievements of successful individuals aren’t due to their personal awesomeness (much as they’d like to believe it) but to an indecipherable combination of factors that can’t easily be untangled, explained, or anticipated. Lots of room for randomness and circumstance to play a role in this line of thinking; some might call it “luck”.
I might be more of a Hayekian than I previously thought. Rand’s views just come across to me as extreme in most cases and I am a capitalist through and through. Yes, it’s true that living standards are primarily developed by the innovative ideas of individuals. I’ve written about this extensively. But there is also an enormous support mechanism that goes into this creation that helps cultivate the environment leading to this increase in living standards. Government isn’t all bad all the time and I think it’s extreme to imply as much. Government can and does do a lot of good things for us. We didn’t create it so it could ruin our lives, though admittedly, if government becomes corrupted or abused it certainly could do that….I particularly think that once you understand the monetary system you develop a greater appreciation for the system we have and the support/facilitating mechanism that we’ve designed.
As for Ryan, I don’t know precisely where he falls on this line. Is he more reasonable like Hayek or is he an extremist type? Anyhow, read the full piece. It’s interesting….
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.