From Black Mass (John Gray, 2007) p91-3
If free markets are normally the result of deliberate construction, spontaneously evolved social institutions are rarely liberal in Hayek’s meaning of the term, at any rate. A political system of the sort Hayek admired came into being in England without anyone planning it; but as Hume showed in his History of England that was by chance, not as a result of the operation of any divine or natural law. In much the same way, feudal societies came into being without anyone intending it or understanding how it happened, and no one designed the curbs on free markets that were imposed in late Victorian Britain. If there is such a thing as spontaneous social evolution it produces institutions of many kinds.
The error of Hayek’s belief that the free market develops spontaneously was shown in Russia during the Yeltsin era. Western governments believed that once state planning was dismantled a market economy would develop automatically. A market economy emerged, but it was dominated by organized crime. Under Putin, Russian anarcho-capitalism was replaced by a new system still intertwined with crime but seemingly more organized and popularly legitimate than before that was more efficient than central planning but far removed from the free market. The result of relying on spontaneous processes was a new type of command economy.
Hayek is often compared with Edmund Burke, the Irish-born eighteenth-century parliamentarian who founded English conservatism, and they do have something in common. Like Hayek, Burke believed that tradition encapsulates the wisdom of generations. However, unlike Hayek, Burke based this belief in religious faith: the invisible movement of tradition was providence at work in history. It was difficult to reconcile this idea with the fact of the French Revolution, but provided he was ready to accept the Terror as divine punishment for human wickedness, Burke could maintain his faith. As a secular thinker, Hayek lacked this recourse. Instead he based his belief in tradition on science, and here he was closer to Auguste Comte. Hayek was a sharp critic of Positivism who would have been horrified by the suggestion that he had anything in common with Comte the Positivist ideologue. Yet, like Comte, Hayek turned to science to validate a providentialist view of human development. Though they differed radically about its structure, both believed a universal system was the end-point of history. ‘
Hayek and Comte viewed history as a one-way street, and in this they were at one with Spencer and Marx. All these thinkers underrated the persistent power of nationalism and religion, which have interacted with new technologies to produce a wide variety of economic and political arrangements. Some may be too repressive and unproductive to survive for example, Soviet-style central planning and the Taliban regime in Afghanistan but at the start of the twenty-first century the world contains several sorts of regime. China has adopted a mix of nationalism and state capitalism, Iran a type of popular theocracy, America a blend of free markets with protectionism and crony capitalism, Russia an ultra-modern version of authoritarianism, Europe a combination of social democracy and neo-liberal economic integration, and so on. None of these systems is fixed for ever. They are all interacting with one another and changing continuously. But they are developing in different directions, and there is no reason to expect any ultimate convergence.
In many respects Hayek’s view of the free market resembles that of Marx. In common with Marx, Hayek viewed the unfettered market not only as the most productive economic system that had ever existed but also as the most revolutionary. Once it has come into being capitalism cannot help spreading, and unless some disaster intervenes it is bound to become universal. However, while Marx understood that the advance of capitalism would overturn bourgeois life, Hayek did not. Hayek believed market societies were based on tradition, writing: ‘Paradoxical as it may appear it is probably true that a successful free society will always be in large measure a tradition bound society.’ He failed to notice that free markets work to subvert the bourgeois traditions that underpinned capitalism in the past. Hayek’s attempt to link the defence of free markets with a kind of cultural conservatism ran up against the transgressive energy of the untrammelled market. It was a contradiction that neo-conservatives understood, and were determined to do something about
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