Hayek, Intellectual Community and Political Populism | Libertarian Society Singapore

Friedrich A. Hayek can be considered as the most significant classic liberal figure in the 1920’s. Hayek tried to give new ideas against the collectivism that was embraced by almost every country in the world during the post World War II as if he was going against the world. In the 1920’s to 1930’s, the idea of communism and fascism was so popular and it changed the market economy with a system that was controlled by the government and a centralised economy planning. The idea spreads to even the democratic countries such as The United States and The Great Britain, using collectivism as the basis of decision-making.
The great economic crisis during the 1930’s made The U.S President Franklin D. Roosevelt and British Economist John Maynard Keynes pushed the government’s intervention massively towards the economic situation in order to maintain everything that was considered a market failure.
In a thesis called “Spontaneous Order”, Hayek tried to explain that humans have knowledge limitations. Therefore, humans must “utilise more of their own knowledge”. Such thing can be achieved as long as humans can interact to one another in order to progress without any interventions.
This matter is what Hayek wrote in his book titled “The Road To Serfdom (1944)”. The book that criticises collectivism made Hayek academically and intellectually excommunicated because he went against the current trending policy. Hayek thinks that the government’s intervention on political and economical aspects can lead to “the way of slavery”, such matter could hamper individual freedom from fulfilling its purpose.
The fundamental of this thought was based on Hayek’s comprehension on individualism which at the time of World War II was strictly forbidden in world politics. In his book titled “The Constitution of Liberty (1960)”, Hayek explained that an individual becomes important because it’s an organism that makes choices, thinks and acts. Hayek promotes the idea to grasp the basic principle of freedom that is a state of “not being the target of others’ arbitrary intentions”.
This differentiates the conditions where people becomes slaves and people being completely free. Individuals become an important component because there will be no free society without free individuals that has an exemption from outside interventions that hampers them from fulfilling each of their own purposes.
According to Hayek, collectivism does not lead to freedom and respect in humanity but leads to an oppressed civilisation and slavery instead. To Hayek, the idea of few people who sits in the government’s chair and controls every political and economic aspect on their behalf is an unreal concept.
Getting rid of the role of free individuals in the market and replacing them with big groups of politicians and bureaucrats that don't even know what people want and need that will destroy the natural mechanism of the market itself. Centralised economic won’t generate any involvement, but creates the state of totalitarianism where a group with few people in it will control the society by making decisions on behalf of the society.
At that time, Hayek introduced his anti-mainstream concept that contradicts with most intellectual communities. Intellectuals tend to side with the concept of socialism at that time. In 1949, Hayek wrote an essay titled “Intellectuals and Socialism” that describes how many intellectuals, even in democratic countries contributed to the triumph of collectivism. The current state of liberalism barely had an impact on intellectuals, so it doesn’t really have a chance to introduce it to the public.
The situation made Hayek establish the Mont-Pelerin Society in 1947, he invited intellectuals to fight for the ideas of freedom in democratic countries. Mont-Pelerin society became a media for Hayek to struggle for freedom in the middle of his intellectual excision at the time.
The moment of crisis in 1970’s became a turning point for world’s political and economic system. Keynes’ idea was slowly abandoned because it didn’t solve unemployment and inflation problems that harmed many countries. This added to the fact that the world’s monetary institutions such as IMF, World Bank and WTO which motorised by Keynes’ idea became a spectre because it hurts many developing countries.
The 40th president of The United States, Ronald Reagan, started to look towards Hayek’s idea and began to deregulate and liberalise the country’s economy by decreasing assets and sold them to the public, he also minimised the tax fare in order to stimulate the economy so that it can rise back up again.
Previously, Margaret Thatcher, the British Prime Minister from the Conservative Party also did the same thing. Her success in rebuilding the British economy made the public choose her to lead for three consecutive periods. Thatcher is also known for being a fan of Hayek’s works and made it as a reference on every decision she made.
The unexpected also happened in China. Through the economic reformation, Deng Xiaoping liberated the economy and started to privatise most state-owned enterprises. The “opened door” policy started to be encouraged by letting foreign investments enter the country. Even the country’s foreign capital investments beat the ones that took place in Europe.
That brought China to become the country that has the biggest export activity, it even surpasses The United States. Now, China has become a respected country in the eyes of the world. With the liberation of its economy,  China is encouraged to give as many as civil liberties in accordance to Hayek’s dream of non-slavery acts.
In the end, Hayek’s struggle for the ideas of freedom gave him a recognition from the prestigious Nobel Economic institution. In 1974, Hayek was awarded the Nobel Economics for his work on monetary theory and business cycle as an appreciation for his world-changing idea.
Hayek’s consistent ideas on defining freedom from every aspect of politics and economy made him a classic liberal thinker whose ideas are still relevant to this day as a cornerstone for countries to make decisions.
This writing was first presented on a Campus Discussion “Hayek, Kaum Intelektual dan Populisme Politik” that was held on May 10th, 2016 on Ciputat School, Indonesia. The discussion was a collaboration between FNF Indonesia, Liberty Studies, and www.suarakebebasan.org

Republished with Permission

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