Gold, volk and IQs

Hayek’s fatal conceit

One has to admire Quinn Slobodan: in order to write his most recent book “Hayek’s bastards: The neoliberal roots of the populist right” (the title is modeled after “Voltaire’s bastards” by John Ralston Saul), he had to enter the world of madmen who produced movies, fictionalized novels, investment newsletters, and comic books detailing the forthcoming economic apocalypse (several apocalypses every year for half a century), invraisemblable conspiracies and own racial superiority. All of that was happening because the piles of money were paid by various tycoons to maintain in a comfortable lifestyle and publishing activity Mont Pelerin Society fellows, so that they could continue meeting each other and exchanging the predictions of doom and gloom in the luxury hotels of the Riviera, Alpine resorts and even on the Galapagos islands.

The reader is unsure if this is really a world of madmen or the world of smart people who pretend to be madmen in order to extract money from the self-interested oligarchs and credulous readers (so called “investors”) who subscribe to their investment newsletters. One has a strong felling of a con business, reminiscent of evangelical scandals where preachers call for humility and love while the real business is one of money.

Did it have to be so? Friedrich Hayek is a serious thinker. Did his writings empower madmen who in many ways distorted his thinking (I will come to that later)? Probably yes. The reason is that Hayek in his later years began to believe that the usual classical defense of private property and free markets was not sufficient. It had to be reinforced by some moral, or even better, seemingly scientific psychological or ethno-biological norms. That led him to dab into the areas of which he knew next to nothing and to fall prey to a weird predilection of the Austrian school for strange metaphors, borderline racism (“the Christian west is the only creator of morals in the modern civilization”, p. 35) and ethno-economics.

Hayek’s moving into psychology, ethno-biology, “hard-wired” moral virtues and similar areas opened the doors to the madmen Slobodian covers in his book. It let them go much further. They were, as Slobodian writes, the believers in the three “hards”: hard-wired human nature which is ethnically or racially determined, hard money (gold), and hard borders (no migration). At least two of these “hard” beliefs are pure travesties of classical liberalism.

Classical liberalism is cosmopolitan. It prides itself of not making differences between individuals and thus opening the entire world to the application of liberal principles, When the alt-Right decided to argue for ethnic, religious or racial differences, it did not simply go against the classical liberal ideology, it showed itself to be a victim of crudest empiricism. East Asians, according to them, were originally not “hard-wired” for economic success. But as East Asian countries became rich, the East Asians joined the exalted ranks of whites and the Ashkenazi Jews as people of superior intellect who, based on their economic success, have the right to rule. If tomorrow African countries become rich, perhaps the Mont Pelerin Society fellows will accept Blacks among the group that has the right to rule. That does not mean that they are not racist. It simply means that their ideology of “hard-wiredness” is unable to predict, based on culture and ethnicity, who will do well under capitalism and who will not. Its explanation of economic success is entirely ad hoc, and by rejecting a much more reasonable explanations that put the accent on historical and structural conditions, and not on race, the alt-Right displays its epistemological impotence.

How did they succeed in rejecting free movement of people? It is one of key tenets of classical liberalism and even of neoliberalism with which most of the alt-Right thinkers discussed in this book are associated. Their argument, by their own admission, is very weak. It is based on IQ-ism: successful parts of the world where smart people by definition live, have the right, in order to remain successful, to fence themselves off from the unsuccessful parts of the world, populated by people of dull intelligence. It is hard to imagine a more drastic departure from classical liberalism: not only is innate inequality of people erected into a dogma and then into a policy, but it requires a forced separation, including in mating, between peoples, and impenetrable borders for one factor of production.

Even the third “hard” rule of “hard money” (gold) is, as Slobodian writes, misinterpreted. Not even Mises whose works, being much more superficial and suffering aplenty from being funded by the Chambers of Commerce were always more attractive to the alt-Right than Hayek’s, did argue for gold as such. Mises saw gold, whose quantity cannot be varied by governments, as a useful tool or anchor to stop governments’ “irresponsibility” in printing fiat currency. Gold had no magical quality that the alt-Right, in Slobodian retelling, ascribes to it—going as far as to invite visitors to the gold museum in Berlin to touch, for a brief moment, the gold bars and as it were through epidermal experience gain the knowledge of correct monetary policy.

On all key issues the alt-Right was a bastardized version of Hayekian creed, or as Slobodian calls it “a mutant strain” of neoliberalism (p. 19). But Hayek himself is, as I mentioned before, guilty of that, by opening, albeit shyly and hesitantly, the door to massive misappropriation and fraud.

The fraud happened because “Hayek’s bastards” despite all their pretenses to the contrary were not intellectuals nor people interested in ideas. There is no doubt left to the reader of this book that they were (as some of them self-congratulatorily called themselves) “intellectual entrepreneurs”. Their objective was to make money. It was not to have their ideas, which most of them, I believe, knew to be either unrealizable or false, accepted. A cynical reader might even say that they hoped that their ideas be never implemented because once brought into the real world such ideas would show their creators’ intellectual bankruptcy and rob them of permanent sources of money syphoned off from the feeble-minded tycoons and credulous public. The authors reviewed here are written of as a part of the modern Western intellectual history only because that history is in a decline and they are its most clear examples. Their true claim to fame is not to have forewarned unsuspecting public to the dangers of the looming apocalypses; it is to have accelerated intellectual decadence and to have converted intellectualism into pure money grubbing.

PS. One might compare in its otherworldliness alt-Right to various groupuscules of Trotskyists. There is some similarity in the fact that both worked out schemes they knew are not within the realm of the politically possible. But Trotskyists were truly dedicated to the ideas, while the alt-Right, in accord with the spirit of the time, cared only about money. This is a big difference.