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Down the Road to Serfdom, Authoritarian Style

Updated: Feb 25


(Blog updated February, 2022). Autocracy is booming in Russia, with even claims of being on a peace making mission while taking over territory in the Ukraine. Autocrats around the Spaceship are cheering the move, including here in the US, as pointed out by Villarreal (2022, In MAGA World… Respect for Putin).


As David Brooks (2022) says it, in a February 24 op-ed, likely stirred by the Vladimir Putin directed Russian invasion of Ukraine:


The democratic nations of the world are in a global struggle against authoritarianism. That struggle has international fronts — starting with the need to confront, repel and weaken Vladimir Putin.


But that struggle also has domestic fronts — the need to defeat the mini-Putins now found across the Western democracies. These are the demagogues who lie with Putinesque brazenness, who shred democratic institutions with Putinesque bravado, who strut the world’s stage with Putin’s amoral schoolboy machismo while pretending to represent all that is traditional and holy.


In the United States that, of course, is Donald Trump. This moment of heightened danger and crisis makes it even clearer that the No. 1 domestic priority for all Americans who care about democracy is to make sure Trump never sees the inside of the Oval Office ever again. As democracy is threatened from abroad it can’t also be cannibalized from within.


It all reminds me of the Kuran (2018) piece titled Another Road to Serfdom, pointing to Authoritarianism flavored by Oligarchism on the Right because of failures, especially in the economy, caused by moving to extremes. The Another Road --- is a play on Hayek (1944) about the Road to Serfdom on the Left, also because of Authoritarianism flavored by Oligarchism emerging as extremes on the left fail. So, overall, Serfdom is always the outcome from the road commanded by the Autocrat whether on Left or Right. And, the move to Serfdom is started when the economic system fails with extreme concentration in income, wealth, and power. People arise against it. The Authoritarian steps in, promises to fix it. The path to Serfdom is guaranteed.


The image shows two Authoritarians, neither one concerned with the problem of the extreme concentration of income, wealth, and power for the favored few at the top. So, the future of both the Russian economy and the US Economy (if the Authoritarians prevail) are described by the Kuran (2018) Another Road to Serfdom. And, as an aside, China's economy has been on the Road to Serfdom for sometime: It cannot succeed.


Metaeconomics makes it clear that economies and governments need to stay away from the tendency to Authoritarianism on both Right and Left, and work to temper the excesses, moving toward balance in the middle. Metaeconomics clarifies it is about moving to a balance in the Individualistic(Right)&Collectivist(Left) frames, searching for the middle ground. It is the only way to achieve peace (eliminate political economic chaos), happiness, and, yes, the only way to achieve economic efficiency in a Humane Capitalism that works for everyone. A Humane Capitalism is only possible if authoritarianism, the arrogance of self-love, extreme self-interest, is tempered: It is about Tempering the Excesses as Dual Interest Theory (DIT) in Metaeconomics (Lynne 2020) makes clear. It is about Saving Capitalism by Making It Good (the phrase related to a 1934 comment by John R. Commons, Institutional Economist, University of Wisconsin, responding to a question about what he had been about over his academic career).


Backgrounding A recent edited book on Authoritarianism in America, by well-known behavioral economist Sunstein (2018), especially because of being part of Thaler and Sunstein (2008), includes a chapter by Kuran (2018). The chapter is titled Another Road to Serfdom, a play on Hayek (1944; see the edited volume by Caldwell, 2007), who saw the Road to Serfdom arising from being too far to the Left. Kuran (2018) sees the same problem arising from being too far to the Right. As Metaeconomics makes clear, both are on-target, with good balance needed on the best road which avoids Serfdom altogether.


Hayek (1944) was concerned about the left, the collectivists, who would move toward communist framing, taking over the means of production. It was all about avoiding the move to a system with too much public property --- and, especially staying away from pure communism, with essentially all public property. As history has demonstrated, such a system will likely never work: All attempts at such systems have led to authoritarians stepping in to fix the problems caused by it. Examples are the current authoritarian systems (which started ostensibly on the path to pure communism) in both China and Russia (although the Russia situation is perhaps more complex, as the Russian State still owns a lot of the productive capital, in factories especially, but the leadership often acts like on the Right, and, a few oligarchs now own most of the land and capital, not that different from some places like the US where most capital is concentrated in a few at the top: Complex), now run by autocrats jointly with cronies in the oligarchy.


Hayek (1944) claimed that anything approaching pure communism (and, Hayek even claimed more moderate Socialism) would lead the economy onto a road to serfdom. Creativity arising out of a person being able to invent, be entrepreneurial, arising in a kind of spontaneous order, would be lost as the authoritarians in charge pushed things into collective processes to decide on production (supply) and to put too much control on consumption (demand). Hayek (1944) even claimed a more moderate Socialism would not work, and claimed the only way to avoid the Road to Serfdom was by moving to the other extreme, that of pure capitalism, which has only private property.


Kuran (2018) makes the case that Another Road to Serfdom is also paved if the system is nudged toward pure capitalism, as it too --- just like pure communism --- always fails, the failure always being the move to extreme concentration of income, wealth and the political power it buys. Pure capitalism would have “no taxes, no price ceilings, no price floors, no public parks, no central banks, no wars of aggression, no immigration restrictions ” (Munger and Villarreal-Diaz 2019, p. 351, quote from Labeit 2009). Without adequate attention to that which the other can go along with as helped by at least some public property and government working to temper the market, the natural progression is to concentrated wealth buying political power, cronyism, and, eventually, to autocracy and oligarchy (Munger and Villarreal-Diaz 2019). The Autocrat then steps into fix the problem caused by too much inequality in income, wealth, and power which makes for people not having a large enough piece of what capitalism produces, in effect giving an inhumane capitalism, a kind of Scroogism at best. Intriguingly, Russia just skipped all the intermediary steps and concentrated the income, wealth, and power right after communism failed, landing on the extreme Right just like a failed pure capitalism: Fascinating.


And, in both cases of an Autocrat and wealthy cronies in charge, whether on the Left or the Right, representative democracy which works to find that which the other (everyone) can go along with, empathy based ethics in a widely shared other-interest, being inclusive of everyone, is lost. Meet me in the middle, please.


Metaeconomic Framing of the Matter of Authoritarianism in Contrast to Humane Liberalism and Humane Capitalism

As Metaeconomics makes clear, a Humane Liberalism --- liberal in the old sense of the word, the Enlightenment version, as Adam Smith envisioned it --- in contrast, sees some merit in both extremes, but only in the sense of seeking balance in individualist&collectivist, Scroogism&Socialism strengths. It is the only way to achieve a Humane Capitalism, one that works for everyone. Like a colleague (Professor Christopher Andrew, while we were on the faculty together at the University of Florida several decades ago) characterized it, after a lengthy conversation about what would eventually evolve into Dual Interest Theory (DIT) in Metaeconomics, a Humane Capitalism came from recognizing that the “Me needs a We to Be, but without a Me there is no We.” Yes, I said, you got it.


In the spirit of Thaler and Sunstein (2008), the way to strike the balance is through nudging, with some regulation and control when it fails, as in their libertarian paternalism frame of reference. We nudge and control away from the extremes of authoritarianism and oligarchism (often emerging with a fascism flavor, too, as certain groups are favored by the wealthy and powerful) and, in gentler forms, nudge away from both Scroogism on the Right and Socialism on the Left, staying away from both extremes. The challenge is that Authoritarianism tends to reappear ---like a Zombie economic idea (after Krugman, 2020) that never seem to completely die --- every time inhumane capitalism (or inhumane communism) goes awry. We avoid both roads to serfdom in a synergistic, sum-greater-than-the-sum-of-the-parts place in the middle on a better road. We search for good balance in joint and nonseparable private & public property, private & public good. We temper and bound the extremes, searching for balance, in order to keep the Authoritarians at bay, please.

The main concern to Kuran (2018) is the authoritarianism (which also tends to have a flavor akin to fascism, focused on the favored few) that is playing in the US, and in several other western democracies (see Applebaum, 2020), on the Right, right now. Ironically, it is also emerging on the Right in Russia which still has remnants of the attempt to do pure communism, with little private property for the millions, instead concentrating property in the state and in the hands of an oligarchy.


Here in the US, and in several of other Democracies, it has also stirred a verbal, and sometimes physically violent, battle between the identitarians, who tend to be more on the Left, and the nativists, who tend to be more on the Right. It is being driven mainly by the nativists on the Right, who have the authoritarian (again, with a fascist flavor) tendency, as demonstrated in quite a number of US political leaders on the Right: Ironically, while parents, grandparents, and great-grandparents fought WWII against authoritarian fascists on the Right, many Americans are now voting same into office.


Intriguingly, too, the authoritarians on the Right claim there is a huge uprising of authoritarians on the Left against which they are railing, albeit there seems to be virtually no empirical evidence of such reality in America at this time. It seems there are a few, perhaps, as illustrated by some quite ferocious vandalism by a few people during the Black Lives Matter protests, but so few as to wonder why it is such a huge deal on the Right. In fact, the entire conversation about economy and society has turned to The Rhetoric of the Right: Language Change and the Spread of the Market (George 2013). In effect, there is no Left, left, in the US. So, why is it there such an uprising on the Right?

Well, several reasons (many of them covered in other Metaeconomics Blogs herein), but for starters, try one word: Diversity. An authoritarian on the Right cannot tolerate diversity. So, there is deep concern over the identitarian coalition, which tends to be on the Left, a coalition that “…loosely connects groups that define themselves according to some form of identity, mostly gender, ethnicity, or sexual orientation (Kuran, 2018, p. 239).” Stenner (2005) characterizes authoritarianism in general, which is more prevalent on the Right, as intolerance of racial, political, and gender diversity. Said intolerance is a main feature of authoritarianism, with an underlying disposition favoring a critical parent – adaptive (obedient) child way of interacting with the world. Moral outrage stirs the critical parent to action: Said outrage in authoritarianism on the right can easily lead to an extreme form of authoritarian with a fascism twist as the end state, as experienced in Germany in the 1930s.

The identitarians on the Left, who tend to be more cosmopolitan, are also rather intolerant of people on the Right, as represented in the nativist coalition, which “… encompasses groups suspicious of economic globalization, technological innovation, cultural change, and cross-border labor mobility (Kuran, 2018, p. 239).” It is all taking stage on a kind of cosmopolitan – nationalism continuum, with the traditional barbarism – civilization continuum of the conservatives and the traditional oppressor – oppression continuum of the progressives lost in the bustle of the struggle between the identitarians and the nativists.

So, intolerance runs rampant on both Right and Left, threatening the very foundation of a humane liberalism based capitalism&democracy, market&government, which depends on diversity. As Kuran (2018, p. 239) characterizes it: “For identitarians, identity-based matters are more central to the quality of life, and nativists say the same about cultural continuity and the scope of economic freedoms… (and it comes down to) whether one of the two intolerant communities might wipe out the other.” Such wiping out, resulting in submission by either group, ensures serfdom. Unfortunately, going back to the 2016-2020 period, the Administration and enablers in Congress seemed to be favoring the wiping out of the identitarians in favor of the nativists: cosmopolitans were less favored than the nationalists. The swing seemed to go the other way after the 2020 election. So, Can it Happen Here, i.e., moving onto Another Path to Serfdom, now produced on the Right?


Looking Forward


Kuran (2018) is concerned, but also holds out hope that the balance in capitalism&democracy that historically helped keep America away from the road and another road to serfdom, staying away from either extreme Left or extreme Right, will prevail. Concerns, though, are real when


“ … citizens … entrust leaders with extensive powers to direct the ‘right’ messages. To block ostensibly harmful acts and expressions, such efforts at control limit the free exchange of ideas. One consequence of their vigilance is the distortion of knowledge in the public domain. Another is the curtailment of social experimentation, which depends on the sharing of thoughts. Limits on expression also impoverish people’s understandings of social processes. Politicians exploit the resulting combustion of hostility, panic, and ignorance through policies that may seem responsive to grievances but are ultimately counterproductive. By pandering to intolerant constituents and stoking fear and anger, they enable the rise of a leader with autocratic ambitions.”


We might also add disparaging democratic processes like making it more difficult to vote by limiting the use of mail-in ballots, and other ways to restrict participation in the democracy: Sounds a bit like authoritarianism with a fascist flavor? Taking America onto the Right (not Left) Road to Serfdom? Looks like a duck, quacks like a duck, perhaps it is a duck?

Kuran (2018, p. 269 ) concludes (and, I encourage you to go read the Chapter, and the other Chapters in Sunstein, 2018, by other known thoughtful writers, researchers: Much more to ponder than covered herein), holds out hope for a “… movement of moderates … (requiring a) sustained collective action by citizens willing to speak for moderation and confront rival forms of intolerance… (yet) forming a large and sustainable tolerant community is no easy task in a society seething with intolerance. Many stars must line up for a return to politics based on mutual respect and willingness to seek common ground.”


DIT in Metaeconomics Can Help Find the Road That Works Best

Hopefully, the stars will provide light for a middle-ground road. The authoritarian extremes in play, no matter which prevails, guarantee serfdom. Adam Smith would not be happy. It is about encouraging the making of wealth (not taking and keeping) but in such a way that everyone can go along with the outcome, avoiding the road to serfdom on both Left and Right. It is about finding optimal inequality, ensuring individual incentives while ensuring each person has a piece of economic activity. DIT in Metaeconomics could be used to help find that middle-ground road. For those of you reading the Metaeconomics Blog, think path 0Z which points to the best road, and stays away from serfdom, with good balance in self&other, person&community, private&public, market&government.



References

Applebaum, A. 2020. Twilight of Democracy: The Seductive Allure of Authoritarianism. New York: Double Day.

Brooks, David. 2022. Defeat Trump, Now More Than Ever. New York Times, February 24.

Caldwell, B. (Editor). 2007. The Road to Serfdom: Text and Documents--The Definitive Edition (The Collected Works of F. A. Hayek, Volume 2) . Chicago: University of Chicago Press. Kindle Edition.

George, David. 2013. The Rhetoric of the Right: Language Change and the Spread of the Market. New York: Routledge.

Krugman, P. 2020. Arguing with Zombies: Economics, Politics, and Fighting for a Better Future. New York: W. W. Norton and Company

Kuran, T. " 2018. Another Road to Serfdom: Cascading Intolerance." In Can It Happen Here? Authoritarianism in America, edited by C. Sunstein. New York: HarperCollins Publishers, Inc.

Labeit, Michael. 2009. “Explaining the Difference Between Capitalism and Corporatism to Michael Moore.” Economic Policy Journal.

Lynne, Gary D. 2020. Metaeconomics: Tempering Excessive Greed. Palgrave Advances in Behavioral Economics, John Tomer, Ed. New York: Palgrave Macmillan.

Munger, Michael C. and Villarreal-Diaz, Mario. 2019. "The Road to Crony Capitalism." Independent Review: A Journal of Political Economy 23 (3): 331-344.

Stenner, K. 2005. The Authoritarian Dynamic. New York: Cambridge University Press.

Sunstein, C. (Editor). 2018. Can It Happen Here? Authoritarianism in America. New York: HarperCollins Publishers Inc., Kindle Edition.

Thaler, R.H. and Sunstein, C.R. 2008. Nudge: Improving Decisions About Health, Wealth, and Happiness. New Haven, Massachusetts: Yale University Press.

Villarreal, Daniel. 2022. "In MAGA World, Contempt for Biden is Matched by Respect for Putin." Newsweek, February 22. https://www.newsweek.com/maga-world-contempt-biden-matched-respect-putin-1681624



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