Thursday, April 28, 2011

Soros Brings Confusion to Cato Seminar on Hayek

I hope there weren't many newbies at the Cato Institute trying to learn about liberty, the thinking of Hayek or Austrian economics, today. A featured speaker at a Cato event was the oligarch George Soros.

Judging from reports, Soros knows as much about Hayek as I do about the ancient rituals of kami.
According to a report from The Future of Capitalism:
Mr. Soros did have some criticism of Hayek, accusing him of "political bias" that led him to become "the apostle of market fundamentalism."
This is some kind of bizarre thinking on the part of Soros. Perhaps taking some perverted notion of the Marxian concept of ideas being based on ones class. In fact, there is no evidence of any political bias in Hayek's writing.

Hayek was a brilliant truth seeker who thought at a very high theoretical level that was unlikely of interest to politicians in their day to day activities. Do you know of any politician that has a position on price signals, scientisim or Hayekian triangles?

As far as "market fundamentalism", this is a strawman used by Soros to imply that free market advocates believe that the market is always correct and that errors can not be made in a free market system. The fact of the matter is that free market advocates understand that the free market system is about profits and losses, and that losses are just as important in directing an economy in a better direction as are profits. There is no belief that there are no errors in a market system.

Further Soros' understanding of Hayek appears to be extremely limited. Here's a report by FC on one exchange:
I asked Mr. Soros what he thought of The Road to Serfdom, which has been propelled onto bestseller lists in part because of its promotion by a critic of Mr. Soros, the broadcaster and author Glenn Beck. Mr. Soros said that to properly answer he'd have to go back and re-read the book.
Soros also clearly has no understanding of the co-ordination problems of a national healthcare program. His objections were limited to the concessions made on pricing with pharmaceuticals, as though if those concessions were not made, Obamacare had the potential to be a success. His only other comment on Obamacare was that he bemoaned  the fact the "public option" was not a part of the final legislation--an option that would have most assuredly wiped out even more private care and made the system even more socialistic:
In response to a question about Obamacare, Mr. Soros said "insurance companies destroyed the core of the reform," the "public option," and he also faulted the law for allowing pharmaceutical companies to make small price concessions and therefore avoid larger price concessions that would come with allowing the government to use its full bargaining power as a purchaser.
Hayek, in no way would have been in favor of such a program with the many distortions in price signals and incentives that the program would create.

Despite this apparent overall cluelessness about Hayek's thinking. Soros did say that
...he'd been "influenced" by Hayek. "He has had a big influence on my thinking," Mr. Soros said


  1. They're building a meme with this "market fundamentalism" schtick, it's what Stiglitz is railing against lately, as well.

    Trying to tie it in to some religious belief. I see what they did there.

  2. He started out saying Hayek was the a main proponent of rational expectations and the efficient market hypothesis. To the extent that neoclassicals exhalt those theories could be considered market fundamentalism in some regard. But to throw Hayek, or any austrian in with the neoclassicals is fallacious.

  3. We should call them statist fundamentalists. We've more justification to do so. As economists, they've replaced the clergy as the intellectual vanguard of the state, weaving apologia upon apologia for it.

  4. It's clear what happened here. The usual way to attack somebody in political circles is almost always, state the opposing side's case as incorrectly as possible, thereby making it easier to knock down. What he talked about had little to nothing to do with anything Hayek believed.

    If he desires to try and paint free market economics as some kind of arcane religious belief, then he can be subject to the same rules. So Soros' vision of the world is for technocrats to be in charge of socialistic enterprises. Alright, because of this fact, Soros is a technocratic fundamentalist. Forget democratic republican values, forget markets, just make the smart people the ones in charge. The problem is the world is much bigger and wider than these people can ever imagine. Social engineering and technocratic command programs end up in outcomes that are either undesired or unexpected. For some reason, this still doesn't dissuade the people like Soros who desire to be the controllers.

    Really, I don't think it's clear he understands Hayek. Even if he does understand him, I doubt he wants to move in that direction because that would mean having to curtail his controlling nature and technocratic instincts.

    What an annoying man. It would be better if he spent his money on drugs and whores like Charlie Sheen instead of trying to engineer the rest of us to his liking.