Saturday, July 22, 2017

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Abolish Government Favoritism

I was on vacation last week, so I am a little behind on blogging. Before I left, the New York Times’s Adam Davidson ran an interesting article on F.A. Hayek, calling him Paul Ryan’s “guru.” In the piece, Davidson quotes my Mercatus and GMU colleague, Pete Boettke:

In actuality, Ryan is like a lot of politicians who merely cherry-pick Hayek to promote neoclassical policies, says Peter Boettke, an economist at George Mason University and editor of The Review of Austrian Economics. “What Hayek has become, to a lot of people, is an iconic figure representing something that he didn’t believe at all,” Boettke says. For example, despite his complete lack of faith in the ability of politicians to affect the economy, Hayek, who is frequently cited in attacks on entitlement programs, believed that the state should provide a base income to all poor citizens.

To be truly Hayekian, Boettke says, Ryan would need to embrace one of his central ideas, known as the “generality norm.” This is Hayek’s belief that any government program that helps one group must be available to all. If applied, Boettke says, a Hayekian government would eliminate all corporate and agricultural subsidies and government housing programs, and it would get rid of Medicare and Medicaid or expand them to cover all citizens. (Hayek had no problem with a national health care program.) Hayek also believed that the government should not have a monopoly on any service it provides; instead, private companies should compete by offering an alternative Postal Service, road system, even, perhaps, a private fire department.

I’m glad Pete picked up on this. In my view, Hayek’s generality norm is the polar opposite of the Pathology of Privilege. And as I have argued in the past, the abolition of favoritism in government policy has both economic and moral appeal. This appeal, moreover, seems likely to cut across the ideological divide.