Ill Fares the Land

by Tony Judt

  But the individualism of the new Left respected neither collective purpose nor traditional authority: it was, after all, both new and left. What remained to it was the subjectivism of private—and privately-measured—interest and desire. This, in turn, invited a resort to aesthetic and moral relativism: if something is good for me it is not incumbent upon me to ascertain whether it is good for someone else—much less to impose it upon them (“do your own thing”).

  True, many radicals of the ’60s were quite enthusiastic supporters of imposed choices, but only when these affected distant peoples of whom they knew little. Looking back, it is striking to note how many in western Europe and the United States expressed enthusiasm for Mao Tse-tung’s dictatorially uniform ‘cultural revolution’ while defining cultural reform at home as the maximizing of private initiative and autonomy.

  In distant retrospect it may appear odd that so many young people in the ’60s identified with ‘Marxism’ and radical projects of all sorts, while simultaneously disassociating themselves from conformist norms and authoritarian purposes. But Marxism was the rhetorical awning under which very different dissenting styles could be gathered together—not least because it offered an illusory continuity with an earlier radical generation. But under that awning, and served by that illusion, the Left fragmented and lost all sense of shared purpose.

  On the contrary, ‘Left’ took on a rather selfish air. To be on the Left, to be a radical in those years, was to be self-regarding, self-promoting and curiously parochial in one’s concerns. Left-wing student movements were more preoccupied with college gate hours than with factory working practices; the university-attending sons of the Italian upper-middle-class beat up underpaid policemen in the name of revolutionary justice; light-hearted ironic slogans demanding sexual freedom displaced angry proletarian objections to capitalist exploiters. This is not to say that a new generation of radicals was insensitive to injustice or political malfeasance: the Vietnam protests and the race riots of the ’60s were not insignificant. But they were divorced from any sense of collective purpose, being rather understood as extensions of individual self-expression and anger.

  These paradoxes of meritocracy—the ’60s generation was above all the successful byproduct of the very welfare states on which it poured such youthful scorn—reflected a failure of nerve. The old patrician classes had given way to a generation of well-intentioned social engineers, but neither was prepared for the radical disaffection of their children. The implicit consensus of the postwar decades was now broken, and a new, decidedly unnatural consensus was beginning to emerge around the primacy of private interest. The young radicals would never have described their purposes in such a way, but it was the distinction between praiseworthy private freedoms and irritating public constraints which most exercised their emotions. And this very distinction, ironically, described the newly emerging Right as well.

  THE REVENGE OF THE AUSTRIANS

  “We must face the fact that the preservation of individual freedom is incompatible with a full satisfaction of our views of distributive justice.”

  —FRIEDRICH HAYEK

  Conservatism—not to mention the ideological Right—was a minority preference in the decades following World War II. The old, pre-war Right had discredited itself twice over. In the English-speaking world, the conservatives had failed to anticipate, understand or repair the scale of the damage wrought by the Great Depression. By the outbreak of war, only the hard core of the old English Conservative Party and rock-ribbed know-nothing Republicans still opposed the efforts of New Dealers in Washington and semi-Keynesian administrators in London to respond imaginatively to the crisis.

  In continental Europe, conservative elites paid the price for their accommodation (and worse) with the occupying powers. With the defeat of the Axis they were swept from office and power. In eastern Europe, the old parties of the center and right were brutally destroyed by their communist successors, but even in western Europe there was no place for traditional reactionaries. A new generation of moderates took their place.

  Intellectual conservatism fared little better. For every Michael Oakeshott, embattled in his rigorous contempt for bien pensant modern thought, there were a hundred progressive intellectuals making the case for the postwar consensus. No one had much time for free marketeers or ‘minimal statists’; and even though most older liberals were still instinctively suspicious of social engineering, they were committed if only on prudential grounds to a very high level of governmental activism. Indeed, the center of gravity of political argument in the years after 1945 lay not between left and right but rather within the left: between communists and their sympathizers and the mainstream liberal-social-democratic consensus.

  The nearest thing to a serious theoretical conservatism in those consensus years came from men like Raymond Aron in France, Isaiah Berlin in the UK and—albeit in a rather different key—Sidney Hook in the USA. All three would have blenched at the label ‘conservative’: they were classic liberals, anti-communist on ethical as well as political grounds and marinated in 19th century suspicion of the over-mighty state. In their different ways, such men were realists: they accepted the need for welfare and social intervention, not to speak of progressive taxation and the collective pursuit of public goods. But by instinct and experience they were opposed to all forms of authoritarian power.

  Aron was best known in these years for his unwavering hostility to dogmatic Marxist ideologues and his clear-eyed support for a United States whose shortcomings he never denied. Berlin became famous for his 1958 lecture on “Two Concepts of Liberty”, where he distinguished between positive liberty—the pursuit of rights which only a state can guarantee—and negative liberty: the right to be left alone to do as one sees fit. Although he saw himself to the end as a traditional liberal, sympathetic to all of the reformist aspirations of the British liberal tradition with which he identified, Berlin thus emerged as a founding reference for a later generation of neo-libertarians.

  Hook, like so many of his American contemporaries, was preoccupied with the anti-Communist struggle. His liberalism thus devolved in practice into an argument for the traditional freedoms of an open society. By conventional US criteria, men like Hook were social democrats in all but name: they shared with other American ‘liberals’ like Daniel Bell an elective affinity for European political ideas and practices. But the strength of his antipathy to communism opened a bridge between Hook and more conventional conservatives, across which both sides would stride with growing ease in the years to come.

  The task of a renascent Right was made easier not just by the passage of time—as people forgot the traumas of the 1930s and ’40s, so they were more open to the appeal of traditional conservative voices—but also by their opponents. The narcissism of student movements, new Left ideologues and the popular culture of the ’60s generation invited a conservative backlash. We, the Right could now assert, stand for ‘values’, ‘the nation’, ‘respect’, ‘authority’ and the heritage and civilization of a country—or continent or even ‘the West’—for which ‘they’ (the Left, students, youth, radical minorities) have no understanding or empathy.

  We have lived so long with this rhetoric that it seems self-evident the Right would resort to it. But until the mid-’60s or so, it would have been absurd to claim that ‘the Left’ was insensitive to the nation or traditional culture, much less ‘authority’. On the contrary, the old Left was incorrigibly old-fashioned in just these ways. The cultural values of a Keynes or a Reith, a Malraux or a De Gaulle were uncritically shared by many of their leftist opponents: except for a brief moment in the aftermath of the Russian Revolution, the mainstream political Left was as reliably conventional in aesthetics as it was in so much else. If the Right had been constrained to deal exclusively with social democrats and welfare liberals of the older sort, it could never have secured a monopoly of cultural conservatism and ‘values’.

  Where conservatives could point to a contrast between themse
lves and the old Left was precisely in the matter of the state and its uses. Even here, it was not until the mid-1970s that a new generation of conservatives felt emboldened to challenge the ‘statism’ of their predecessors and offer radical prescriptions for dealing with what they described as the ‘sclerosis’ of over-ambitious governments and their deadening impact upon private initiative.

  Margaret Thatcher, Ronald Reagan and—far more tentatively—Valéry Giscard d’Estaing in France were the first mainstream right-of-center politicians to risk such a break with the postwar consensus. True, Barry Goldwater in the 1964 presidential election had made an early foray in that direction: but with disastrous consequences. Six years later, Edward Heath—the future Conservative prime minister—experimented with proposals for freer markets and a more restrained state; but he was violently and unfairly castigated for his ‘anachronistic’ resort to defunct economic ideas and beat a hasty retreat.

  As Heath’s misstep suggests, while many people were irritated at over-mighty trade unions or insensitive bureaucrats, they were unwilling to countenance a wholesale retreat. The social democratic consensus and its institutional incarnations might be boring and even paternalist; but they worked and people knew it. So long as it was widely believed that the ‘Keynesian revolution’ had wrought irreversible change, conservatives were stymied. They might win cultural battles over ‘values’ and ‘morals’; but unless they could force public policy debate onto a very different terrain, they were doomed to lose the economic and political war.

  The victory of conservatism and the profound transformation brought about over the course of the next three decades was thus far from inevitable: it took an intellectual revolution. In the course of little more than a decade, the dominant ‘paradigm’ of public conversation shifted from interventionary enthusiasms and the pursuit of public goods to a view of the world best summed up in Margaret Thatcher’s notorious bon mot: “there is no such thing as society, there are only individuals and families”. In the United States, at almost exactly the same moment, Ronald Reagan achieved lasting popularity for his claim that it was “morning in America”. Government was no longer the solution—it was the problem.

  If government is the problem and society does not exist, then the role of the state is reduced once again to that of facilitator. The task of the politician is to ascertain what is best for the individual, and then afford him the conditions in which to pursue it with minimal interference. The contrast with the Keynesian consensus could not be more glaring: Keynes himself had taken the view that capitalism would not survive if its workings were reduced to merely furnishing the wealthy with the means to get wealthier.

  It was precisely such a blinkered understanding of the operations of a market economy which had led, in his view, to the abyss. Why, then, did we in our own times revert to a similar confusion, reducing public conversation to a debate cast in narrowly economic terms? For the Keynesian consensus to be overthrown with such consummate ease and apparent unanimity, the counter-arguments must have been forceful indeed. They were, and they did not come out of nowhere.

  We are the involuntary heirs to a debate with which most people are altogether unfamiliar. When asked what lies behind the new (old) economic thinking, we can reply that it was the work of Anglo-American economists associated overwhelmingly with the University of Chicago. But if we ask where the ‘Chicago boys’ got their ideas, we shall find that the greatest influence was exercised by a handful of foreigners, all of them immigrants from central Europe: Ludwig von Mises, Friedrich Hayek, Joseph Schumpeter, Karl Popper, and Peter Drucker.

  Von Mises and Hayek were the outstanding ‘grandfathers’ of the Chicago school of free-market economics. Schumpeter is best known for his enthusiastic description of the “creative, destructive” powers of capitalism, Popper for his defense of the “open society” and his writings on totalitarianism. As for Drucker, his publications on management exercised enormous influence over the theory and practice of business in the prosperous decades of the postwar boom. Three of these men were born in Vienna, a fourth (von Mises) in Austrian Lemberg (now Lvov), the fifth (Schumpeter) in Moravia, a few dozen miles north of the imperial capital. All five were profoundly shaken by the interwar catastrophe that struck their native Austria.

  Following the cataclysm of World War I and a brief socialist municipal experiment in Vienna (where Hayek and Schumpeter joined the debates over economic socialization), the country fell to a reactionary coup in 1934 and then, four years later, to the Nazi invasion and occupation. Like so many others, the young Austrian economists were forced into exile by these events and all—Hayek in particular—were to cast their writings and teachings in the shadow of what became the central question of their lifetime: Why had liberal Austria collapsed and given way to fascism?

  Their answer: the unsuccessful attempts of the (Marxist) Left to introduce into post-1918 Austria state-directed planning, municipally owned services, and collectivized economic activity had not only failed; they had led directly to a counter-reaction. Thus Popper, to take the best-known case, argued that the indecision of his socialist contemporaries—paralyzed by their faith in ‘historical laws’—was no match for the radical energies of fascists, who acted.12 The problem was that socialists had too much faith in both the logic of history and the reason of men. Fascists, being uninterested in both, were supremely well-placed to step in.

  In the eyes of Hayek and his contemporaries, the European tragedy had thus been brought about by the shortcomings of the Left: first through its inability to achieve its objectives and then thanks to its failure to withstand the challenge from the Right. Each of them, albeit in different ways, arrived at the same conclusion: the best—indeed the only—way to defend liberalism and an open society was to keep the state out of economic life. If authority was held at a safe distance, if politi-cians—however well-intentioned—were barred from planning, manipulating, or directing the affairs of their fellow citizens, then extremists of Right and Left alike would be kept at bay.

  The same dilemma—how to understand what had happened between the wars and prevent its recurrence—was confronted by Keynes, as we have seen. Indeed, the English economist asked essentially the same questions as Hayek and his Austrian colleagues. However, for Keynes it had become self-evident that the best defense against political extremism and economic collapse was an increased role for the state, including but not confined to countercyclical economic intervention.

  Hayek proposed the opposite. In his 1944 classic, The Road to Serfdom, he wrote:No description in general terms can give an adequate idea of the similarity of much of current English political literature to the works which destroyed the belief in Western civilization in Germany, and created the state of mind in which naziism could become successful.13

  In other words, Hayek—by now living in England and teaching at the London School of Economics—was explicitly projecting (on the basis of Austrian precedent) a fascist outcome should Labour, with its loudly proclaimed welfare and social service objectives, win power in Britain. As we know, Labour did indeed win. But far from paving the way for a revival of fascism, its victory helped stabilize postwar Britain.

  In the years following 1945 it seemed to most intelligent observers as though the Austrians had made a simple category error. Like so many of their fellow refugees, they had assumed that the conditions which brought about the collapse of liberal capitalism in interwar Europe were permanent and infinitely reproducible. Thus in Hayek’s eyes, Sweden was another country doomed to follow Germany’s path into the abyss thanks to the political successes of its Social Democratic governing majority and their ambitious legislative program.

  Mis-learning the lessons of Nazism—or assiduously applying a highly selective handful of them—the intellectual refugees from central Europe marginalized themselves in the prosperous postwar West. In the words of Anthony Crosland, writing in 1956 at the height of postwar social democratic confidence, “no one of any standing now believes t
he once-popular Hayek thesis that any interference with the market mechanism must start us down the slippery slope that leads to totalitarianism.” 14

  The intellectual refugees—and especially the economists among them—lived in a condition of endemic resentment toward their uncomprehending hosts. All non-individualist social thought—any argument that rested upon collective categories, common objectives or the notion of social goods, justice, etc.—aroused in them troubling recollections of past upheavals. But even in Austria and Germany circumstances had changed radically: their memories were of little practical application. Men like Hayek or von Mises seemed doomed to professional and cultural marginality. Only when the welfare states whose failure they had so sedulously predicted began to run into difficulties did they once again find an audience for their views: high taxation inhibits growth and efficiency, governmental regulation stifles initiative and entrepreneurship, the smaller the state the healthier the society and so forth.

  Thus when we recapitulate conventional clichés about free markets and western liberties, we are in effect echoing—like light from a fading star—a debate inspired and conducted seventy years ago by men born for the most part in the late 19th century. To be sure, the economic terms in which we are en-couraged to think today are not usually associated with these far-off political disagreements and experiences. Most students in graduate business schools have never heard of some of these exotic foreign thinkers and are not encouraged to read them. And yet without an understanding of the Austrian origins of their (and our) way of thinking, it is as though we speak a language we do not fully comprehend.