For a long time, Hayek’s ideas had only a few disciples, and Keynesian economics dominated the policies of Western governments in the post-war years. Many countries established welfare states despite Hayek’s warnings against it. But the oil shortage and economic downturn of the 1970s persuaded some to look again at Hayek’s ideas, and in 1974, to the surprise of many, he was awarded the Nobel Prize for Economics.
From this point on, Hayek’s ideas became the rallying point for those who championed unregulated free markets as the route to economic prosperity and individual liberty. In the 1980s, Reagan and Thatcher pursued policies intended to roll back the welfare state, reducing taxation and cutting regulations. Many of the leaders of the revolutions against communist rule in eastern Europe were also inspired by Hayek’s thinking.
In post-war Europe, the ideas of John Maynard Keynes won out over those of Hayek. Key industries such as the railways were run by state-owned companies.
Shock policies
Hayek’s claim to be a liberal has been criticized by many, including former British Liberal Party leader David Steel, who argued that liberty is possible only with “social justice and an equitable distribution of wealth and power, which in turn require a degree of active government intervention”. More damning still from a liberal point of view is the association of Hayek’s ideas with what Canadian journalist Naomi Klein describes as the “shock doctrine”. In this, people are persuaded to accept, “for their own ultimate good”, a range of extreme free-market measures – such as rapid deregulation, the selling of state industries, and high unemployment – by being put in a state of shock, either through economic hardship or brutal government policies.
Hayek’s free-market ideology became associated with a number of brutal military dictatorships in South America, such as that of General Augusto Pinochet in Chile – apparently just the kind of totalitarian regime Hayek was arguing against. Hayek was himself personally associated with these regimes, though he always insisted that he was only giving economic advice.
Hayek remains a highly controversial figure, championed by free marketeers and many politicians on the right as a defender of liberty, and despised by many on the left, who feel his ideas lie behind a shift towards hardline capitalism around the world that has brought misery to many and dramatically increased the gap between rich and poor.
Ronald Reagan and Margaret Thatcher both enthusiastically embraced Hayek’s message that government should be shrunk, cutting taxes and state-provided services.
FRIEDRICH HAYEK
Born in Vienna in 1899, Friedrich August von Hayek entered the University of Vienna just after World War I, when it was one of the three best places in the world to study economics. Though enrolled as a law student, he was fascinated by economics and psychology, and the poverty of post-war Vienna urged him to a socialist solution. Then in 1922, after reading Ludwig von Mises’s Socialism, a devastating critique of central planning, Hayek enrolled in Mises’s economics class. In 1931, he moved to the London School of Economics to lecture on Mises’s theory of business cycles, and began his sparring with Keynes on the causes of the Depression. In 1947, with Mises, he founded the Mont Pèlerin Society of libertarians. Three years later, he joined the Chicago school of free-market economists, along with Milton Friedman. By his death in 1992, Hayek’s ideas had become highly influential.
Key works
1944 The Road to Serfdom
1960 The Constitution of Liberty
See also: Immanuel Kant • John Stuart Mill • Pierre-Joseph Proudhon • Ayn Rand • Mikhail Gorbachev • Robert Nozick
IN CONTEXT
IDEOLOGY
Conservatism
FOCUS
Practical experience
BEFORE
1532 Machiavelli’s The Prince analyses the usually violent means by which men seize, retain, and lose political power.
1689 Britain’s Bill of Rights limits the monarchy’s powers.
1848 Marx and Engels publish the Communist Manifesto, which Oakeshott believes is used unthinkingly as a “rulebook” for political action.
AFTER
1975 In Cambodia, Pol Pot proclaims “Year Zero”, erasing history. His Maoist regime kills 2 million people in 3 years.
1997 China’s principle of “One Country, Two Systems” allows for Hong Kong’s free-market economy after Britain returns the territory to China.
The political extremism that engulfed much of the world in the 20th century, with the rise of Hitler in Germany, Stalin in Russia, and Mao in China, stirred Michael Oakeshott’s career-long investigation into the nature of political ideologies and their impact on the lives of nations. He considered that Marxist and fascist leaders had seized on the thought of political theorists like “an infection”, with disastrous consequences for millions. Oakeshott named this contagious disease “rationalism”.
Tracing the emergence of British parliamentary institutions to the “least rationalistic period of politics – the Middle Ages”, Oakeshott explained that in Britain, parliament had not developed following a rationalist or ideological order. Rather, the imperative to limit political power and protect against tyranny acted as a deterrent, stabilizing Britain against the rationalist absolutisms that gripped Europe.
"In political activity, then, men sail on a boundless and bottomless sea."
Michael Oakeshott
Fixed beliefs
Oakeshott saw rationalism in politics as a fog obscuring the real-life, day-to-day practicalities that all politicians and parties must address. The rationalist’s actions are a response to his fixed theoretical beliefs rather than to objective or “practical” experience. He must memorize a rulebook, such as Marx and Engels’s Communist Manifesto, before he can navigate the waters in which he finds himself, and so he is constantly detached from reality, operating through an ideological fog of abstract theories. Oakeshott declared that “men sail a boundless and bottomless sea” – meaning that the world is hard to fathom and that attempts to make sense of society’s behaviour inevitably distort and simplify the facts. He was wary of ideologies, seeing them as abstract, fixed beliefs that cannot explain what is inexplicable. Allergic to uncertainty, they convert complex situations into simple formulae. The rationalist politician’s impulse is to act from within the “authority of his own reason” – the only authority he recognizes. He acts as though he understands the world and can see how it should be changed. It is very dangerous in politics, Oakeshott believed, to act according to an artificial ideology rather than real experience of government. Practical knowledge is the best guide and ideology is false knowledge.
Although Oakeshott was known as a conservative theorist, and his thinking has been appropriated by elements of modern-day conservatism, this is an ideological label that he did not recognize, and he did not pledge public support for conservative political parties.
Oakeshott likened political life to a ship on rough seas. Predicting exactly how the waves will form is impossible, so negotiating the storms requires experience.
MICHAEL OAKESHOTT
Michael Oakeshott was born in London in 1901 to a civil servant and a former nurse. He studied history at the University of Cambridge, graduating in 1925. He remained in academia for the next half century, barring his covert role in World War II when he served with British intelligence as part of the “Phantom” reconnaissance unit in Belgium and France.
Oakeshott taught at both Cambridge and Oxford universities, after which he moved to the London School of Economics and was made Professor of Political Science. He published widely on the philosophy of history, religion, aesthetics, and law as well as politics. His influence on Conservative party politics in Britain led prime minister Margaret Thatcher to put him forward for a knighthood, which he declined, not seeing his work as party-political in nature. He retired in 1968, and died in 1990.
Key works
1933 Experience and Its Modes
1962 Rationalism in Politics and Other Essays
/> 1975 On Human Conduct
See also: Niccolò Machiavelli • Thomas Hobbes • Edmund Burke • Georg Hegel • Karl Marx
IN CONTEXT
IDEOLOGY
Islamic fundamentalism
APPROACH
Jihad
BEFORE
622–632 CE The first Muslim commonwealth, in Medina under Muhammad, unites separate tribes under the umbrella of faith.
1906 The All-India Muslim League is founded by Aga Khan III.
AFTER
1979 In Pakistan, General Zia ul-Haq puts some of Maududi’s ideas into practice as Islamic Sharia-based criminal punishments become law.
1988 Osama bin Laden forms al-Qaeda, calling for a global jihad and the imposition of Sharia law across the world.
1990 The Cairo Declaration on Human Rights in Islam cites Sharia law as its sole source.
The genesis of the global Islamic revival in the 20th century has often been traced to the rejection of European colonialism and Western decadence in Africa and Asia. However, it was also linked to internal issues of communal politics, Muslim identity, the dynamics of power in a multi-ethnic, multi-faith society, and – in India – the question of nationalism. The political party Jama’at-i-Islami, founded by Maulana Abul Ala Maududi in 1941, became a revolutionary force at the vanguard of the Muslim reawakening in India. Addressing what he saw as a deep intellectual uncertainty and political anxiety among Indian Muslims after the rule of the British Raj, Maududi formulated a fresh perspective on Islam designed to reverse the decline in Muslim political power by forging a new universal ideological brotherhood.
"Islam does not intend to confine its rule to a single state or a handful of countries. The aim of Islam is to bring about a universal revolution."
Abul Ala Maududi
The Islamic state
Always more of a scholar and a mujaddid (reformer) than a practical, hands-on politician, Maududi remained detached from specific political and social issues. Instead, he concentrated on communicating his vision of the ideal Islamic state. Every element of this state would be informed “from above” by the laws of din (religion), not by secular Western principles of democratic governance. The Islamic state would therefore be innately democratic because it directly reflected the will of Allah.
This holy community could come into being only if its citizens were converted from ignorance and error to an uncompromising and purer understanding of Islam as a whole way of life. Maududi had studied European socialists, who saw their “base” as the masses of the working class in every country. Maududi saw the world population of Muslims as his “base” in the same way. If united ideologically, Muslims would eventually be politically indivisible, rendering secular nation-states irrelevant. The Islamic jihad (holy war) was not only a struggle to evolve spiritually, it was also a political struggle to impose an all-encompassing Islamic ideology. This would focus on Islamic control of state resources, so that finally the kingdom of God would be established on Earth.
In 1947, on the Partition of India and Pakistan on religious lines, the British Raj was dissolved. Although his party did not back Partition, criticizing its leaders’ policies as insufficiently Islamic, Maududi moved to Pakistan, determined to make it an Islamic state.
The Islamic revolution in Iran, led by Ruhollah Khomeini, ushered in the world’s first Islamic republic in 1979. A state run on Islamic religious lines was Maududi’s lifelong goal.
Criticism of the approach
Western critics of Maududi’s call for an Islamic world order claim that Islam sees its own history as a long descent from ideal beginnings, rather than as an evolutionary advance of civilization and reason. Meanwhile, the fundamentalist Muslims in Maududi’s slipstream see the ongoing interference of Western countries in the internal politics of the Middle East as the continuation of colonial domination, and believe that only Islamic government ruling through Sharia law (canonical law based on the teachings of the Quran), as interpreted by Muslim clerics, can govern mankind.
ABUL ALA MAUDUDI
Born in Aurangabad, India, the reformer, political philosopher, and theologian Maulana Abul Ala Maududi belonged to the Chisti tradition, a mystic Sufi Islamic order. He was educated at home by his religious father. Later, he began to earn his living as a journalist. In 1928, he published Towards Understanding Islam (Risala al Dinyat), earning him a reputation as an Islamic thinker and writer. Initially he supported Gandhi’s Indian nationalism, but quickly began to urge India’s Muslims to recognize Islam as their only identity.
In 1941, Maududi moved to Pakistan, where he advocated an Islamic state. He was arrested and sentenced to death in 1953 for inciting a riot, but the sentence was commuted. He died in New York in 1979.
Key works
1928 Towards Understanding Islam
1948 Islamic Way of Life
1972 The Meaning of the Quran
See also: Muhammad • Karl Marx • Theodor Herzl • Mahatma Gandhi • Ali Shariati • Shirin Ebadi
IN CONTEXT
IDEOLOGY
Objectivism
FOCUS
Individual liberty
BEFORE
1917 The young Ayn Rand witnesses the October Revolution in Russia.
1930s Fascism rises across Europe as a series of authoritarian states centralize state power.
AFTER
1980s Conservative, free-market governments – in the UK under Margaret Thatcher, and in the US under Ronald Reagan – achieve electoral success.
2009 The Tea Party movement begins in the US, with a right-wing, conservative, tax-reducing agenda.
Late 2000s Renewed interest in Rand’s works follows the global financial crisis.
During the mid-20th century, the twin forces of fascism and communism led many in the West to question the ethics of state involvement in the lives of individuals.
Russian-American philosopher and novelist Ayn Rand believed in a form of ethical individualism, which held that the pursuit of self-interest was morally right. For Rand, any attempt to control the actions of others through regulation corrupted the capacity of individuals to work freely as productive members of society. In other words, it was important to preserve the freedom of a man from interference by other men. In particular, Rand felt that the state’s monopoly on the legal use of force was immoral, because it undermined the practical use of reason by individuals. For this reason, she condemned taxation, as well as state regulation of business and most other areas of public life.
"Man – every man – is an end in himself, not the means to the ends of others."
Ayn Rand
Objectivism
Rand’s main contribution to political thought is a doctrine she called objectivism. She intended this to be a practical “philosophy for living on Earth” that provided a set of principles governing all aspects of life, including politics, economics, art, and relationships. Objectivism is built on the idea that reason and rationality are the only absolutes in human life, and that as a result, any form of “just knowing” based on faith and instinct, such as religion, could not provide an adequate basis for existence. To Rand, unfettered capitalism was the only system of social organization that was compatible with the rational nature of human beings, and collective state action served only to limit the capabilities of humanity.
Her most influential work, Atlas Shrugged, articulates this belief clearly. A novel set in a United States that is crippled by government intervention and corrupt businessmen, its heroes are the industrialists and entrepreneurs whose productivity underpins society and whose cooperation sustains civilization. Today, Rand’s ideas resonate in libertarian and conservative movements that advocate a shrinking of the state. Others point out problems such as a lack of provision for the protection of the weak from the exploitation of the powerful.
Atlas supports the world on his shoulders in this sculpture at the Rockefeller Center, New York. Rand believed that businessmen supported the nation state in the same way.
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AYN RAND
Ayn Rand was born Alisa Zinov’yvena Rosenbaum in St Petersburg, Russia. The Bolshevik Revolution of 1917 resulted in her family losing their business and enduring a period of extreme hardship. She completed her education in Russia, studying philosophy, history, and cinema, before leaving for the US.
Rand worked as a screenwriter in Hollywood before becoming an author in the 1930s. Her novel The Fountainhead appeared in 1943 and won her fame, but it was her last work of fiction, Atlas Shrugged, that proved to be her most enduring legacy. Rand wrote more non-fiction and lectured on philosophy, promoting objectivism and its application to modern life. Rand’s work has grown in influence since her death and has been cited as providing a philosophical underpinning to modern right-libertarian and conservative politics.
Key works
1943 The Fountainhead
1957 Atlas Shrugged
1964 The Virtue of Selfishness
See also: Aristotle • Friedrich Nietzsche • Friedrich Hayek • Robert Nozick
IN CONTEXT
IDEOLOGY
Anti-totalitarianism
FOCUS
Truth and myth
BEFORE
1882 French historian Ernest Renan claims that national identity depends upon a selective and distorted memory of past events.
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