It is not every day the iconic F.A. Hayek is associated with support for one-world government. Yoram Hazony’s critique of Hayek on that score highlights interesting fissures in theories of political economy on the Right. In some of his newspaper writing, and in The Virtue of Nationalism, the Jerusalem-based academic argues that Hayek advocated replacing independent nations with a world-wide federation.
The book, Hazony’s fourth, is a strong defense of nationalism that has been welcomed by many conservative free marketeers. Yet it portrays the great economist Hayek—a leading proponent of liberty who was beloved by Hazony idol Margaret Thatcher, and by many supporters of Hazony’s case for nationalism—as one whose views on international order would stifle liberty.
The apparent contradiction signals a conspicuous divide on questions of national sovereignty between classical liberals and conservatives.
Arguably the most contentious citation by Hazony, referenced in an op-ed he published two years ago in the Wall Street Journal, is from Hayek’s 1939 essay, “The Economic Conditions of Interstate Federalism”(collected in Individualism and Economic Order, 1948): “The abrogation of national sovereignties and the creation of an effective international order of law is a necessary complement and the logical consummation of the liberal program.”
Hazony’s conclusion is that “classical liberalism thus offers ground for imposing a single doctrine on all nations for their own good.” More than that, classical liberalism “provides an ideological basis for an American universal dominion.”
All this is initially confusing at best. In his 1944 book The Road to Serfdom, Hayek is critical of international organizations like the League of Nations, forerunner of the United Nations, even as he condemns the atrocities that were committed by nation-state governments, backed often by widespread nationalist sentiment. Hayek does not as a consequence call, in that work, for an upward channeling of power into some sort of worldwide federation.
Greater context sheds some light. The contentious citation from “The Economic Conditions of Interstate Federalism” was first published in 1939 in the New Commonwealth Quarterly, and follows with the next line in both the article and later book: “In a recent discussion of international liberalism, it has been rightly contended that it was one of the main deficiencies of nineteenth century liberalism that its advocates did not sufficiently realize that the achievement of the recognized harmony of interests between the inhabitants of the different states was only possible within the framework of international security.” Hayek then goes on to endorse the idea that “there must be neither alliance nor complete unification; neither Staatenbund nor Einheitsstaat but Bundesstaat.”
Here, Hayek is referring to Lionel Robbins and his Economic Planning and International Order (1937). Professor Robbins of the London School of Economics favored a return to laissez-faire but “he made numerous ad hoc exceptions,” as his entry in the Concise Encyclopedia of Economics notes. The issue for Robbins and Hayek was not how to force one’s own values on governments that did not respect liberty, but how to meet the threats posed by internationally expansionist governments, given the rise of communism and its pursuit of global domination, and Nazism’s militarism and the carnage wrought by the Third Reich.
Hayek defined international federalism at the time as a means to protect liberty, exerting pressure on governments by respectable peers to observe property rights and rule of law domestically, even within the “balance of power”—itself a situation some contemporary scholars argue comes into existence through spontaneous order. Without a balance of power, individual liberty disappears, as Edwin van de Haar notes.
The danger of newly independent postcolonial nations falling into the communist bloc was justifiably of concern when Hayek made these observations. (A third of the world would subsequently fall under Soviet sway.) A system of worldwide federalism was simply a way to safeguard property rights and freedom against the forces of totalitarianism. It was a matter of promoting good governance in international affairs, not a global government per se.
Hayek had a sophisticated take on international relations. Van de Haar gives an excellent overview of Hayek’s stance in its classical liberal context, demonstrating that, while the Austrian economist was indeed a federalist in international relations, he was no starry-eyed believer in international peace and harmony. Hayek was among the more hawkish of the classical liberals, in fact.
In later life, he regretted not focusing more on international affairs. The connection between the balance of power and Hayek’s ideas, writes Van de Haar, “is less surprising than it might seem because the great classical-liberal thinkers, such as Hume, Smith, Mises, and Hayek, were rather power oriented in their views on international affairs.” It seems to me this assessment is not inconsistent with Hazony’s belief in the applicability of the spontaneous order of markets to our international relations.
For Hayek, some form of federalism among nation-states was needed in situations where these nations were unable to live side by side; clearly evidenced by wars at the time. The nation remains the basic unit of international society in Hayek’s view. Where federations are required to maintain individual liberty, they ought to be classically liberal in nature, which is to say, with a minimal set of tasks.
Returning to Hazony, he too agrees that there exists a basic minimum of what constitutes governance within international affairs, though specifics are not outlined in The Virtue of Nationalism. Addressing critics at the Heritage Foundation, Hazony conceded that there are limits to principles like national independence, and non-intervention in the affairs of states, and he cited the cases of the Rwandan genocide and atrocities in Cambodia. “There exists there a moral obligation to go in, stop the killing and get out,” he argued, adding that his principles of nationalism should not assumed to be dogma.
However, Hazony strongly distinguished such interventions from the rather limitless concept of moral obligation circulating at present, one that calls for military intervention against regimes not respecting standards expected by Americans. He favorably cites thinkers including the Baron de Montesquieu, Edmund Burke, and Alexander Hamilton, who believed that different political arrangements would be fitting for different nations, “each in keeping with the specific conditions it faces and traditions it inherits.” Traditions preserve institutions. In their absence, when systems are implanted from outside, those interventions fail.
Hazony’s assessment of the nation-state today in Western Europe and North America is framed by his understanding of the primary role in its development played by Protestant thought. He draws on the work of Calvinist and Anglican thinkers who reassessed the Old Testament, drawing theological terms for the state via the nation of Israel. Scholars disagree on the extent to which this nation-state approach has been conducive to liberty enjoyed today, including Rodney Stark. Some commentators have highlighted the remarkable liberty that was once evident in hundreds of smaller city-states across Europe, a situation in which identity did not derive from belonging to a nation in the modern sense. Alberto Mingardi asserts that the nation-state has “claimed the world for itself,” making bodies like the EU “cartels of nation states”—that is to say these bodies are extensions of the nation-state rather than alternatives to it, as Hazony would have us believe.
Mingardi says the entire idea of a national identity as a source of the legitimacy of government was a revolutionary shift away from basing legitimacy in ideas, rather than a notion of identity tied to the happenstance of birth. Pre-Reformation ideas of political legitimacy emerging from, among others, the Late Scholastics—in which Hayek’s Austrian School claims roots—is perhaps worth more analysis, much as the economic ideas of the 16th and 17th centuries have come under a more intense spotlight in considering the makings of the modern economy.
What is needed is a deeper assessment of the traditions that formed the basis of the nation-state’s legitimacy, and that formed the basis of the liberty enjoyed by those who reside in those states (as well as the endurance of those liberties, which Hazony sees as rapidly eroding without inquiring very much into the causes of the erosion). We may do well to focus on the pre-Reformation traditions that preceded, but were not wholly replaced by, the dominant Anglo-Saxon traditions that have played a crucial role in the development of liberty.
Assessing those traditions would be an exercise entirely consistent with, dare I say called for by, the passionate love of freedom that is evident in The Virtue of Nationalism.
