Is Neoliberalism A Liberalism or A Stranger Kind of Bird On Hayek and Our Discontents

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Is Neoliberalism a Liberalism, or a Stranger Kind of

Bird? On Hayek and Our Discontents
Matthew Sharpe
To cite this article: Matthew Sharpe (2009) Is Neoliberalism a Liberalism, or a Stranger Kind of
Bird? On Hayek and Our Discontents, Critical Horizons, 10:1, 76-98
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Download by: [Deakin University Library] Date: 14 September 2017, At: 20:38
Is Neoliberalism a Liberalism,
or a Stranger Kind of Bird?
On Hayek and Our Discontents1
Matthew Sharpe
Downloaded by [Deakin University Library] at 20:38 14 September 2017
Abstract: This paper examines the theoretical ideas of Friedrich von Hayek,
arguably the key progenitor of the global economic orthodoxy of the past two
decades. It assesses Hayeks thought as he presents it: namely as a form of liberal-
ism. Section I argues that Hayeks thought, if liberal, is hostile to participatory
democracy. Section II then argues the more radical thesis that neoliberalism is
also in truth an illiberal doctrine. Founded not in any social contract doctrine,
but a form of constructivism, neoliberal thought at its base accepts the para-
doxical need to discipline subjects for freedom, however this might contra-
vene peoples natural, social inclinations. The argument is framed by reference
to Aristophanes great comedy, The Birds, whose o shore borderless empire
ironically pregures the dream of neoliberal social engineers, and their corpo-
rate supporters.
Keywords: Friedrich von Hayek, Aristophanes Birds, neoliberalism, liberalism,
democracy, tyranny, disciplining for freedom
Aristophanes Birds, like all the comedies, is on one level about the comic con-
sequences of the overreaching of human eros. Written in 414, shortly after
Alcibiades Sicilian expedition had rendered Athens wartime demise inevitable,
the play can also be read politically. Looked at today, The Birds looks like an
amusing parody of libertarianism of all stripes, and the neoliberalism that has
been reshaping the world since the late 1970s, until the recent nancial col-
lapse of October 2008 has placed it under a cloud. In The Birds, our two heroes,
Peisthetaerus (on whose name more to conclude) and Euelpides (a man of good
hope) leave their native Athens. They dream of a land where they could be as free
as birds, no longer having to pay burdensome taxes and duties, far beyond the
tiresome democratic assemblies and courts of their homeland. However, by dint
1. Earlier versions of this paper were presented at Macquarie Universitys Philosophy Department and
the Ashworth Centre for Social Theory at the University of Melbourne. I wish to thank the audi-
ences for their critique and feedback, and not least for the papers Aristophanic title.
Critical Horizons: A Journal of Philosophy and Social Theory 10(1), April 2009, 7698
Acumen Publishing Ltd. 2009
IS NEOLIBERALISM A LIBERALISM, OR A STRANGER KIND OF BIRD? 77
of chance and attering rhetoric, Peisthetaerus manages to full this ageless, igno-
ble wish. He persuades the birds of the world, who are as susceptible to attery
as the rest of us, to build him a kingdom 600 feet in the open air. The kingdom
will be called Nephronococcygia, roughly cloud-cuckoo land. In this fabulous
kingdom, men will become fabulously rich. The birds will be their new, true
gods: gods whose ability to y unchecked across all national borders mean they
can espy untapped silver mines, and forecast the success of all trading ventures.
In a further, good return on Peisthetaerus oshore political investment, men
shall not even have to build temples as they did for the old gods. Instead, they
shall simply worship where they stand, in the open air. Suspended entrepreneuri-
ally between heaven and earth, Nephronococcygia will be able to exact rightful
duties for all remaining commerce between men and their older gods, too.
Now to contend that neoliberalism is not simply a deeply anti-democratic
teaching, but also illiberal, seems at rst glance a paradigm instance of cloud-
cuckoo-land-type thinking. Neoliberalism is the international name for that
collection of ideas, principally economic, which has attained hegemony in the
public policies of national governments and international nancial institutions
like the World Bank and IMF, following the global economic crises of the 1970s.
In Australia quickly dubbed economic rationalism and associated with the
New Right elite social movement everywhere, neoliberalism brings together
ideas from Austrian, Neoclassical and Chicago schools of economics. The result
is that broad set of public policy prescriptions that citizens of most rst world
countries outside Scandinavia now know by heart: the deregulation of all possible
markets, continuing campaigns attacking the basic legitimacy of trade unions,
the removal of all intra- and international barriers between markets, the replace-
ment of indirect by direct taxation schemes, the minimization or outsourcing
of state welfare, education and health spending, and the privatization of all pub-
lic assets. Until October 2008, when the global nancial system precipitously
crashed, forcing the nationalization of banks around the globe, this policy plat-
form enjoyed an overwhelming international legitimacy and hegemony.
Neoliberalism has not only interpreted, but has rapidly been changing the
institutions and society in which we live and work. Yet it remains that social
theorists and philosophers have devoted comparatively little attention to it.
Ignored by poststructuralism (or celebrated under other names), dismissed as
based on an impoverished anthropology by social theorists, or brushed o as
more of the same by neoMarxists, there are arguably few more pressing theo-
retical tasks today than to seriously confront neoliberal ideas. The nancial crisis
has undoubtedly shaken the neoliberal hegemony, yet if this hegemony is to be
supplanted by a dierent, more progressive programme, we need to move beyond
simple or casually ignorant dismissals of this body of ideas. Equally inadequate
are all those criticisms that would see neoliberalism as solely an elite ideology,
reecting the capture of bureaucratic agencies by new mandarins (in Australia,

78 MATTHEW SHARPE
a view held by gures including Carroll, Manne, Pusey), or of the media and
executive by the new right (again in Australia, this view is represented by politi-
cal scientist Damien Cahill for example).2
Like any dominant or hegemonic ideology, neoliberalism institutes a set of
practices and institutions that become experienced by subjects as inevitable and
natural. In order to be able to do this, moreover, neoliberal thought pitches a
powerful appeal to the wider populace. It does this principally by drawing on,
and reinterpreting in its own image, the powerful and still overwhelmingly legiti-
mate modernist ideals of libert and egalit (about fraternit it is silent.) The argu-
ment is this: the freeing of economic markets is the necessary, if not sucient,
condition for nations achievement of political and cultural freedom, and as

such a thoroughgoing liberal modernity. Any theoretical attempt to properly
evaluate and to oppose neoliberal ideas and policies, I would argue should we
agree that there are good reasons for this must begin by challenging the legiti-
macy of this neoliberal appropriation of what the French call egalibert. It is
this task that I will undertake here.
Put simply, the principal problem for neoliberals claim to liberal, democratic
legitimacy is that, from Pinochet onwards, the historical record simply does not
back this claim. Neoliberal governments do not have a better record on civil liber-
ties than the Keynesian regimes they deride as the stalking horses of state totali-
tarianism. Nor, more strangely, is their record in the cutting of state expenditure
particularly outstanding, particularly when it comes to spending on the repres-
sive arms of the executive (police, intelligence and military).3 The neoliberal
era since 1975 has coincided with the rise of anti-liberal, right-wing populist
movements around the globe: in Australia, for instance, the Joh for Canberra
and One Nation campaigns, and the latter terms (20012007) of the Howard
Liberal government.4 It has also seen neoliberal governments, in seemingly seam-
less alliance with the more authoritarian discourses of neoconservatives, again
and again waging culture wars against liberal elites, and rhetorically tar-
geting minorities and out-groups, whether they be single mums, welfare cheats,
2. See R. Manne & J. Carroll (eds), Shutdown: The Failure of Economic Rationalism and How to
Rescue Australia (Melbourne: Text Publishing, 1992); M. Pusey, Economic Rationalism in Canberra:
A Nation-building State Changes its Mind (Melbourne: Cambridge University Press, 1991). See
also D. Cahill, The Radical Neo-Liberal Movement as a Hegemonic Force in Australia, 1976
1996, PhD thesis, University of Wollongong, 2004, www.library.uow.edu.au/adt-NWU/uploads/
approved/adt-NWU20041217.152455/public/01Front.pdf (accessed February 2009). See also
D. Cahill, The Radical Neoliberal Movement and Its Impact on Australian Culture, paper pre-
sented at Australian Political Science Association Conference 2004, www.adelaide.edu.au/apsa/
docs_papers/Aust%20Pol/cahill.pdf (accessed February 2009).
3. For the recent, long overdue history, see Naomi Klein, The Shock Doctrine (Harmondsworth:
Penguin, 2007).
4. The textbook account of Australian politics in the 1980s, and the embrace of the economic right,
is Paul Kelly, The End of Certainty (Sydney: Allen & Unwin, 1992).

illegal migrants, Moslems, and so on. Faced with these seeming falsiers, it
behoves us to question the suciency of the types of explanations proered by
neoliberal advocates which invariably say that these exceptions, if anything,
are the result of the lamentable need to combat continuing Keynesian regime
remnants. If, on the contrary, we can show that the central ideas of neoliberal
thinkers can be seen to harbour anti-democratic and illiberal conceptions of the
state and civil society, the neoliberals rationalizations fall short, if they were not
always wilfully partial.
In order to investigate this last prospect, and for purposes of economy (excuse
the irony), I focus here exclusively on the thought of Friedrich Hayek. The
founder of the Mount Pelerin society in 1947, Hayeks political and intellectual
career is a direct inspiration for the global rise of the New Right after 1975. Like
Milton Friedmans, Hayeks work is also particularly important in evaluating
neoliberalism as a political ideology that lays claim to popular, liberal and demo-
cratic legitimacy. The reason is that Hayek on the whole did not restrict himself
to writing texts in economic theory. After early disappointments in this eld,
Hayek turned to epistemology, legal and political theory. Hayek presents his
thought as a far-ranging Weltanschauung. This worldview, as Hayek presents it,
is seemingly characterized by the most impeccable liberalmodernist credentials:
a ubiquitous praise of private liberties both in themselves and for the pluralistic
civil society they make possible; a strident defence of the rule of general law and
the separation of powers which would institutionally guarantee such liberties
and plurality; and a post-MandevillianSmithean defence of the market as a
spontaneous order that governments must accommodate, and the rule of law
undergirds.5 Far from a simple reactionary, Hayeks works in fact look forward
to an internationalist, global, civil society a Great or Abstract Society not
altogether unlike Aristophanes Nephronococcygia, 600 feet above or beyond any
national boundaries. In this society, the free choices of peoples from all nations
will invisibly be coordinated through the market, and general laws alone. The
particular, and particularistic causes of international war will as such be removed.
In this brave new globalized world, movement for movements sake will be
embraced.6 Human beings incalculable, entrepreneurial initiative and imagina-
tion the true motor of progressive social change will nally be released from
the shackles of collectivist and/or rationalistic traditions.
However, in what follows, I will demonstrate that Hayeks thought harbours
a darker underside, which advocates understandably do not tend to advertise.
For the liberal and democratic credentials of this underside are far less reassuring,
5. For the case for Hayek as liberal, see J. Gray, Hayek on Liberty (London: Routledge, 1998). For a
more sceptical assessment, see A. Gamble, Hayek: The Iron Cage of Liberty (Boulder, CO: Westview
Press, 1996).
6. F. von Hayek, The Constitution of Liberty (Routledge: London, 2006), 37.

80 MATTHEW SHARPE
if they do not serve to corral societies into what one critic (Andrew Gamble) has
pointedly dubbed an iron cage of liberty.7 When rstly the anti-democratic,
and secondly the anti-liberal, dimensions of this underside are uncovered, I
will argue, we have every right to turn Hayeks famous charge against social
democracy against neoliberalism suggesting that it too cradles its own illib-
eral potentials, indeed a kind of post-modernist tyranny of forcibly privatized
dierences.
So let us proceed.
I. Neo-? Asking the right questions of Hayek
One feature of Hayeks work is his repeated strictures against the possibility of
desirability of what he calls constructivist rationalism or Cartesian construc-
tivism, which he later calls a fatal conceit ignorant of and hostile to the bene-
cence of the market system.8 This is one of the several points of uncanny parity
between his thought and the cultural libertarianism of much post-structuralist
thought. Yet Volume III of Hayeks Law, Legislation, Liberty contains Hayeks
own, full-scale proposals for what he calls a Model Constitution. As Gamble,
Cristi and others have noted, these highly constructivist proposals provide us
with a privileged insight into Hayeks political position.9 They can also serve to
begin our argument here.
Hayeks Model Constitution in Law, Legislation, Liberty is rmly situated
in the liberal constitutionalist tradition that Hayek celebrates in the impressive
central chapters of The Constitution of Liberty. It is proposed with the intention,
central to Hayeks work, of lastingly guaranteeing the liberal rule of general,
publicly known, prospective laws. Hayek is no rightwing libertarian like Murray
Rothbard; indeed he accepts in full Ciceros proposition that there is no freedom
outside of the laws.10 Hayek wants to foreclose any possibility of governments
passing intrusive decrees that, retrospectively, target particular individuals or
actions, thereby violating their civil liberties. With this noble end in view, Hayek
7. In Gamble, Hayek: The Iron Cage of Liberty.

8. See F. von Hayek, The Fatal Conceit: The Errors of Socialism (London: Routledge, 2004). Hayeks
hostility to constructivism is a central theme in his oeuvre. On this, see for example B. M. Rowland,
Beyond Hayeks Pessimism: Tradition and Bounded Cartesian Rationalism, British Journal of
Political Science 18 (1988), 22141, esp. 2258.
9. Gamble, Hayek: The Iron Cage of Liberty, ch. 6; Renato Cristi, Carl Schmitt and Authoritarian
Liberalism (Cardi: University of Wales Press, 1998).
10. For Hayeks liberal position on the rule of law see Hayek, The Constitution of Liberty, chs 1011,
14.

prescribes a bicameral parliament.11 There will be a governmental assembly

(roughly a lower house) tasked with conducting the governmental business of
the day. This assembly, however, will be functionally separated from the second,
legislative assembly (or upper house). Its responsibility would be to make the
general, prospective laws within whose scope elected representatives could gov-
ern. A constitutional court would arbitrate on any potential conicts between
the two houses, and pronounce on which assembly should adjudicate on any
constitutionally ambiguous issue.12
Now none of this seems too much of a departure from extant forms of liberal-
parliamentarianism around the rst world at the beginning of the twenty-rst
century. Much more controversial, however, are Hayeks stipulations concern-

ing the franchise that would be eligible to elect, or to run to be, members of
either of these assemblies. In the legislative assembly or upper house, Hayek
stipulates, only men of property over forty-ve would be eligible to vote or be
elected, no political parties would be allowed, and each member would stand
for a healthy fteen-year term. In the governmental assembly, political parties
would be allowed, terms would be shorter, and the franchise would be wider or
(as it were) younger. Nevertheless, even in this extended franchise, there would
still be strict limits. In particular, to quote Hayek: all employees of government
and all who received pensions and other support from the government should
have no vote.13
Now perhaps many people in the New Right do not nd such proposals con-
tentious. But here I suspect that, however politically successful they have been
so far, they still are running far ahead of general public sentiment in most rst
world liberal democracies. So how does Hayek rationalize these curtailments of
the democratic franchise, in the terms of his advertised political liberalism? To
be blunt: Hayeks political philosophy involves a sharp reassertion of the dier-
ence between liberalism and democracy. Living at the end of the twenty-rst
century in a nation whose political institutions contain both liberal and demo-
cratic elements, it is easy to forget this dierence. Yet, as Hayek would remind
us, liberalism much predated the extension of the franchise in England, for
only one example, electoral reforms begun only in 1832 then 1867, whereas the
push towards civil liberties arguably begun as early as Magna Carta, and certainly
1689. For Hayek, in fact, liberalism and democracy are not just dierent answers
to the same political question. They are responses to an entirely dierent set of
political questions: viz. democracy to the question of who and how many should
11. The model constitution is the subject of an entire chapter in F. von Hayek, Law, Legislation,
Liberty: Volume III, The Political Order of a Free People (Chicago, IL: University of Chicago Press,
1979), ch. 6.
12. Gamble, Hayek: The Iron Cage of Liberty, 149.
13. Hayek, Law, Legislation, Liberty, 118.

82 MATTHEW SHARPE
rule, and liberalism to the question of how and towards what end government
should be exercised, however it be congured. As Hayek explains, in a richly
revealing passage that (among other things) reects his central debt to the work
of his authoritarian political teacher, Carl Schmitt:
Liberalism and democracy, although compatible, are not the same. The
dierence is best seen if we consider their opposites: the opposite of liber-
alism is totalitarianism, while the opposite of democracy is authoritarian-
ism. In consequence, it is at least possible that a democratic government
may be totalitarian and that an authoritarian government may act on liberal
principles.14
Now, there is no doubt, as radical conservatives like Leo Strauss lament, that
early modern liberalism marked a decisively democratic shift in political thought.15
The social contract theories of the early liberals, from Hobbes onwards, enshrined
for the rst time the idea that government should be founded on the consent
of the governed, as against the wisdom or sacrality of the rulers. Nevertheless,
the classical liberals like Tocqueville, Constant, Humboldt, and Action whom
Hayek admired, deeply versed in the political thought and history of the ancients,
remained profoundly fearful of the immoderate passions of the demos. Up to John
Stuart Mill, for this reason, liberal thinkers generally opposed the democratic
extension of the franchise. The freedom from toil aorded men of wealth, and the
freedom from democratic demands aorded by the limited franchise, were valor-
ized for making possible representatives independent-minded responsibility to
the common good. Opening up the franchise to the many, by contrast, could only
compromise this independence. It would jeopardize the achievement of good
government, by overburdening political deliberation with the potentially limit-
less demands of what Hannah Arendt for one called the social question.16
When advocates celebrate Hayeks return to classical liberalism, the point is,
we should be mindful of all this entails. Hayeks limitations of the franchise in
his Model Constitution far from reecting some simply totalitarian drift
in fact reect only the liberal-aristocratic convictions typical of the authors of
the Federalist papers, Tocqueville and the other earlier liberals Hayek cites as his
authorities. Throughout his writings, in fact, Hayek is consistently ambivalent
about the boons of the democratic forms of liberalism that developed after 1850,
which he holds have served to engender the baleful century of socialism now in
desperate economic and political need of being rolled back.17 In The Constitution
14. Quoted in Cristi, Carl Schmitt and Authoritarian Liberalism, 166, emphasis added.
15. See Leo Strauss, Natural Right and History (Chicago, IL: University of Chicago Press, 1953).
16. See Hannah Arendt, On Revolution (Harmondsworth: Penguin, 1990), ch. 2.
17. F. von Hayek, The Road to Serfdom (London: Routledge, 2001).

of Liberty, Hayek credits that democratic elections form the only peaceful method
of regime change human beings have yet discovered. Reecting that democratic
component in early liberalism just mentioned, since the governments basis in
the consent of the governed provides an important safeguard of individual lib-
erty, Hayek even acknowledges how democratic institutions can play an impor-
tant role in preserving the liberties of the governed. However, concerning the
third and strongest justication of democracy Hayek raises, rst introduced by
Mill that the political liberty to participate in elections is an indispensable
means of civic education Hayek is all-but-silent. From the rst chapter of The
Constitution of Liberty, in fact, Hayek stresses that the political liberty to par-
ticipate in the decision-making processes of ones government is not a necessary

feature of liberty, as he conceives it:
A free people in this [political] sense is not necessarily a people of free

men it can scarcely be contended that the inhabitants of the District of
Columbia, or resident aliens in the United States, or persons too young to
vote do not enjoy full personal liberty because they do not share in politi-
cal liberty 18
The reason is this. Hayek prioritizes the protection of civil liberties histori-
cally, the gains of liberalism pre-circa 1850, encoded in general protections of
contract, property and conscience over concerns about who should govern. As
such, in his precise formulation, democracy at best appears as a means for achiev-
ing certain ends, and must be judged by what it will achieve. It is probably the
best method for achieving certain ends, but [it is] not an end in itself.19 While
the dogmatic democrat regards it as desirable that as many issues as possible be
decided by majority vote, Hayek explains, the liberal believes that there are
denite limits to the range of questions which should be thus decided.20 To be
precise, what is at stake with these limits as we shall see is the preservation
of the spontaneity of the market and the Great Society that it makes possible.
The complex structure of the Great Society would clearly not work if the remu-
neration of all dierent activities were determined by the opinion which the
majority holds of their value, Hayek makes clear.21 Other neoliberal thinkers
like Gary Becker have drawn their own conclusions, openly proposing their own
model constitutions in which it would become illegal for a government to run
up a budgetary decit, for whatever ends. Hayek is never so specic. But what is
clear is that his fear of the unwise, potentially unlimited demands of democratic
18. Hayek, The Constitution of Liberty, 13.

19. Quoted in Gamble, Hayek: The Iron Cage of Liberty, 912.
20. Quoted in ibid., 93.

84 MATTHEW SHARPE
sovereignty is an animating feature of his political thought. If democracy is

taken to mean government by the unrestricted will of the majority, Hayek tells
us, I am not a democrat, and even regard such government as pernicious and in
the long run unworkable.22
Once we have uncovered Hayeks sharp distinction between liberalism and
democracy, in fact, it becomes tempting to see it as the key to unlocking the
entire novelty (or, as it were, the neo- aspect) in Hayeks neoliberalism. Hayeks
thought radically bids up what political theorist Franz Neumann once called the
liberal traditions profoundly alienated conception of politics:23 the sense that
reexive, collective agency cannot express, but only limit, individuals ourishing,
as in (for example) Benjamin Constants classically liberal formulation: We are

today no longer able to enjoy the liberty of the ancients, which consisted in their
continual and active participation in collective power. Our freedom, by contrast,
must reside in the peaceful enjoyment of private independence.24
The question of what might bind such peacefully enjoying private individu-
als the problem of order or of security then haunts liberal thought from its
inception in the work of Thomas Hobbes. Hayeks decisive answer is that the
problem of order is wholly resolvable, with only the smallest number of possible
exceptions, by recourse to the operations of the free market. If Hayek is right,
that is, people simply need not undertake reexive, political action to guarantee
social order, or to maximize the common wealth. The reason is that political eco-
nomics from Adam Smith to Hayeks teacher Von Mises has allegedly shown that
the marketplace is a spontaneous order, more analogous to biological systems,
than the product of the volitional agency of any one social subject or planning
agency. What unites the multitudes of butchers and bakers within this catallaxy
(for Hayek proposes ultimately that we eschew the still-too-anthropomorphic
terms order or organization) is simply the price mechanism. This mechanism
encodes signals to each of us as to the relative levels of demand for the dierent
goods and services we are confronted with. Indeed, for Hayek, who here brings
to economic theory an epistemological scepticism drawn from Hume, Ryle and
the later Wittgenstein, individuals free choices are always based on knowledge
that is both irreducibly dispersed (or relative to agents particular situations),
and largely tacit (incapable of theoretical reformulation and propositional com-
munication without loss). Accordingly, any order that is allowed to emerge out
of the myriad, local choices they make, mediated only by money, will for Hayek
most truly reect what might today be called subjects plural dierences, and

23. In F. Neumann, The Concept of Political Freedom, in his The Democratic and Authoritarian State:
Essays in Legal and Political Theory, H. Marcuse (ed.), 160200 (New York: Free Press of Glencoe,
1964).
24. Quoted in N. Bobbio, Liberalism and Democracy (London: Routledge, 2005), 2, emphasis added.

the inassimilable plurality of their language games. More than this, as Adam
Smith already glimpsed in his metaphor of the invisible hand, such a spontaneous
catallaxy will more productively utilize societies available stocks of knowledge
than any attempt to plan social outcomes from centrally or on high.25
Hayeks sceptically informed ontology of spontaneous orders is probably
the single Hayekian idea most celebrated by his supporters, and is at the heart
of his way of thinking. There are two identiable reasons for its importance.
First, despite Hayeks acerbic criticisms of the constructivist assumptions of
neoclassical economics, it allows his thought to be politically calibrated with
neoclassical methods of social analysis, and the indomitable neoclassical faith in
the benecence of leaving the market free to choose. Second, Hayeks faith in the
incalculable spontaneity of the market allows him to put on a new, social scien-
tic footing the powerful political arguments from perversity (or unintended
consequence), jeopardy and futility, which Hirschmann has shown to be the
invariable stock-in-trade of reactionaries responses to progressive social reforms
since the French revolution.26 In something like a political-philosophic reection
of Freuds famous kettle logic, that is, Hayeks greatest eorts are devoted to argu-
ing that all such reforms must be at once epistemically ill-founded, practically
unwise, and morally unjust. How does he achieve this?
Well, rst, political interventions in the market are epistemically ill-founded.
The reason is that the legitimating claims for any such interventions will have
nally to lay claim to a knowledge of the social whole that is simply unavailable
to nite agents. Certainly in any advanced society, but given the irreducibly tacit
and local nature of all human knowledge mentioned above, such knowledge for
Hayek is as unattainable as knowledge of the sovereign good or cosmic totality
was for Kant. In one of the many striking convergences between neoliberalist and
post-structuralist doxa, accordingly, Hayek dismisses all projects in directed social
government from the welfare state to Stalinism as acceding to the fatal,
Cartesian or rationalist conceit that social order could, and should, be a
consciously planned organization. In response, Hayek accepts as fully as many
on the post-structuralist left the paradoxes of negative liberty that critics since
Hegel have pointed out against it: It is submission to un-designed rules and
conventions whose signicance and importance we largely do not understand
[Hayek says] [and] that the rationalistic mind nds so uncongenial [that]
is indispensable for the working of a free society.27 Or, as he elsewhere puts it:
all of the institutions of liberty are at the same time institutions based in the
25. There are numerous accounts of Hayeks ideas. This author is especially indebted to Gray, Hayek on
Liberty, Part I: Hayeks System of Ideas.
26. A. Hirschmann, The Rhetoric of Reaction: Perversity, Futility, Jeopardy (Cambridge, MA: Harvard
University Press, 1991).
27. Hayek, The Constitution of Liberty, 63.

86 MATTHEW SHARPE
common ignorance of all concerning the highest Good. The idea is that this igno-
rance both reects and, when humbly acceded to, preserves the irreducibly local
and tacit and so perhaps we should say private bases of human knowledge
and choices.28
Second, Hayek argues that all democratic interventions in the market are not
simply wrong-headed, but will for this reason be practically disastrous. This is
what Kley calls Hayeks consequentialist argument, reected in the new rights
reactivation of much older rhetoric concerning the inevitably perverse unin-
tended consequences of human endeavours. Hayeks argument goes like this.
The wealth, complex division of labour, and cultural plurality we currently enjoy
are evolutionary products made possible by the unique, dynamic eciency of

the market over previous generations. Accordingly, to try to collectively opt out
of the market catallaxy now would be to undermine what has become an indis-
pensable condition of the very existence of present mankind.29 The economic
progress that we have come to expect seems in a large measure to be the result of
the inequality inherent in the market, and to be impossible without it, Hayek
argues in The Constitution of Liberty.30 The conclusion is not simply that to try
to rectify todays inequalities will be to rob tomorrows children of the indirect
benets these inequalities make possible, in incentivating entrepreneurs to
new discoveries. As Law, Legislation, Liberty puts it frankly, the catallaxy is the
only possible economic system capable of sustaining current populations: so, in
Margaret Thatchers Hayekian words, there is no alternative. This [market]
morality is not justied by the fact that it enables us to survive, Hayek quali-
es. Yet, as continues with a sublime understatement, it does allow us to survive,
and there is something perhaps to be said for that.31
Third, for Hayek, any projects in collective political intervention in the market
will be unjust as well as practically imprudent and epistemically ill-founded. In
Hirschmanns terms, Hayeks arguments here regure reactionary claims rst used
in the second half of nineteenth century that democratic reforms must both jeop-
ardize past gains, and secretly encode the vested interests of reformist elites.
The reasoning here is this. For Hayek, the market is not only the only means of
social organization compatible with the material survival of complex, modern
societies. Its humble respect for the dispersed, tacit nature of all knowledge means
it alone is consistent with a multi-cultural civil society, wherein individuals
can pursue their divergent, evolving conceptions of the good. All human ends
or purposes that individuals pursue lie outside the market, Hayek contends. We
28. And we note the elective anities here again between neoliberalism and the popular reception of
post-structuralist thought in the Anglophone academy.
29. R. Kley, Hayeks Social and Political Thought (Oxford: Clarendon Press, 1994), 186.
30. Hayek, The Constitution of Liberty, 39, 40.
31. Quoted in Kley, Hayeks Social and Political Thought, 189, emphasis added.

bring them to the bargaining table from nowhere, or at least nowhere relevant
to the concerns of the theorist. But in this way, he argues, the laws that make
market exchange possible have the same, formal status as the Kantian moral law.
As against all forms of social organization which do (falsely) posit a knowable
common or higher good, that is, the market is ends-neutral. It is concerned
simply with deciding concerning the means namely, economic goods for
subjects competing purposes, which are always pre- or extra-economic. However
inequitable the results of a free market seem, Hayeks superb reversal of received
common sense is thereby to assert that it is individuals or groups conscious
attempts to correct for these inequalities that alone are morally questionable. On
one hand, because no one can know the Sovereign Good, the claims of reformers
to such higher knowledge must truly reect only their own, particular perspec-
tive on the same. These claims should then be read as but the reections of their
proponents will to socioeconomic power, in a kind of right wing repackaging
of vulgar Marxist ideology critique. On the other hand, Hayek repackages the
argument of nineteenth-century opponents of democracy, such as Macauley,
used also by Carl Schmitt to ingeniously advocate against the social appropria-
tion of Junker lands under Weimar.32 This is the argument that to redistribute
wealth, legislators must target specic individuals or groups (the wealthy) in order
to redistribute their wealth to another specic group (the less well o.) Any such
social democratic measures, the point is, must in this way rob Peter to pay Paul,
violating the rights of the wealthy to the property they have accumulated through
lawful trade. By doing this, any claims for social justice violate the requirement of
generality enshrined in the liberal rule of law so hard won in the early moderns
struggle against the privileges (private laws) of throne and altar.
Faced then with this veritable swag of Hayekian arguments against democratic
political agency at once ill-founded, consequentially disastrous, and perni-
ciously unjust I propose the following two formulations concerning Hayekian
neoliberalisms elective anities with democracy:
neoliberalism transforms the democratic moment in earlier liberal thought,
narrowing the justication for citizens scrutiny of their governors (from
the bottom up) to economic matters, reguring the basis of government
in consent into the claim that the market alone represents the consensual,
common good.
in neoliberalism, the function of the liberal rule of law accordingly changes.
No longer primarily the mechanism to limit the arbitrary capacities of rulers
(from above), as for earlier liberals, in neoliberalism its source of legitimacy
32. On this point, see F. Neumann, The Change in the Function of Modern Law, in his The Democratic
and Authoritarian State, 2268.

88 MATTHEW SHARPE
now shifts to become a mechanism to limit the economically unsustainable

demands of citizens (from below).
II. Whats neo- under the sun? Hayekian liberalism without liberalism
Now this disclosure of the strictly non-democratic implications of Hayeks neo-

liberalism is surely important enough, in todays political environment. Most
contemporary Australians take the universal franchise for granted. They would
automatically hear an endorsement of universal adult surage in our leaders
valorizations of freedom. Australians might be horried to learn that the hero

of the ascendant Liberal dries of the Keating to Howard era does not share this
complacency, and sees the freedom to vote as a potential threat to freedom as
he conceives it.33 Yet, as Hayeks distinction between liberalism and democracy
alerts us, to expose the anti-democratic moment in Hayeks position is not the
same thing as establishing that his is an illiberal position. Hayeks desire to limit
democratic demands on governments indeed reects an unavoidable need facing
any democratic regime, of how to institute its own limitations. Hayeks opposi-
tion to legal positivism, for example, rightly points out how the legal doctrine
that any statute, because duly passed, is legitimate thereby potentially allows par-
liamentary majorities to legislate away their own, hard-won liberties, carried away
on the spur of some moment. Surely, then, even if we have shown that Hayeks
thought is deeply anti-democratic, it remains to Hayeks advocates to defend its
liberalism, in the expressed subordination of the powers of government to the
end of protecting the freedom of the benecent market and so on?
In order to answer this question satisfactorily, I would argue that we have to
resolve the perplexing question of the philosophical foundations of Hayeks retake
on liberalism. Many commentators on Hayek have noted the peculiar diculty
an exegete faces in addressing this question. Hayeks thought seems at times to
ride roughshod over many received conceptual oppositions: not only political
liberalism versus reactionary conservatism, modernism and traditionalism, but
universalism versus the emphasis on the irreducibly tacit, local, and particular;
epistemological anti-constructivism versus the predilection to construct Model
Constitutions, epistemological scepticism with a palpable sense of the power of
socialist ideas, Kantianism versus consequentialism, Kantianism versus moral
33. Reading Hayek certainly throws into dierent relief the signicant limitations on the democratic
franchise that the Howard governments 2006 electoral reforms instituted in Australia, which disen-
franchised felons (including a disproportionate number of indigenous Australians) and limited the
time available for new, principally young voters to register after elections are called. More famously,
the 2000 US election threw into relief the existence of American laws limiting the franchise, which
are fully consistent with the free market capitalism of the neoliberal period.

sentiment theories, legal formalism versus anti-positivism: the list goes on. What
Hayeks trajectory into his last works make clear however is this. For all Hayeks
advertised anities with the classical liberals particularly Smith and Fergusons
systems of natural liberty Hayeks defence of liberty in no way means that
he accepts the liberal doctrine of the natural rights of individuals. Like Burke or
Bentham, Hayek in fact treats all such doctrines as eectively nonsense on stilts:
products of that Cartesian-constructivism which, ignobly denying the epistemic
nitude of men, ignores the real bases of liberty in the evolving catallaxy of the
free market.34 Hayeks neoliberalism thus sets in place a new foundation and
trajectory for liberal thought so the neo- in the label neoliberalism seems
justied in this case. It is the -liberal component we need to question. Hayeks

proposal is that the defence of liberty can only be adequately undertaken in
the terms of a theory of cultural evolution or selection, or perhaps we should
frankly say, a positivistically repackaged philosophy of history. But when exam-
ined, the evolutionary narrative Hayek presents in Knowledge, Evolution, Society
and elsewhere35 can be seen to represent almost a term-for-term reversal of the
contractarian ctions of the classical liberals Hayek seemingly reprises.
In the beginning, Hayek agrees more with Rousseau (contra Hobbes and
Locke), humans lived in small, harmonious, hunter-gatherer communities of
between thirty and fty people. But Hayeks narrative reects his debt to post-
Darwinian natural history. For him, this beginning is historical and datable. It
lasted between 500 thousand and 1.5 million years, until several thousand years
ago. It was in this extended infancy of mankind, far from being a war of all
against all, that the human sense of moral duty evolved, in response to the vis-
ible needs of our known friends, and our naturally altruistic moral sentiments
for them.36 Such an instinctual sense of altruism, Hayek argues, lies at the basis
of our moral codes. In fact, Hayek suggests it is hardwired into our physiological
constitution. Yet Hayek is no Rousseauian, however nobly he depicts our savage
ancestors to be. If he laments the passing of the social forms wherein altruistic
morality were possible, we have seen in Section I that he also thinks there is no
going back. Several thousand years ago, Knowledge, Evolution, Society narrates,
somewhere in the Mediterranean, there was a decisive leap forward. A small
number of men, the worlds rst entrepreneurs, found themselves with an eco-
34. Hayeks opposition to the natural rights teachings of Hobbes, Locke and Rousseau, then, is not
grounded, as in Bentham or Mill, in a utilitarian commitment to the greatest happiness. For him,
utilitarianism also falls foul of the charge of constructivism, with its unrealistic presupposition that
any single agent, rather than the market could decide the greatest good for the greatest number.
Nor is it to arm the rights of Brits, Frenchmen, or any other nation since national progress also
has too often led to the compromise of Hayekian liberty.
35. F. von Hayek, Knowledge, Evolution, Society (London: Adam Smith Institute, 1984).
36. Hayek, quoted by A. Belsey, The New Right, Social Order and Civil Liberties, in The Ideology of
the New Right, R Levitas (ed.), 16797 (Cambridge: Polity, 1986), 177.

90 MATTHEW SHARPE
nomic surplus. And rather than hoarding it, or redistributing it unproductively

to the clerical elites, they chose to trade with members of other tribes. In this
way, Hayek says, a new set of open institutions, values, and practices was born.
This world-historical moment was verily the inception a new form of, market-
based, unsociable sociability: one which would eventually trump all older, closed
social formations, and give rise to what Hayek claims, somewhat cavalierly, is
our worldwide, prosperous, and peaceful society.37
The historical plausibility of Hayeks mythos does not concern us. Its more
signicant implication, in terms of understanding the novelty of Hayeks neo-
liberalism, is this. The great extended society, which Hayek argues developed
after the rst entrepreneurs appeared, is not natural to us at least at our cur-
rent state of aective evolution. Hayek is clear on this: the rst entrepreneurs
initiated an ethics which made the worldwide exchange society possible. Yes,
but if many of the conventions and even the institutional moorings of this soci-
ety have subsequently been culturally selected, it remains true that the market
order cannot satisfy [peoples] emotional needs.38 As Knowledge, Evolution,
Society underscores: In a sense, it is rather surprising that all the people in the
world are not socialists. Emotionally, ninety-nine percent of the population
of the world are socialists.39 Unlike for the rst liberals, the point is the private
realm of the market/civil society for Hayek is in no way the private reserve and
preserve of our original liberty, bounded by inalienable natural rights. The end
of his liberal government, and the basis of the rule of law, as he conceives
them can accordingly not lie in the preservation of our already given nature. On
the contrary, Hayek at various points is at pains to stress that the preservation
of liberty requires nothing less than a permanent vigilance against our human
natures, the ignorance of the many concerning the benecence of the catallaxy,
and the constant temptation intellectuals and ignoramuses alike feel to intervene
in it. The primordial instincts must be restrained and tamed for catallaxy to
continue, Hayek says, the great moral adventure on which modern man has
embarked when he launched into the Great Society is [however still] threatened
when he is required to apply to his fellow-men rules which are appropriate to
the fellow-members of a tribal group.40
Hayeks rhetoric against Cartesianism aside, then, Hayeks regrounding of
liberalism in an idiosyncratic theory of cultural evolution turns this liberalism,
if it can still bear this name, into its own, out-and-out social constructivism. To
put things bluntly: the spontaneous order of the market that Hayek wants to
say is more like the natural evolution of a crystal than the result of purposive
37. Hayek, in ibid.

38. Hayek, Law, Legislation and Liberty, 146.
39. Hayek, in Belsey, The New Right, Social Order and Civil Liberties, emphasis added.
40. Hayek, in Gamble, Hayek: The Iron Cage of Liberty, 26.

human agency turns out to be not as spontaneous as all that. As Hayek puts it
programmatically in The Constitution of Liberty, liberty for him is an artefact
or a project, rather than a state or an inalienable human condition:
Man has not developed in freedom. The member of the little band to which
he had had to stick in order to survive was anything but free. Freedom
is an artefact of civilization that released man from the trammels of the
small group, the momentary moods of which even the leader had to obey.
Freedom was made possible by the gradual evolution of the discipline of civili-
zation which is at the same time the discipline of freedom 41
Here, then, our reading of Hayekian neoliberalism intersects with a series

of points made by Foucault in his unpublished lectures in 19781979 on the
German Ordoliberals and the Chicago School neoliberals, since developed for an
Anglophone readership by Rose, Dean, Gordon, Burchell, Hindess, and others.
Foucault notes that the Ordoliberalen and Chicago School thinkers dismissed
the historical implications of liberal-capitalism in (respectively) the advent of
Nazism or the great depression.42 Like Hayek in The Road to Serfdom, their
argument was that these events reected less capitalisms, than human historys
failure so far to give the free market a proper chance. For these neoliberals also,
that is, just as for Hayek the progress of liberty must ceaselessly push up against
the innate moral emotions and instincts acquired during 500,000 years, so
the major problem of social politics [is] not the anti-social eects of the mar-
ket, but the anti-competitive eects of society.43 The result is that New Right
rhetoric concerning frugal government aside neoliberal regimes in practice
both have been and must be culturally interventionist. It is just that, as against
the social democratic, Keynesian forms of government, the end of this interven-
tion has changed. To quote Hayek again, in The Constitution of Liberty: there is
all the dierence between deliberately creating a system in which competition will
work as benecially as possible, and passively accepting institutions as they are.44
41. Hayek, quoted in Mitchell Dean, Governmentality: Power and Rule in Modern Society (London:
Sage, 1999), 1556, emphasis added.
42. See the collection of essays in A. Barry et al., Foucault and Political Reason: Liberalism, Neo-liberal-
ism, and Rationalities of Government (Chicago, IL: University of Chicago Press, 1996): particularly
G. Burchell, Liberal Government and Techniques of the Self , 1936; N. Rose, Governing
Advanced Liberal Democracies, 3764; B. Hindess, Liberalism, Socialism and Democracy:
Variations on a Governmental Theme, 6580.
43. C. Gordon, Governmental Rationality: An Introduction, in The Foucault Eect: Studies in
Governmentality, G. Burchell et al. (eds), 152 (London: Harvester Press, 1991), emphasis added.
In the Australian context, M. Pusey has put this thought by saying that, for the new right, civil
society represents a kind of stagnant sludge that the economy must be forcibly driven through.
44. Hayek, quoted in Gamble, Hayek: The Iron Cage of Liberty, 80, emphasis added.

92 MATTHEW SHARPE
Far from trying to preserve society against the unintended by-products of the
operations of markets, as social liberalism and democracy did, neoliberal regimes
instead set out actively to dismantle society as a reality which might resist the
circuitry of the catallaxy, or to reshape it in the markets image. Or, as we might
historically schematize: whether in early liberalism the social externalities and
preconditions of the market still fell mostly beneath the concern of government;
and in Hayeks bemoaned century of socialism between 1850 and 1975 they
became the object of direct state intervention; in the neoliberal period the telos of
government becomes to deliberately marketize all those practices and institu-
tions which both classical and social liberalisms considered outside the sway of
market relations.
Neoliberalisms eschewing of the discourse of natural rights combines with its
constructivist understanding of liberty as an artefact, that is, to license today a
dierent type of illiberal collapse of public and private, the state and civil soci-
ety, than those lamented in the social democracies. It has always been perhaps
the paradox of liberal government to try to govern indirectly not by limiting,
but by harnessing, individuals private liberties and the independent realm of
the market. But neoliberal government goes further, or crosses a line. Instead of
intrusively governing the market from above, it brings the market to Mohammad.
As Mitchell Dean puts it:
The ethos of this form of neoliberalism is one of a kind of double-play or

reduplication, or a folding back of its objectives upon itself the market
is reconstituted as a kind of global entity seriously compromising the capaci-
ties of national governments [to govern at all] [Y]et at the same time
neoliberalism seeks to contrive and actively construct markets where they do
not exist 45
One example of such a created, entire quasi-market is the Job Network,

which supplants the older welfare agencies of the commonwealth government
in present-day Australia. Within the Job Network, private, community and
church bodies bid in periodic, competitive tenders for the licence to deliver
education and employment outcomes, in exchange for government remunera-
tions. Dierently, Rose, Dean, Cruikshank and Power have documented the
swarming of audit, counselling, training and contractual arrangements in the
neoliberal period, as the means to calibrate previously unproductive, or extra-
economic activities to monetarized parameters, and to empower agents to
take scal responsibility for their own health, welfare, dotage and insurance.46
In some neoliberalist literature, there seems in fact to be no moral or other limit
45. Dean, Governmentality, 161, emphasis added.

46. See M. Power, The Audit Society: Rituals of Verication (Oxford: Oxford University Press, 1997);

to the private realms into which market logics could, and by implication, should,
be benecently unleashed. Gary Becker, for example, calculates on a market-
based approach to engender for socially optimal level of crime, and advocates a
revolutionary extension of marginal calculus to include the shadow costs and
benets associated with all of children, prestige or esteem, health, altruism,
envy, and pleasure of the senses.47 In several papers, widely commented on and
debated on the internet blogs, Becker even proposes his economic model of
the dating market: one unintended consequence of which is the fascinating
(Becker) proposition that polygamy for successful, wealthy men can be economi-
cally rationalized.48
Now, the neoliberal shift rst world nations like Australia have seen from
governance to what Bob Jessop calls metagovernance49 or governance through
markets on one level responds to 1970s criticisms of the scal overburdening
of the Keynesian nation states. By getting marketized agencies to deliver services
previously delivered by the state, we happily minimize the public costs, risks,
and burdens of social reproduction. Neoliberal metagovernance also serves in
this way to manage 1970s neoconservative anxieties about the legitimation crisis
facing modern democracies, putting an inventive governmental spin on the age-
less political wisdom that it is always preferable to outsource the least palatable
responsibilities of ruling. The key dierence about this neoliberal conguration,
though, is that within it the markets neoliberal rhetoric invites us to free are
themselves now being deployed as the governmental instruments for the disciplinary
civilization of civil society. As Hayeks anti-naturalist constructivism legislates,
that is, neoliberal governments do not simply nd and treat of markets as quasi-
natural realms whose pre-existing boundaries must be protected. The true liberty
of which we are historically capable is yet to be historically achieved. Accordingly,
the creation and intensication of markets today become the means to engen-
der in citizens the industrious incentivized modes of subjectivity required for
success in the great society, as well as to restrain all those atavistic impulses
and socialistic institutions that would resist the Hayekian discipline of civiliza-
tion which is at the same time the discipline of freedom.50 This is why today one
is no longer ever just unemployed, one is a jobseeker; one is not a student or a
patient, but a client; not a concerned parent, but a consumer of education; and
at the limit, not a homeless person, but a (voluntary) rough sleeper. If subjects
B. Cruikshank, Revolutions Within: Self-government and Self-esteem, in Barry et al. (eds),

Foucault and Political Reason, 23152.
47. G. Becker, Treatise on the Family (Cambridge, MA: Harvard University Press. 1991), 67.
48. For Beckers continuing speculations on the matter of polygamy, see The BeckerPosner Blog,
www.becker-posner-blog.com/archives/2006/10/is_there_a_case.html (accessed February 2009).
49. In B. Jessop, The Future of the Capitalist State (Cambridge: Polity, 2002).
50. von Hayek, Law, Legislation, Liberty, 163, emphasis added.

94 MATTHEW SHARPE
have not yet learned to do what they must, as it were, neoliberal government
banks on our learning by doing it, making it increasingly impossible for us to con-
duct our working or private lives except as marketized subjects free to choose
everything but the possibility of organizing social relations except through the
price mechanism.
Conclusion: dethroning Peisthetaerus, or a road to serfdom paved with gold?
To invoke what Sartre once said about Marxism, neoliberalism is today the
unavoidable horizon of the world in which we live. Despite its more simplistic
detractors, neoliberalism derives its ideological power by making a strong claim
to the modernist values of freedom (gured as freedom to choose in markets,
free from state or union regulations), equality (gured as equality of opportu-
nity in markets, and before the law), and a dynamic, pluralistic society that will
mean that we do not miss any longer solidary fraternit. As we saw in Part 1,
however, the ipside of neoliberalisms claims to liberal-modern legitimacy is a
set of dire warnings that align it, rhetorically at least, with forms of reactionary
conservatism. Hayek, whom we have mostly examined, hitches to his laudatory
statements in praise of libert a sequence of arguments that warn potentially dis-
astrous moral and economic eects of any political interventions in the market
catallaxy. The title of Hayeks rst political book, The Road to Serfdom, written
in 1944, intentionally condenses the case against socialists of all parties from
Nazis to Stalinists that Hayek was to consolidate over the next four decades.
Any attempts to intervene in the free market both must presuppose the violation
of private liberties; on the basis of discretionary claims to a common good that
could never be univocally accepted in complex societies; and because of ine-
ciencies, justify yet further, more intrusive forms of governmental intervention
all the way down the slippery slope to political and economic unfreedom.
The concern with, and fear of, tyrannical forms of government that Hayeks
and all neoliberalism appeals to is as old as Western political thought itself. Hayek
cites ancient Greek drinking songs, recorded in Herodotus and Thucydides,
praising the killers of tyrants and the virtue of isonomia, equality before impartial
laws. Hayeks arguments in The Road to Serfdom and elsewhere, particularly his
anxieties to limit the potentially limitless demands of the demos, certainly echoes
a tradition, hailing from Plato and Polybius, that aligns tyranny with political
democracy. For Plato, tyranny is by its very nature issue aligned with democratic
regimes. The political liberties allowed citizens under democracies promote com-
peting factions, the taming of which will call forth one tyrant to rule them all.
More deeply than this, the immoderate bodily Eros of tyrants mirrors that of the
demos, a circumstance that allows tyrannical rhetoricians like the Gorgias Polus
to readily woo the many (o pollos). To this lineage of political argument, Hayeks

account of the road to serfdom brings a distinctively later modern, Weberian

concern with the growth of bureaucratic administration. As Hayek (selectively)
quotes Mannheim, We have never had to set up and direct the entire system
of nature as we are forced to do today with society mankind is tending more
and more to regulate the whole of its social life.51
However, this paper has argued that, when we interrogate Hayeks neoliberal,
libertarian opposition to any of form of big government, the near-Manichean
purity and puritanical passion of his opposition does not hold. Hayeks return to
classical liberalism in fact involves its renovation, heightening liberalisms dis-
trust of political agency, relativizing its commitment to inalienable natural rights,
and licensing a constructivist approach to civil society that treats participation in

markets as both the end and the means of engendering a new enterprise culture
to come. In the nal years of his life, in fact, the full extent of the compatibility of
neoliberalism with tyrannical regimes was shown by Hayeks public support for
the notoriously anti-democratic and illiberal military regime of General Augusto
Pinochet in Chile. Hayek visited Pinochets Chile twice, receiving a personal audi-
ence with the dictator. In his rst 1978 visit, Hayek is reported to have warned
Pinochet not about the perils his unlimited executive power aorded him, but
about the dangers of unlimited democracy. Returning in 1981, in an interview
with the local paper, El Mercurio, Hayek in no way retracted his earlier endorse-
ment, as the world came to learn about the growing numbers of the disappeared.
Rather, Hayek underlined that, as he saw things, a dictatorship may impose lim-
its on itself, and a dictatorship that imposes such limits may be more liberal in its
policies than a democratic assembly that knows of no such limits.52
Whatever the limits Hayek saw or imagined Pinochet observing, Aristophanes
Birds with which we begun also presents us with a somewhat more complicated
vignette of the prospects of a wholly libertarian state than we might initially have
imagined. Peisthetaerus, the illustrious founder of Cloud Cuckoo land, spends
much of the second half of the play ghting o all manner of lickspittles poets,
inspectors, town planners trying to curry his favour. When other humans
learn of the fabulously free land, meanwhile, all manner of scoundrels make
their way to it, from informers hoping to gain wings to sow protable intrigues
against their neighbours, to young men hoping for the freedom to beat up their
dads. When a winged god enters Nephronococcygias airspace, thirty thousand
mobile archers of the Hover and Swoop Corps are despatched; Iris, the Gods
messenger, is accosted as an illegal transient, and asked for her papers. By dint of
cunning rhetoric, Peistheterus by the plays end manages to best the ancient Gods
completely, and win to his bed Zeus partner, Basiliea: or, roughly, sovereignty,
51. Hayek, quoted in Gamble, Hayek: The Iron Cage of Liberty, 83.
52. Quoted in Cristi, Carl Schmitt and Authoritarian Liberalism, 168, emphasis added.

96 MATTHEW SHARPE
she who holds the key of the Gifts to Mankind Department, good government,
wise policies, law and order, as Prometheus puts it in the play. Today I heard
a public announcement, the chorus leader at one point announces: to him that
kills one of the tyrants, a reward of one talent and this struck me as odd,
seeing that the tyrants were killed years and years ago. Everything comes to look
as though The Birds is a comment on the nature of tyranny, and its uncanny
proximity with Peisthetaerus all-too-human wish to be done with paying ones
debts, and to live in a city, as Euelpides hopes, where the worst thing that can
happen is to be awoken early to take a bath before a wedding feast.
The very name of our comic hero in The Birds, Peisthetaerus, could not but
have evoked to Aristophanes audience the name of the tyrant Peisistratus, under
whose reign was inaugurated the very Panathenauea, or great Athenian festival,
at which the play was performed. Recalling Peisistratos reign in fact points to
another understanding of tyranny than the Platonic lineage in which Hayek
works, and which we might do equally well to recall in considering neoliberal-
ism. This understanding also hails from the ancients, and is more grounded in
the historical record as we know it. According to it, the essence of tyrannical
government is not only that it is immoderate government unchecked by law, in
the name of the private good of the ruler. It is that form of government charac-
terized by the destruction of any notion of a public realm, grounded in ideals
and concerns citizens hold in common, in the name of which their rulers might
govern: the banishment of the citizens from the public realm and the insistence
that they mind their private business while [as Aristotle writes] only the ruler
should attend to public aairs.53 This account of tyranny, signicantly, does not
carry the economic connotations of Hayeks language of serfdom. Peisistratos,
who happens to have made his fortune in another mining boom, signicantly
grew Athens GDP, as we would say today. Aristotle remembers his realm as a
golden age, and there is no question that without it the subsequent reforms of
Cleisthenes and Athenian democracy would never have been possible. Indeed,
the problem with tyranny for this second understanding of the road to tyranny
is not that [tyrannical regimes] are cruel, which often they are not, but rather
that they work too well.54 As Hannah Arendt writes, for this ancient account of
tyranny, in fact: Tyranny was tantamount to furthering private industry and
industriousness, but the citizens could see in the policy nothing but the attempt
to deprive them of the time necessary for participating in common matters.55
If we subtract the explicit reference to tyranny, and recall that for neoliberalism
there is actually no such thing as common matters, this might stand as an adequate
description of government under neoliberalism.
53. H. Arendt, The Human Condition (Chicago, IL: University of Chicago Press, 1958), 224.
54. Ibid., 221.
55. Ibid.

Matthew Sharpe lectures in philosophy and psychoanalytic studies at Deakin University. He

is the co-author of The Times Will Suit Them: Postmodern Conservatism in Australia (2008)
and the author of numerous articles on critical theory, political philosophy, psychoanalysis
and politics.
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Is Neoliberalism A Liberalism or A Stranger Kind of Bird On Hayek and Our Discontents

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Critical Horizons

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Is Neoliberalism a Liberalism, or a Stranger Kind of

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condition for nations achievement of political and cultural freedom, and as

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I. Neo-? Asking the right questions of Hayek

7. In Gamble, Hayek: The Iron Cage of Liberty.

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prescribes a bicameral parliament.11 There will be a governmental assembly

century. Much more controversial, however, are Hayeks stipulations concern-

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ticipate in the decision-making processes of ones government is not a necessary

A free people in this [political] sense is not necessarily a people of free

18. Hayek, The Constitution of Liberty, 13.

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sovereignty is an animating feature of his political thought. If democracy is

as in (for example) Benjamin Constants classically liberal formulation: We are

22. Quoted in ibid., 92.

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are evolutionary products made possible by the unique, dynamic eciency of

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now shifts to become a mechanism to limit the economically unsustainable

Now this disclosure of the strictly non-democratic implications of Hayeks neo-

valorizations of freedom. Australians might be horried to learn that the hero

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justied in this case. It is the -liberal component we need to question. Hayeks

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nomic surplus. And rather than hoarding it, or redistributing it unproductively

37. Hayek, in ibid.

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Here, then, our reading of Hayekian neoliberalism intersects with a series

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The ethos of this form of neoliberalism is one of a kind of double-play or

One example of such a created, entire quasi-market is the Job Network,

45. Dean, Governmentality, 161, emphasis added.

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B. Cruikshank, Revolutions Within: Self-government and Self-esteem, in Barry et al. (eds),

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Conclusion: dethroning Peisthetaerus, or a road to serfdom paved with gold?

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account of the road to serfdom brings a distinctively later modern, Weberian

and licensing a constructivist approach to civil society that treats participation in

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Matthew Sharpe lectures in philosophy and psychoanalytic studies at Deakin University. He

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