Trump considering John Allison as Treasury secretary

[nbhadja]

Would be a killer pick

http://www.bloomberg.com/politics/articles/2016-11-23/ex-bb-t-ceo-allison-said-to-be-in-running-for-top-treasury-job

Highlights from article :

. He’s been a critic of the Federal Reserve and the Troubled Asset Relief Program, the government’s effort to purchase toxic assets from financial institutions following the sub-prime mortgage meltdown.

He has long criticized what he calls the “massive” increase in regulation. The Charlotte, North Carolina-native has called for a repeal of 95 percent of regulations, including all of the Dodd-Frank Act

. He has funded a series of programs on college campuses to promote the works of libertarian novelist Ayn Rand and (Austrian) economist Friedrich Hayek in business and political science programs.

[Ender]

Hayek? Uh... NO.


According to Hayek, government is "necessary" to fulfill the following tasks: not merely for "law enforcement" and "defense against external enemies" but "in an advanced society government ought to use its power of raising funds by taxation to provide a number of services which for various reasons cannot be provided, or cannot be provided adequately, by the market." (Because at all times an infinite number of goods and services exist that the market does not provide, Hayek hands government a blank check.)

Among these goods and services are

protection against violence, epidemics, or such natural forces as floods and avalanches, but also many of the amenities which make life in modern cities tolerable, most roads … the provision of standards of measure, and of many kinds of information ranging from land registers, maps and statistics to the certification of the quality of some goods or services offered in the market.

Additional government functions include "the assurance of a certain minimum income for everyone"; government should "distribute its expenditure over time in such a manner that it will step in when private investment flags"; it should finance schools and research as well as enforce "building regulations, pure food laws, the certification of certain professions, the restrictions on the sale of certain dangerous goods (such as arms, explosives, poisons and drugs), as well as some safety and health regulations for the processes of production; and the provision of such public institutions as theaters, sports grounds, etc."; and it should make use of the power of "eminent domain" to enhance the "public good."

Moreover, it generally holds that "there is some reason to believe that with the increase in general wealth and of the density of population, the share of all needs that can be satisfied only by collective action will continue to grow."

Further, government should implement an extensive system of compulsory insurance ("coercion intended to forestall greater coercion"), public, subsidized housing is a possible government task, and likewise "city planning" and "zoning" are considered appropriate government functions — provided that "the sum of the gains exceed the sum of the losses." And lastly, "the provision of amenities of or opportunities for recreation, or the preservation of natural beauty or of historical sites or scientific interest … Natural parks, nature-reservations, etc." are legitimate government tasks.

In addition, Hayek insists we recognize that it is irrelevant how big government is or if and how fast it grows. What alone is important is that government actions fulfill certain formal requirements. "It is the character rather than the volume of government activity that is important." Taxes as such and the absolute height of taxation are not a problem for Hayek. Taxes — and likewise compulsory military service — lose their character as coercive measures,

if they are at least predictable and are enforced irrespective of how the individual would otherwise employ his energies; this deprives them largely of the evil nature of coercion. If the known necessity of paying a certain amount of taxes becomes the basis of all my plans, if a period of military service is a foreseeable part of my career, then I can follow a general plan of life of my own making and am as independent of the will of another person as men have learned to be in society.

https://mises.org/library/why-mises-and-not-hayek

[undergroundrr]

Hey, when trump's right-hand man is citing Cheney as a mentor, I'll take Hayek any day.

[CaptUSA]

Yeah, I'd take him. Former head of Cato. (which is ironic, of course, because Cato is a big proponent of the trade deals Trump rails against. And he's an investment banker.)

If Trump picks Allison, I'll be impressed.

[Superfluous Man]

Has anyone else noticed how all these articles about people Trump is considering for various posts never include the Pauls. Never mind getting on the short list. They're not even in the realm of consideration with anyone but a segment of the bling Trump following lemmings.

[CaptUSA]

Has anyone else noticed how all these articles about people Trump is considering for various posts never include the Pauls. Never mind getting on the short list. They're not even in the realm of consideration with anyone but a segment of the bling Trump following lemmings.

It's still early, but if Trump ends up with Tulsi Gabbard as Secretary of State and John Allison as Treasury Secretary, there would be at least 2 spots that would show a Paul influence. I'm hopeful, yet not holding my breath.

[UWDude]

Has anyone else noticed how all these articles about people Trump is considering for various posts never include the Pauls. Never mind getting on the short list. They're not even in the realm of consideration with anyone but a segment of the bling Trump following lemmings.

Rand is staying in the Senate, and Ron is simply too old.
Nice derail attempt. You learn that reading the JTRIG manual?

[Krugminator2]

Hayek? Uh... NO.


https://mises.org/library/why-mises-and-not-hayek

John Allison is hardcore libertarian. John Allison is actually qualified to be Treasury Secretary.

FA Hayek is arguably the most prominent free market thinker ever to set foot on Earth. I would make a strong case that Hayek deserves his own holiday. It is possible FA Hayek been more responsible than anyone in making the world a freer place through writing Road to Serfdom. Whereas Hans Hoppe is a pissant nobody who taught at a 8th tier school.

[Ender]

John Allison is hardcore libertarian. John Allison is actually qualified to be Treasury Secretary.

FA Hayek is arguably the most prominent free market thinker ever to set foot on Earth. I would make a strong case that Hayek deserves his own holiday. It is possible FA Hayek been more responsible than anyone in making the world a freer place through writing Road to Serfdom. Whereas Hans Hoppe is a pissant nobody who taught at a 8th tier school.

NO.

It is Mises that deserves his own holiday. Hayek is a neocon that learned his finances from Mises.

[Superfluous Man]

Hayek is a neocon

Oh please.

I propose a new site rule banning gratuitous uses of the word "neocon."

[presence]

TREASURY SECRETARY
* Steven Mnuchin, former Goldman Sachs Group Inc executive and Trump's campaign finance chairman
* Jeb Hensarling, Republican U.S. representative from Texas and chairman of the House Financial Services Committee
* Tom Barrack, founder and chairman of Colony Capital Inc
* John Allison, former CEO of BB&T Corp

of the 4 reported by Reuters as contenders Allison would be the best liberty pick



https://en.wikipedia.org/wiki/John_A._Allison_IV
https://en.wikipedia.org/wiki/Thomas_J._Barrack_Jr
https://en.wikipedia.org/wiki/Jeb_Hensarling
https://en.wikipedia.org/wiki/Steven_Mnuchin

[Krugminator2]

NO.

It is Mises that deserves his own holiday. Hayek is a neocon that learned his finances from Mises.

Umm.. I see.

[Ender]

Oh please.

I propose a new site rule banning gratuitous uses of the word "neocon."

Oh please- does social democrat feel better?


Why Mises (and not Hayek)?

09/12/2016 Hans-Hermann Hoppe

Let me begin with a quote from an article that my old friend Ralph Raico wrote some 15 years ago:

Ludwig von Mises and F. A. Hayek are widely considered the most eminent classical liberal thinkers of this century. They are also the two best known Austrian economists. They were great scholars and great men. I was lucky to have them both as my teachers.… Yet it is clear that the world treats them very differently. Mises was denied the Nobel Prize for economics, which Hayek won the year after Mises's death. Hayek is occasionally anthologized and read in college courses, when a spokesman for free enterprise absolutely cannot be avoided; Mises is virtually unknown in American academia. Even among organizations that support the free market in a general way, it is Hayek who is honored and invoked, while Mises is ignored or pushed into the background.

I want to speculate — and present a thesis — why this is so and explain why I — and I take it most of us here — take a very different view. Why I (and presumably you) are Misesians and not Hayekians.

My thesis is that Hayek's greater prominence has little if anything to do with his economics. There is little difference in Mises's and Hayek's economics. Indeed, most economic ideas associated with Hayek were originated by Mises, and this fact alone would make Mises rank far above Hayek as an economist. But most of today's professed Hayekians are not trained economists. Few have actually read the books that are responsible for Hayek's initial fame as an economist, i.e., his Monetary Theory and the Trade Cycle and his Prices and Production. And I venture the guess that there exist no more than 10 people alive today who have studied, from cover to cover, his Pure Theory of Capital.

Rather, what explains Hayek's greater prominence is Hayek's work, mostly in the second half of his professional life, in the field of political philosophy — and here, in this field, the difference between Hayek and Mises is striking indeed.

My thesis is essentially the same one also advanced by my friend Ralph Raico: Hayek is not a classical liberal at all, or a "Radikalliberaler" as the NZZ, as usual clueless, has just recently referred to him. Hayek is actually a moderate social democrat, and since we live in the age of social democracy, this makes him a "respectable" and "responsible" scholar. Hayek, as you may recall, dedicated his Road to Serfdom to "the socialists in all parties." And the socialists in all parties now pay him back in using Hayek to present themselves as "liberals."

Now to the proof, and I rely for this mostly on the Constitution of Liberty, and his three volume Law, Legislation, and Liberty which are generally regarded as Hayek's most important contributions to the field of political theory.

According to Hayek, government is "necessary" to fulfill the following tasks: not merely for "law enforcement" and "defense against external enemies" but "in an advanced society government ought to use its power of raising funds by taxation to provide a number of services which for various reasons cannot be provided, or cannot be provided adequately, by the market." (Because at all times an infinite number of goods and services exist that the market does not provide, Hayek hands government a blank check.)

Among these goods and services are

protection against violence, epidemics, or such natural forces as floods and avalanches, but also many of the amenities which make life in modern cities tolerable, most roads … the provision of standards of measure, and of many kinds of information ranging from land registers, maps and statistics to the certification of the quality of some goods or services offered in the market.

Additional government functions include "the assurance of a certain minimum income for everyone"; government should "distribute its expenditure over time in such a manner that it will step in when private investment flags"; it should finance schools and research as well as enforce "building regulations, pure food laws, the certification of certain professions, the restrictions on the sale of certain dangerous goods (such as arms, explosives, poisons and drugs), as well as some safety and health regulations for the processes of production; and the provision of such public institutions as theaters, sports grounds, etc."; and it should make use of the power of "eminent domain" to enhance the "public good."

Moreover, it generally holds that "there is some reason to believe that with the increase in general wealth and of the density of population, the share of all needs that can be satisfied only by collective action will continue to grow."

Further, government should implement an extensive system of compulsory insurance ("coercion intended to forestall greater coercion"), public, subsidized housing is a possible government task, and likewise "city planning" and "zoning" are considered appropriate government functions — provided that "the sum of the gains exceed the sum of the losses." And lastly, "the provision of amenities of or opportunities for recreation, or the preservation of natural beauty or of historical sites or scientific interest … Natural parks, nature-reservations, etc." are legitimate government tasks.

In addition, Hayek insists we recognize that it is irrelevant how big government is or if and how fast it grows. What alone is important is that government actions fulfill certain formal requirements. "It is the character rather than the volume of government activity that is important." Taxes as such and the absolute height of taxation are not a problem for Hayek. Taxes — and likewise compulsory military service — lose their character as coercive measures,

if they are at least predictable and are enforced irrespective of how the individual would otherwise employ his energies; this deprives them largely of the evil nature of coercion. If the known necessity of paying a certain amount of taxes becomes the basis of all my plans, if a period of military service is a foreseeable part of my career, then I can follow a general plan of life of my own making and am as independent of the will of another person as men have learned to be in society.

But please, it must be a proportional tax and general military service!

I could go on and on, citing Hayek's muddled and contradictory definitions of freedom and coercion, but that shall suffice to make my point. I am simply asking: what socialist and what green could have any difficulties with all this? Following Hayek, they can all proudly call themselves liberals.

In distinct contrast, how refreshingly clear — and very different — is Mises! For him, the definition of liberalism can be condensed into a single term: private property. The state, for Mises, is legalized force, and its only function is to defend life and property by beating antisocial elements into submission. As for the rest, government is "the employment of armed men, of policemen, gendarmes, soldiers, prison guards, and hangmen. The essential feature of government is the enforcement of its decrees by beating, killing, and imprisonment. Those who are asking for more government interference are asking ultimately for more compulsion and less freedom."

Moreover (and this is for those who have not read much of Mises but invariably pipe up, "but even Mises is not an anarchist"), certainly the younger Mises allows for unlimited secession, down to the level of the individual, if one comes to the conclusion that government is not doing what it is supposed to do: to protect life and property. And the older Mises never repudiated this position. Mises, then, as my own intellectual master, Murray Rothbard, noted, is a laissez-faire radical: an extremist.


https://mises.org/library/why-mises-and-not-hayek

[Superfluous Man]

Oh please- does social democrat feel better?



https://mises.org/library/why-mises-and-not-hayek

I don't know if that's any better or not, or what "social democrat" is even supposed to mean. But neocon is absolutely unacceptable. Not a single thing in that article you posted has anything at all to do with neoconservatism.

[PatriotOne]

John Allison - I always look for ties to both the Rothschilds and the Rockefellers when vetting these kind of picks. The fact that I see no obvious ties between Allison and them is super duper. You can't say that for any Treasurer Sec in recent history. Fingers crossed this is the guy picked.

[Ender]

I don't know if that's any better or not, or what "social democrat" is even supposed to mean. But neocon is absolutely unacceptable. Not a single thing in that article you posted has anything at all to do with neoconservatism.

A neoconservative in American politics is someone presented as a conservative but who actually favors big government, interventionalism, and a hostility to religion in politics and government. The word means "newly conservative," and thus formerly liberal.

Sep 2, 2016
Neoconservatism - Conservapedia
www.conservapedia.com/Neoconservatism

A rebuttal to Hayek's book:




Now, in a book dedicated to an investigation of the theoretical and historical groundwork of freedom, particularly within the context of a state structure, it is of the utmost importance that the boundary between coercion and non-coercion, as applied to the actions of the state, be clearly drawn. For how else are we to know when the state is exercising its legitimate functions or coercing its citizens? Hayek differentiates these two categories of actions by applying the concept of the Rule of Law. "Law," Professor Hayek asserts on p. 149, "in its ideal form might be described as a 'once-and-for-all' command that is directed to unknown people and that is abstracted from all particular circumstances of time and place and refers only to such conditions as may occur anywhere and at any time." We see, then, that the Rule of Law is the governance of society under a set of abstract rules which in no way discriminate among the citizenry and, hence, are equally applicable to all. . . .

It is one of Hayek's purposes to build up a theoretical framework from which the necessity of private property can be deduced, a conclusion arrived at from an investigation of the nature of power and freedom in society. It would clearly seem to be subverting the very groundwork of such a principle if the theoretical system upon which it rests allows for the concentration and legitimate use of such powers in the hands of the state which can result in a system the nature of which aims at the overthrow of personal liberty. Hayek says: "the recognition of private property is . . . an essential condition for the prevention of coercion." Yet he succeeds in placing within the power of the state the very means of interfering with that right under the guise of acting consistently within the borders of its legitimate domain and consonant with the Rule of Law. Here, then, lies the main critique of Hayek's proposed framework: that it offers a rationale for what clearly are coercive acts of the state, e.g., conscription, interference in the economy (under the principle that it is attempting to minimize personal coercion) and alteration by flat of the social structure of personal relationships which have developed spontaneously and undirected over the course of centuries.

Given that such situations as the voluntary contractualization of parties to a mutually beneficial agreement (e.g., the example cited above concerning the spring in the desert) can be classed under the heading of "coercion" within Hayek's system, and that what appear to be clear cases of coercive governmental action, such as conscription, are deemed legitimate and in accordance with the Rule of Law, it would seem that Hayek's position on the nature of coercion and freedom must, as it stands, be rejected.

http://www.garynorth.com/public/13079.cfm

[Krugminator2]

A neoconservative in American politics is someone presented as a conservative but who actually favors big government, interventionalism, and a hostility to religion in politics and government. The word means "newly conservative," and thus formerly liberal.


http://www.garynorth.com/public/13079.cfm

Arguing about Hayek being a neoconservative isn't even worth addressing. It is brain-dead.

I will address the crackpots you keeping citing. Here is a Gary North on instituting a theocracy and the importance of being able to murder children who get lippy with their parents.


"When people curse their parents, it unquestionably is a capital crime," he writes. "The integrity of the family must be maintained by the threat of death." Likewise with blasphemy, dealt with summarily in Leviticus 24:16: "And he that blasphemeth the name of the Lord, he shall surely be put to death, and all the congregation shall certainly stone him."http://reason.com/archives/1998/11/01/invitation-to-a-stoning

[Ender]

Arguing about Hayek being a neoconservative isn't even worth addressing. It is brain-dead.

I will address the crackpots you keeping citing. Here is a Gary North on instituting a theocracy and the importance of being able to murder children who get lippy with their parents.

http://reason.com/archives/1998/11/01/invitation-to-a-stoning

I wasn't citing Gary North- and the first quote was from the Mises Institute.

But hey- if you guys don't know the difference between Mises and Hayek- no wonder we're in trouble.

[Krugminator2]

I wasn't citing Gary North- and the first quote was from the Mises Institute.

But hey- if you guys don't know the difference between Mises and Hayek- no wonder we're in trouble.

You did link to Gary North. Mises and Hayek having different views is irrelevant. . Both can be appreciated.

[Ender]

You did link to Gary North. Mises and Hayek having different views is irrelevant. . Both can be appreciated.

Murray Rothbard on Hayek:


F.A. Hayek and the Concept of Coercion

[This article is taken from chapter 28 of The Ethics of Liberty.1 Listen to this chapter in MP3, read by Jeff Riggenbach. The entire book is being prepared for podcast and download.]

In his monumental work The Constitution of Liberty, F.A. Hayek attempts to establish a systematic political philosophy on behalf of individual liberty.2 He begins very well, by defining freedom as the absence of coercion, thus upholding "negative liberty" more cogently than does Isaiah Berlin.

Unfortunately, the fundamental and grievous flaw in Hayek's system appears when he proceeds to define "coercion." For instead of defining coercion as is done in the present volume, as the invasive use of physical violence or the threat thereof against someone else's person or (just) property, Hayek defines coercion far more fuzzily and inchoately: e.g., as "control of the environment or circumstances of a person by another (so) that, in order to avoid greater evil, he is forced to act not according to a coherent plan of his own but to serve the ends of another"; and again: "Coercion occurs when one man's actions are made to serve another man's will, not for his own but for the other's purpose."3

For Hayek, "coercion" of course includes the aggressive use of physical violence, but the term unfortunately also includes peaceful and non-aggressive actions as well. Thus, Hayek states that "the threat of force or violence is the most important form of coercion. But they are not synonymous with coercion, for the threat of physical force is not the only way in which coercion can be exercised."4

What, then, are the other, nonviolent "ways" in which Hayek believes coercion can be exercised? One is such purely voluntary ways of interacting as "a morose husband" or "a nagging wife," who can make someone else's "life intolerable unless their every mood is obeyed."

Here Hayek concedes that it would be absurd to advocate legal outlawry of sulkiness or nagging; but he does so on the faulty grounds that such outlawry would involve "even greater coercion." But "coercion" is not really an additive quantity; how can we quantitatively compare different "degrees" of coercion, especially when they involve comparisons among different people? Is there no fundamental qualitative difference, a difference in kind, between a nagging wife and using the apparatus of physical violence to outlaw or restrict such nagging?

It seems clear that the fundamental problem is Hayek's use of " coercion" as a portmanteau term to include, not only physical violence but also voluntary, nonviolent, and non-invasive actions such as nagging. The point, of course, is that the wife or husband is free to leave the offending partner, and that staying together is a voluntary choice on his or her part. Nagging might be morally or aesthetically unfortunate, but it is scarcely "coercive" in any sense similar to the use of physical violence.

Only confusion can be caused by lumping the two types of action together.

But not only confusion but also self-contradiction, for Hayek includes in the concept of "coercion" not only invasive physical violence, i.e., a compulsory action or exchange, but also certain forms of peaceful, voluntary refusal to make exchanges. Surely, the freedom to make an exchange necessarily implies the equivalent freedom not to make an exchange. Yet, Hayek dubs certain forms of peaceful refusal to make an exchange as "coercive," thus lumping them together with compulsory exchanges.

Specifically, Hayek states that

there are, undeniably, occasions when the condition of employment creates opportunity for true coercion. In periods of acute unemployment the threat of dismissal may be used to enforce actions other than those originally contracted for. And in conditions such as those in a mining town the manager may well exercise an entirely arbitrary and capricious tyranny over a man to whom he has taken a dislike.5

Yet, "dismissal" is simply a refusal by the capital-owning employer to make any further exchanges with one or more people. An employer may refuse to make such exchanges for many reasons, and there are none but subjective criteria to enable Hayek to use the term "arbitrary." Why is one reason any more "arbitrary" than another? If Hayek means to imply that any reasons other than maximizing monetary profit are "arbitrary" then he ignores the Austrian School insight that people, even in business, act to maximize their "psychic" rather than monetary profit, and that such psychic profit may include all sorts of values, none of which is more or less arbitrary than another.

"For Hayek, 'coercion' of course includes the aggressive use of physical violence, but the term unfortunately also includes peaceful and non-aggressive actions as well."

Furthermore, Hayek here seems to be implying that employees have some sort of "right" to continuing employment, a "right" which is in overt contradiction to the property rights of employers to their own money. Hayek concedes that dismissal is ordinarily not "coercive"; why then, in conditions of "acute unemployment" (surely in any case, not of the employer's making), or of the mining town? Again, miners have moved voluntarily to the mining town and are free to leave whenever they like.

Hayek commits a similar error when he deals with the refusal to exchange made by a "monopolist" (the single owner of a resource). He admits that "if … I would very much like to be painted by a famous artist and if he refused to paint me for less than a very high fee [or at all?], it would clearly be absurd to say that I am coerced."

Yet he does apply the concept of coercion to a case where a monopolist owns water in an oasis. Suppose, he says, that people had "settled there on the assumption that water would always be available at a reasonable price," that then other water sources had dried up, and that people then "had no choice but to do whatever the owner of the spring demanded of them if they were to survive: here would be a clear case of coercion,"6 since the good or service in question is "crucial to [their] existence."

Yet, since the owner of the spring did not aggressively poison the competing springs, the owner is scarcely being "coercive"; in fact, he is supplying a vital service, and should have the right either to refuse a sale or to charge whatever the customers will pay. The situation may well be unfortunate for the customers, as are many situations in life, but the supplier of a particularly scarce and vital service is hardly being "coercive" by either refusing to sell or by setting a price that the buyers are willing to pay. Both actions are within his rights as a free man and as a just property owner. The owner of the oasis is responsible only for the existence of his own actions and his own property; he is not accountable for the existence of the desert or for the fact that the other springs have dried up.7

Let us postulate another situation. Suppose that there is only one physician in a community, and an epidemic breaks out; only he can save the lives of numerous fellow-citizens — an action surely crucial to their existence. Is he "coercing" them if (a) he refuses to do anything, or leaves town; or (b) if he charges a very high price for his curative services? Certainly not. There is, for one thing, nothing wrong with a man charging the value of his services to his customers, i.e., what they are willing to pay. He further has every right to refuse to do anything. While he may perhaps be criticized morally or aesthetically, as a self-owner of his own body he has every right to refuse to cure or to do so at a high price; to say that he is being "coercive" is furthermore to imply that it is proper and not coercive for his customers or their agents to force the physician to treat them: in short, to justify his enslavement. But surely enslavement, compulsory labor, must be considered "coercive" in any sensible meaning of the term.

All this highlights the gravely self-contradictory nature of including a forced activity or exchange in the same rubric of "coercion" with someone's peaceful refusal to make an exchange.

As I have written elsewhere:

A well-known type of "private coercion" is the vague but ominous sounding "economic power." A favorite illustration of the wielding of such "power" is the case of a worker fired from his job….

Let us look at this situation closely. What exactly has the employer done? He has refused to continue to make a certain exchange which the worker preferred to continue making. Specifically, A, the employer, refuses to sell a certain sum of money in exchange for the purchase of B's labor services. B would like to make a certain exchange; A would not. The same principle may apply to all the exchanges throughout the length and breadth of the economy….

"Economic power," then, is simply the right under freedom to refuse to make an exchange. Every man has this power. Every man has the same right to make a proferred exchange.

Now, it should become evident that the "middle-of-the-road" statist, who concedes the evil of violence but adds that the violence of government is sometimes necessary to counteract the "private coercion of economic power" is caught in an impossible contradiction. A refuses to make an exchange with B. What are we to say, or what is the government to do, if B brandishes a gun and orders A to make the exchange? This is the crucial question. There are only two positions we may take on the matter: either that B is committing violence and should be stopped at once, or that B is perfectly justified in taking this step because he is simply "counteracting the subtle coercion" of economic power wielded by A. Either the defense agency must rush to the defense of A, or it deliberately refuses to do so, perhaps aiding B (or doing B's work for him). There is no middle ground!

B is committing violence; there is no question about that. In the terms of both doctrines (the libertarian and the "economic power" arguments), this violence is either invasive and therefore unjust, or defensive and therefore just. If we adopt the "economic-power" argument, we must choose the latter position; if we reject it, we must adopt the former. If we choose the "economic-power" concept, we must employ violence to combat any refusal of exchange; if we reject it, we employ violence to prevent any violent imposition of exchange. There is no way to escape this either-or choice. The "middle-of-the-road" statist cannot logically say that there are "many forms" of unjustified coercion. He must choose one or the other and take his stand accordingly. Either he must say that there is only one form of illegal coercion — overt physical violence — or he must say that there is only one form of illegal coercion — refusal to exchange.8

And outlawing the refusal to work is, of course, a society of general slavery. Let us consider another example that Hayek quickly dismisses as noncoercive: "If a hostess will invite me to her parties only if I conform to certain standards of conduct and dress … this is certainly not coercion."9 Yet, as Professor Hamowy has shown, this case may well be considered "coercion" on Hayek's own criteria. For,

it might be that I am a very socially conscious person and that my not attending this party would greatly endanger my social standing. Further, my dinner jacket is at the cleaners and will not be ready for a week … yet the party is tomorrow. Under these conditions could it be said that my host's action in demanding my wearing formal attire as the price of access to his home is, in fact, a coercive one, inasmuch as it clearly threatens the preservation of one of the things I most value, my social prestige?

Furthermore, Hamowy points out that if the host should demand, as a price of invitation to the party, "that I wash all the silver and china used at the party," Hayek would even more clearly have to call such a voluntary contract "coercive" on his own criteria.10

In attempting to rebut Hamowy's trenchant critique, Hayek later added that "to constitute coercion it is also necessary that the action of the coercer should put the coerced in a position which he regards as worse than that in which he would have been without that action."11 But, as Hamowy points out in reply, this does not salvage Hayek's inconsistent refusal to adopt the patent absurdity of calling a conditional invitation to a party "coercive." For,

the case just described seems to meet this condition as well; for while it is true that, in a sense, my would-be host has widened my range of alternatives by the invitation, the whole situation (which must include my inability to acquire formal attire and my consequent frustration) is worse from my point of view than the situation which had obtained before the invitation, certainly worse than had existed before my would-be host had decided to have a party at that particular time.12

Thus, Hayek, and the rest of us, are duty-bound to do one of two things: either to confine the concept of "coercion" strictly to the invasion of another's person or property by the use or threat of physical violence; or to scrap the term "coercion" altogether, and simply define "freedom" not as the "absence of coercion" but as the "absence of aggressive physical violence or the threat thereof."

Hayek indeed concedes that "coercion can be so defined as to make it an all-pervasive and unavoidable phenomenon."13 Unfortunately, his middle-of-the-road failure to confine coercion strictly to violence pervasively flaws his entire system of political philosophy. He cannot salvage that system by attempting to distinguish, merely quantitatively between "mild" and "more severe" forms of coercion.

Another fundamental fallacy of Hayek's system is not only his defining coercion beyond the sphere of physical violence, but also in failing to distinguish between "aggressive" and "defensive" coercion or violence. There is all the world of distinction in kind between aggressive violence — assault or theft — against another, and the use of violence to defend oneself and one's property against such aggression. Aggressive violence is criminal and unjust; defensive violence is perfectly just and proper; the former invades the rights of person and property, the latter defends against such invasion. Yet Hayek again fails to make this crucial qualitative distinction. For him, there are only relative degrees, or quantities, of "coercion." Thus, Hayek states that "coercion, however, cannot be altogether avoided because the only way to prevent it is by the threat of coercion."14

From this, he goes on to compound the error by adding that "free society has met this problem by conferring the monopoly of coercion on the state and by attempting to limit this power of the state to instances where it is required to prevent coercion by private persons."15 Yet, we are not here comparing varying degrees of an undifferentiated lump we can call "coercion" (even if we define this as "physical violence"). For we can avoid aggressive violence completely by preventing it through purchasing the services of defense agencies, agencies which are empowered to use only defensive violence. We are not helpless in the throes of "coercion" if we define such coercion only as aggressive violence (or, alternatively, if we abandon the term "coercion" altogether, and keep the distinction between aggressive and defensive violence).

Hayek's crucial second sentence in the above paragraph compounds his error many times further. In the first place, in any and all historical cases, "free society" did not "confer" any monopoly of coercion on the State; there has never been any form of voluntary "social contract." In all historical cases, the State has seized, by the use of aggressive violence and conquest, such a monopoly of violence in society. And further, what the State has is not so much a monopoly of "coercion" as of aggressive (as well as defensive) violence, and that monopoly is established and maintained by systematically employing two particular forms of aggressive violence: taxation for the acquisition of State income, and the compulsory outlawry of competing agencies of defensive violence within the State's acquired territorial area.

Therefore, since liberty requires the elimination of aggressive violence in society (while maintaining defensive violence against possible invaders), the State is not, and can never be, justified as a defender of liberty. For the State lives by its very existence on the two-fold and pervasive employment of aggressive violence against the very liberty and property of individuals that it is supposed to be defending. The State is qualitatively unjustified and unjustifiable.

Thus, Hayek's justification of the existence of the State, as well as its employment of taxation and other measures of aggressive violence, rests upon his untenable obliteration of the distinction between aggressive and defensive violence, and his lumping of all violent actions into the single rubric of varying degrees of "coercion." But this is not all. For, in the course of working out his defense of the State and State action, Hayek not only widens the concept of coercion beyond physical violence; he also unduly narrows the concept of coercion to exclude certain forms of aggressive physical violence. In order to "limit" State coercion (i.e., to justify State action within such limits), Hayek asserts that coercion is either minimized or even does not exist if the violence-supported edicts are not personal and arbitrary, but are in the form of general, universal rules, knowable to all in advance (the "rule of law"). Thus, Hayek states that

The coercion which a government must still use … is reduced to a minimum and made as innocuous as possible by restraining it through known general rules, so that in most instances the individual need never be coerced unless he has placed himself in a position where he knows he will be coerced. Even where coercion is not avoidable, it is deprived of its most harmful effects by being confined to limited and foreseeable duties, or at least made independent of the arbitrary will of another person. Being made impersonal and dependent upon general, abstract rules, whose effect on particular individuals cannot be foreseen at the time they are laid down, even the coercive acts of government become data on which the individual can base his own plans.16

Hayek's avoidability criterion for allegedly "noncoercive" though violent actions is put baldly as follows:

Provided that I know beforehand that if I place myself in a particular position, I shall be coerced and provided that I can avoid putting myself in such a position, I need never be coerced. At least insofar as the rules providing for coercion are not aimed at me personally but are so framed as to apply equally to all people in similar circumstances, they are no different from any of the natural obstacles that affect my plans.17

But, as Professor Hamowy trenchantly points out:

If follows from this that if Mr. X warns me that he is going to kill me if I buy anything from Mr. Y, and if the products available from Mr. Y are also available elsewhere (probably from Mr. X), such action on the part of Mr. X is noncoercive!

Purchasing from Mr. Y is "avoidable." Hamowy continues:

Avoidability of the action is sufficient, according to this criterion, to set up a situation theoretically identical to one in which a threat does not occur at all. The threatened party is no less free than he was before the threat was made, if he can avoid the threatener's action. According to the logical structure of this argument, "threatening coercion" is not a coercive act. Thus, if I know in advance that I will be attacked by hoodlums if I enter a certain neighborhood, and if I can avoid that neighborhood, then I need never be coerced by the hoodlums…. Hence, one could regard the hoodlum-infested neighborhood … in the same way as a plague-infested swamp, both avoidable obstacles, neither personally aimed at me …

— and hence, for Hayek, not "coercive."18

Thus, Hayek's avoidability criterion for non-coercion leads to a patently absurd weakening of the concept of "coercion," and the inclusion of aggressive and patently coercive actions under a benign, noncoercive rubric. And yet, Hayek is even willing to scuttle his own weak avoidability limitation on government; for he concedes that taxation and conscription, for example, are not, and are not supposed to be, "avoidable." But these too become "noncoercive" because:

they are at least predictable and enforced irrespective of how the individual would otherwise employ his energies; this deprives them largely of the evil nature of coercion. If the known necessity of paying a certain amount in taxes becomes the basis of all my plans, if a period of military service is a foreseeable part of my career, then I can follow a general plan of life of my own making and am as independent of the will of mother person as men have learned to be in society.19

The absurdity of relying on general, universal ("equally applicable"), predictable rules as a criterion, or as a defense, for individual liberty has rarely been more starkly revealed.20 For this means that, e.g., if there is a general governmental rule that every person shall be enslaved one year out of every three, then such universal slavery is not at all "coercive." In what sense, then, are Hayekian general rules superior or more libertarian than any conceivable case of rule by arbitrary whim?

Let us postulate, for example, two possible societies. One is ruled by a vast network of Hayekian general rules, equally applicable to all, e.g., such rules as: everyone is to be enslaved every third year; no one may criticize the government under penalty of death; no one may drink alcoholic beverages; everyone must bow down to Mecca three times a day at specified hours; everyone must wear a specified green uniform, etc. It is clear that such a society, though meeting all the Hayekian criteria for a noncoercive rule of law, is thoroughly despotic and totalitarian.

Let us postulate, in contrast, a second society which is totally free, where every person is free to employ his person and property, make exchanges, etc. as he sees fit, except that, once a year, the monarch (who does literally nothing the rest of the year), commits one arbitrary invasive act against one individual that he selects.

Which society is to be considered more free, more libertarian?21

Thus, we see that Hayek's Constitution of Liberty can in no sense provide the criteria or the groundwork for a system of individual liberty. In addition to the deeply flawed definitions of "coercion," a fundamental flaw in Hayek's theory of individual rights, as Hamowy points out, is that they do not stem from a moral theory or from "some independent nongovernmental social arrangement," but instead flow from government itself.

For Hayek government — and its rule — of law creates rights, rather than ratifies or defends them.22 It is no wonder that, in the course of his book, Hayek comes to endorse a long list of government actions clearly invasive of the rights and liberties of the individual citizens.23

https://mises.org/library/fa-hayek-and-concept-coercion