Topic: Question on Hayek and Libertarianism (Read 1044 times)

Libertarians support minimum wages?

In a society where ample number of resources are available ,i believe we only need a few of them .One one condition though. The few resources should be present in abundance . A liberatarian is a walking contradiction. As somewhere in his book itself ,he is against protectionism but supports minimum wages.Maybe the whole thing has to do with the dynamic technological environment.

At least I think this (dinofelis) is not the case. (Starvation in the free market). The main reason is that labour is the most general factor, and wages in the market will be basically the same for all, with more for some professions, based on (uniqueness of) skill, need for trust, psychological cost of work (dirtyness, risk) and so on. In the free market, most people will be wage earners, some people will be entrepreneurs, and some will have lots of capital or money. With no cryonism, someone who has become rich has at the same time offered a better service to society. Or, in the case of saving, through having consumed less. Some might have inherited or been granted money, which is ok, because if this is not possible, the rights of the grantor would have been infringed.

If someone in spite of this would not be able to sustain himself, private and direct solutions would be available. Logic: In a society where a large majority would do this through taxes, someone would also be willing to do this privately, when need is less and resources are more plentiful.

That assumes that libertarians don't believe in charity or voluntary collectivism. That the possessors of automatic capital will watch everyone else starve.

The state can just spend the money it gets from taxes.

When the public finally wake up, they won't allow the state to "create wealth" by manipulating money (monetary policy), or to incur debt (monetary policy by the back door.)  Mediating between taxpayers and benefit recipients is, really, just politicians finally making themselves useful.

Automation is never going to replace human employment totally.  There's always something you can't automate.  People will always want new goods and services.  There will always be something in the innovation process that must be manual.

However you raise a good point that a lot of modern employment is "useless" in the sense that they directly or indirectly serve the whims of the rich or relatively rich.  (Nothing inherently wrong here, just that whims make for unstable demand that translates into economic insecurity.)  IMO this is only a problem in the environment created by modern state-based money.  Without artificially inflated financial assets, people would feel safe about maintaining the value of their savings without gambling in the financial markets, and they would feel safe to consume.  (In fact they would almost be forced to consume as their remaining years get fewer and savings grow bigger.)  Every economic/business cycle downturn has been preceded by some kind of financial bust (mild or severe) where artificially propped-up assets finally face market realities.

I can't speak for libertarians in general, but their idea of getting rid of state money is sound.  The problem is how to get there from here, which is an economy addicted to artificially supported demand by the haves.  It's not easy, but not impossible to solve either.

It is true that
Is not equal to minimum wage, maybe he meant "unconditional income", and I think it is probably what he meant but he does not elaborate on that.

So you advocate he really meant unconditional income is a way to prevent a ruling power of using starving people as a weapon.
But unconditional income can only exist by exercising power on the monetary policy of the country, and thus rule out sound money. Which would then impact economic freedom and get back to the road of serfdom.

It is a shame he did not elaborate more on that.

Can't this also be interpreted as a support for a "basic income" and not necessarily a "minimum wage"?

You underestimated the power of starving people

Lots of starving people connected together will become a destructive power, if organized by some resource rich guys, can make a sudden change in the landscape of upper class. And political fight is a daily business in the upper class, starving people is their weapon

It was also in the wikipedia article. Long time since I read the book. You are probably right. It is inconsistent.

Sorry, I should have quoted.


In Security And Freedom of Road to Serfdom.

He spend great time of talking against "the security of the particular income a person is thought to deserve", but does not say a thing about the first kind of security, and why he considers it external to the market system.

I don't think he supported minimum wages.

This is not true.  A libertarian is only a walking contradiction if he doesn't, at the same time, accept social Darwinism in which cultural, economical and social heritage is part of the struggle for the fittest.  The normal outcome of this is a world, in which only the possessors of fully automatic capital survive (the others die of starvation).  This has a lot of advantages, in the first place ecological advantages: one doesn't need to be a large number of capital possessors.  So making most people (non-capital possessors) starve to death is a serious improvement of most ecological problems.  If only a million or so of capital possessors survive, they would be able to live in great luxury, with a minimal burden on the environment, and possessing essentially the whole planet.  It would finally be life in paradise. 
Of course, there would be a painful transition from a labor-driven economy with a lot of people, and a huge ecological burden, to a purely capital driven economy, fully automated.  People dying of hunger would struggle, and probably cause a lot of problems before dying out.  But once they are gone, the problem would be solved, and a purely capitalist paradise would emerge.

As I pointed out, Hayek is not libertarian, at least not in Road to Serfdom. Which make me see some incoherency in his thoughts. Never seen that from Rothbard for example.

No input of other economists be it Rothbard or Friedman or any other on such contradiction ?

It is very strange, Hayek takes time to explain logically his arguments, but for that he seems oblivious to the need to defend them.

You aren't the first to wonder about those apparent contradictions. I don't think he ever clarified them.


Prior to WW2, something like 40% of the U.S. population worked on farms. Now, because of technology, it's more like 4%. We do not see 36% unemployment because people adapt. Many kinds of jobs will disappear in the future due to the advance of technology, and people will adapt.

Every libertarian is a walking contradiction since technological automation is going to prove a marxist-friendly method as the only way out when unemployment gets stacking up perpetually, and once the bubble of "new" stupid useless jobs to cover up the unemployment rates blows, and this method is universal welfare, unless you want riots daily due pissed off people not having minimum resources meet.

I am currently reading the Road of Serfdom of Hayek.
This is, as this forum told me before I bought, a marvelous book I do not regret one instant buying.

I just have one question. Hayek defines very well what are ultimately the effect of restrictionism/protectionism on markets, and the root of what caused it. (Namely, the perceived injustice of labor being outdated by technological progress)

But there are some subjects, in the book, which are not a lot discussed in depth by Hayek, which, to me, seems in contradiction with what he is preaching.
He seems favorable to minimum wages, but also for social services around insurances, but do not explain clearly his rational.
Insurances and wages are part of the market system. Insurance is a market of risk and wages part of the labor market.
A minimum wage can be seen as a restriction of entering the market for labor whose value is below it. (Milton Friedman)

I don't understand how he can rationally be against protectionism and restrictionism while being in favor of minimum wages and public insurance services.

Is there any writing where he talks about these subjects more deeply ?
I also want to know how his vision evolved until he died, Road of Serfdom being one of his first book.