Review: ‘The Constitution of Liberty’ by F. A. Hayek

George Orwell observed that one irony of imperialism is that in some ways it is the imperialist’s own freedom that is destroyed, rather than his subjects’. The imperial officer finds his actions dictated to him not by his true beliefs, but by what his subjects expect from him. As Orwell phrased it in his essay, “Shooting an Elephant,” “He wears a mask, and his face grows to fit it.”*

Conservatives and libertarians today seem to follow a similar path. As if weary from hearing their views distorted into a caricature, they decide to adopt the caricatured position themselves. On no issue does this seem clearer than the question of wealth, more specifically the deservedness of those who have wealth. Skeptics of laissez-faire attack advocates of lower tax rates and less government involvement as puppets of plutocrats; the only beneficiaries of these policies, say the market skeptics, are the ultra-rich. The right’s all-too-common response? The market is wise and just. It rewards those who merit it. As the eminent economist and former George W. Bush adviser Greg Mankiw put it, “A person who contributes more to society deserves a higher income that reflects those greater contributions.”

This philosophy, if it qualifies as such, fits the universe of Ayn Rand, where characters are clearly demarcated as either deserving or parasitical. The wealth creators in “Atlas Shrugged” do deserve their wealth, as those trying to repurpose it for their own ends deserve the readers’ scorn. But Rand’s universe is not ours (for one, there is not a child in sight), and a far better philosophy of the free market system was offered by Friedrich Hayek. In his magnum opus, “The Constitution of Liberty,” Hayek provides a reminder of what conservatives should believe, not what they’ve morphed into supporting. 

Hayek’s work is the most idea-dense book I have ever read. His footnotes alone contain a greater wealth of knowledge than an entire chapter of most pop sociology books. Someone could fill an entire thesis with Hayek’s insights, and no doubt someone already has, so instead I want to highlight one underrated  argument in “The Constitution of Liberty” concerning the role of moral “desert.” According to Hayek, the moral deservedness of society’s richest individuals has little to do with the income distribution resulting from free exchanges. And nor should it. The proper response to those decrying the market’s failure to reward individual merit, according to Hayek, is not to say that, actually, the people reaping the outsized gains are just more deserving than the rest of us. Rather, it is to say that, “in a free system it is neither desirable nor practicable that material rewards should be made generally to correspond to what men recognize as merit.” 

Reward according to merit necessarily implies reward according to assessable merit. It’s precisely the impossibility of this task — of some group serving as an accurate judge of each citizen’s true worth — that underpins the rationale for liberty and a free market system in the first place. 

This is not to say the resulting income distribution is random, just that it does not correspond to what we traditionally consider meritorious qualities: how much effort one gives, how upstanding one’s character, etc. The market rewards economic value added, and that is all. And this should come as a relief, given the alternative: “The mark of the free man is to be dependent for his livelihood not on other people’s views of his merit but solely on what he has to offer him.” 

Only when we think of our income as determined by society as a whole, says Hayek, do we expect reward according to merit. A moment’s reflection hints at how dystopian this world would become. If moral worth really could be discerned from one’s salary, not only would class conflict increase to levels reminiscent of “A Tale of Two Cities” or, to be redundant, “The Dark Knight Rises.” More than that, so would social relationships among friends and family. Money is already a source of resentment, envy, and tension. Why, then, is there such insistence to further tie how much money an individual has to his or her moral virtues? The world does not need another reason to look down on the poor.

As the rest of Hayek’s work can attest, arguments for economic liberty are compelling enough on their own without dubiously crediting merit where the market simply credits economic value. Those who support the system Hayek championed would thus do better to evangelize the arguments he actually makes, rather than defend the views his opponents ascribe to him. There’s no reason to change our face to fit the mask unfairly assigned to us.

*The relevant passage from Orwell’s essay is below:

Here was I, the white man with his gun, standing in front of the unarmed native crowd – seemingly the leading actor of the piece; but in reality I was only an absurd puppet pushed to and fro by the will of those yellow faces behind. I perceived in this moment that when the white man turns tyrant it is his own freedom that he destroys. He becomes a sort of hollow, posing dummy, the conventionalized figure of a sahib. For it is the condition of his rule that he shall spend his life in trying to impress the “natives,” and so in every crisis he has got to do what the “natives” expect of him. He wears a mask, and his face grows to fit it. I had got to shoot the elephant. I had committed myself to doing it when I sent for the rifle. A sahib has got to act like a sahib; he has got to appear resolute, to know his own mind and do definite things. To come all that way, rifle in hand, with two thousand people marching at my heels, and then to trail feebly away, having done nothing – no, that was impossible. The crowd would laugh at me. And my whole life, every white man’s life in the East, was one long struggle not to be laughed at.