Prime Time for Paul Ryan’s Guru (the One That’s Not Ayn Rand)
As Paul Ryan and Mitt Romney take the stage in Tampa this week, the ghost of an Austrian economist will be hovering above them with an uneasy smile on his face. Ryan has repeatedly suggested that many of his economic ideas were inspired by the work of Friedrich von Hayek, an awkwardly shy (and largely ignored) economist and philosopher who died in 1992. A few years ago, it was probably possible to fit every living Hayekian in a conference room. Regardless of what happens in November, that will no longer be the case.
Hayek’s ideas aren’t completely new to American politics. Some mainstream Republicans, including Ronald Reagan, have name-checked him since at least the 1980s as a shorthand way of signaling their unfettered faith in the free market and objection to big government. But few actually engaged with Hayek’s many contentious (and outré) views, particularly his suspicion of all politicians, including Republicans, who claim to know something about how to make an economy function better. For these reasons, and others, Hayek has become fashionable of late among antigovernment protesters, and if Ryan brings even a watered-down version of his ideas into the Republican mainstream, the country’s biggest battles about the economy won’t be between right and left, but within the Republican Party itself — between Tea Party radicals who may feel legitimized and the establishment politicians they believe stand in their way.
For the past century, nearly every economic theory in the world has emerged from a broad tradition known as neoclassical economics. (Even communism can be seen as a neoclassical critique.) Neoclassicists can be left-wing or right-wing, but they share a set of crucial core beliefs, namely that it is useful to look for government policies that can improve the economy. Hayek and the rest of his ilk — known as the Austrian School — reject this. To an Austrian, the economy is incomprehensibly complex and constantly changing; and technocrats and politicians who claim to have figured out how to use government are deluded or self-interested or worse. According to Hayek, government intervention in the free market, like targeted tax cuts, can only make things worse.
Many of Ryan’s most famous proposals have clear Hayekian roots. His Roadmap for America’s Future includes calls for government to step out and let the market decide. His proposal to allow citizens to buy whatever health insurance they want, rather than use a government-promoted exchange, also seems to be embedded in the Austrian tradition. In other important ways, though, Ryan is anything but Austrian. While Hayek would laugh at an economic forecast for distant 2013, Ryan’s budget plan includes predictions about 2083. The congressman’s proposal for two separate tax systems — a flat-tax system and a loophole-filled tax system — is exactly the sort of contradictory governmental problem-solving that Hayek detested.
more:http://www.nytimes.com/2012/08/26/magazine/prime-time-for-paul-ryans-guru-the-one-thats-not-ayn-rand.html?pagewanted=all