Neither Utopia nor Dystopia: “Never Forget”

Personally, my patience for any dystopian Utopia and utopian Dystopia can be as dismal as my low opinions of them. Liberal Capitalism promises both at the same time to anyone willing to accept its ideas wholeheartedly. Certain Liberal Capitalist promises are always sugarcoated with “socialism” to deceive people of their historical origins. One example worthy of mention here is the Monetarist proposal of “Universal Basic Income” (UBI) or a “Basic Income Guarantee” among Liberal Capitalists. Most people are not going to know that UBI has its origins in unlikely places such as Monetarism and the Austrian School.

The best way to distinguish Liberal Capitalist rhetoric from Socialist rhetoric is to look for a dialectical debate over “freedom” and “security.” Ernst Jünger rightfully saw this “freedom-security dialectic” as that ideology’s defining characteristic in Der Arbeiter, which can be correlated to Alexander Hamilton’s criticism of the Bill of Rights in the US Constitution in Federalist Paper No. 84. “Liberty” under Liberal Capitalism is “being free from becoming insecure” or “becoming free to be secure.” The language employed here is paradoxically insisting that no Individual on their own can be truly free or secure. That only a government under the rule of law can justify certain policies that reassure “security” and preserve “freedom” by creating new insecurity, new unfreedom. The aftermath of the 9/11 attacks in 2001 is a textbook example: in order to regain security and thus be free from terrorism, the American people tolerated the TSA patdowns at airports, the PATRIOT Act, NSA surveillance of their personal communications, and the Afghanistan and Iraq Wars. When one visits the 9/11 Memorial & Museum, the first thing one finds upon entering is an airport security checkpoint to remind everyone of why 9/11 justified those measures to be free from being insecure and thus become free.

These same themes of “freedom” and “security” are also discernible in the premise behind UBI and the Liberal Capitalists who promoted its antecedents. In order to be free to regain financial security and thus become free from Welfare Capitalism, a system of periodic payments is far better than to be given several individual payments. Instead of social insurance and retirement pensions, condensing everything into a single payment is more efficient. That in turn will lower the costs of sustaining the existence of a Liberal Capitalist Parliamentary Democracy. And by doing so, the Individual is protected from the imperfect competition of the free market for Kapital by the creation of more Kapital to fuel even more imperfect competition.  

The origins of UBI within Liberal Capitalist discourse can be found in places like that one passage in Friedrich von Hayek’s wartime book, The Road to Serfdom. When he was not repudiating economic planning by glorifying the image of a one-man army like a 1980s-style John Rambo or Arnold Schwarzenegger flick, von Hayek advocated for Welfare Capitalism through “social insurance” and “basic income.” The distinct manner in which von Hayek advocated for them in Road to Serfdom, much like Universal Basic Income, was also fixated on the dialectics of ‘freedom’ and ‘security’. Again, it too is another example of the freedom-security dialectic.

The following is the relevant passage which I am referring to as a noteworthy origin for UBI. Notice the language in which von Hayek employed “freedom from economic planning” to justify “two kinds of Security.” Also note how “freedom” and “security” are bound by the rhetoric about “equality,” a term which von Hayek clearly saw as tantamount to the same herd mentality which defines Liberal Capitalism through destruction of authenticity, of Authentic Dasein. I had marked the relevant statements in bold for ease of reference and relevance:

The wishful delusion that there is really no longer an economic problem [q.v. Economic Calculation Problem] has been furthered by the claim that a planned economy would produce a substantially larger output than the competitive system [Read: Market Economy]. This claim, however, is being progressively abandoned by most students of the problem. Even a good many economists with socialist views are now content to hope that a planned society will equal the efficiency of a competitive system. They advocate  planning because it will enable us to secure a more equitable distribution of wealth. And it is indisputable that, if we want consciously to decide who is to have what, we must plan the whole economic system.

But the question remains whether the price we should have to pay for the realization of somebody’s ideal of justice is not bound to be more discontent and more oppression than was ever caused by the much abused free play of economic forces. For when a government undertakes to distribute the wealth, by what principles will it or ought it to be guided? Is there a definite answer to the innumerable questions of relative merits that will arise?

Only one general principle, one simple rule, would provide such an answer: absolute equality of all individuals. If this were the goal, it would at least give the vague idea of distributive justice clear meaning. But people in general do not regard mechanical equality of this kind as desirable, and socialism promises not complete equality but ‘greater equality’.        

This formula answers practically no questions. It does not free us from the necessity of deciding in every particular instance between the merits of particular individuals or groups, and it gives no help in that decision. All it tells us in effect is to take from the rich as much as we can. When it comes to the distribution of the spoils the problem is the same as if the formula of ‘greater equality’ had never been conceived.

It is often said that political freedom is meaningless without economic freedom. This is true enough, but in a sense almost opposite from that in which the phrase is used by our planners [during World War II in the United Kingdom]. The economic freedom which is the prerequisite of any other freedom cannot be the freedom from economic care which the socialists promise us and which can be obtained only by relieving us of the power of choice. It must be that freedom of economic activity which, together with the right of choice, carries also the risk and responsibility of that right.

What was shown here was von Hayek’s invocation of the freedom from being insecure. What follows is the freedom to become secure. In case anyone is not following, the dead giveaways are highlighted, italicized and boldfaced:

Like the spurious ‘economic freedom’, and with more justice, economic security is often represented as an indispensable condition of real liberty. In a sense this is both true and important. Independence of mind or strength of character is rarely found among those who cannot be confident that they will make their way by their own effort.

But there are two kinds of security: the certainty of a given minimum of sustenance for all and the security of a given standard of life, of the relative position which one person or group enjoys compared with others.

There is no reason why, in a society which has reached the general level of wealth ours has, the first kind of security should not be guaranteed to all without endangering general freedom; that is: some minimum of food, shelter and clothing, sufficient to preserve health. Nor is there any reason why the state should not help to organize a comprehensive system of social insurance in providing for those common hazards of life against which few can make adequate provision.

It is planning for security of the second kind which has such an insidious effect on liberty. It is planning designed to protect individuals or groups against diminutions of their incomes.

If, as has become increasingly true, the members of each trade in which conditions improve are allowed to exclude others in order to secure to themselves the full gain in the form of higher wages or profits, those in the trades where demand has fallen off have nowhere to go, and every change results in large unemployment. There can be little doubt that it is largely a consequence of the striving for security by these means in the last decades that unemployment and thus insecurity have so much increased.

In retrospect, von Hayek deliberately framed his rhetoric as a choice between the freedom to insecurity through the unfreedom of security and the freedom from security through the freedom of insecurity. We can make similar arguments with the cases of post-9/11 measures and of UBI.

Does the freedom of ‘being more insecure’ after 9/11 justify anyone’s unfreedom of ‘being more secure’ with TSA security at airports? Or does the unfreedom of ‘being more secure’ after 9/11 justify anyone’s freedom of ‘being more insecure’ without TSA security at airports?

Does the freedom of ‘being more insecure’ after Welfare Capitalist spending cuts justify anyone’s ‘unfreedom of being more secure’ with Universal Basic Income? Or does the unfreedom of ‘being more secure’ after Welfare Capitalist spending cuts justify anyone’s ‘freedom of being more insecure’ without Universal Basic Income?          

This may seem like an odd set of questions to ask, but these questions are derived from von Hayek’s logic regarding economic planning and his alternative, Welfare Capitalism, in Road to Serfdom. By eliminating Welfare Capitalism, UBI will not necessarily become what it was claimed to be because there are limits to how much Kapital there can be in existence. Realistically, those payments are going to be smaller than what is expected of the Kapital spent on sustaining Welfare Capitalism vis-à-vis social welfare programs. The same can also be argued about Milton Friedman’s own antecedent to UBI, a “Negative Income Tax Credit.” Much like a Negative Interest Rate, a Negative Income Tax has the government paying the taxpayer more Kapital and Friedman’s Monetarism can provide that, but at what cost to both the government and taxpayer?  

Truly, what is going to happen instead is that the government will expropriate Kapital from other taxpayers to finance the UBI payments, as it is already doing with existing social welfare programs. And if the government cannot scrounge any more Kapital through taxation and spending cuts, it will create Kapital out of thin air by pegging Currency to Schuld (Debt/Guilt). Monetarism permits it.

Welfare Capitalism discourages Arbeit and Geld under the Work-Standard. Those implications were apparent to me in “Taxation and the Work-Standard” (Part I, Part II, and Part III). In defiance of Road to Serfdom supposedly being devoted to “socialists,” I am convinced that ‘new policies requires new methods; never pour new wine into old wine bottles.’



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