Samuelson on Hayek

In this journal’s same issue, Professors Edward McPhail and Andrew Farrant of Dickinson College have published letters between Hayek and me, along with their comments. I desist from providing any peer-reviewer comments of my own.

But, since I happen to be still alive at so late a date, I jot down here certain ad hominem nuances that only I could be privy to.

Hayekian biography confirms a few commonplaces. His was a highly original mind. That meant he had to work out everything for himself rather than learning stuff from teachers. Also, his was a slightly depressive personality. Popularity, unpopularity and virtual anonymity added to this. Once he told me (and I quote from memory) that (in his seventies) he feared he had become stale and uncreative. But later his originality did come back. In hindsight he learned that his two periods of letdown in fact turned out to have coincided with two incidents of heart infarction. In paraphrase: Right there is the brain–mind connection that had preoccupied Hayek when writing his psychology treatise The Sensory Order (Hayek, 1952).

Add to the above that as I myself aged beyond seventy and eighty and ninety, it came to my notice that one must learn to appreciate that elderly friends do need to be handled gently. Here is a germane example. After Harry Johnson’s stroke in Venice he still produced many worthy research articles. But he became easily irritated. He argued with various long-time friends. When the publisher who had carried his stuff for decades was three weeks late in sending a book out for review, he broke off relations with that company. Often I heard myself saying to good mutual friends of Harry and me: “That’s not our Harry arguing. It’s his arteries. Let’s just go with the flow and remember Johnson’s fertility and admirable versatility.”

So it was when I began to receive complaints from my long-time acquaintance Friedrich Hayek. Why at so late a date should I belabor the persisting differences between us on ideological issues?

No good deeds go unpunished! Never then, or before, or later did I have reason to think or to say: Yes, I have misunderstood you. Yes, I have incorrectly quoted from you. Mea culpa.

Exactly what I have written above evaluating The Road to Serfdom is precisely what I believed about it in the 1940s and continued to believe about it up to the present 2007.

Why agitate ourselveswhenwe are each entitled to harbor different analyses? One learns that often it is better to avoid an argument than to win one. Amen.

In this footnote on ad hominem matters, some few additional remarks may be useful. Most of my gifted mentors, born in the nineteenth century, lacked today’s “political (and ethnic) correctness.” There were of course some honorable exceptions among both my Yankee and European teachers. Reder (2000) has provided a useful exploration of such unpleasantries. Central to his expositions were appraisals of the triad John Maynard Keynes, Joseph A. Schumpeter and Friedrich Hayek on the subject of anti-semitism.
Unexpectedly, I was forced in the end to conclude that Keynes’s lifetime profile was the worst of the three. In the record of his letters to wife and other Bloomsbury buddies, Keynes apparently remained in viewpoint much the same as in his Eton essay on that subject as a callow seventeen-year-old.

Hayek, I came to realize, seemed to be the one of the three who at least tried to grow beyond his early conditioning. The full record suggests that he did not succeed fully in cleansing those Augean Stables. Still, a B grade for effort does trump a C-grade.

Keynes’s visceral social repugnance would interest future historians less if it never contaminated his intellectual judgments. However early on, like Bertrand Russell, Keynes did recognize barbaric evils in Lenin’s utopia. Strange though that instead of discovering the key role of Georgian Josef Stalin, it was the beastliness of Leon (Lev) Trotsky that Keynes’s pen picks up on.


Do you not have any comments on the substance of Samuelson's essay? Do you think he is mostly right in his assessment? Where would you disagree with him?

He lost me at, "When a centrist like me says this about an extremist like Hayek,"

Samuelson is a centrist - only in his mind.

Disappointed. I was hoping to see something juicy about Paul and Salma.

Is it Samuelson or his editor who writes á la instead of à la? Amusing in a sentence about error.

Tyler, Please explain why you find Samuelson's piece snotty? Even Lord Robbins
changed his mind of P & P right?

What an extraordinary document. Somebody should help Samuelson get a blog going. This could get interesting.

The paper was edited somewhat, but rather lightly, leaving quite a few of the warts on. I figured that what will probably be the final statement by Samuelson on Hayek should go forth pretty close to how he wanted it to go forth.

Perhaps the author (an Austrian) took some liberties but here's the link of a Samuelson quote stating that the in spite of skeptics the "socialist economy can function and even thrive" a few years before the dismantling of the entire system. If the charge of making an inaccurate prediction is unfair I'll ignore the argument "out of deference" and maybe address it when I'm 91 and Samuelson's has long past on MR(if it's still around). I'll also, in some footnote, add nothing to the debate by making defamatory ad hominem statements about the passed economist and praise him for his "sort of growth" in said ad hominem caricature.,M1

Reder's discussion of Hayek in the context of the anti-semitism of Keynes and Schumpeter is noteworthy mostly for its smear quality and its lack of substance on the subject of Hayek.

Hayek is smeared as an anti-semite for noting a sociological fact about the assimilation of different waves of different economic classes of Jewish immigrants into Vienna. The same sociological fact has in some form can be identified concerning different waves of almost any immigrant population in almost every country in the world.

"Nor am I arguing that these developments are inevitable. If they were, there would be no point n writing this."

F. A. Hayek, _The Road to Serfdom_, p. 4.

"there is no reason to believe that this movement is inevitable"

_TRtoS_ p. 194.

"There is NO REASON why in a society which has reached the general level of wealth which ours has attained the first kind of security [i.e. against severe physical privation, the certainty of a given minimum of sustenance to all] should not be guaranteed to all without endangering general freedom .. there can be no doubt that some minimum of food, shelter, and clothing, sufficient to preserve the health and the capacity to work, can be assured to everybody. Indeed, fr a considerable part of the population of England this sort of security has long been achieved."

_TRto_S_, p. 120

Hayek's later books give suggestions how to make "welfare state" institutions and "mixed economy" institutions best fit in with other institutions in the wider liberal order. In other works Hayek also gives a far wider list of government regulations and institutions that are perfectly compatible with a free society.

The only think I find inevitable is economists distorting Hayek's work -- especially if we're talking left of center economists.

So, is a ~40% drop in asset values at least a rest stop in Serfdom?

‘tell you what - as a man who spent first 30+ years of his life in the Soviet Union, then settled in US and on top of it did quite a bit of traveling, I am reading about “conclusive, physical proof† being not a possibility with a total, utter bewilderment.

Do you guys ever try to look outside of your ivory towers?

As the editor who handled and approved the publication of Samuelson's piece in JEBO.
I mostly want to stay out of the debates here (I might post on econospeak about some
of it later). However, I thought I should address one matter that has come up, the
charge that it is somehow inappropriate for Samuelson to have raised the "charge of

I admit to having felt uncomfortable about it being brought up, but I suspect that many
readers are unaware of the fact that Samuelson, like Milton Friedman, is in a uniquely
appropriate position to discuss this matter. He was himself a victim of anti-Semitism,
having been turned down for a professorship at Harvard in the late 1940s, mostly because
of it, although his great defender, Joseph Schumpeter, himself accused of anti-Semitism
in the cited paper by Melvin Reder, supposedly said that it was more a mattter of jealousy
on the part of the other Harvard colleagues of Samuelson's admitted brilliance. But it is
clear that Samuelson himself believes it was mostly due to anti-Semitism.

As a matter of fact, in the end, Samuelson largely concurs with Reder, that of the three whom
he looked at, the case was probably strongest against Keynes, whom Samuelson admired and agreed
with on substantive economic matters (see the discussion in the text where he favors Keynes's
positions on macroeconomics over Hayek's), with it being the weakest against Hayek, whom Samuelson
describes as "being the one of the three who at least tried to grow beyond his early conditioning,"
even if Samuelson seems to suggest that he did not fully succeed, which I can understand some will
find as still unacceptable smearing of Hayek. In any case, as a victim of anti-Semitism himself and
someone who knew all three of these famous economists, I do think it is not unacceptable for him to
weigh in on this controversial "ad hominem" matter on his own for the historical record.

(Oh, regarding Friedman, he was turned down for a reappointment at the (progressive) University of
Wisconsin in 1940, with anti-Semitism having long been alleged as a major factor, although the degree
to which it was remains a point of major dispute.)

I’m wondering what if someone in academia would afford himself a statement along the lines “it’s a vulgar mistake to think that most slaves in the South were miserable†?
Would it stay in a textbook for numerous editions? Would he be awarded a Nobel? Would colleagues prize his brilliance? Discuss the comparative degree of egregiousness of the statement?

"In any case, as a victim of anti-Semitism himself .."

That's jumping to conclusions, isn't it? All you demonstrated was that he thought himself to be a victim of anti-Semitism, based on some very sketchy evidence. Being turned down for a Havard professorship is a common enough occurence, after all.

Secondly, your casual assumption that even real victims of discrimination are the ideal people to detect prejudice in others is unwarranted. As a rule they are prone to seeing bigotry where none exists.

Interesting I think:

"I do think it is not unacceptable for him to
weigh in on this controversial "ad hominem" matter on his own for the historical record".

Samuelson can opine on whatever pleases him. But it does seem somewhat extraordinary that he can smear the long-dead Hayek as an anti-semite on the basis that he, Samuelson, was rejected for a position at Harvard - possibly because he was Jewish. I suspect, however, that Samuelson is hardly unique in that regard. Many, many individuals have been rejected for positions at Harvard (and other places too) for all sorts of reasons.

Greg Ransom wrote above:

"Reder's discussion of Hayek in the context of the anti-semitism of Keynes and Schumpeter is noteworthy mostly for its smear quality and its lack of substance on the subject of Hayek.

Hayek is smeared as an anti-semite for noting a sociological fact about the assimilation of different waves of different economic classes of Jewish immigrants into Vienna. The same sociological fact has in some form can be identified concerning different waves of almost any immigrant population in almost every country in the world."

Ransom is exactly right. I am both Jewish and a great fan of Hayek. I had known that Hayek spent lots of time with Jewish people in Vienna -- see, e.g. the discussion in Jerry Muller's book, The Mind and the Market (an excellent book, by the way). Reder points to not a single bit of evidence of antisemitism on Hayek's part. His article is the worst kind of smearing by association. His method of argument is as follows: Hayek said A, Keynes said B, B is much worse than A, but they have some similarity, so Hayek is also antisemitic. Give me a break. In all of these cases, the A seems entirely innocent. I would say that Reder operates in the following way: He assumes that Hayek is antisemetic and then attempts to see if he can read Hayek's statements as consistent with antisemetism. That is unfair, not accurate, and really a slander.

Mike R.,

I agree (and Samuelson does too), that the evidence that Hayek was
anti-Semitic is at best extremely weak. But your argument in defense
does not cut it. "Some of my best friends are Jewish" was always the
worst self-defense by anti-Semites, and Keynes could have made the
same argument as well. It does get down to whether or not Reder was
unfairly interpreting statements by Hayek or not, which is a different
matter, and not one specifically addressed very well here by anybody.

I appreciate that Greg and others may consider
Samuelson's giving Hayek only a "B" on this mattter to be unfair or
inappropriate. But PAS is largely defending him on the matter and
saying he was better than either Keynes, whom he admired,or his friend
and defender, Schumpeter. I see an awful lot of excessive whining
going on here on this matter.

We should also encourage libertarians to think far beyond Hayek.

Hayek wrote: "The effective limitation of power is the most important problem of social order" (The Political Order of a Free People, p. 128) and "The chief evil is unlimited government, and nobody is qualified to wield unlimited power" (The Constitution of Liberty, p. 403.)

But it is in error to call this the "most important" or "chief" evil. It is time to add more.

First, unlimited power is a mere subdivision of the general problem of overcentralization.

More important, overcentralization isn't the only problem. There are at least three: (1) overcentralization, (2) overspecialization, and (3) the uncertain outer environment.

In current parlance, #2 overspecialization isn't usually considered to be a problem. In the economy, for example, it brings us many different goods and services.

But each one of us spends most of the time looking at very different things to train for, and compete in, different jobs. This has two bad effects, indeed they are increasingly very bad effects: One is a loss of general knowledge about the world. The other is that the knowledge that remains in common, i.e. our common culture, gets thinner and simpler.

Hayek believed that markets will best solve the problem of incomplete information (the "calculation debate.") Nowadays, "information economists" hope that the web will do it. Again, both are incorrect. The problem isn't access to information, the problem is the permanently limited attention-time to absorb it, while the amount is exploding.

#3, the outer environment, remains uncertain because rational analysis cannot predict it exactly, if it can predict it at all. (There is a list of different reasons why: inabilities in modelling; n-body calculation problems; deterministic chaos; problems in real measurement; logic of theory verification, etc. etc.)

This didn't matter when there was plenty of stuff to exploit. But now we're running up against resource limitations, and with no hard evidence that technological ingenuity can continue to keep pace with the logarithmic depletions.

We all want liberty. But until libertarians go beyond #1 above, and start to incorporate #2 and #3 as equal problems, they will remain propounders of an emotional attitude, not an intellectual approach.

No, Barkley. I think you're complaining too much. Sameuelson was turned down at Harvard - for reasons that may or may not have been good. You have alleged that this was due to anti-semitism (to be fair so have others). There is prima facie evidence for this - but nothing more. Indeed we read that Schumpeter (also smeared in the footnote, you chose to publish, as an anti-semite) argued for PAS, while another 'known anti-semite' made the decision to reject him. So we are far more likely to be seeing evidence of an additional animosity to a charge of anti-semitism. The real problem, however, is that this incident is being used to justify a claim that Hayek was anti-semitic. But Hayek was not involved at all. Furthermore, even if this incident never occured PAS would have encountered anti-semites throughout his life and would have some experiences of anti-semitism. Yet again that provides no evidence that Hayek was an anti-semite. So the criticism of you stands, you have published a smear without any evidence. Your defense fails. PAS may well be sensitised to anti-semitism but that is a necessary but not sufficient ground for believing the charge. I don't recall ever reading Friedman saying Hayek was an anti-semite. But I do recall reading in Johan van Overtveldt's "The Chicago School" that Friedman argued against Hayek being in the economics department at Chicago.

Your best defense, I would have thought, is Samuelson's own defense - old people should be allowed to say what they want about their old friends.

I'm sorry, but when you're Paul Samuelson, and you're applying for a position in economics, and you don't get it, you ALSO don't get to claim antisemitism. In order for antisemitism to be a factor, there must be evidence for it beyond your own incompetence, of which Samuelson has, in spades.

Bruce Caldwell's biography of Hayek describes Hayek breaking with some of his mentors and associates in Vienna specifically because he rejected anti-Semitism. Caldwell seems to have done a pretty careful job of research in general, so I would like to see a shred of evidence of anything Hayek did or said that could be construed as anti-Semitic before I would credit Samuelson's sleazy cheap shot.

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