Introduction

The following article will be of interest to anyone drawn to the power of ideas and how "intellectuals" use them over the course of time to influence the public debate about issues of economic and social policy. The economic ideas expressed in the article itself will probably excite a certain amount of controversy; we neither endorse nor reject them. We are interested in what the author has to say about the interaction of ideas, intellectuals and society.

In April 1945, Reader's Digest published the condensed version of Friedrich Hayek's classic work The Road to Serfdom. For the first and still the only time in the history of the Digest, the condensed book was carried at the front of the magazine rather than the back.

Among the many who read the condensed book was Antony Fisher. In his very early thirties, this former Battle of Britain pilot turned stockbroker turned farmer went to see Hayek at the London School of Economics to discuss his concern over the advance of socialism and collectivism in Britain. Fisher feared that the country for whom so many, including his father and brother, had died in two world wars in order that it should remain free was, in fact, becoming less and less free. He saw liberty threatened by the ever-growing power and scope of the state. The purpose of his visit to Hayek, the great architect of the revival of classical liberal ideas, was to ask what could be done about it.

"My central question was what, if anything, could he advise me to do to help get discussion and policy on the right lines... Hayek first warned me against wasting time-as I was then tempted-by taking up a political career. He explained his view that the decisive influence in the battle of ideas and policy was wielded by intellectuals whom he characterised as the secondhand dealers in ideas'. It was the dominant intellectuals from the Fabians onwards who had tilted the political debate in favour of growing government intervention with all that followed. If I shared the view that better ideas were not getting a fair hearing, his counsel was that I should join with others in forming a scholarly research organisation to supply intellectuals in universities, schools, journalism and broadcasting with authoritative studies of the economic theory of markets and its application to practical affairs."

Fisher went on to make his fortune by introducing factory farming of chickens on the American model to Britain. His company, Buxted Chickens, changed the diet of his fellow countrymen, and made him rich enough to carry out Hayek's advice. He set up the Institute of Economic Affairs in 1955 with the view that:

"[Those carrying on intellectual work must have a considerable impact through newspapers, radio, television and so on, on the thinking of the average individual. Socialism was spread in this way and it is time we started to reverse the process."

He thus set himself exactly the task which Hayek had recommended to him in 1945.

Soon after that meeting with Fisher, Hayek expanded on his theory of the influence of intellectuals in an essay entitled 'The Intellectuals and Socialism', first published in the Chicago Law Review in 1949 and now republished by the Institute of Economic Affairs. According to Hayek, the intellectual is neither an original thinker nor an expert. Indeed he need not even be intelligent. What he does possess is:

a) the ability to speak/write on a wide range of subjects; and b) a way of becoming familiar with new ideas earlier than his audience.

Let me attempt to summarise Hayek's insights:

1. Pro-market ideas had failed to remain relevant and inspiring, thus opening the door to anti-market forces.

2. Peoples' knowledge of history plays a much greater role in the development of their political philosophy than we normally think.

3. Practical men and women concerned with the minutiae of today's events tend to lose sight of long-term considerations.

4. Be alert to special interests, especially those that, while claiming to be pro-free enterprise in general, always want to make exceptions in their own areas of expertise.

5. The outcome of today's politics is already set, so look for leverage for tomorrow as a scholar or intellectual.

6. The intellectual is the gatekeeper of ideas.

7. The best pro-market people become businessmen, engineers, doctors and so on; the best anti-market people become intellectuals and scholars.

8. Be Utopian and believe in the power of ideas.

Hayek's primary example is the period 1850 to 1950, during which socialism was nowhere, at first, a working-class movement. There was always a long-term effort by the intellectuals before the working classes accepted socialism. Indeed all countries that have turned to socialism experienced an earlier phase in which for many years socialist ideas governed the thinking of more active intellectuals. Once you reach this phase, experience suggests, it is just a matter of time before the views of today's intellectuals become tomorrow's politics.

The Intellectuals and Socialism was published in 1949 but, apart from one reference in one sentence, there is nothing to say it could not have been written 40 years later, just before Hayek's death. It might have been written 40 years earlier but for the fact that, as a young man, he felt the over-generous instincts of socialism. When Hayek penned his thoughts, socialism seemed triumphant across the world. Anybody of enlightened sensibility regarded themselves as of 'The Left'. To be of 'The Right' was to be morally deformed, foolish, or both.

In Alan Bennett's 1968 play Forty Years On, the Headmaster of Albion House, a minor public school which represents Britain, asks: 'Why is it always the intelligent people who are socialists? Hayek's answer, which he expressed in his last major work, The Fatal Conceit, was that 'intelligent people will tend to overvalue intelligence'. They think that everything worth knowing can be discovered by processes of intellectual examination and 'find it hard to believe that there can exist any useful knowledge that did not originate in deliberate experimentation'. They consequently neglect the 'traditional rules', the 'second endowment' of 'cultural evolution' which, for Hayek, included morals, especially 'our institutions of property, freedom and justice'. They think that any imperfection can be corrected by 'rational co-ordination' and this leads them 'to be favourably disposed to the central economic planning and control that lie at the heart of socialism'. Thus, whether or not they call themselves socialists, 'the higher we climb up the ladder of intelligence ... the more likely we are to encounter socialist convictions.

Only when you start to list all the different groups of intellectuals do you realise how many there are, how their role has grown in modem times, and how dependent we have become on them. The more obvious ones are those who are professionals at conveying a message but are amateurs when it comes to substance. They include the 'journalists, teachers, ministers, lecturers, publicists, radio commentators, writers of fiction, cartoonists, and artists'. However we should also note the role of 'professional men and technicians' who are listened to by others with respect on topics outside their competence because of their standing. The intellectuals decide what we hear, in what form we are to hear it and from what angle it is to be presented. They decide who will be heard and who will not be heard. The supremacy and pervasiveness of television as the controlling medium of modern culture makes that even more true of our own day than it was in the 1940s.

There is an alarming sentence in this essay: '[I]n most parts of the Western World even the most determined opponents of socialism derive from socialist sources their knowledge on most subjects on which they have no first-hand information'. Division of knowledge is a part of the division of labour. Knowledge, and its manipulation, are the bulk of much labour now. A majority earns its living in services of myriad sorts rather than in manufacturing or agriculture.

A liberal, or as Hayek would always say, a Whig, cannot disagree with a socialist analysis in a field in which he has no knowledge. The disquieting theme of Hayek's argument is how the fragmentation of knowledge is a tactical boon to socialists. Experts in particular fields often gain 'rents' from state intervention and, while overtly free-market in their outlook elsewhere, are always quick to explain why the market does not work in their area.

This was one of the reasons for establishing the IEA and its 100-plus sister bodies around the world. Hayek also regarded the creation of the Mont Pelerin Society, which first met in 1947, as an opportunity for minds engaged in the fight against socialism to exchange ideas-meaning, by socialism, all those ideas devoted to empowering the state. The threat posed by the forces of coercion to those of voluntary association or spontaneous action is what concerned him.

The struggle has become more difficult as policy makers have become less and less willing to identify themselves explicitly as socialists. A review of a book on socialism which appeared in 1885 began:

"Socialism is the hobby of the day. Platform and study resound with the word, and street and debating society inscribe it on their banners."

How unlike the home life of our own New Labour! Socialism has become the 's' word, and was not mentioned in the Labour Party's election manifesto.'

Socialism survives, however, by transmuting itself into new forms. State-run enterprises are now frowned upon, but the ever-expanding volume of regulation-financial, environmental, health and safety-serves to empower the state by other means.

Part of Hayek's charm is the pull of his sheer geniality. He is generous and mannerly in acknowledging that most socialists have benign intentions. They are blind to the real flaws of their recipes. Typically, Hayek ends with a point in their favour: '[I]t was their courage to be Utopian which gained them the support of the intellectuals and therefore an influence on public opinion'. Those who concern themselves exclusively with what seems practicable are marginalised by the greater influence of prevailing opinion.

I commend to you Hayek's urge not to seek compromises. We can leave that to the politicians. 'Free trade and freedom of opportunity are ideals which still may arouse the imaginations of large numbers, but a mere 'reasonable freedom of trade' or a mere 'relaxation of controls' is neither intellectually respectable nor likely to inspire any enthusiasm'.

Most of the readers of this paper will be Hayek's secondhand dealers in ideas'. Conceit makes us all prone to believe we are original thinkers but Hayek explains that we are mostly transmitters of ideas borrowed from earlier minds (hence secondhand, in a non-pejorative sense). Those scholars who really are the founts of new ideas are far more rare than we all suppose. However, Hayek argues that we, and the world, are governed by ideas and that we can only expand our political and policy horizons by deploying them.

He was supported in this view - and it was probably the only view they shared - by John Maynard Keynes. In 1936 Keynes had concluded his most famous book, The General Theory of Employment, Interest and Money, with these ringing words:

"... the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist...Soon or late, it is ideas, not vested interests, which are dangerous for good or evil."

Of course, this was true of no one more than of Keynes himself, whose followers were wreaking havoc with the world's economy long after he had become defunct. But it was also true of Hayek. It was Hayek's good fortune to live long enough to see his own ideas enter the mainstream of public policy debate. They were not always attributed to him: they were described as Thatcherism, or Adam-Smith liberalism, or neo-conservatism, but he was responsible for their re-emergence, whether credited or not. We received a striking demonstration of this at the IEA in 1996 when we invited Donald Brash, the Governor of the Reserve Bank of New Zealand, to give the prestigious Annual Hayek Memorial Lecture on the subject of 'New Zealand's Remarkable Reforms'. He admitted that, although 'the New Zealand reforms have a distinctly Hayekian flavour', the architects of them were scarcely aware of Hayek at all, and Brash himself had never read a word of Hayek before being asked to give the lecture.

The IEA can claim some victories in the increasing awareness of classical liberal ideas and ideals. It is hard to measure our influence, yet, if we awaken some young scholar to the possibility that the paradigms or conventions of a discipline may be flawed, we can change the life of that mind forever. If we convince a young journalist he can do more good, and have more fun, by criticising the remnants of our socialist inheritance, we can change that life. If we persuade a young politician he can harass the forces of inertia by tackling privilege and bureaucracy, we change the course of that life too. The IEA continues in its mission to move around the furniture in the minds of intellectuals. That includes you, probably.

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21st Century Learning Initiative

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