Ancap-tyan, Bitarch
At the “Constitution of Freedom” conference held on June 1 in Moscow, “Constitution of Freedom”, British economist John Meadowcroft gave a presentation titled “Is there a road to serfdom? A public choice analysis of Hayek’s most famous work”. The lecture was based on his joint article with André Alves, “Hayek’s Slippery Slope, the Stability of the Mixed Economy and the Dynamics of Rent Seeking”, published in 2014 in the journal Political Studies.
Meadowcroft analyzes the prediction formulated by Hayek in his famous political pamphlet “The Road to Serfdom” and shows that the prediction turned out to be incorrect: not only is minarchism unstable, but so is totalitarianism, whereas a mixed economy actually is stable. Using rich material, he demonstrates that today, the conditional norm is approximately 40-50% of GDP redistributed by the state. States that redistribute less strive to redistribute more, in full accordance with Hayek’s logic, while states that redistribute more face serious market inefficiency and social discontent—and after some time return to a stable state. Moreover, developed states that have reached this norm today confidently hold high positions in economic and political freedom rankings.
On June 13, Ved Neumann released a review in which he explained the phenomenon described by Meadowcroft through the hypothesis that the modern state is a form of secular religion. According to Ved, this explains, for example, why the stability of the welfare state is paradoxically provided by its opacity. Further, Ved predicts that the transparency brought about by the information revolution will indeed make this religion marginal, and the modern welfare state will not be able to survive this, being replaced by panarchy.
However, it makes sense to question the very thesis that the state stops expanding once it reaches a certain level of redistribution. Yes, it is true that direct levies cause discontent, and direct monopoly management of the economy undermines the foundation of economic growth. But in addition to the tax burden, there is also the regulatory burden, and many business representatives note that it can hinder work almost even more.
At the same time, by strengthening regulations, the state may even decrease the share of its presence in the economy. For example, with a single education standard and a single state exam, the state can boldly abandon the maintenance of schools: private schools will still be forced to engage in the same brainwashing, as the auditing authorities will demand of them. At the same time, it is unlikely that such a state of affairs will negatively affect the country’s position in freedom rankings—since ranking calculations evaluate access to education, not its content or the freedom to choose subjects.
State standards in many other sectors, from medicine to trade, or, for instance, vehicle technical inspections, can work in a similar way. All certification procedures can be extremely transparent and completely free of corruption (this is precisely what fundamentally distinguishes the first world from the third), but even the most pleasant packaging will only mask the continued movement along the same road described by Hayek.
So, the arrival of new transparency may not kill that very secular religion, but only lead to its reformation. Therefore, we would be better off assuming that no panarchy will build itself, and continuing our regular sermons.
