Laski, Hayek, Keynes, and the

Creation of Contemporary Politics

Prof. Kenneth R. Hoover

The central institutions of our society, the government and the economy, have become, in contemporary politics, objects of ideology. Rather than being perceived as entities that contain processes and practices of a diverse and complicated nature, they have become, like the gods of Greek mythology, actors imbued with motivation, an inner nature, and designs upon our individual well-being. While the reality of governments and economies is that they vary enormously in the range and moral content of their activities, the ideologized version ascribes uniform and predictable qualities to them -- qualities that create reassurances and threats evocative of public support and opposition. These politicized responses undermine the ability of citizens to understand how these institutions work, and what new possibilities may be found within them.

This ideologizing of institutions borrows heavily from the work of three powerful thinkers and political activists of the 20th century: Harold Laski (1893-1950); Friedrich Hayek (1899-1992), and Maynard Keynes (1883-1946). Harold Laski argued for a democratically responsive state that would replace capitalism with a socialized economy. Laski shaped the interwar approach of the British Labour Party leading up to its historic victory in 1945. Friedrich Hayek celebrated the market and depreciated governmental regulation. At first dismissed, Hayek finally came to eminence as the founder of the conservative revolt against the welfare state in the 1980's and 1990's. Maynard Keynes thought that intelligent policy-makers could bring the market and the state into harmony. He created a moderate form of political economy for the post-war politics of the West.

Laski, Hayek, and Keynes were colleagues and rivals beginning in the 1920’s through to the 1940’s. They interacted personally, in journals of opinion, and in policy-making arenas which makes the story all the more interesting. They also did more than any of their contemporaries to define the left, right and center of the political spectrum. The kernel of their legacies lay in their orientation to the basic institutions of modern society: the market and the government. They brought to a kind of ideological culmination the implicit institutionalist premise of utilitarian, socialist, and even Kantian forms of political economy. Where earlier forms of ideology centered on values such as individualism, justice, community, and class or nationalist solidarity -- these three targeted the role and mission of institutions as the essence of politics. They became the intellectual icons around whom were gathered many of Britain’s, and the West’s, major political actors.

l OF MEANINGS AND METHODS

Each of these three personalities has a life-story with developmental dimensions that are intertwined with historical moments of great consequence. I will look at each figure in a developmental perspective; that is, I will examine how each personality was formed in confronting the challenges that shape identity. I will consider the three critical markers of identity formation and change: the kinds of competencies or skills each came to have; the communities they were part of; and the commitments that defined their personal lives.

Drawing on the theoretical formulations and empirical research of Erik Erikson, John Bowlby, and Carol Gilligan, as well as the verification found in three decades of work by James Marcia and other social psychologists, I have formulated this threefold approach to identity analysis in The Power of Identity: Politics in a New Key (1997), and will apply it here. The intention is not to invoke detailed psychiatric evidence, but rather to see the contours and major features of each personality in a historical context. My sources are biographies, scholarly articles and books, the authors' writings, archival materials, and interviews. The objective is to understand the nexus between identity, ideas, and ideology.

I will seek to demonstrate a congruence between the ideas arising from a personal struggle for identity with the political needs of Britain in the thirties, the post-war era, and the latter third of the 20th century. What factors in the development of each of these personalities shaped the convictions that led them to become articulators of ideology? How did their convictions meet the ideological needs of mass publics at the time of their ascendancy?

As the pioneer of this approach, Erik Erikson, observed:

I will explore the relationships between personalities, ideas, and political change in search of an answer to the question as to how we came to ideologize the institutions of government in the particular way that characterizes contemporary politics. We can only begin to approach these questions in the space of this article, however some promising directions may be indicated.

I will suggest that there are two patterns in the stories of Laski, Hayek, and Keynes that provide clues to the connection between identity and ideology: firstly, the significance of developmental turning points or crises that shape fundamental attitudes. The orientation of an individual’s belief system arises from profound experiences that make a lasting imprint. Certainly for personalities of the force and stature of these three, the tenacity they display in working through an argument amidst great historical events suggests an extraordinary commitment to a basic position.

Secondly, we will see the role that the act of being in opposition plays in defining and limiting the cogency of ideology. Ideologies are most often discussed in terms of what they favor, rather than what they oppose. The analysis below will indicate why reversing those priorities may lead to a better understanding of the link between identity and ideology. As we consider the particular competencies that each person developed, the way that these fit with the communities they were part of, and the personal commitments that marked their maturation, we will begin to see how personal development and ideological formation proceed in tandem. In each case, the development of an oppositional view toward prevailing institutional practices can be seen to have emerged from this constellation of factors.

It is a cliché of psycho-history that there must, in each great person’s life, be some turning point that defines identity and shapes destiny. The paradigmatic case is Luther’s call to the priesthood in defiance of his father, and his subsequent confrontation of "the holy father" in Rome. Less dramatic, but perhaps as powerful, were the forces that shaped the lives and minds of Laski, and Hayek, and Keynes. As this exercise in identity analysis seeks to demonstrate, there are critical moments or phases that predict the direction of future beliefs and commitments. We can see the repetition of these forms throughout the careers of each person. By marking out the parameters of these forms, we can provide both a thematic analysis that makes sense of their lives, and an explanation as to why each person played such a powerful part in responding to the historic challenges that beset England and the industrialized world during the key decades of modernization.

Laski and Hayek, left and right on the spectrum of ideology, demonstrate the most obvious developmental crises. Raised in Manchester, Harold Laski was the second son of a prominent family active in the Jewish temple and in the affairs of the Liberal Party. For Laski, the revolt against his parents has been well documented and widely remarked upon by his principal biographers: Michael Newman (1993); Isaac Kramnick and Barry Sheerman (1993); and Kingsley Martin (1953). His was a two-edged revolt: directly against the authority of his father in a highly patristic cultural and familial environment, and no less directly, against the privileged circumstances of his upbringing.

Harold Laski's prominence came on the heels of a religious and social rebellion against a powerful and determined father. A sickly boy, he read William Morris's News from Nowhere in his teens which, along with the writings of the Webbs, introduced him to the hidden world of the poverty stricken. When the youthful Laski cast his searching eye upon the Liberal establishment of which his parents were an integral part, he found it hollow and he set out to remove the curse of inequality.

Having abandoned his religious faith in his early teens, Laski was repulsed by the strictures of religion and of the class system that he saw everywhere around him. At the age of 16, Laski fell in love with and, two years later, married a woman eight years older who was neither Jewish nor conventional in her beliefs and behavior. The marriage both alienated his family for a time, and created the basis for a lifelong commitment that was, by all accounts, the emotional foundation of Laski's ability to manage a huge volume of writing, involvement at the highest levels of British, and often American, politics, and a career as the most beloved of teachers.

Laski learned early to distinguish sharply between the mundane, imperfect world of his Manchester surroundings and "the more rational and just world that could be attained". This visionary idealism was complicated by the tensions of the Jewish experience in England, which was the subject of a youthful book, The Chosen People, an unpublished analysis accompanied by chapters of painfully self-reflective short fiction. He wrestled with the twin pressures of religious patrimony and youthful rebellion all the while as he constructed a version of democratic authority that would confront the class privilege he detected behind the appearances of the Liberal establishment.

Laski carried his enthusiasm for progressive causes to Oxford. The study of politics and history under the tutelage of Ernest Barker soon consumed his prodigious energies. His first activist experience as a young Fabian was with the suffrage movement; and he became an advocate of syndicalism as a way of empowering workers against a paternalistic state controlled by capitalists.

Forced by his parents to be separated during most of his college years, Harold and Frida Laski were re-united upon his appointment in 1914 to the faculty of McGill University in Montreal. Laski sought paid publishing opportunities in leading left-wing magazines, partly out of a need to pay for his daughter's medical bills while in Montreal. Through his political articles, he became a familiar voice among progressive intellectuals, a voice answered two years later by the call to an appointment at Harvard.

Laski's move to Harvard at the age of 23 came from his uncanny appeal for eminences such as Oliver Wendell Holmes, who regarded him as a son, along with Felix Frankfurter, and later, Louis Brandeis. Laski began to formulate a conception of pluralism as a kind of democracy of natural selection whereby the best talents among the people would be brought to the service of society. Laski’s advocacy of the Boston Police Strike, as well as his anti-war polemics, nearly cost him his position at Harvard. He was saved by the administration’s resolute defense of academic freedom, as he would be again at LSE when Maynard Keynes among others came to his public defense.

From 1920, Laski’s base was the London School of Economics where he upstaged the more conventional and conservative economists on the faculty. Laski, now reconciled with his family, provoked strong feelings of affection from students, ambivalence from colleagues, and distrust from much of the establishment. Increasingly radical in his politics, he became a powerful polemicist, confidant and nettlesome critic of prime ministers as well as of President Roosevelt, and a leader among British Labourites, in all the major political dramas of the 20's, 30’s, and 40's. As the American historian Carl Becker observed, Laski was "omnipresent and omnivocal" on the left.

The political target of his rebellion was the power of capital to define and control the lives of the working class. Laski's professional career encompassed the agitation against capitalism that characterized the late stages of the British empire, the catastrophe of World War I, the stock market crash, the Depression, and World War II. Each of these historical crises prompted the demand for class-based explanations, and each gave impetus to government led reforms.

In Laski’s view, World War I was the tragic revelation of the greed and violence that flows from capitalism. Struggles for independence by Indians and Africans were seen as legitimate democratic rejoinders to imperial exploitation. The depression demonstrated the instability of capitalism, and the inability of its patrons to confront the need for reform. The Second World War appeared to him as an opportunity for the advancement of a socialist agenda as the price for full working class mobilization in pursuit of victory.

In return for Labour participation in the coalition government of the war years, he lobbied at the highest levels for a permanent transition to socialist prescriptions such as nationalization of industries and economic planning. Laski’s grand plan was rebuffed by Churchill as well as by Atlee and the other Labour ministers of the coalition government. He fought back as the Parliamentary Labour Party pressed the government for implementation of the Beveridge Report which Laski saw as a preliminary to true socialism. The essential point is that there is no major event that is seen outside of the framework of class conflict.

In 1943, Laski was weakened by a nervous breakdown, and in 1944 Hayek’s Road to Serfdom names Laski in a direct attack on economic planning. Striving unsuccessfully to oust Atlee and other moderates from Labour Party leadership, Laski chaired the National Executive of the Labour Party when it defeated Winston Churchill in the election of 1945. In the new Parliament, 67 Labour M.P.’s. were Harold Laski’s former students. Creation of the National Health Service and a limited nationalization of rail, coal, and steel followed. Riding high as a Labour doyen, he came to grief in 1946 both by alienating the moderates who held actual power, and by undertaking a losing libel suit against a newspaper of Lord Beaverbrook's for reporting that he had advocated violent revolution. Perhaps broken from these experiences, he died of a lung infection in 1950 at the age of 56.

What Laski offered to Britain was a particular kind of identity carrying with it a set of ideas that addressed the major concerns of inter-war life. His message was, as he liked to summarize it, "No cake for anyone ‘til there’s bread for everyone." Rebellious against the traditions of his family, he was a class rebel whose speeches to trade union members opened with an apology for being born rich. He demonstrated a genius for political communication at both the elite and the mass levels. In his persona of the intellectual as workers’ advocate, and in his pluralist prescription, there was the assurance that democratic socialism could be achieved through the instruments of mass politics. The violence that blighted European politics could be kept at bay by a movement of the well-intended aiming for a pluralist democracy of socialist proportions. He proclaimed that in England, "We had it in our power to by consent that which in other nations has been done by violence."

The Left Book Club, the Labour Party, and the readership of Laski’s favorite journals of opinion could follow a path that he and others marked out. The path led away from the class-ridden past toward a future of socialist provision, equality, and the dynamism of a fully engaged working class committed to a new statist community. The old ruling class would, as he said at his libel trial, simply consent to their own "erosion" by "fading out of the picture in which (they) have been previously the most prominent part".

The essential symmetry here is between Laski’s personal rebellion that was at once thorough-going and yet moderated by strong bonds to his family and political culture, and the restrained form of English working class militance at a time when many of their continental brethren were being taken into camp by communist revolutionaries. The congruence is as striking as it is fateful for English politics of this period. A.J. P. Taylor points to Laski’s critical role in "remaking English social democracy and giving it its present form," Taylor states that:

The particular style of historical brinkmanship that led Laski repeatedly to suggest that revolutionary violence would be the alternative to change of the sort he recommended, has about it a deep-seated psychological determination to take on the world. It is reminiscent of the rude shock he administered to his parents and family over the question of his marriage and his unorthodox political views. Perhaps, in his libel trial, it was the collision between the dominant theme of his writings, which was "revolution by consent," and the minor theme of impending violence, that made the loss of the suit so personally devastating.

Harold Laski’s legacy was the legitimation for nearly fifty years of extensions of government power into the fields of industrial relations, health provision, comprehensive schemes to assure welfare, and the regulation and nationalization of all major sectors of the economy. Most of these initiatives might well have been taken without Harold Laski, but his role as advocate was vital in shaping public opinion, and no one can be sure that, absent Laski, the welfare state would have achieved anything like its highest degree of development. Aneurin Bevan attributed the 1945 victory to Laski's work in political education. His eminence in this field was recognized when he was asked to help draft the United Nations Universal Declaration of Human Rights.

Harold Laski also became the visible symbol in British politics for those, like Friedrich Hayek, who saw the welfare state as a way station on the slippery slope to serfdom, and the Declaration of Human Rights as an absurdity that undermined the concept of rights itself.

From a present perspective, the intellectual current that gave coherence and meaning to the politics of the left has been switched to the right, and to the service of ideas nowhere as clearly articulated as in the writings of Laski's LSE colleague for nearly 20 years, Friedrich Hayek. Hayek provided the intellectual grounding for the ideological shift from democratic socialism to free enterprise capitalism, and from the government as the preferred institution to its rival, the market.

For Friedrich Hayek, the analysis must be more tentative given the lack of biographical materials. While Keynes and Laski have been examined in detail by noted scholars who have combed the original sources, this has yet to happen with Hayek on the same scale. What we have, however, are interviews with those who knew him, his own fragmentary biographical reflections, and the observations of scholars familiar with his history.

Born in 1899, Friedrich Hayek was, like Laski and Keynes, a child of the end of the 19th century. As with Keynes, Hayek benefited from a doting father and a strongly supportive homelife. The comfort and tranquillity of Hayek’s upbringing were sharply disrupted by his World War I service in the Austro-Hungarian army. As a very young officer, he saw at first hand the inefficiency and confusion of a multi-national army engaged in trying to save an improbable empire. He comments on having seen "the great empire collapse over the nationalist problem. I served in a battle in which eleven different languages were spoken. It's bound to draw your attention to the problems of political organization". Returning from combat to the university, he found an intellectual world as chaotic as the battlefields he had just left. As Stephen Kresge comments in his introduction to Hayek’s autobiographical memoir:

Hayek’s experience as a young post-graduate in traveling to New York in 1923, where he spent time in the New York Public Library reading newspaper accounts that revealed the falseness of Austrian propaganda about the war, removed any remaining illusions about his national patrimony. Kresge concludes, "We can date Hayek’s skepticism toward the actions and motives of government from this point". This was the turning point that would lead him to reconsider the role of government and of the validity of its pretensions to rationalizing society.

As Erik Erikson remarks in Life History and the Historical Moment, we need to be able to see "a ‘great’ man’s crises and achievements as communal events characteristic of a given historical period". Hayek’s detachment from the intellectual universe of his upbringing was of a piece with the experience of other post-War Austrian intellectuals who came under the influence of Darwin, Freud, Wittgenstein, and Marx. Hayek’s own youthful agnosticism, as well as his skepticism about the philosophical basis for Marxism and Freudianism, left him without a system of thought.

As Hayek reflected in later years, he had, in the early 1920’s, become a man "in search of a theory, but didn't know yet what a theory really was." A book published in 1922 provided the intellectual context for his break with the Fabian Socialism of his youth. Ludwig von Mises, the foremost representative of a school of Austrian economists and philosophers, captured the energies of Friedrich Hayek for the battle against activist government in general, and socialism in particular. Mises' economics and Carl Menger's theory of the spontaneous generation of social institutions set out alternatives to fashionable thinking.

Over the next seventy years in more than 130 articles and 25 books, Hayek developed his theory, mobilized his followers, and carried the battle to his enemies, whether of the Keynesian center or of Laski's left, and, in so doing, defined a new position for the political right. Rejecting the received doctrines of European conservatism, and even some aspects of ‘rationalist’ versions of capitalism such as those put forward by Mises and Friedman, he ultimately moved the right to adopt his distinctive variant of classical liberalism.

The theory originates with Mises' economic critique of socialism, and moves on to reset the theory on a new philosophical basis crafted by Hayek from elements drawn from classical economics and contemporary theories of knowledge. The first impulse toward this theory was Hayek's dawning awareness that attempts to reconstruct social institutions so as to serve political ends were, however humane their intent, flawed by the limitations on human knowledge and reason. Even as a young man in America, he was dubious about such low order tinkering as was offered by the pragmatists and progressives of the time.

Returning to Austria in the early 1920’s, he was married at a time when inflation made a desired career in the diplomatic service financially untenable. He worked with Mises in a government bureau and then in setting up an institute to trace trade cycles, an enterprise that was to bring him in 1928 into contact with Maynard Keynes, director of a similar British institute. Hayek began to integrate his extensive knowledge of trade cycles with his view of monetary theory. Both his knowledge, and the classical orientation of his theory primed Hayek's critique of Keynes' Treatise on Money, published on Hayek's arrival in London in 1931. He had come initially to lecture at LSE, and was then offered a Professorship. Support for the move came from LSE's rising star, Lionel Robbins, who was interested both in integrating LSE's curriculum around a monetarist anti-Keynesian view of economic theory, and in countering the increasing influence of Laski’s leftism.

The battle that Hayek was recruited by Robbins to fight was joined immediately. In the early years of 1930’s, there were a series of sharp policy differences between Hayek and Keynes centering on whether government should act positively to deal with the crises of the economy. The publication in 1935 of Karl Popper's attack on doctrinaire forms of certainty in The Logic of Scientific Discovery gave Hayek an epistemological and methodological formulation that impelled him to apply his theory of knowledge to economic questions. In 1936, just when his colleague Laski's leftist militancy was peaking, Hayek lectured the London Economic Club on the relationships between economics and knowledge. The fact that markets utilize "an infinitely greater amount of information than the authorities can ever do" in directing production to desired ends makes markets inherently superior to governments as arbiters of the allocation of resources. This became the epistemological foundation for his attack on socialism.

The antagonist of Keynes in his effort to persuade the government to adopt pump priming measures to counter the depression, Hayek and Robbins unraveled the reformist consensus that Keynes was trying to create. Keynes dismissed Hayek’s work, and attempted to sidetrack Robbins. Yet Robbins and the opposition carried the day, and Britain had no "New Deal" to ameliorate the harshness of class division in the depression.

With the outbreak of the war, the London School of Economics moved to Cambridge. Keynes arranged rooms for Hayek, and their personal relationship was restored. Their political and economic views were never reconciled even though Hayek’s ally, Lionel Robbins, came over to Keynes’s position on the role of government in the economy.

As disturbed by the rise of fascism as he was by socialism, Hayek came to see them as two sides of the same coin -- a view contrary to Laski's and Beveridge’s popular analysis that Fascism was the work of capitalists intent on defeating democratic socialism. Hayek saw both as efforts to construct social and economic outcomes through bureaucracies that inevitably, and dangerously, undermine the economic efficiencies that are achieved through the market's utilization of dispersed knowledge. These distortions lead to ever increasing inflation as governments make work for the unemployed and pay for it by printing money.

Hayek condemned both fascism and socialism as the logical result of the abdication of individual responsibility to government control. His polemical Road to Serfdom (1944) made his reputation as a political thinker of great consequence. By his own admission, the book also cut him off from professional economists because of his differences with Keynesianism, and from political opinion because of his anti-socialism. It was apparently read by Winston Churchill who used Hayek's arguments in the 1945 election campaign to attack the "Gestapo" state advocated by Laski and the Labour left. That strident phrase was thought to have contributed to Churchill’s defeat.

While the Road to Serfdom had its polemical uses, it was an attack, not on government per se, but on socialist conceptions of centralized planning. Where there was no threat to competition, as in the provision of basic minimums of income and welfare, or of services for which there can be no viable market, or no profit potential, there is a role for government action if the ends are socially worthy. Hayek was, however, increasingly distrustful of government's ability to resist the expansion of such activities. The analytical hinge of his argument turned on a critique of government as an instrument of rationality and moral improvement. He had distanced himself emphatically from most of his intellectual colleagues, and Labour’s victory in 1945 was to marginalize him further.

Coincidental with his newfound notoriety as a polemicist, Hayek had re-established personal contact with his first love, a cousin whom he had wanted to marry and, who, through mis-understandings on both parts, had married someone else. Her husband having died, Hayek arranged to meet her in Vienna. This led him to seek a divorce. His wife refused. Hayek went in search of a venue where he could complete the divorce without his wife’s consent. He was able to arrange a temporary appointment at the University of Arkansas for this purpose since that state’s laws were far more permissive than England’s. After a bitter struggle over the provision for his family, a settlement was agreed to. His two children and first wife, Helen "Hella" von Fritsch, were left with the aftermath of a scandalous divorce. His new wife, Helene "Lena" Bitterlich, had no financial resources. He was forced from this point forward, as he commented to his private secretary Charlotte Cubitt, "to do everything for money."

The episode perhaps provides a motivation for Hayek's advocacy in The Constitution of Liberty of "truly voluntary" relations between husband and wife with no role for governmental protection of aggrieved parties. He defends this as a deduction from his general position on individual freedom and governmental coercion. The divorce scandalized his colleagues, among them Lionel Robbins who had attempted unsuccessfully to arrange a mutually agreeable financial settlement. A political apostate and intellectual dissident, he now became a socially isolated figure.

Meanwhile his reputation grew among non-academic intellectuals and business leaders in the West, including the U.S.. Seeking kindred spirits, Hayek formed the Mont Pélerin Society in 1947 to gather together European and American conservative traditionalists, libertarians, and business leaders. He became an early associate of the Foundation for Economic Education and writer for The Freeman, a libertarian journal, that was widely distributed to influential capitalists. His popularity in these circles led to a series of grants by which he supplemented his income.

In 1950 Hayek was offered a Professorship at the University of Chicago -- not by the Economics Department for whom he was too controversial -- but by the inter-disciplinary Committee on Social Thought. This brought him into close contact with Milton Friedman and the developing "Chicago School" of free market economists. Critical of Friedmanesque exaggerations of the rationality of the marketplace, Hayek nevertheless fit well with the monetarist pro-capitalist bent of his colleagues.

At Hayek’s behest, one of his disciples formed the Institute of Economic Affairs in London in 1956 specifically to counter the legacy of Harold Laski and the Fabian Society. The Institute was destined to play a major role in advancing Hayek’s free market ideas and encouraging the development of a worldwide network of privately funded ideologically conservative think tanks. A generation of conservative politicians, among them Margaret Thatcher, have acknowledged the critical role of these institutions in shaping their views and making conservatism politically acceptable.

Moving from critique to his own prescription for politics, he wrote The Constitution of Liberty (1960). Here he elaborated functions of government that embrace a fair amount of what reform liberal, if not socialist, governments do: a safety net for the poor, and insurance for health care, accidents, and old age, along with disaster assistance and prevention of monopolies, environmental pollution and the depletion of resources. His rationale was that government should do what markets cannot do, though this was the minor premise of his assumption that the main purpose of the constitution is to limit democracies from transgressing the boundaries requisite to the maintenance of the market. Progressive taxation and the remediation of inequalities of opportunity were beyond the pale. The attraction for his followers was in his reduction of the state to an agency of coercion, and his parallel claim that morality attaches only to free individual choice -- in the use of capital, among other areas. A "constitution of liberty" designed to secure such freedoms from claims of social justice was his alternative to the post-war welfare state. In 1962, he left Chicago for the University of Freiburg where he continued to write on political themes. His early economic works were recognized in the award of a Nobel Prize in Economics with 1974.

The more moderate elements of his political views were lost in the enthusiasm with which the anti-socialist Keynesian critic was greeted by vanquished traditional conservatives as well as by disaffected leftists who were gravitating toward a libertarian position. The political necessity for the revival of the right was that conservative traditionalists form an alliance with advocates of free markets and individual liberty. For those in the "fusionist movement," Hayek was embraced as both a free market advocate and the defender of moral traditions. He links the two as inseparable:

The moralism is especially interesting in view of his divorce. It is a morality that takes its justification not from theology or ethics, or from any notion of responsibility for others, but rather from a test, "the comparative increase of population and wealth," that appears to be nothing more than materialism allied with a kind of relativism. In any event, an ever more appreciative, and well-financed, movement of rightist intellectuals, politicians, and corporate leaders provided the wherewithal to translate Hayek's pro-market theories into action.

In 1979, a political revolution narrowly succeeded in Britain. Margaret Thatcher used Hayek's views to pick up where Churchill left off in the attack on the British welfare state. Suited by background and temperament to the views of a "nation of shop-keepers," Thatcher (née Roberts) was the daughter of a grocer and Rotarian who had sent a congratulatory letter to the editor when Harold Laski’s newspaper libel suit had failed. Now dominated by huge unions, the Labour Party's position became ever less tenable as Britain's competitive position in the world economy eroded.

On the other side of the Atlantic, Ronald Reagan credited Hayek by name as in influence in shaping his victories over entrenched versions of liberalism in the Republican party as well as the Democrats. It was Hayek who supplied the answer for those who claimed that "social justice" required that there be a welfare state. How could it be that, in the name of equality, individuals would be treated differently by the state? That would surely be the result of any attempt at redistribution. Besides, if morality is an attribute only of individual voluntary acts, not of collective or coerced actions, then government actions are a-moral at best. As David Miller observes, "To the Thatcherites and the Reaganites of the 1970’s and 1980’s, he was what Marx had been to the socialists of the 1880’s and 1890’s".

In 1989, with the fall of the wall, Hayek and his followers saw the ultimate vindication of his critique of socialism . In 1991, President George Bush awarded Hayek the Medal of Freedom, the highest U.S. civilian decoration. Hayek was widely read by Eastern European dissidents and his ideas have a powerful presence in post-communist politics. Meanwhile the successors to Thatcher and Reagan tried to keep the fusionist coalition together, but internal factionalism between social conservatives and economic libertarians weakened their successors and, by the nineties, created an opening for a centrist opposition. Friedrich Hayek died in Freiburg in 1992.

Friedrich Hayek was to come into his own as an influential intellectual in a time of economic uncertainty coupled with the resolution of an ideological struggle that had consumed the post-war world. For many reasons, the culprit in the uncertainties of the time turned out to be government. As disillusioned by government regulation as Laski was by capitalist exploitation, Hayek became the intellectual tribune of the anti-statist reaction in the latter third of the 20th century.

Paradoxically, the Keynesian notion of governmental regulation of the economy, let alone Laski’s prescription for nationalization, led the public to blame the government for whatever went wrong in the economy whether it arose from bad decisions by corporate or union leaders or for whatever other reason. On many levels of public opinion, there was an increasing disenchantment with the lack of moral focus in government, and the corruption of the political process through tax breaks, subsidies, and provisions for the undeserving. Hayek supplied a critique of social justice claims, and a defense of common law morality, that legitimized a retreat from welfare provision while relieving capitalist consciences along with, perhaps, his own.

Maynard Keynes offers a more complicated picture than either Hayek or Laski. There are enough turning points and other events in his life to supply Donald Moggridge with material for 900 pages of biography, and Robert Skidelsky with more that twice that number. Yet there is agreement between these and other biographers, as well as those I interviewed, that Keynes’s identity development was deeply shaped by a constantly reinforced sense of the superiority of secular intellect over faith, custom, conventional sources of authority, and even morals. From a home life in a family immersed in Cambridge’s academic culture, to youthful triumphs at Eton, to undergraduate stardom at Kings College, followed by distinction in his examinations and in his first posting at the India Office, there is an unbroken record of attainment based on intelligence and a distinctive charisma.

The inevitable break with the realities of a society steeped in custom and tradition appeared first as a disjunction between this precious personal world and his everyday experience of life. He could seek refuge from those realities in his coterie at Eton, and in his commitment to the Apostles of the Conversazione Society at Kings. He could indulge his homosexuality within this close circle, and, when outside of it, by the occasional use of male prostitutes. While tolerated at Cambridge, the official view was codified in the law that made homosexuality a capital offense. The justification of this self-created universe of mind and morals was the unceasing preoccupation of Keynes and his friends. Their student papers, given and discussed long into the night, reveal the intensity of their search. The working through of these insights in Keynes’s philosophic writings provides the record of his self-justification.

The collision between this intellectual aerie and mundane reality became steadily more apparent as he moved into a position of real responsibility in the India Office and then, fatefully, in the Treasury Department in the First World War. The bitter break with the powers that shaped the settlement, and the trenchant and supremely self-confident critique of them and their work in The Economic Consequences of the Peace, are the drum rolls of an apostasy that would take Keynes into battle against the received wisdom on political economy throughout the twenties and thirties.

Now famous in his own right, he combined his political activities with his scholarly pursuits at Cambridge having turned down the directorship of the London School of Economics and Political Science. As Robert Skidelsky, his most exhaustive and intriguing biographer, comments, Keynes's views "expressed a mood of scientific and moral optimism, much at variance with the 'original sin' notions which underlay adherence to the automatic rules of the gold standard and conventional morality." Whatever theological significance his views may have had, as Donald Moggridge points out, Keynes’s epistemological approach was first and foremost about practicality. The same Keynes who wrote A Treatise on Probability was deeply involved with the currency of India, reparations from the Great War, monetary policy, and business cycle. Keynes’s political intent was to justify statesmen of a Liberal bent such as himself in making the world a better place to live. Armed with an analytical framework, Keynes rapidly came to be seen as a uniquely competent critic of traditional prescriptions for public policy.

Keynes’s pursuit of the aesthetic was nearly as intense as his devotion to better policy. In 1925, he perplexed his friends by marrying ballerina Lydia Lopokova, a Diaghalev star who brought her own professional and personal idiosyncrasy to the union. Diaghalev's ballet, 'the art form which defined the age,' was of a piece with the other intellectual and cultural revolutions of the teens and twenties.

This developing competence as a practical philosopher, his affiliations with the Bloomsbury community, along with his personal commitments, must be seen as the developmental context of his works on political economy. Almost immediately after World War I, there had appeared in Britain an economic phenomenon that would define the next two decades: persistent high unemployment. At 10% or above through the twenties, and much higher in the Great Depression, it became an impetus to left wing politics -- and to the re-examination of economic orthodoxy. The conventional view had been that unemployment in England would be resolved by the "normal" return of the labor market to equilibrium through lower wages. But normality of this sort would have acknowledged the subordination of England, and Europe, to American financial power; and it would have the gravest consequences for domestic politics.

Keynes, who had grown up with Alfred Marshall and A. C. Pigou literally at his dinner table, took it as his mission to find a new path for Britain and then the west. His disputes with the orthodoxies of Marshall and Pigou were not just arid academic debates or political skirmishes, but also confrontations with the authorities of his youth. It was as if intelligence could conquer everything -- even the verities by which he had been raised.

High unemployment and the depression, in Keynes's view, followed from Versailles, and from the ineptness of capitalists and government leaders alike in responding to new conditions. His response was the formation in his General Theory of Employment, Interest, and Money (1936) of a system of macro-economics that would permit the regulation of the economy such that massive unemployment would never again become a problem. The higher wages consequent on war spending could be sustained if only investment could be supplied in sufficient quantities to bring up the level of demand. The key was to unlock non-productive savings either through regulatory schemes, or by substituting government spending on public goods, paid for through borrowing and taxation, until prosperity itself would right the balance.

The Second World War was likewise the logical consequence of the failed settlement of the First War. His response this time was twofold: a salvation operation designed to preserve as much as possible of Britain's position in the world, and the creation of an institutional framework for international monetary stability that would avoid the mistakes of the Versailles settlement. He succeeded temporarily at the former, and for the longer term in the latter.

His legacy of the managed economy dominated the politics of the fifties, sixties, and seventies through to the elections of Margaret Thatcher and Ronald Reagan. As Richard Nixon said in his first term, "we're all Keynesians now." That legacy has been attacked by a resurgence of monetarist economics, and by the popularization of his old adversary Hayek's notions of the primacy of the free market over government intrusion.

Keynes's influence arose from the consequences of the settlement of WWI for Europe and the West, the disputes over responses to the depression, and the nature of post-war economies as they were shaped by new institutions and policy directions. He expressed in his own persona the desperation of a culture in crisis, the profound desire for a better, more certain path to security, and the assurance that intellectual mastery of economic forces was indeed possible. As Peter Clarke observes, there was a congruence between the Keynesian institutional prescription and the historical situation of Britain after World War II:

l THE OPPOSITIONAL BIND OF IDEOLOGY

As unusual as each of these persons’ individual histories may be, there are critical elements of their developmental patterns that meet the parameters of broadly shared experiences. These patterns predisposed each to perfect an ideological approach that captured mass sentiments at critical historical moments. But this observation does not yet tell us all we need to know if ideology is to be understood in a manner that permits us to control its worst effects. For that, we need to gain perspective on the workings of ideology more broadly.

Ideologies are customarily presented as affirmative beliefs in values, institutions, and policies. While all ideologies contain critiques of society, the burden of analysis for the student of ideology most often rests on determining the validity of suggestions for the improvement of the human condition. Marxism appears to be the exception in that the critique of capitalism is a good deal more carefully worked out than the plan for communism. The empirical basis of the former permits the claim that Marxist criticism is a form of analysis, while Marxist communism is an ideology.

In these present cases, the ideological residue of their work amounts to the celebration of the market in the instance of Hayek, of government for Laski, and of a progressive intellectualism with Keynes. While the followers of Laski and Hayek, in effect, ideologized institutions, Keynes’s project was to establish the credibility of a way of analyzing problems of public policy. In this, he sets up a counter-reaction. The elites who practice this method of analysis are seen from the left to be purveyors of middle-class values, and from the right as self-interested partisans. While the careful consideration of the views of each theorist would moderate and refine these stereotypes, those distinctions are lost in the heat of political battle. A few minutes listening to the gross characterizations of "the government," "the market," and "the elites" that comprise contemporary political discussion in the popular media would make the point.

What is striking, however, is that each characterization derives its impact from the presumed faults of the alternative. The disciples of Hayek assume the faults of government flow from a basic defect in the way information is used; Laski’s followers have no doubt that capitalism is exploitative by the nature of the profit motive; and, for contemporary Keynesians, the alternative to an intellectual elite is seen to be rule by a dogmatic and superstitious mass. For these reasons, I will now attend to what it was that each was against. We are seeking clues to the dynamics of ideology, and the thesis here is that we will find them on the oppositional side, rather than the affirmative side, of their work.

I will begin with Laski, who illustrates the point most clearly. In his rebellion against capitalism, we search in vain for any particular understanding of the workings of an economy, of the ways that scarcity can be overcome and competing preferences resolved. Lionel Robbins, his student and then his colleague at LSE, noted his early impression of his teacher:

In place of explanations of the forces at work in the economy, we find stereotypes such as the following published near the end of Laski’s life:

While Laski has no trouble producing examples to buttress these claims, and they are pleasing to the ears of capitalism’s critics, there is no real attempt in his work to provide an alternative to the competitive model of interest satisfaction other than through consultation and, with it, the hoped for resolution of rival claims on a reasonable basis. There is a naiveté about the task of coordinating production to meet scarcity that is unrelieved by any effort to address the concrete realities of supply and demand.

Laski's zeal made it impossible for him to comprehend the moderation of Atlee's program for Britain, and he used up his credit with many on the left in ill-tempered criticisms of the work of the Atlee cabinet. In this loss of acuity about the institutional and cultural targets of criticism, we have what I term the oppositional bind of ideology. Deriving, as such forceful opposition does, from developmental crises of great consequence, we need not be surprised that this is the blind side of ideology. Powered by emotion rather than intellect, opposition of this sort leads to blinkered judgment.

Had Harold Laski been less in need of self certainty about the rightness of his rebellious course as a young person, he might have turned his powerful intellect more carefully upon the nature of the economic system that produced the inequalities he confronted. He would not have indulged in such generalizations about capitalism as: "It implies a distribution of property at no point referable to moral principle. It means waste and corruption and inefficiency." Had Laski examined the processes of entrepreneurship and wealth creation as carefully as he searched out rationales for reconciling the institutions of government with the political aspirations of the working class, he might have assembled a lasting contribution to political and economic theory. As it is, his intellectual legacy has disappeared, and the failures of the British left in dealing with the dynamics of economics led to eighteen years of conservative rule and the remaking of Labour’s program.

Similarly with Hayek, we have the benightedness of his views about the workings of politics and government. His famous assertion that planning puts a strain on information gathering permits him to dismiss, rather than to analyze, what governments in fact do. Those whom I interviewed agreed that he was remarkably unrealistic about how modern mass democracies actually work. Ralph (Lord) Harris, Founding President of the Institute for Economic Affairs, remembered Hayek’s suggestion that the National Health Service be abolished, to which Thatcher responded that it would cost her the Prime Ministership. Ralf (Lord) Dahrendorf, former Director of LSE and author of its centennial history, recalled an incident where Hayek upbraided Thatcher for socialist tendencies in her willingness to retain some aspects of government activism. He noted that Hayek was given a high honor and "shelved" by the conservative government. Again, looking at Hayek’s near final words on the subject:

There is precious little here that would explain why societies with highly developed political systems have generated cultural, and indeed economic, enterprises of great sophistication and scope, while those that lack developed governments have remained at subsistence levels.

The intensity of Hayek’s condemnation of government planning appears to lead to exaggerated counter-claims for the market:

This rather places in jeopardy all exercises of planning whether by governments or corporations and eliminates any consideration of the role of expert analysis and shared intelligence in estimating parameters, assessing experience, and forecasting future developments. These forms of activity are the stuff of corporate planning as well as government regulation. While Hayek distinguishes the two by the government’s access to the means of coercion and the pervasiveness of its power, the distinction would be puzzling to those fired by a corporation without recourse, as well as to those familiar with the means of political or juridical response to unpopular or unconstitutional exercises of governmental power. The procedures by which democracies aggregate and articulate people's desires and aspirations are derided when they are not dismissed. The fact that public power is accountable through constitutions and elections, while private power is far less restrained as a form of coercion is downplayed or ignored.

As Michael Oakeshott, whom Hayek thought of as an ally, wrote of Hayek's approach to politics: "the main significance of Hayek's Road to Serfdom -- (is) not the cogency of his doctrine, but the fact that it is a doctrine. A plan to resist all planning may be better than its opposite, but it belongs to the same style of politics." What Hayek understood about the state was indelibly shaped by deductions from a general theory animated by a series of disillusioning experiences wherein governments appeared to be the culprits. His undergraduate law degree oriented him to the Germanic conception of the state and did little to prepare him for the realities of modern mass democracies. Hayek was heir to a Kantian tradition in which the role of the state was very clear: it was to be the "Rechtsstaat." As Andrew Gamble points out, Hayek learned that the state was supposed to be "a government of universal laws which prescribed strict limits for government intervention in civil society". He came to see the governments of his time, whether fascist, socialist, or even modern democracies, as both defilers of their true purpose, and underminers of the economic system. The theme of betrayal originates here.

Hayek visited upon politics a design for a constituted utopia that was derived from his vision of the market, and what is required for its sustenance. The denigration of political institutions, and the blanket endorsement of the market, that has followed on the rise of the right is just now playing out as an incapacity to address in any intentional fashion major problems of drugs, domestic abuse, the environment, and care of the young and the marginalized. As George Orwell observed in his review of The Road to Serfdom: "(Hayek) does not see, or will not admit, that a return to 'free' competition means for the great mass of people a tyranny probably worse, because more irresponsible, than that of the state."

With Maynard Keynes, the oppositional bind results from a dismissal of forms of knowledge outside his conception of rationality. Stupidity, defined so as to include all utterances not conforming to Keynesian probabilistic rationalism, was the target. The supply of his stereotypical characterizations of the less enlightened is indeed abundant. As Donald Moggridge, the editor of his collected works and author of Maynard Keynes: An Economist’s Biography, notes, Keynes was specific about seeing his own views as "sensible". He relegated other views of economics to the form of ignorance known as "self-interest". The essence of his objection here was to raw materialism, avarice, usury, and the "insatiable" demand for positional goods.

On the refusal of the conservatives to increase expenditures to counter the depression, Keynes declaimed:

A yet more specific example would be his review of Hayek’s book Prices and Production:

His denunciations of right and left were even-handed. He wrote to George Bernard Shaw:

Additional manifestations of ignorance, in his view, included nationalism and class war. All of these were forms of "madness" that afflicted leaders as well as the masses. The influence of these forces must be countered by the intervention of rational elites.

Keynes's campaign against ingrained stupidity was also personal. The personification of the opposition was the only student to best him in the Tripos at Cambridge: Otto Niemeyer. Keynes was particularly irritated at his second in Economics to Niemeyer. Keynes suggested it was because he knew more about economics than his examiners. Niemeyer passed up the India Office for the Treasury, thus opening the way to Keynes' assignment there. Otto Niemeyer became the quintessential formulator of the "Treasury view" against which Keynes fought in the 1920's and 1930's. At a famous dinner party debate in 1925, Churchill, then Chancellor of the Exchequer, pitted Keynes against Niemeyer on the question of returning to gold. Keynes's side lost, and Churchill took the fateful step that seriously aggravated the unemployment problem.

According to Keynes, laissez faire and free competition were "hypotheses" that less and less resembled the way the world works, and therefore were clearly not a sensible model for policy-making. Only with properly managed capitalism, might it be possible to fulfill basic needs so that there would be a release from the pressure of constant striving sufficient to permit a return to "sane wisdom."

In the field of social policy, labeled plainly in his writings as "sex and drugs," he thought prevailing public views were "mediaeval," and that new policies should be built upon what "civilized" opinion and practice of "educated and uneducated" folk in their private lives reveal. There is little room here for a positive valuation for any notion of natural law, or of divinely inspired morality.

All that said, in Keynes’s case, there was a progression to a more mature view of his early enthusiasm for rational motivations. In his 1938 memoir, "My Early Beliefs," he mused about the views of his Cambridge circle:

Peter Clarke cautions us against reading too much into this disavowal. The link between methodology and morals can indeed be found in his early work, and there were personal and historical reasons in 1938 for a recent heart-attack victim being somewhat skeptical of the human condition.

Keynes did remain a rationalist, however his maturation as a progressive intellectual consisted in realizing that there is no necessary linkage between individual rationality and social good. As he argued in supporting the public spending of the New Deal, "a course of behavior which might make a single individual poor can make a nation wealthy." As a philosopher, he concluded that a wider array of evidence had to be subjected to his probabilistic analysis than just the data of the statistician and the logician. Keynes came to realize that beneficial social action can only be attained by applying logic to the "order and pattern of life amongst communities [italics mine]" as he says in My Early Beliefs, and this provides the basis for intervention in individual behavior by institutions that make intentional and deliberative judgments on behalf of the community.

So Keynes’s My Early Beliefs represents, not a rejection of probabilistic act utilitarianism, but a maturation of its premises to incorporate a broader range of evidence into the calculation, namely "expectations," or, more broadly, "psychological forces," or even, in a more famous Keynesian phrase, "animal spirits." The point for progressives is whether there are ways of capturing the patterns manifest in these motivations as evidence that can be logically linked to consequences thus forming a basis for action.

Unlike Laski or Hayek, Keynes had the direct experience of both the market through his speculations and business operations, and the government through his brief, but highly instructive, tenure in the India Office and his later government service in the Treasury, in the armistice negotiations, and in numerous encounters with economic policy-making. Keynes saw plenty of stupidity in both realms, but it wasn't quite that the institutions were the problem so much as the analytic failures of those who made the decisions. He never really questioned the legitimacy of the institutions themselves. To pick up on John Stuart Mill's famous witticism, he tried to play Socrates to the pigs in both the market and the government. His faith in the policy-makers capable of applying his kind of rational analysis remained whole.

While there was progressive moderation in Keynes's understanding of admissible evidence about the order and pattern of life, for Hayek and Laski there is only a trajectory that leads to ever stronger antipathies, and ever greater claims for the institutions at the heart of their ideologies. Laski's conceptual attachment to notions of liberty weakened steadily as he embraced the state ever more closely in his quest to confront capitalism. By 1939, he was ready to admit that "only after the equal society has been attained can the process of pluralism come into view," and this required the takeover of the capitalist state by the Labour Party.

As for Hayek, Edward Crane, a leader among libertarian intellectuals and President of the Cato Institute, concluded that Hayek’s final views in The Fatal Conceit were so extreme that "reason turns out to be the béte noir of his thesis, though he offers an occasional disclaimer," and that "there is, regrettably, a reactionary undercurrent to Mr. Hayek’s final work." Hayek’s consultations with the Pincohet government in Chile, even over the objections of Margaret Thatcher, illustrate the extent of his dis-avowal of modern democratic governance.

However Keynes's views may have matured, there remains a legacy of disjunction between elite affinities for secular rationalism, on the one hand, and the religious and ethical mores of society, on the other. The failure of Keynes’s progressive heirs to effectively address these concerns for morality and developmental nurturance disables efforts to respond to the challenges of a pervasive media culture that erodes faith and undermines critical processes of human development. Public disillusionment with institutions and decision-makers is consonant with sagging rates of mass participation as well as the mobilization of moralist movements among the most disaffected.

m POLITICS, IDENTITY ANALYSIS, AND THE STUDY OF IDEOLOGY

We have arrived at the 21st century in a rather strange condition. Major wars seem to be a thing of the past. Ideological controversy has moved from the extremes of left and right into a center that satisfies few partisans, and bores most citizens. The irony is that the very institutions that have brought this peace, the government, and this prosperity, the market, are seen as the problem of our times. Government wants "your money" so it can force you to do otherwise than what you would choose -- and that wastefully. The market chews up people's security, and their environment, while concentrating wealth.

Yet most would agree on a moment's reflection that governments are capable of great good deeds, and are, in any case, absolutely essential to civilized living. Similarly, command economies, or corrupted political economies, that squash free enterprise and destroy the marketplace are the enemies of liberty. Why would anyone think that government is bad (or good) and that the market is good (or bad), when the evidence is there for all to see that either can be good or bad, and that political morality does not inhere in institutions, it arises out of the actions of citizens, producers, and consumers?

The successive targeting of capitalists in the marketplace, of politicians in government, and of elites in all spheres, as the perpetrators of plots against public well-being is perhaps inevitable. What we have seen here is how Hayek, Keynes, and Laski came to be icons of these struggles. All three illuminated our understanding even while they engendered reactions that complicated the tasks of dealing with the realities of complex societies. Hayek contributed cogently to changing perceptions of how markets work; Keynes was right about the Versailles settlement and right about the need for selective pump priming in the unsettled economies of his era; and Laski at least confronted the problems of making government responsive to the working class. It is unfair to hold Hayek, Keynes, and Laski responsible for the distortion of their views. However, as we have argued here, the distortion builds on tendencies found within their work.

The implications of the approach taken here for the study of ideology are that we must be fully aware of the link between identity and ideology if the phenomenon is to be seen whole. Analysts of ideology have an important role to play in bringing the power of knowledge to bear upon political behavior. As Michael Freeden observes, ideology is indeed the form of "thought-behavior" that connects most people with the world of policy, institutions, and procedures that constitutes politics. As he suggests, "Perhaps ideologies, as combinations of reason and emotion, come closer to the heart of politics itself. Thus scholarship devoted to understanding the identity-ideology linkage is intended to supplement, not to displace, analysis of the morphology of concepts, their historic origins and contextual grounding.

What identity analysis supplies to the student of ideology is an account of motivation, of its force and direction, so that the interplay of conceptual morphology, history, and context can be made more intelligible. It is the way that identity needs impel the "de-contestation" of concepts, in Freeden's terms, that demarcates the ideologist from the theorist or philosopher. In short, the conceptual approach deals with the parameters and constraints of conceptual discourse; identity analysis explains the agenda that political actors bring to the discussion.

While the oppositional bind may not be a universal feature of ideological behavior, it is surely one of the main types of linkage that we may expect to find. The identity-driven desire to confront some presumed obstacle to one's own, or society's, improved condition has its dangerous side precisely in the failure of analysis that characterized these cases. Albert Hirschman notes another such epistemologically dangerous pattern of linkage when he discusses the rhetorics of intransigence whereby both reactionaries and progressives tie their affirmative cases to arguments from inevitability. The politically convenient feature of such arguments is that they cannot be proved absent knowledge of the future. Our discussion of the tie between identity and ideology suggests that this turn to the inevitable is the resort of those whose need for advocacy has outrun the means of verification available to bolster their case. Laski’s forecast of violence as the inevitable alternative to socialism fits here, as does Hayek’s vision of the direct path to serfdom.

The danger of arguments impelled by the need to oppose, or by the resort to the inevitable, are particularly great when their focus is on institutions of the complexity and versatility of governments and markets. Institutions do not act in a unilinear fashion as Hayek and Laski were prone to argue, nor are elites entirely predictable as the critics of Keynes would assume. Institutions and elites are themselves capable of learning-behavior. As the American sociologist John Campbell demonstrates, institutions make their way by a process of interpretation, interaction and bricolage, or the deliberate adjustment and combination of prior institutional forms to address new problems.

The evolutionary changes of the market in its cultural and political context are a prime illustration. Monetarist economics are increasingly seen as a partial, and partisan, approach that needs, at the least, to be supplemented by attention to fiscal and budgetary strategies for maintaining economic equilibrium and addressing the distributive aspects of the economy. Keynes’s mature progressivism supplies electorates and their leaders with a way of approaching this dynamic. When ideologists, whether right, left, or even center, overlook these adaptive modalities, we have the recipe for the excesses that are so evident in 20th century political and economic history.

The translation of developmental challenges arising from changing commitments, communities, and competencies into ideological positions becomes most threatening when political leaders simplify creeds into slogans. As an illustration, Congressman Dick Armey, Majority Leader of the U. S. House of Representatives, proclaimed recently: "The market is rational, the government is dumb!" Such Hayekian ideologizing of institutions has the utility for politicians of distracting attention from the substance of policies that advantage the rich at the expense of the marginalized, but the even graver loss is to the meaning of democratic discourse.

Deliberate community decision-making is not optional if contemporary societies are to address their most critical policy problems. The full potential of institutional learning will be needed if this is to be done effectively. Democratic institutions make possible the kind of conceptual shaping and refinement that undermine ideological approaches and mediate between contending identities..