 I will start with my speech. I want to talk about the Hayek myth. As most of you know, I was once upon a time during my final high school years and my early student years, also a lefty. And when I gradually discovered the eras of the leftist creed, I looked around for alternatives and I found, based on their frequent mention in the press, as a principal antagonist and alternatives to everything socialist, Milton Friedman and Friedrich Hayek. And in fact, I found many good arguments in their writings to combat the predominant left at that time and it was through the gateway of Friedman and Hayek that I eventually then also discovered Mises and finally Rothbard. So I have to say that I owe something intellectually to both Friedman and Hayek. But that is not my topic. Instead, I want to pursue the question why it is that both Friedman and Hayek were presented then almost 40 years ago and still and even more so today, especially in Europe, but also in the United States, as the most radical opponents of all things left while, as I came to realize very quickly and will show shortly, Friedman and Hayek are actually part of the left, not of the traditional hardcore Marxist version of course, but in any case of the soft core social democratic welfare state variety of socialism and because of this, in my view, offer anything but a principled alternative to socialism and the left wing. Now one might call this the Friedman Hayek myth. Now here I want to confine myself only to half of this myth to the Hayek myth. Friedman in fact is far better known than Hayek. If you Google, he has about 30 million mentions and Hayek has close to 7 million. Friedman I think is partly better known than Hayek because he's really the better and clearer writer of the two in part because he's American, which always helps in this day and age. But I want to concentrate on Hayek and why do I want to concentrate on Hayek? Because in my estimation, Hayek is a more important thinker and he and his fame will last longer than Friedman's. For one, he is a better economist because while Friedman was still until his death in 2006, singing the praises of Greenspan and Bernanke, many people inspired by Hayek and by the Mises Hayek business cycle theory already foresaw the coming and still ongoing great recession. But more importantly because Hayek as an old world European is plainly the better educated and intellectually well rounded man. Whereas Friedman is essentially an economist-economist, Hayek is a true intellectual well read, not just in economics but in intellectual history, in psychology, philosophy, sociology and law. But it is not their technical economics that made both of them famous, but their excursions into the field of political theory. Accordingly, I will concentrate here on Hayek as a political theorist and more specifically on his constitution of liberty and his three volume law legislation and liberty which are generally regarded as Hayek's most important contributions to the field of political theory. First I want to show that despite many interesting things he might have to say, Hayek is fundamentally a muddled and confused thinker. This comes out most clearly when we examine his definitions and elaborations on the concept of freedom and coercion. Now Hayek defines freedom as the absence of coercion so far so good. However, contrary to a long tradition of classical liberal thought, he does not define coercion as the initiation of threat of physical violence against property and person. He does not define it as an attack against legitimately via original appropriation, production or voluntary exchange acquired property. Instead, he offers a definition whose only merit is its elusiveness and fogginess. By coercion, quote, we mean such control of the environment or circumstances of a person by another that in order to avoid greater evil he is forced to act not to a coherent plan of his own but to serve the ends of another. Or coercion occurs when one man's actions are made to serve another man's will, not for his own but for the other's purpose. And freedom is a state in which each agent can use his own knowledge for his own purposes. Now what you immediately note in this definition of freedom and coercion is this. This definition does not contain anything regarding actions, scares, goods and property. Rather, coercion refers to a specific configuration of subjective wills or plans or conflicting plans or thoughts or conflicting thoughts and expectations. Yet then, with these subjective descriptions, subjective terms, then it is useless for the following reason. First, it is entirely useless as a guideline for actions. That is, it is useless to answer the question, what am I allowed to do here and now if I do not want to commit a coercive act? Because in general, I do not know the will or the plans of others. And in any case, to know all other wills would be absolutely impossible. Even if I wanted to, I could never be sure from the outset that what I was planning to do would not coerce anyone. Yet individuals obviously must be permitted to act correctly prior to knowing anything about the plans of other people. And for this to be possible, the criterion employed to distinguish between freedom on the one hand and coercion on the other hand must be some objective criteria. It must refer to an event or a non-event that possesses a physical description and over whose outcome an actor must possess physical control. Second, Hayek's definition is also useless as a retrospective criterion of justice. That is, it cannot answer the question, is the accusation of A against B justified or who is guilty and who isn't guilty? And what sort of compensation or punishment is appropriate? Since Hayek's definition does not contain any physical, intersubjectively ascertainable criteria, his judgments are entirely arbitrary. As mental predicates, Hayek's categories of freedom and coercion are compatible with every real physical state of affairs. They possess no power whatsoever to make real distinctions in the real world. Correspondingly confused and contradictory then are Hayek's attempts to apply his definitions. In applying his definition, Hayek on the one hand reaches the conclusion that the initiation and threat of physical violence constitutes coercion. Good enough. The threat of force or violence occurs when armed bands of conquerors make the subject people toil for them when organized gangsters extort a levy for protection and so on. Good and fine. On the other hand, and I'll give you a detailed quotation on that in a minute, on the other hand, he classifies acts of the initiation or threat of physical violence such as compulsory military service or taxes as non-coercive provided only that the victim of such aggression could have reliably expected and adjusted to it. This is an outrageous thing to say and I'll give you the quote a little bit later. Moreover, on the one hand, Hayek identifies physical violence with coercion. On the other hand, he does not accept the absence of physical violence or damage as a criterion for non-coercion. Quote, the threat of physical force is not the only way in which coercion can be exercised. Even if A has committed no physical aggression against B or his property, he may nonetheless be guilty of coercion. According to Hayek, this is the case whenever A is guilty of omitted help that is whenever he has not provided B with goods or services that B had expected from him and regarded as crucial to my existence or preservation of what I most value. Now Hayek claims that only a small number of cases actually fit this criterion. He gives two examples. The owner of a mine in a mining town who decides to dismiss a worker allegedly coerces and likewise it is supposed to be coercive if the owner of the sole water supply in a desert is unwilling to sell his water or if he refuses to sell it at the price that the others deem fair. It should be obvious that it requires little imagination to recognize that Hayek's criterion is in fact all-encompassing. Any peaceful action a person may perform can be interpreted by others, indeed by any number of others as constituting coercion because every activity is at the same time always the omission of innumerable alternative activities that he could have performed and every omission becomes coercion if a single person claims that the execution of what he has not done the execution of the omission was crucial to the preservation of what I most value. Whenever cases of both omitted help and physical violence are categorically defined as coercion however then obviously inescapable contradictions must arise. If A's omission constitutes coercion toward B then obviously B must possess the right to defend himself against A's coercion yet B's only defense would be that he could employ physical violence against A who has omitted doing certain things but then acts of physical violence could no longer be classified as coercion rather physical violence would then be defense and in this case coercion would be the peaceful refusal to engage in an exchange and it would be also coercion if somebody attempted to defend himself against an enforced, violently imposed exchange on him. On the other hand, if physical violence were defined as coercion then B would of course not allowed to defend himself against an omissive A and if B nonetheless attempted to do so then the right to defense would rest with A but in this case of course omissions would not constitute coercion blatant contradictions. Now from these conceptual confusions stems Hayek's absurd thesis of the unavoidability of coercion and his corresponding equally absurd justification of government Quote, coercion however cannot be altogether avoided because the only way to prevent it is by the threat of coercion Free society has met this problem by conferring the monopoly of coercion on the state and by attempting to limit this power of the state to instances where it is required to prevent coercion by private persons. End of quote. Now according to both of Hayek's definitions of coercion this thesis is nonsensical if omitted help represents coercion then coercion in the sense of physical violence becomes necessary and not just unavoidable otherwise if the initiation and the threat of physical violence is defined as coercion it can be avoided first because each person possesses control over whether or not he will physically attack another and second because every person is entitled to defend himself with all his means against another's physical attack it is only unavoidable that so long as physical aggression exists there will also be a need for physical defense yet the unavoidability of defensive violence has nothing to do with the alleged unavoidability of coercion unless one confuses a categorical difference between attack and defense and asserted that the threat of defending oneself in the event of an attack is the same thing kind of thing as a threat of attacking now if physical violence is forbidden then it follows that one is allowed to defend oneself against it it is just absurd to classify attack and defense under the same rubric of coercion defense is to coercion as day is to night yet from the unavoidability of defense no justification for a government monopoly of coercion follows to the contrary a government is by no means merely a monopoly of defense that helps private individuals avoid otherwise unavoidable defense expenditures because the government must obviously tax people in order to have the means to defend other people and the government's monopoly of coercion thus includes in particular also the right of the state to commit violence against private citizens and their complementary obligation on the part of the citizens not to defend themselves against government attacks now but what sort of justification for a government is this that if a person surrenders unconditionally to an attacker he may save himself otherwise unavoidable defense expenditures now on to the theme of government and its functions now according to Hayek government is necessary to fulfill the following tasks not merely law enforcement and defense against external enemies but in an advanced society government ought to use its power of raising funds by taxation to provide a number of services which for various reasons cannot be provided adequately by the market now since at all times an infinite number of goods and services that exist which the market does not provide Hayek hands government here essentially a blank check among these are protection against violence epidemics or such natural forces as floods and avalanches but also many of the amenities which make life in modern cities tolerable most roads the provisions of standards of measure and many kinds of information ranging from land registers maps and statistics to the certification of the quality of some goods or services offered in the market additional government functions are the assurance of a certain minimum income for everyone government should distribute its expenditures over time in such a manner that it will step in when private investment flags it should finance schools and research as well as enforce building regulations, pure food laws the certification of certain professions the restrictions on the sale of certain dangerous goods such as arms, explosives, poisons and drugs as well as some safety and health regulations for the processes of production and the provision of such institutions such as theaters, sports grounds and so on there's hardly anything left and it should make use of the power of eminent domain that is of expropriation to enhance the public good moreover it generally holds that there is some reason to believe that with the increase in general wealth and of the density of population the share of all needs that can be satisfied only by collective action will continue to grow further, government should implement an extensive system of compulsory insurance allegedly coercion intended to forestall greater coercion public subsidized housing is a possible government task and likewise city planning and zoning are considered appropriate government functions provided that the sum of the gains exceeds the sum of the losses only Hayek knows how he can calculate this and lastly the provision of amenities or opportunities for recreation or the preservation of natural beauty or of historical sites or scientific interest natural parks, nature reservations and so on are also legitimate government tasks in addition, Hayek insists that we recognize that it is irrelevant how big government is or if and how fast it grows what alone is important is that the government actions fulfill certain formal requirements quote it is the character rather than the volume of government activity that is important taxes as such and the absolute height of taxation are not a problem for Hayek taxes and likewise military compulsory military service lose their character as coercive measures and now the quote if they are at least predictable and are enforced irrespective of how the individual would otherwise employ his energies this deprives them largely of the evil nature of coercion if the known necessity of paying a certain amount of taxes becomes the basis of all my plans if a period of military service is a foreseeable part of my career then I can follow a general plan of life of my own making and am as independent of the will of any other person as men have learned to be in society so if you know you will be enslaved for 20 years you can adjust to this if you know that the taxation imposed to you is 90% and you can adjust to it this is not coercion I mean how ridiculous can you be now it should be abundantly clear at this point that the claim that Hayek is a radical libertarian a radical liberal and a principal opponent of the left is plain ridiculous then the question arises of course how come that this myth exists that he is such a person I must speculate of course the most obvious answer is that the journalists and media that propagate this myth simply do not know what they are talking about and that one simply copies what another one has pronounced before but this although there is certainly some truth in it does not explain how this myth could arise in the first place and why it is so persistent someone must be interested in this myth and its persistence now let me suggest another more plausible explanation put yourself into the shoes of the dominant egalitarian left of all parties and there are no non-left parties left in the meantime what would you do in order to maintain your own dominant position or even improve it in light of the fact that you cannot possibly hope to achieve a complete and total uniformity of an in public opinion now what I would do is something this first I would want to identify the most dangerous opponents of the prevailing leftist sentiments and exclude them as good as I can from public discourse by ignoring them not mentioning them and barring them from entrance into any position of influence before the age of the internet this was comparatively easy to do Mises and Rothbard for instance who are such dangerous individuals were in fact hardly ever mentioned and it was extremely difficult to find their books in any libraries or even know of their very existence second I would want to delineate the range of legitimate polite and civilized discourse by identifying some prominent individuals that I can present as dangerous foes but they are in fact muddled and unprincipled enough to easily debate them and have them entangled in constant contradictions and concessions to my own leftist programmatic goals this makes me appear tolerant and I can always and open-minded of course and I can always win the debate by pointing out that even these enemies agree with my own fundamental premises you all know the strategy it typically takes a form of saying you know but even Hayek and Friedman admit this and do not denies this what can you then say they are already the dangerous foes out there war is absolutely impossible and as for these so-called enemies themselves all the while they are appointed by the predominant left as the officially approved opponents of the ruling left as the enemies their left loves to hate they themselves gain tremendously in prominence and respectability and become themselves part of the establishment with access not only to the mainstream media but to the highest ranks of state power if you just some keywords Hayek and Friedman and Margaret Setscher and Ronald Reagan and another keyword Helmut Schmidt at Hayek's 80th birthday Helmut Schmidt social democratic chancellor of Germany at that time wrote him a telegram saying we are all Hayekians now and he meant it, he was um now these people then become welcome guests at all sorts of official meetings and conferences and indeed if you look at meetings of Hayekians and Friedmans nowadays they are regularly sponsored or cosponsored by various governmental organs and functionaries they are government organizations that feature these people and they and their followers repay the favor done them by the left in participating in the exclusionary practice vis-a-vis the real genuine dangerous enemies of the prevailing leftist public opinion they certainly Hayek and Friedman themselves but also many of their followers know these people they know people like Mises and Rospart but if they mention them at all they typically say a few complimentary words to be quickly followed by a lot of deprecating remarks Hayek for instance mentioned Rospart only in a couple of footnotes in his entire body of work and in the preface to Mises's book on socialism and to Mises's memoirs his Erinnerung Hayek claimed that Mises had actually changed his mind and given up on his earlier excessive rationalism even though there are absolutely no indications whatsoever on such a change of mind in Mises's case and Friedman always dismissed and tried to make fun of Mises who had referred to him and his ilk at the Mont Pelerin society meeting as nothing but a bunch of socialists the same sort of assessment you can also find the leaders of the German Hayek Foundation Hayek is hailed as the greatest philosopher and economist of freedom in the 20th century if not in all of human history and Murray Rospart a few complimentary remarks good economist but everything that he does ends in absurdity no explanation what that absurdity is so the style is always the same you recognize them you say one nice word one the next sentence you utter is but they are basically not cases in any case what these people do the Friedman nights and the Hayekians nowadays rather than with nutty extremists and anarchists such as Mises and Rospart and their associates they and even more so their present day followers prefer to associate with high ranking politicians central bankers and warmongers just look at Mont Pelerin society meetings there you see the assembly of these types of people or another conference recently took place on Hayek and Ober-Gurgel the main speaker was Wachlaw Klaus who is in favor of the Bannisch decrease which expropriated all Germans in former Czechoslovakia and the other two main speakers were people working for the European investment bank in the head of some Austrian government connected bank that's the conference that Hayekians put on now what to do then I think we should say it the way it is and in the age of the internet there's no longer possible to entirely ignore us we would thereby explode this unholy alliance between the ruling left and its officially designated and approved radical free market opposition now no doubt this would bring us the enmity of the leaders of the Hayekian and the Friedmanite movement but it also makes it possible to win over many confused and searching souls of this movement that found Hayek and Friedman first but also see that there are problems in it and look for a way out and what should we say now in this connection I want to give you some quotes from Rothbard before the constitution of liberty was published the manuscript was sent to Rothbard and Rothbard wrote two memos on the manuscript one was a page by page criticism that was sent back to Hayek himself I don't think Hayek adopted any of that stuff the second was an internal memo sent to the Volcker fund which had funded Hayek's salary at this time it basically calls for defunding Hayek after this memo so I want to quote from this informal memo that Rothbard sent to the Volcker fund I quote the first sentence of this memo and then the last paragraph the first sentence and this refers to the constitution of liberty the first sentence is if a Hayek's constitution of liberty is surprisingly and distressingly and extremely bad and I would even say evil book that's the first sentence now the last paragraph there he says this then is the face that F.A. Hayek will present to the world in his constitution of liberty it is a face such that if I were a young man first getting interested in political questions and I should read this as the very best product of the extreme right Marie Wallis refers to the libertarian movement as extreme right here I would become a roaring leftist in no time and so I believe with almost anyone that is why I consider this such a dangerous book and why I believe that right wingers should attack this book with great vigor when it appears instead of what I'm sure they will do applauded like so many trained seals four first Hayek attacks laissez-faire and attacks or ignores the true libertarians thus setting up the even Hayek admits line and second his argument is based on a deprecation or dismissal of both reason and justice so that anyone interested in reason or justice would tend to oppose the whole book and because of Hayek's great prominence in the intellectual world any failure by extreme right wingers to attack the book with the impeccable vigor which it deserves will inordinately harm the right wing cause that we all hold dear and the same also applies to Friedman I have spared my time as I think Friedman's case is even worse than the case of Hayek's thank you very much