Hayek's Bastards

The rise of illiberal libertarianism

Today’s post was inspired by reading a new book of the same title by Quinn Slobodian, a Canadian academic, whose last book “Crack-Up Capitalism” I recently recommended in my “Ten Books to Understand the World Right Now”. I’d add this new book to the list too and I’ve made use of it throughout this piece alongside other research. The conclusions are mine.

This post can be read alongside two others from the last few months on Musk’s ideology and the growth of global nationalist networks as a sort of trilogy on the intellectual history of the modern radical right.

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One of the many oddities of the Trump regime is seeing self-professed libertarians like Peter Thiel and Elon Musk in alliance with fervent nationalists.

The Austrian sages of libertarianism were not keen on either tariffs or brutally restrictive immigration policies. As Ludwig von Mises wrote back in the 1920s:

“The effects of restricting [the freedom of movement] are just the same as those of a protective tariff…Looked at from the standpoint of humanity, the result is a lowering of the productivity of human labour, a reduction in the supply of goods at the disposal of mankind.”

Or as Friedrich Hayek put it: “nationalistic bias…frequently provides the bridge from conservatism to collectivism.”

Yet many of their followers are now closely aligned with radical right populists. In the US the Mises Institute in Alabama has been one of the strongest advocates for aggressively anti-immigration policies. Former Trump adviser Steve Bannon regularly quotes Hayek’s most famous book “Road to Serfdom” while also slamming “globalists” and advocating crackdowns on migrants. Nor is this a purely American phenomenon. The German AfD’s deputy leader Beatrix von Storch is a member of the Hayek Society, and the director of Vienna’s Hayek Institute, Barbara Kolm, is a leading light in the far right Austrian Freedom Party.

To some extent this is a marriage of convenience – capital attaching itself to power for short term advantage. It’s hard to believe, for instance, that Thiel or Musk agree with Trump’s decision to impose tariffs on every other country, but they presumably consider it an acceptable trade-off for the ability to influence him and gain benefits from his patronage. (Though Musk might be reconsidering, he called Trump’s influential trade adviser Peter Navarro “dumber than a sack of bricks” last week).

There’s also an element of straightforward hypocrisy: freedom for me but not for you. One obvious example: Thiel’s protégé J. D. Vance castigating European countries for their lack of free speech, while his boss signs executive orders attempting to destroy law firms and universities he dislikes.

But there is also a deeper, and longstanding, ideological synthesis between one wing of the libertarian movement and nationalist populism, which stems from concerns about the cost of the welfare state. While most (including Hayek) accept you need some safety net, their fear is that people are inherently wired to support an ever expanding, and increasingly expensive, system in search of equality. This is a particular challenge in democracies where those who stand to benefit from improved welfare and services outnumber those who don’t. Thus Thiel wrote in 2009 that:

“I no longer believe that freedom and democracy are compatible…. Since 1920, the vast increase in welfare beneficiaries and the extension of the franchise to women — two constituencies that are notoriously tough for libertarians — have rendered the notion of ‘capitalist democracy’ into an oxymoron.”

Over the decades there have been all sorts of attempts to find intellectual justifications for slashing the size of the welfare state. Charles Murray’s “Losing Ground” in 1984 argued that social programmes hurt the poorest by incentivising bad choices. This was both deeply intellectually unconvincing and hugely influential on politicians looking for justifications for spending cuts. More recently Tyler Cowan has adapted the case. He recognises that welfare states do benefit today’s poor, but argues they harm future generations.

Unsurprisingly, while these arguments have influence on elites they are not compelling to the wider population. Social security programmes remain almost universally popular in the US and, in general, the cost of welfare states has continued to rise across the developed world even under conservative governments. This has led some libertarians to see radical right populism as an ally that can create the conditions for their agenda, unifying around their shared dislike of equality.

In the rest of the post I’ll explore how this alliance was built over the past few decades and the consequences for Trumpism and radical right politics worldwide.

And we’ll start with a group of cloned dogs owned by Argentinian President, and illiberal libertarian, Javier Milei (pictured above).