… is from page 247 of F.A. Hayek’s Spring 1933 memo – titled “Nazi-Socialism” – to William Beveridge, as this memo appears in the Appendix to the 2007 Definitive Edition (Bruce Caldwell, ed.) of F.A. Hayek’s classic and still-relevant 1944 book, The Road to Serfdom:
The inherent logic of collectivism makes it impossible to confine it to a limited sphere. Beyond certain limits collective action in the interest of all can only be made possible if all can be coerced into accepting as their common interest what those in power take it to be. At that point, coercion must extend to the individuals’ ultimate aims and ideas and must attempt to bring everyone’s Weltanschauung into line with the ideas of the rulers.
DBx: Hayek here puts his finger on the chief danger lurking in today’s calls by many conservatives for “common good capitalism.” The term (“common good capitalism”) sports a connotation that’s unambiguously lovely. Who, after all, opposes the common good? Yet the essence – and menace – of “common good capitalism” is in its prefix.
Their insistence on prefixing “capitalism” with “common good” implies that “common good capitalists” believe that the capitalist market order left to its own devices does not serve the common good. The operation of prefixing “capitalism” with “common good” is obviously meant to distinguish “capitalism” as proposed by the common-gooders from capitalism as understood and defended by capitalism’s most-acclaimed champions – scholars such as Adam Smith, Frédéric Bastiat, Ludwig von Mises, F.A. Hayek, W.H. Hutt, Fritz Machlup, Ronald Coase, Milton Friedman, Armen Alchian, James Buchanan, Leland Yeager, Vernon Smith, Israel Kirzner, Harold Demsetz, Thomas Sowell, Walter Williams, Dick Wagner, Deirdre McCloskey, and Robert Higgs.
The fundamental difference – and it is a categorical one – between capitalism unprefixed and “common good capitalism” is that only under the former are individuals allowed to choose their own concrete goals subject only to the equal right of everyone to do so. In contrast, under “common good capitalism” some concrete goals are elevated in importance over other concrete goals. Under “common good capitalism” the state will prevent certain peaceful actions and mandate others in an attempt to artificially encourage and enable the pursuit of those concrete ends favored by “common good capitalists.” The irony is that the “good” that is triumphantly described as “common” is nothing more than the particular “good” that is preferred by whichever “common good capitalists” happen to be in power.
Some “common good capitalists” are more open than are other such “capitalists” about their preferred concrete goals – about the particular economic arrangements and ‘outcomes’ that they hold as being necessary for the common good. Oren Cass, for example, wants more factory work and a smaller financial sector. He also wants the government to compel people in their roles as consumers to support people in their roles as producers. (Ignore here the fact that Cass doesn’t understand that all such compulsion turns the favored ‘producers’ into something quite the opposite of producers; it turns them into parasites.)
Other “common good capitalists” are frustratingly silent about just how their versions of “common good capitalism” differ from capitalism unprefixed. These “common good capitalists” assure us that “common good capitalism” is the way to go, but (at least so far) they’ve given us no details. They tell us nothing concrete. We’re to trust that the as-yet-unrevealed concrete ends that their version of “common good capitalism” would promote – ends that differ from the ends that prevail under capitalism unprefixed – serve the common good.
But whether spelled out or not, the concrete ends that would be promoted by “common good capitalism” are ends to be imposed by the state. With compulsion. No one would be permitted to choose or act in any ways that are believed to distract from the pursuit of the concrete ends that the rulers have somehow divined are ones that are most consistent with the common good.
“Common good capitalism,” in short, is illiberal. It is authoritarian even though many of its proponents sincerely do not believe themselves to be advocating for an authoritarian doctrine. “Common good capitalism,” therefore, is fundamentally inconsistent with capitalism as understood and championed by liberals such as Bastiat and Hayek.