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The Christian Faith and the Financial Crisis
Part Two: The Financial Crisis (12)


I'd like to finish with some words about the actual course of Griffths's revolution in relation to the ideas that inspired it. The name most obviously associated with the ideas proclaimed in the IEA pamphlets is of course that of Friedrich Hayek. I should perhaps say that both in Morality and the Market Place and The Business Corporation as a Moral Community. Griffiths distances himself from Hayek, but this is mainly on the grounds that his own rather watered-down Christianity provides a better moral support for market economics than Hayek's agnostic libertarianism or individualism. He has not, so far as I can see, distanced himself from Hayek's purely economic argument.

Hayek died in 1992 at the age of ninety three. I don't know how he would have regarded the policies that were pursued in his name but I suspect that he might not have liked them. For a start I'm not sure that he really took account of what might be meant by 'globalisation'. For sure he favoured its nineteenth century equivalent, 'Imperialism', which functioned to the benefit of all classes in the Imperialist power, but the globalisation which is dumping cheaper goods from distant parts of the world onto the home market is not the same thing as the Imperialism that dumped cheaper goods from the home market onto distant parts of the world. It is more difficult on this basis to argue that the market works to the benefit of the whole society - the whole world society perhaps, but not the national economy. We may also wonder if he would have approved of the artificial expansion of demand by what Brenner has characterised as 'asset-price Keynesianism' - pumping money into the economy not simply by printing it but by inflating the value of various investment products and of housing. This indeed is the exact opposite to the policy Hayek advocated in the 1930s, of encouraging saving rather than spending. And we might wonder if he would have approved of the huge expenditure on war that has characterised the US economy, especially following the events of September 2001, and which has often been called 'military Keynesianism' since it too has the effect of stimulating sectors of the economy that would not otherwise be supported by the market (competition for government contracts by 'private' companies is hardly the same thing as a free market).

Something of what he might have thought can perhaps be found on the website of the 'Luwig von Mises Institute'. Luwig von Mises was Hayek's teacher in Vienna in the 1920s and the Ludwig von Mises Institute regards itself as the guardian of what it calls the 'Austrian school' of economics in its purest form. One of its frequent contributors is Justin Raimondo who also more or less runs the website, formed in the context of the Balkan wars in the 1990s. The Institute has consistently opposed all US military adventures abroad and also published closely argued critiques of the wider history of American imperialism going back to the conquest of California. The critique is largely moral but in the specific context of the Ludwig von Mises Institute it is also economic - war diverts money away from the free market and enhances government power. Hayek's Road to Serfdom, published in 1944, was specifically directed against the view that the planning elements of the war economy could usefully be prolonged into peacetime. I have not seen Griffiths anywhere commenting on recent American and British military adventures but he has argued that the major impetus for the inflation of the 1970s was the difficulty the US had in financing the Vietnam war.

This has become an issue in US politics because there is a tendency within the Republican Party - and indeed within the 'Tea Party' - that follows a line very close to that of the Ludwig von Mises Institute - a determined opposition to all government interference in the economy including not just such things as health and education but also military expenditure. The best known representatives of this tendency are Senator Ron Paul and his son, Rand Paul, named for the ultra-individualist and anti-socialist novelist Ayn Rand. Ron Paul made a bid for the Republican candidacy in the last US election and was by far the most popular candidate among Republican youth. It is strange and almost rather touching to find articles by Justin Raimondo, Ron Paul, Pat Buchanan and a leading exponent of 'Reaganomics', Paul Craig Roberts, regularly appearing on left wing news sites.

All this naturally brings them into conflict with the other major intellectual influence in the US Republican movement - the famous 'Neo-Conservatives'. It may be no accident that many of the leading older generation Neo-Conservatives come from a Marxist background. Marxism would argue that the process of forming and maintaining a global economy necessarily entails war - in the first place to open up parts of the world that may be inclined to resist inclusion in the global market (the British war on China and the US threats against Japan in the nineteenth century could be taken as examples of that, as could the Vietnam war and other wars to prevent the spread of Communism); and, secondly, to ensure dominance within the global system - the First World War being the classical example of that. Both the 'Austrians' and the Neo-Conservatives would claim to be committed to free market principles but in the case of the Austrians the commitment is genuine and they are ineffective in politics; in the case of the Neo-Conservatives it is an ideological fog and they are effective in politics. But a war economy fuelled by massive debt owed to China is certainly not what Hayek envisaged. The much more morally conscious Christian Brian Griffiths, however, doesn't seem to mind.