The Social Democratic Tradition in a Hayekisian Australia

"...Hayek’s polemic against the left was an axiomatic component of his advocacy of a radical, neo-liberal alternative – one which argued the absolute centrality of the market; a role for the state as a protector of that market but little else besides; and apocalyptic warnings that any political interference with the integrity (even ‘sanctity’) of the market would place the entire national project on the “slippery slope” to totalitarianism...

It is important to state clearly the essential elements of the Hayekian orthodoxy. Hayek’s political philosophy is premised on a stark view of human nature that social democrats find confronting. In his Australian lecture, “The Atavism of Social Justice”, Hayek argues
that the altruistic feelings human beings had for one another in small tribes in primal society are rendered redundant by the impersonal demands imposed on human beings in more complex societies through prices determined in the market....

...In other words, social justice, whether it is taken maximally to mean equality of outcome, or more minimalistically to mean equality of opportunity, has absolutely no place in the Hayekian scheme....

...Social democrats have a range of objections to the market fundamentalism of the Hayekian system – a system which represents a radical departure from the schema expounded by Adam Smith two centuries before in the Wealth of Nations... Hayek is in every sense, therefore, a radical... whose philosophical system continues to drive much of the intellectual and policy software of the Howard Government, together with the bureaucracy that serves it...

...Furthermore, Hayek remains oblivious to the fact that social democrats are ultimately shaped by Smith (among others) rather than Marx. Social democrats have always respected and accepted the creativity, the efficiency and the wealth-generating capacity of markets.
But social democrats, unlike Hayek’s neo-liberals, have never been blinded by free market fundamentalism. Social democrats, by contrast, have always recognised a positive role for the state in performing functions the market cannot...

... Social democrats reject Hayek’s a priori assertion that altruism is a primitive value which can and should be purged from human consciousness. Social democrats accept the Smithian view that human beings are equally self-regarding and other-regarding and, as noted above, both should be reflected in a social democratic political economy. To the self-regarding values of liberty, security and prosperity should be added other-regarding values of equity, solidarity and sustainability. Properly constructed, these latter values are also market-enhancing
rather than market-detracting. Furthermore, this spread of values embraces social democratic concepts of both negative and positive liberty – not just the absence of coercion of the individual but equally creating the opportunity for the individual to participate fully in economic, social and political life..."

- The Hon. Kevin Rudd, MP
An Address to the Centre for Independent Studies
As Shadow Foreign Minister
Sydney, November 16 2006