Friedrich von Hayek’s ‘The Intellectuals and Socialism’ (1949) appears to be an important work, for perhaps almost all libertarian/free-market think tanks lead back to it. The spirit of the essay, which was written in response to the great flurry of postwar social planning, runs warm in Australia’s own Institute for Public Affairs (IPA): the defence of free-market ideas in principle rather than via pragmatics.
It is also insightful beyond its immediate (ideological) aims.
It covers the following:
- Intellectuals have more power than they are given credit
- For this greason socialism – or rather, the principles of planned economy – had become a dominant in public policy
- But why are intellectuals, above all the brightest ones, so attracted to socialism? Because socialism espouses a visionary utopian existence which inspires, whereas liberal thinkers tend to fixate on more mundane practicalities of the present
- In conclusion, liberalism needs its own inspiring visionary thinkers
What is an intellectual?
For Hayek the class of intellectuals is broad. These ‘professional secondhand dealers in ideas’ are the consumers, synthesisers, and above all disseminators of ideas and conceptual frameworks. It is a class composed of the literate and educated: teachers, academics, and journalists, but also scientists and doctors.
Last week I criticised, in particular, one aspect of Hobbes’ own critique of the ‘ethical shopper’ paradigm, his argument that western brands have weakened due to shifts in global economic structures. I won’t rehash this here, the image below captures the gist of my argument: western brands are more powerful than ‘mega suppliers’.
Western mega brands have great financial resources. The most popular brands are the biggest players in negotiations with manufacturing interests. The largest of the ‘mega suppliers’ is much smaller than the three brands listed here (Nike, H&M, Walmart – crudely represented here in terms of net profit). Not only are western brands already popular and becoming more so in developing markets; these markets have their own homegrown brands with potential to rival western brands on the global stage.
Here, I want to continue to defend the role that brands and pressure on brands plays in global reform while exploring Hobbes’ argument that formal institutional means (state/international laws) should be used to push global reform and also the problems associated with the ascent of new markets in developing countries (a relative decline of western market power). Continue reading
A couple of months ago ‘human rights consultant’ Michael Hobbes wrote a critique of the ‘ethical shopper’ paradigm of global manufacturing reform, followed several days later by a more pointed addendum. His critique is fixed around the argument that major western fashion brands are not as powerful as they are thought to be and that in the future they will become weaker. As such, he argues that consumer pressure on brands is not effective as a force for change.
His main points are:
(1) An evolution in global apparel (the rise of ‘megasuppliers’ and ‘fast fashion’) means that not even brands have precise knowledge of where their products are made;
(2) Western consumption will decline over the coming decades: the new big markets are in developing countries, and it is goods that are manufactured for these markets that are produced in the worst conditions;
(3) As a result of the changing dynamics of consumerism (the rise of new middle classes in developing countries), the importance of western brands will diminish in favour of an ‘undifferentiated goods’ model of production.
Maybe even more than the other reasons I’ve outlined, this is why consumer advocacy campaigns are never going to improve working conditions in the developing world: Western markets simply don’t matter as much as they used to. India produces twice as much clothing for its own consumers as it does for us. Fifty-six percent of the clothing produced in China is for the Chinese market. Both of those numbers are only going to grow. (Michael Hobbes)