But he does not see, or will not admit, that a return to ‘free’ competition means for the great mass of people a tyranny probably worse, because more irresponsible, than that of the State. The trouble with competitions is that somebody wins them.
This bit feels like it’s missing something, which I don’t know that Hayek ever stated fully, which I think Rand stated a little more clearly. I think there are two main parts of it.
First, there’s a way of organizing that humans have had for a long time, with toiling peasants and idle rich. There’s a new way of organizing, that roughly dates to the Industrial Revolution (but not quite), where there are toiling peasants, idle rich, and organizing rich.
That is, sometimes people get rich by finding a bunch of peasants and somehow managing to get a percentage of their output (see The Emperor for a view of this), and this relationship is roughly parasitic—the main value the nobility provide is keeping other nobility from taxing the peasants instead.
There’s a different thing that people can do, tho, which is doing useful thinking or providing a useful service, and that makes for the organizing rich. The frame that sees Sam Walton as just another duke who someone managed to entitle himself is missing the ways in which a world with Walmart is richer than a world without Walmart. This relationship really does seem more mutualistic.
This sort of generates idle rich. I don’t think many of the Waltons since Sam have done all that much that’s interesting, but they’re much less obviously parasitic. (If they just lent out money and lived off the interest, that’s much more of a voluntary exchange than the medieval baron taxing his parents.)
Second, I think the “more irresponsible” thing is fake, for basically the reason discussed in the earlier paragraphs, and expanded on in the public choice literature. Governments could act in ways that put the public interest first, but empirically they act in a way that benefits the governing cartel (in a way that is worse for socialism than alternatives, because of the ‘tyrannical minority’ bit). Governments could set food subsidies in ways that make people who eat the food healthier (which is what you might expect voters would want), but at least in the US they set it in ways that make people who eat the food less healthy, but which benefit politically connected farmers.
Like, at the beginning of the pandemic, Gates was talking about building more vaccine factories at the same time that the federal government was punishing people for doing unlicensed tests that helped alert people to community spread inside the US; that makes it really difficult for me to take seriously the bit where monopolistic billionaires are ‘more irresponsible.’
[Of course, I’m writing in America in the 2020s, where most of the billionaires on my mind are tech billionaires; Orwell was writing in England in the 1940s, where many of the equivalent rich people would have been clearly in the ‘parasitic nobility’ camp, or directly descendant from them. But I think the thing about industrial fortunes being good, and often reinvested in progress, still could have been obvious then.]
I think it’s actually quite hard to have everyone in an organization trust everyone else in an organization, or to only hire people who would be trusted by everyone in the organization. So you might want to have some sort of tiered system, where (perhaps) the researchers all trust each other, but only trust the engineers they work with, and don’t trust any of the ops staff, and this lets you only need one researcher to trust an engineer to hire them.
[On net I think the balance is probably still in favor of “internal transparency, gated primarily by time and interests instead of security clearance”, but it’s less obvious than it originally seems.]