Check out Corey Robin’s post about Hayek’s support of dictatorship.
The reality is that well-functioning societies rely on a mixture of market forces and socialist institutions. It’s been the case in America just as anywhere else. Contrary to right-wing mythology, there was never a golden-age of market purism. The U.S. has benefited from market forces, to be sure, but it takes pretty heavy indoctrination to claim that everyone would’ve been even better off without things like organized labor, The New Deal, the GI Bill, or Great Society initiatives.
It’s good to think about what sort of blend of market forces and socialism is optimal. It’s also good to think about whether or not social programs are working as planned. What’s not good is to cling to the idea that any and all redistributionist efforts will lead to the inevitable downfall of society.
That sort of market purism does really strange things to folks moral logic simply due to the fact that market failures exist. If it’s a self-evident proposition that THE MARKET knows best, then there can’t be any such thing as a market failure, let alone an undesirable market outcome. So what if the market wage for labor is a poverty wage? THE MARKET has spoken. What if a downturn in the business cycle leads to mass unemployment? Well then we just need to take our beatings, because THE MARKET has already decided our fate.
And what if your choice is between democratic socialism or market purism under a bloody dictatorial regime?
Go with THE MARKET, Hayek says. Sometimes THE MARKET must be fed with the blood of innocents.