ABSTRACT
Introduction Like many classical liberals of the Cold War era, F. A. Hayek was of two minds about the role of philanthropy in modern commercial societies. In digressions sprinkled throughout his published works, Hayek hailed philanthropy as a Tocquevillian alternative to the welfare state and praised voluntary associations for their “recognition of many needs and discovery of many methods of meeting them which we could never have expected from the government” (Hayek 1979: 50). At the same time, Hayek built his case for a free society on a principled critique of philanthropic action. The moral imperative to do “visible good to [our] known fellows (the ‘neighbor’ of the Bible)” is, in his view, “irreconcilable with the open society to which today all inhabitants of the West owe the general level of their wealth” (Hayek 1978: 268). In this chapter, I examine the structure and significance of the commerce/philanthropy relationship in Hayek’s thinking and in the evolving discourse of classical liberal economics. I begin by linking Hayek’s critique of philanthropy to the anti-socialist economics he formulated in the aftermath of the Great Depression and World War II. Widening the lens, I show that Hayek’s treatment of commerce and philanthropy as separate spheres, and his reduction of the economy to commerce only, were typical of twentieth-century economics at large – specifically, the modernist genre of economic theory that Hayek so trenchantly criticized from the 1930s on (Burczak 1994, 2006). I conclude by employing the ideas of Hayek, Amartya Sen, and other critics of economic modernism to recast Adam Smith’s commercial society as an extensive network of voluntary co-operation in which commerce and philanthropy work together to promote human freedom and flourishing.
