CHITESTER: …. Going back to the question I asked you about people you dislike or can’t deal with, can you make any additional comments in that regard, in terms of the characteristics of people that trouble you?So here we have Hayek asserting:
HAYEK: I don’t have many strong dislikes. I admit that as a teacher—I have no racial prejudices in general—but there were certain types, and conspicuous among them the Near Eastern populations, which I still dislike because they are fundamentally dishonest. And I must say dishonesty is a thing I intensely dislike. It was a type which, in my childhood in Austria, was described as Levantine, typical of the people of the eastern Mediterranean. But I encountered it later, and I have a profound dislike for the typical Indian students at the London School of Economics, which I admit are all one type—Bengali moneylender sons. They are to me a detestable type, I admit, but not with any racial feeling. I have found a little of the same amongst the Egyptians —basically a lack of honesty in them. (Nobel Prize-Winning Economist: Friedrich A. von Hayek, Regents of the University of California, 1983. p. 490).
(1) Although he protested that he had no racial prejudices, Hayek admitted a dislike for a certain type of persons conspicuous among “Near Eastern populations” whom he found fundamentally dishonest, and who in the Austria of his youth could be described as “Levantine, typical of the people of the eastern Mediterranean.”Now, to be fair to Hayek, I don’t see evidence of the kind of vile and shameful 19th-century racism in these opinions that holds that certain groups of human beings are inferior in terms of intelligence, morality or honesty owing to genetic or hereditary causes. But Hayek’s contemptible, irrational and disgraceful ethnic slurs and bigotry cannot be denied either.
There is something shocking in these statements. Who on earth was Hayek talking about here? Some have charged that Hayek was showing latent anti-Semitism (Reder 2002: 263), and I find it difficult not to agree. Any person ranting about fundamentally “dishonest” Levantine people sounds like a cowardly anti-Semite to me. If not, who was the target? I don’t think there were many Syrians or Lebanese in the Austria of Hayek’s childhood and youth (which is the period from 1899–1918). Nor will the charge of ethnic slander and bigotry be dismissed if one chooses to deny that Hayek had in mind here human beings who happen to be of Jewish ethnicity: for now Hayek is open to the charge of even greater bigotry against Levantine people in general. Who seriously thinks that whole nations of people are all fundamentally “dishonest”? Anyone who thinks this is a bigot and an idiot.
(2) Hayek held a profound dislike for “the typical Indian students at the London School of Economics” supposedly of a particular detestable type, “Bengali moneylender sons.” Hayek showed himself guilty of a contemptible ethnic slur here, one which Anand Chandavarkar has described as Hayek’s “bizarre notion of Bengali students as sons of moneylenders, the one profession which the versatile Bengali has always scorned. The few postgraduate Indian pupils of Hayek – S. R. Sen, Said Ahmad Meenai and B. R. Shenoy – were all ‘honest’ high achievers who certainly did not answer to his image of Indian students” (Chandavarkar 2002: 224). I might add that I find it ridiculous and paradoxical that an inveterate apologist for Classical liberal, laissez faire capitalism like Hayek would have a prejudice against money-lenders’ sons. Isn’t money lending or banking a fundamentally important profession in modern capitalism?
(3) If this wasn’t enough, Hayek found time to use a similar ethnic slur of dishonesty (if not quite as pronounced) against Egyptians as well.
If any apologist for Hayek contends that Hayek was kind and generous to his students and friends who happened to be Jewish or Indian, then the very same defence can be made of Keynes: just like Hayek, Keynes had Jewish friends and displayed great kindness toward them.
The lesson here is that Hayek, like Keynes, was also guilty of despicable ethnic slanders and prejudices (see Chandavarkar 2000 for Keynes’s anti-Semitism). Moreover, do these bigoted remarks provide us with any reason to reject the economic theories of Hayek?
Of course not. To do so would be to invoke the ad hominem fallacy. The shameful anti-Semitism of Keynes is irrelevant to the question of the truth of the economic theories in the General Theory and Keynes’s later work. The shameful (and arguably) latent anti-Semitism of Hayek is strictly irrelevant to the truth of Hayek’s economic theories.
Any modern Keynesian can condemn the bigotry of Keynes as an utterly disgraceful and immoral part of Keynes’s personality and character, while asserting the fundamental truth of many of the economic theories in the General Theory. The modern Austrian can condemn the bigotry of Hayek as an utterly disgraceful and immoral part of Hayek’s personality and character, while asserting the truth of the ideas in Hayek’s economics. The ad hominem fallacy and name calling abuse have no part in the debates on economic theory.
Chandavarkar, A. 2000. “Was Keynes Anti-Semitic?,” Economic and Political Weekly 35.19 (6–12 May): 1619–1624.
Chandavarkar, A. 2002. “Did Hayek Deserve the Nobel Prize? Friedrich Hayek (A Biography) by Alan Ebenstein,” Economic and Political Weekly 37.3 (Jan. 19–25): 223–224.
Hamowy, R. 2002. “A Note on Hayek and Anti-Semitism,” History of Political Economy 34.1: 255–260.
Hamowy, R. 2005. The Political Sociology of Freedom: Adam Ferguson and F. A. Hayek, Edward Elgar, Cheltenham.
Nobel Prize-Winning Economist: Friedrich A. von Hayek. Interviewed by Earlene Graver, Axel Leijonhufvud, Leo Rosten, Jack High, James Buchanan, Robert Bork, Thomas Hazlett, Armen A. Alchian, Robert Chitester, Regents of the University of California, 1983.
Reder, M. W. 2000. “The Anti-Semitism of Some Eminent Economists,” History of Political Economy 32: 834–856.
Reder, M. W. 2002. “Reply to Hamowy’s Note on Hayek and Anti-Semitism,” History of Political Economy 34.1: 261–272.