I stick with Hayek in believing in some core government interventions where the individual cannot save himself. Finding a way to ensure that as many people as possible can get private (or semi-public) health insurance counts as one of them. But a reader notes that this Hayek position is not uncontroversial among many libertarians (which is why, despite my deep libertarian inclinations, I have never claimed the label). Here's Richard Epstein on the topic:
In sum, I think that the charge of Hayekian socialism carries with it a certain accuracy, because Hayek did not see the close intellectual and institutional connections between the government interventions that he supported and those which he opposed.
In part, Hayek made mistakes because of the political circumstances of his own time. In order to slay the dragon of central planning, he thought it imperative to concede some points to the opposition. But a second reason is at work as well, and it brings us back to the philosophical origins of Hayek's position. The central feature of Hayekian thought was its reliance on ignorance. It is ignorance that make central planning fail. It is ignorance that gives local knowledge its real bite. It is ignorance that leads us to embrace a conception of subjective value. I value my ignorance as much as the next fellow.
But truth be known, Hayek has gotten his central philosophical point only partly right.
He overstates the level of ignorance that we have, and thus underestimates the dangers of government intervention driven by knowledge of partisan advantage. It may well be that I cannot draw the demand curve for my new widget; but I do know that there are few states of the world in which I am better off without my protected monopoly that with it. And ignorant, thought I may be, I will be prepared to invest a good deal in securing that legal protection if allowed to do so by the rules of the game. With partial knowledge I can put self-interest to work in the political sphere just as I can put it to work in the economic sphere.
Truth be known, that is where Hayek goes wrong. We (collectively) may not know enough to manage a complex economic system from the center, but we (individually) do know enough to seek to rig the rule of the game to cut in our favor. Imperfect information coupled with confined self-interest offers a better set of behavioral assumptions about individual actors and social processes. Once we make those assumptions, we must be aware of the dangers that come from interferences with the contractual freedom and with legal efforts to maintain, from the center, minimum levels of security for us all.
These ideals may sound fine in the abstract, but in practice they confer too much power on government bureaucrats and often invite private behaviors that ape many of the worst characteristics of the central planning that Hayek rightly deplored. The Hayekian critique applies to the Hayekian concession on minimum welfare rights. In that important sense, the charge of Hayekian socialism sticks.