Libertarians have often discussed whether libertarians can morally accept socialist benefits if they live under socialism. Those who find it acceptable argue that since the State took your money, you can morally "take it back" (and then some?) by accepting state benefits. Few libertarians want to do like Samuel E. Konkin III and live "under the radar."
Socialists wonder whether libertarians who accept state goodies are merely rationalizing. In any event, Hayek seemed eager to receive whatever state benefits (from Austria or the U.S.) for which he was eligible.
The Nation reports that Charles G. Koch (of the Koch Brothers fame) became head of the libertarian Institute for Humane Studies in 1973, whereupon he invited Friedrich Hayek -- then living in Austria -- to come to the U.S. "to serve as the institute's 'distinguished senior scholar; in preparation for its first conference on Austrian economics, to be held in June 1974.
"Hayek initially declined Koch's offer. In a letter to IHS secretary Kenneth Templeton Jr., dated June 16, 1973, Hayek explains that he underwent gall bladder surgery in Austria earlier that year, which only heightened his fear of 'the problems (and costs) of falling ill away from home.' (Thanks to waves of progressive reforms, postwar Austria had near universal healthcare and robust social insurance plans that Hayek would have been eligible for.)
"IHS vice president George Pearson (who later became a top Koch Industries executive) responded three weeks later, conceding that it was all but impossible to arrange affordable private medical insurance for Hayek in the United States.
"However, thanks to research by Yale Brozen, a libertarian economist at the University of Chicago, Pearson happily reported that 'social security was passed at the University of Chicago while you [Hayek] were there in 1951. You had an option of being in the program. If you so elected at that time, you may be entitled to coverage now.'
"A few weeks later, the institute reported the good news: Professor Hayek had indeed opted into Social Security while he was teaching at Chicago and had paid into the program for ten years. He was eligible for benefits.
"On August 10, 1973, Koch wrote a letter appealing to Hayek to accept a shorter stay at the IHS, hard-selling Hayek on Social Security's retirement benefits, which Koch encouraged Hayek to draw on even outside America. He also assured Hayek that Medicare, which had been created in 1965 by the Social Security amendments as part of Lyndon Johnson's Great Society programs, would cover his medical needs.
"Koch writes: 'You may be interested in the information that we uncovered on the insurance and other benefits that would be available to you in this country. Since you have paid into the United States Social Security Program for a full forty quarters, you are entitled to Social Security payments while living anywhere in the Free World. Also, at any time you are in the United States, you are automatically entitled to hospital coverage.'
"Then, taking on the unlikely role of Social Security Administration customer service rep, Koch adds, 'In order to be eligible for medical coverage you must apply during the registration period which is anytime from January 1 to March 31. For your further information, I am enclosing a pamphlet on Social Security.'
"The private correspondence between two of the most important figures shaping the Republican Party's economic policies -- billionaire libertarian Charles Koch and Nobel Prize–winning economist Friedrich Hayek, godfather of today's free-market movement -- were obtained by Yasha Levine from the Hayek archives at the Hoover Institution at Stanford University. This is the first time the content of these letters has been reported on.
The documents offer a rare glimpse into how these two major free-market apostles privately felt about government assistance programs—revealing a shocking degree of cynicism and an unimaginable betrayal of the ideas they sold to the American public and the rest of the world...
"Publicly, in academia and in politics, in the media and in propaganda, these two major figures -- one the sponsor, the other the mandarin -- have been pushing Americans to do away with Social Security and Medicare for our own good: we will become freer, richer, healthier and better people.
"But the exchange between Koch and Hayek exposes the bad-faith nature of their public arguments. In private, Koch expresses confidence in Social Security's ability to care for a clearly worried Hayek. He and his fellow IHS libertarians repeatedly assure Hayek that his government-funded coverage in the United States would be adequate for his medical needs.
"None of them -- not Koch, Hayek or the other libertarians at the IHS -- express anything remotely resembling shame or unease at such a betrayal of their public ideals and writings. Nowhere do they worry that by opting into and taking advantage of Social Security programs they might be hastening a socialist takeover of America. It's simply a given that Social Security and Medicare work, and therefore should be used." ...
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