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Hayek, the Accidental Freudian

The economist was fixated on subconscious knowledge and dreamlike enchantment—even if he denied their part in his relationships.

In addition to being a fan of Hayek, Cáceres sat on a special board of advisers to the military dictator Augusto Pinochet, who had overthrown Chile’s democratically elected Socialist leader, Salvador Allende, in a violent coup four years earlier. In the following years, Hayek continued to defend the regime, describing its leaders as “educated, reasonable, and insightful men” and Pinochet as “an honorable general.” To a doubting public, Hayek explained that dictators can cleanse democracies of their “impurities.” He reassured critics that he had “not been able to find a single person even in much maligned Chile who did not agree that personal freedom was much greater under Pinochet than it had been under Allende.” It was one of the rare instances when his perception of the country matched reality; as a respondent pointed out, “such absolute unanimity only exists when those who disagree have been imprisoned, expelled, terrified into silence, or destroyed.” Persuasive as these readings are, they don’t quite capture that moment of élite domination in the Hayekian market, when the “innovations” of a seeing and knowing few have “forced a new manner of living” on the unseeing and unknowing many, whose function is neither to invest nor amass but to yield, not to the economy or the state but to their superior.

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