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Hayek on Limited Democracy, Dictatorships, and the ‘Free’ Market: An Interview in Argentina, 1977

Part of the Archival Insights into the Evolution of Economics book series (AIEE)


Hayek is highly-regarded for his contributions to the development of liberal thought, particularly his work on individual freedom, economic freedom, ‘spontaneous’ order, and limited state action. He also defended dictatorial regimes, provided that they were committed to achieving the conditions of a ‘free’ market economy at the expense of unlimited democracy. This chapter examines Hayek’s rationale for supporting certain types of dictatorial regimes, based largely on the views expressed in an interview published in the Argentinean weekly magazine, SOMOS while on a one-week visit to Argentina in 1977. At that time, ‘Dirty War’ Argentina was ruled by the administration of army commander General Jorge Rafael Videla. Hayek defined ‘the condition of freedom’ as ‘a state in which each can use his knowledge for his purposes’ so as to achieve individual goals free from intervention or coercion on the part of an external authority: ‘Coercion is evil precisely because it thus eliminates an individual as a thinking and valuing person and makes him a bare tool in the achievement of the ends of another.’ By defending the practice of relying on dictatorial regimes to achieve the conditions of a ‘free’ market economy, Hayek contradicted his own concept of freedom, which he defined as ‘absence of coercion.


  • Unlimited Democracy
  • Actual Limit State
  • Videla
  • Alsogaray
  • National Reorganization Process

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    ‘The National Reorganization Process’ is the term that leaders used when referring to the regime during the Videla dictatorship that ruled Argentina from 1976 to 1983.

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    Prior to his appointment as Minister of Economics, Martínez de Hoz was the ‘CEO of Acindar the country’s leading steel manufacturer’ (Klor et al. 2017, 12).

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    Frondizi was Argentina’s President (1958–1962).

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    The Union of the Democratic Centre (U.D.C.) received financial aid from The National Endowment for Democracy (NED) through ‘the Instituto de la Economica Social de Mercado, which is associated with the U.D.C. and of which Alsogaray’ played an important role (Corn 1991). The NED is funded by a number of Fortune 500 corporations, including Chevron, Coca-Cola, Google, and Microsoft, in addition to the US Chamber of Commerce ( It claims to be ‘dedicated to the growth and strengthening of democratic institutions around the world’ (

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    In 2010, Videla was sentenced to life imprisonment for crimes committed during the Dirty War.

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    Hayek distinguished between limited and unlimited democracy by expressing his belief that ‘unlimited democracy is under the sway of the dangerous and “demagogic” idea of social justice and allows … governments too much power’ (Farrant et al. 2012, 521).

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    In 1977, Hayek also visited Chile and met with General Augusto Pinochet (1915–2006), who abused and violated human rights on countless occasions during his dictatorial rule (1973–1990). Hayek openly expressed his preference for ‘liberal dictators’ like Pinochet over democratically elected governments in an interview he gave to El Mercurio, a neo-liberal Chilean newspaper that received funding from the CIA and played an important role in the success of the military coup that overthrow the socialist government of Salvador Allende (1908–1973). Hayek regarded Pinochet and other dictators that sought to achieve the conditions of a liberal society as ‘educated, reasonable and insightful men—men, who honestly hope that the country can be returned to a democratic order soon … men who … [would be] happy to let go the responsibility which they believed they had to assume.’ Hayek’s preference for the Chilean dictator could not be attributed to his ignorance about Pinochet’s brutal rule, as he was the ‘recipient of evidence that amply documented the Pinochet Junta’s human rights abuses.’ In spite of this knowledge, he continued to publicly defend the Junta and its efforts to achieve a ‘free’ market economy. He also expressed positive opinions about Pinochet’s dictatorial regime, claiming that ‘it is possible for a dictator to govern in a liberal way’ (Farrant and McPhail 2014, 332, 336, 341). In El Mercurio, Hayek also stated that ‘Chile’s efforts to develop and reform its economy provided “an example at the global level”’ (Farrant et al. 2012, 521).

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    Hayek (1978) did not consider human rights to be particularly important, claiming that it was a fairly new concept: ‘You see, my problem with all this is the whole role of what I commonly call the intellectuals, which I have long ago defined as the secondhand dealers in ideas. For some reason or other, they are probably more subject to waves of fashion in ideas and more influential in the American sense than they are elsewhere. Certain main concerns can spread here with an incredible speed. Take the conception of human rights. I’m not sure whether it’s an invention of the present administration or whether it’s of an older date, but I suppose if you told an eighteen year old that human rights is a new discovery he wouldn’t believe it. He would have thought the United States for 200 years has been committed to human rights, which of course would be absurd. The United States discovered human rights two years ago or five years ago. Suddenly it’s the main object and leads to a degree of interference with the policy of other countries which, even if I sympathized with the general aim, I don’t think it’s in the least justified. People in South Africa have to deal with their own problems, and the idea that you can use external pressure to change people, who after all have built up a civilization of a kind, seems to me morally a very doubtful belief. But it’s a dominating belief in the United States now.’ Friedrich Hayek, interviewed by Robert Chitester date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles,

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    ‘Hayek provided several examples of the type of supposedly transitional dictatorial government he had in mind: England under Oliver Cromwell (Cromwell’s Protectorate supposedly providing a vital transitional way-station “between absolute royal power and the limited powers of constitutional monarchies”), the example provided by “two very strong men” (“Adenaur and Ludwig Erhardt”) in West Germany, and the example provided by the Portuguese “dictator Oliveira Salazar” (Salazar supposedly ‘started on the right path…but he failed”).’ In 1962, Hayek sent a copy of The Constitution of Liberty (1960) to Salazar (1889–1970), the authoritarian Prime Minister of Portugal (1932–1968), in the hope that his book might prove useful for Salazar ‘in his endeavour to design a constitution which is proof against the abuses of democracy’ (Farrant et al. 2012, 521).

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Filip, B. (2018). Hayek on Limited Democracy, Dictatorships, and the ‘Free’ Market: An Interview in Argentina, 1977. In: Leeson, R. (eds) Hayek: A Collaborative Biography. Archival Insights into the Evolution of Economics. Palgrave Macmillan, Cham.

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