The False Binary Logic – PART 1 : The Economy. How Hayek and von Mises creates a false dichotomy between market and state.
Luc Lelievre : "Simple problems are often presented as impossibly complicated."
How Hayek and von Mises creates a false dichotomy between market and state.
by Suavek
First, I have a confession to make. I am not an economist, though I have been interested in the subject of false dichotomies in politics and economics for about twenty years. I felt compelled to write this short article because I find it almost unbearable that some people base their well-intentioned views on propaganda, and on insufficient information stemming from a deliberately narrowed discourse. While the cited sources provide important information, I cannot vouch for the complete absence of foolish propaganda within them. This article is a quick draft, yet I consider it urgently necessary. Regarding this topic, I have long suspected that this is an age-old scam; however, it was only today that I discovered—by chance—that I am not alone in this view and that I can actually substantiate it.
Numerous economists, political scientists, and philosophers have argued that the theories of Friedrich August von Hayek and Ludwig von Mises construct a false dichotomy : economists John Maynard Keynes and Karl Polanyi, political scientists like Raymond Plant, and philosophers such as John Gray, and others. Propaganda deliberately employs such tactics in the realms of economics and politics to dumb us down and incite us to squabble over absurd, extreme positions and futile viewpoints, rather than engaging in meaningful discussion to find a practical “golden mean.” Indeed, propaganda does everything it can to keep certain topics out of public discourse and to curtail that discourse. It is a form of effective brainwashing designed to prevent any meaningful change driven by grassroots action, thereby ensuring that the only effective power remains the exclusive preserve of the “Eliters.”
Some call this “false binarity”, or “false binary”. In English academic literature, this is more commonly referred to as a false dichotomy, a false dilemma, or black-and-white thinking. Whatever one calls it, the logic is flawed, as both perspectives overlook essential factors and thus fail to reflect reality. Consequently, a dispute over the “correct” policy—or economics—is inevitable, yet unproductive.
Critics argue that both thinkers artificially divide complex economic and social realities into two extreme, mutually exclusive choices, completely ignoring stable and successful middle grounds.
The critique of false binarity in their work typically focuses on three central pillars:
The Market vs. Central Planning Dichotomy
The Theory:
During the historic Socialist Calculation Debate, Mises and Hayek argued that a society faces a strict binary choice: either a free market driven by decentralized price signals or a socialist centrally planned economy. Mises asserted that without market prices, rational economic calculation is literally impossible.
The Counter-Argument:
Critics like Oskar Lange, and later institutional and Keynesian economists, pointed out that this is a false dilemma. The real world is not an absolute choice between pure laissez-faire and totalitarian socialism. The practice of modern economics shows that virtually all successful nations operate as mixed economies—combining market mechanisms with state regulations, public goods, and social safety nets—which have proven highly stable.
Freedom vs. Serfdom (The Political Slippery Slope)
The Theory:
In his famous work The Road to Serfdom, Hayek posited a political binary: once a democratic society allows state intervention or expands the welfare state, it enters a slippery slope that inevitably leads to totalitarianism. In this view, any step away from a pure market economy is a step toward tyranny.
The Counter-Argument:
Political scientists and historians heavily criticize this as a false causal binarity. A major counter-example frequently cited is the Scandinavian model. The historical reality of Western ( social market economy in West-Germany) and Northern Europe (Norway, Sweden, and Finland) directly refutes Hayek’s claim; these nations have maintained high tax rates and extensive welfare systems for generations, yet they consistently rank among the freest, most democratic societies in the world. While we do see that democratic social structures are being dismantled there as well, and that the advance of totalitarianism is not sparing these countries either, I am referring here to the entire post-war period.
Omniscient Market vs. Complete State Ignorance
The Theory:
Hayek constructed an epistemological binarity regarding knowledge. He argued that individuals and governments are inherently and “constitutionally ignorant” of the vast complexities of society. Conversely, he viewed the market as a “spontaneous order” that possesses a near-perfect, aggregated capacity to coordinate information through price signals.
The Counter-Argument:
Nobel laureate Joseph Stiglitz and other modern economists argue that this is a flawed, binary oversimplification. Markets are not inherently omniscient; they suffer from massive systemic failures, including information asymmetries, monopolies, and an inability to address collective crises. Mainstream criticisms emphasize that the real choice is not between a flawless market and an incompetent state, but rather finding an optimal regulatory balance.
The conclusion
If you have a particular interest in this topic, it might be worth researching the concept of the “social market economy.” However, since I am primarily dedicated to the subject of “fraud in medicine,” I cannot delve deeper into this topic, which I have only touched upon here. What I do want to emphasize, however, is that in economics, the “workable truth” can be neither black nor white; it can only lie somewhere in the middle. I am certain that almost everything we were told about capitalism and socialism—or Left and Right—was one-sided, exaggerated, and therefore untrue. Two examples: First, the depiction of certain useful social structures is erroneously framed in association with communism. And second, the distinction between the capitalism of the 1950s and 1960s and its later, neoliberal variant is often glossed over, as if they were one and the same form of capitalism. Yet neoliberalism ought really to be described as ruthless market radicalism; the euphemistic term “neoliberalism” actually obscures its predatory nature.
Friedrich August von Hayek is widely considered the founding father of neoliberalism . As an Austrian-British economist and philosopher , he was a leading figure of the Austrian School of Economics (Please be careful; there is a lot of terrible propaganda here: Austrian School of Economics ) and famously spearheaded the Mont Pelerin Society ( propaganda, too ! ) in 1947, which laid the intellectual groundwork for the global neoliberal movement . [2, 3]
You can find interesting, further information in this article in German (without propaganda) :
HIStory:
James McGill Buchanan. A third way of market radicalism beyond Hayek and Friedman
https://apolut.net/history-james-mcgill-buchanan/
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Sources :
https://mises.org/mises-wire/debunking-seven-common-criticisms-austrian-economics
https://mises.org/mises-wire/they-didnt-listen-reality-hayeks-bestseller
https://mises.org/mises-wire/mr-stiglitz-hayek-room-us
https://cdn.mises.org/rae7_2_5_2.pdf
https://mises.org/mises-wire/why-austrians-are-not-neoliberals
https://www.ebsco.com/research-starters/history/hayek-opposes-centralized-economic-planning
https://www.economicshelp.org/blog/glossary/criticism-austrian-economics/
https://www.exploring-economics.org/de/entdecken/der-markt-und-seine-politische-okonomie/
https://hfgg.de/wp-content/uploads/2023/05/66_Wissen-Hayek.pdf
https://www.ebsco.com/research-starters/history/hayek-opposes-centralized-economic-planning
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The Power of Clear Writing
What Thomas Paine and Benjamin Franklin Can Teach Us Today
Jul 01, 2026
“ ( … )
Today, many institutions communicate through layers of technical jargon, bureaucratic language, and procedural complexity. Simple problems are often presented as impossibly complicated. This complexity serves a purpose: it shields institutions from scrutiny and makes it harder for ordinary people to understand what is happening or to hold anyone accountable.
( … ). ”
Full article :
https://hxlibraries.substack.com/p/the-power-of-clear-writing
[ Editor’s note: In one of his comments, Luc Lelievre provided the following link regarding this topic:
https://mises.org/mises-wire/why-history-refuses-stay-planned ]
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The State of the Economy
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Related article :
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Article in German: https://apolut.net/history-james-mcgill-buchanan/
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The most reliable information on the “Covid” hoax and the deceptions of the system can be found in the statements of Dr. Mike Yeadon, at the links below :
Dr. Mike Yeadon’s Substack #1 :
https://drmikeyeadon.substack.com/
( Notes : https://drmikeyeadon.substack.com/notes, and other activities on Substack : https://substack.com/@drmikeyeadon )
The Telegram channel of Dr. Mike Yeadon ( other Telegram channels with his name are fake ! ) :
https://t.me/DrMikeYeadonsolochannel
A collaborative Substack by Dr. Yeadon and Suavek ( Dr. Mike Yeadon’s Substack #2 ) :
Fraud Prevention Hotline / suavek1.substack.com
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Source :
https://drmikeyeadon.substack.com/p/reminder-suaveks-substack-the-fph
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Dr. Mike Yeadon, December 21 ( update Dec. 23 ), 2025 :
Source :
https://drmikeyeadon.substack.com/p/scorpions-in-the-dock
Consider subscribing to my friend Suavek s publication an essential move please. There you can find many posts from my Telegram channel collated with other material in a skilful way. Fraud Prevention Hotline
Best
Mike
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DEAR FRIENDS,
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https://drmikeyeadon.substack.com/p/my-other-substack
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Good to know to avoid potential misunderstandings :
Before publishing an article, there isn’t enough time during the editorial process to discuss every detail. In case of doubt, each author is therefore only responsible for their own statements.
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We urge you, if possible, to add both Substacks to your recommended list in your Substack. Thank you very much in advance,
Mike & Suavek
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The possible support goes to Suavek. Any support is especially welcome at this time, and is VERY appreciated, but of course is not mandatory, as this Substack is free. I extend my sincere thanks to those who have supported me so far.
You can either do something against or for something :
Hello friends,
I needed to elaborate slightly on a section of the article to avoid misunderstandings. The previous text was imprecise and has now been replaced by the following:
"Political scientists and historians heavily criticize this as a false causal binarity. A major counter-example frequently cited is the Scandinavian model. The historical reality of Western ( social market economy in West-Germany) and Northern Europe (Norway, Sweden, and Finland) directly refutes Hayek’s claim; these nations have maintained high tax rates and extensive welfare systems for generations, yet they consistently rank among the freest, most democratic societies in the world. While we do see that democratic social structures are being dismantled there as well, and that the advance of totalitarianism is not sparing these countries either, I am referring here to the entire post-war period."
Oh, I’ve subsequently added a few sentences to various parts of the article—or modified them. It seems my work was published a bit too hastily...
You can find interesting, further information in this article in German :
https://apolut.net/history-james-mcgill-buchanan/
Suavek
I would like to suggest that the post war period is not very long, in the 19th century you could live your entire life without coming into contact with the state, maybe an exception would be post offices.
If you give the state your finger it will take your arm, it is therefore inevitable that tyranny will result from welfare.
I take your point that its possible we have been fed two theories to keep us in the psychopaths overton window, just as in right and left but for me there can be no doubt whatsoever that the state will inevitably become tyrannical because its baked into human nature, estate agents tend to be sociopathic liars because the sales system they operate in is corrupting by nature.
State help might not set out to be a trap but that is how it will finish up, I am now quite convinced that the psychopaths were responsible for the NHS and it's equivalent in Europe so as to create dependabcy and destroy self reliance both for patients and medical staff, I find it inconceivable that doctors and nurses could have been persuaded to murder patients before the NHS was created.
Thank you for your work, I find it invaluable.