Not only was the fate of the Jews tied to the fate of liberalism, the fate of liberalism became intertwined with the fate of the Jews. ‘The deep irony’ of the late Hapsburg empire into which Hayek was born, writes Ernste Gellner, one of its most penetrating analysts, was that ‘an authoritarian Empire, based on a medieval dynasty and tired to the heavily dogmatic ideology of the Counter-Reformation, in the end, under the stimulus of ethnic, chauvinistic centrifugal agitation, found the most eager defenders amongst individualist liberals, recruited in the faith with which the state was once so deeply identified. … But now the logic of the situation led [the house of Hapsburg] to be the pattern of a pluralistic and tolerant society.’ In the final decades of the Hapsburg empire, one nationality after another turned its back on the empire, including, finally, the Austro-Germans, who adopted a national, indeed völkisch, identification as Germans. The last and most faithful supporters of the Hapsburg regime turned out to be ‘the new men: the commercial, industrial, academic, professional meritocrats, interested in maintaining an open market in goods, men, ideas, and a universalistic open society.’ It was these newly arrived meritocrats, many of them of Jewish origin, who became the cadres of Austrian liberalism.’
The result was what Gellner has dubbed ‘pariah liberalism,’ a liberalism formulated by cultural outsiders and antipathetic to the very notion of cultural insiderdom and outsiderdom. These liberals favored cultural openness and individualism over closed communities, ethnic or economic. In a culture where their roots were stigmatized, they stood for an abstract and universalistic individualisms against the romantic communalism represented by both socialism and nationalism.
Jerry Mueller, Mind and the Market 350-52 (19--)
FWIW, I believe von Hayek was not Jewish, but his mentor, Ludwig von Mises, was. My notes don't give a source for the Gellner reference, but I suppose it is Ernest Gellner, Language and Solitude: Wittgenstein, Malinowski and the Habsburg Dilemma (1998).
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