The historical analysis upon which this book depends amounts to nothing more than extremely poor scholarship masquerading as thoughtful contrarianism. Hayek's conflation of Nazism with Socialism merely because they have similar names in German is an example of stupidity on the level of mistaking the PATRIOT Act for patriotism or the Ministry of Peace for peacefulness. This distracting error is unfortunately the foundation of the entirety of his argument. His theory of authoritarianism consists of extrapolations from misplaced assumptions about Nazi Germany and disproven projections about the direction the U.S. & Britain are heading in the post-war era. His quaint economic theory tells us little about contemporary authoritarian regimes and even less about modern social democracy. In sum, don't bother.

Hayek is a huge figure in economics and of immense influence on neoliberalism, and reading this I was struck by just how deeply and completely neoliberalism goes as a theoretical framework. I know many would not agree with that (though many would), but Thatcher claimed him as her own and that is enough for me. There are also those conversations in the Mount Pelerin Society with Milton Friedman. It fascinates me that this resonance is true not just of the ideas, but also in the way language is used and in its underlying sense of victimisation, a sense that continues even as so many neoliberal policies have waxed victorious over Keynsianism across the world. The Road to Serfdom was written in 1944; I found it so chilling to see the same arguments in so much vogue today used in the context of WWII, Hitler, and Stalin. The chill comes from the fact that so little of the rhetoric has changed in over sixty years, and that really, Hayek saw the world in the same stark black and white that George W. Bush did, and both benefited greatly from it. Below are what I believe to be some of the principle strands of thought found here that were entirely familiar with present day rhetoric:

- Socialism inexorably leads to fascism, liberalism is the only alternative
- Glorification of the individual but a fear of the masses
- Necessity of limited democracy
- Money as the measure of all things
- Competition in a free market as the best regulator of society
- Growing the total wealth rather than redistribution of wealth as the solution to poverty (trickle-down economics)
- A return to ‘traditional’ individualist values
- The sacredness of private property
- The selfishness of organised labour
- Necessity of government intervention to favour the market

What struck me most forcibly was undoubtedly this claim: "Few are ready to recognise that the rise of Fascism and Nazism were not a reaction against the socialist trends of the preceding period, but a necessary outcome of those tendencies” (p 4). This equation of socialism with fascism seems only to have grown through the years, you have only to witness the immense outcry against “Obamacare”. I wondered where the hell that came from, now I know. Hayek sets Socialism up essentially as a straw man by first equating it with some brand of what I would call Stalinism (though I’ll never deny that too many calling themselves socialists supported many of these totalitarian ideas), and then insisting that any kind of government effort to achieve a more just world will lead to totalitarianism. To disagree with a critique of an Orwellian system of mind control is something I would never do; to claim that there are only two choices before us, totalitarianism or Hayek’s vision of liberalism, is equally absurd. But going back to the “Obamacare” debacle, that is clearly what many people think.

Hayek in some ways comes off as the more reasonable and kinder face of liberalism when you look through the ages; life for him is not brutal, nasty and short, and he insists that liberalism does not argue that all men are egotistic or entirely selfish (and I use ‘men’ deliberately, the only woman mentioned in the book is the poor plain girl with the futile wish to be a salesgirl in a shop). Men are simply limited in their knowledge and imagination, and it is impossible for them to agree on any but a handful of very general things. This agreement can never stretch to values of any kind. Sad but true.

Read on and there is a darker side to this. Side by side with the glorification of individual choice and freedom, there exists also the characteristic contempt for the masses. Hayek says on page 168:"Probably it is true enough that the great majority are rarely capable of thinking independently, that on most questions they accept views which they find ready-made, and that they will be equally content if born or coaxed into one set of beliefs or another. In any society freedom of thought will probably be of direct significance only for a small minority”. This of course means that any kind of mass movement requires organising the worst elements:"It is, as it were, the lowest common denominator which unites the largest number of people” (p 142). In spite of his statement that democracy cannot exist without capitalism, he wants it in its most limited form. He states tellingly: “We have no intention, however, of making a fetish out of democracy . . . . Democracy is essentially a means, a utilitarian device for safeguarding internal peace and individual freedom. As such it is by no means infallible or certain" (p 73).

Thus it is not ‘the people’ who should ultimately control things, but something else. And again there is no room for alternatives here, there is only a stark choice between totalitarianism and the market (never mind that people control and manipulate the market in myriads of ways, just look at centuries of stock market scandal). Hayek argues that in claiming man’s ability to regulate his life and society, one “fails to see that, unless this complex society is to be destroyed, the only alternative to submission to the impersonal and seemingly irrational forces of the market is submission to an equally uncontrollable and therefore arbitrary power of other men" (p 210).

Money becomes the measure of all things, the only way we can be motivated to our full potential and know what to value. He writes on page 129, "It is not merely that if we want people to give their best we must make it worth while for them. What is more important is that if we want to leave them the choice, if they are to be able to judge what they ought to do, they must be given some readily intelligible yardstick by which to measure the social importance of the different occupations…” This yardstick is salary. It is absurd to me that I should view a Wall Street trader as a thousand times more valuable to society than any teacher, fireman, nurse, or even the latest winners of the Nobel Prize in physics, but so Hayek argues.

Competition becomes the great regulator, the only possible regulator in the face of human fallibility. Hayek equates competition with justice in that neither favours one person over another, and success is based only on capacity and luck. Even he is forced to admit that this more true in theory than in fact given a system of private property and inherited wealth, but in spite of this, competition is the best we can hope for. And indeed, under a competitive system and with money as the measure of all things, we are able to find the perfect tool for recording all individual actions and guiding them, and that is prices. So precise a tool is it, Hayek compares entrepreneurs to engineers watching the hands of a few dials and adjusting their activities to the rest of humanity. To rely on anything other than competition to regulate society, even for the best of ends, will inexorably result only in fascism as it substitutes a moral rule of law (controlled by a democratic majority and we’ve already seen where that will end given the lowest common denominator belief) for an arbitrary and predictable one. I’m beginning to understand the zealousness of neoliberalism’s proponents, it’s like a rewriting of the Lord of the Rings really, a saga of good against most absolute evil. And everybody hates fascism.

Rounding it up, we have trickle-down economics: “Perhaps no less important is that we should not, by short-sighted attempts to cure poverty by a redistribution instead of by an increase in our income, so depress large classes as to turn them into determined enemies of the existing political order” (p 214-15), and what is undoubtedly a good line: “It may sound noble to say: damn economics, let us build up a decent world--but it is, in fact, merely irresponsible” (p 215). We have the return to traditional values: “If we are to succeed in the war of ideologies and to win over the decent elements in the enemy countries, we must first of all regain the belief in the traditional values for which this country stood in the past, and must have the moral courage stoutly to defend the ideals which our enemies attack” (p 224). The values are familiar too, as compassion and kindness are thrown out the window in favour of “independence, self-reliance, and the willingness to bear risks, the readiness to back one's own conviction against a majority, and the willingness to voluntary co-operations with one's neighbours” (p 218). Of course there is the sacredness of private property as the most important guarantee of freedom, not just for those who own it, but somehow for those who do not. Organised labour is bad and constraining capitalism only hurts everyone. “To the worker in a poor country the demand of his more fortunate colleague to be protected against his low wage competition by minimum wage legislation, supposedly in his interest, is frequently no more than a means to deprive him of his only chance to better his conditions by overcoming natural disadvantages by working at wages lower than his fellows in other countries” (p 231). I’ve read this so many times before it’s as though it has been copied verbatim into every report and article justifying the existence of exploitation around the world. The necessity of limited government intervention to favour the market is here too (which David Harvey would argue is one thing distinguishing neoliberalism from liberalism), as he argues strongly against a pure laissez-faire position, though you could argue that the interventions we have seen are rarely to make “the best possible use of the forces of competition as a means of coordinating human efforts”.

It’s not just ideas, but attitudes that have continued strong. The way that the right-wing always perceives itself as the underdog, as under attack. Hayek bemoans the fact that socialism is dominant while liberalism is in fact the motor of progress, so taken for granted that people can no longer recognise it. As he states, “It might be said that the very success of liberalism became the cause of its decline” (p 19). There might have been some truth when he was writing, but the rhetoric continues long after the years of Reagan and Thatcher completely turned it around. There is also the same clarion call to sacrifice, “It is essential that we should re-learn frankly to face the fact that freedom can only be had at a price and that as individuals we must be prepared to make severe material sacrifices to preserve our liberty”, when the growing gap between rich and poor since these policies have become victorious make it so clear just whose sacrifice is required. It is hard to see why sacrifice should still be necessary after so many decades of it. The good times never arrived for most people I’m afraid.

The interesting things that don’t quite mesh with the neoliberal world today? He does admit that some kind of basic safety net may be necessary, even a good thing, as long as it doesn't inhibit competition. There is also the railing against monopolies. Hayek argues that they also lead to totalitarianism, not quite purposefully but in effect. I think possibly he might not be happy with the giant corporations we see today, it’d be an interesting question and one I’d quite like to ask him. The outcome of policies self-described as neoliberal has, in effect, been the death of competition; I would claim that this is inevitable in a system where the only measure of value is wealth and the only regulatory mechanism is competition, but it would be interesting to hear Hayek’s response. And the ultimate irony? He also states quite clearly that democracy works best in very small nations, smaller even than the UK…what would he make of America, the country which has done more to promote his views in theory than any other?

A must!

متاسفانه ترجمه به اندازه ای بد و در انتقال مطلب گنگ و ناتوان است که امکان ادامه ی کتاب وجود ندارد. خیلی از کتاب های کلاسیک ، مهم و تخصصی در حوزه های مختلف این گونه در ایران نابود شده اند و دیگر خوانده نمی شوند . ترجمه ی بد باعث می شود که دیگر نه کسی کتاب را تا اخر بخواند و نه مترجم دیگری به فکر ترجمه دوباره کتاب بیفتد به این علت که به لحاظ اقتصادی معمولا ترجمه دوباره کتاب به صرفه نیست و در بازار با استقبال مواجه نمی شود و این غم انگیز است .

It's probably impossible to review a book of this importance and craft without getting all giddy and gushy. After completing it, I feel elevated, a member of a lofty tribe of In-The-Knows, privy to the inner workings of one of the most phenomenal minds of the 20th century. That's no hyperbole. Hayek's achievements go well beyond teaching us about the evils of socialism and earning an Economics Nobel; his insights touched on many disciplines, informing fields as diverse as evolutionary biology and ecology, digital electronics and robotics, sociology and anthropology. Although aspects of what would become the study of cybernetics were available pre-Hayek (he himself credits Darwin with the basic concept), the principles of "spontaneous order," including self-organization and servomechanisms, were first elucidated in his writings on markets.

If you're into evolutionary processes, you'll come away from this book with an entirely new appreciation for them. Although I've relied on Hayek's arguments for years in my own political debates, I have to say that there's a deeper influence on my personal philosophy embodied in those principles. I'm in awe of complexity, particularly the behaviors of complex-adaptive systems, and it's quite clear to anyone with a modicum of understanding (or even a semi-modicum, like me) that economies and societies are just such systems. It's also obvious that, given the ability of such systems to adapt and evolve, that they are inherently superior to engineered systems. A perfectly-orchestrated planned economy would not adapt to changing conditions in society; it would instead force society to remain static, permanently adapted to it.

This book is almost entirely political, although it relies heavily on economic arguments. In other words, it does not strive to point out where socialism is *economically* in error, although those errors come out incidentally over the course of the text. The point of the book is to demonstrate that freedom and statism are antagonistic quantities, and that socialism requires a degree of statism that verges on (and easily spills over into) totalitarianism.

Some parts of the book will seem quite controversial, even revisionist, to today's readers who are unwilling to regard Nazism as a form of socialism. (This is an argument I've had many times.) The fact of the matter is that Hayek was there, on the scene, as Nazism was developing, and he traced its roots through the Germanic threads of socialism which were prevalent throughout Europe at the time. While it's easy to claim that Hitler cynically proclaimed Nazism's socialist bona fides in order to woo socialist voters, it's inescapable that Nazism actually began as a reaction to what was regarded, in Germany, as "English" liberalism. In effect, Nazism unified the older Left with the newer, nationalist Right, since both camps so vehemently opposed that liberalism (both for its pro-liberty emphasis and because it was associated with the hated WWI enemy). Other clues are there for the taking: the scapegoating of Jews as capitalists (via the banking system, with which they were, fairly or unfairly, associated); the employment of Party political officers within firms throughout the Reich, to direct industrial output per Party needs.

To a socialist who cannot fathom socialism being anything other than benevolent and non-violent, it's all but impossible to include Hitler and his ilk under that rubric. But the fact remains: Nazi Germany was a planned economy, and it was the model totalitarian society that Hayek was warning us about. He wasn't writing about Soviet Russia, folks. Moreover, the socialist basis of Nazism wasn't exactly controversial back then; many of the same American journalists who gushed over the "success" of Soviet planning also sang the praises of Germany's economic activity, for the very same reasons.

Although the Soviet world wasn't Hayek's specific target, it does serve as a prime example of one of his later arguments about how "the worst" end up in positions of power in such realms. It's no accident that the Nazis ended up modeling so much of their governance structure on that of the Soviets, nor that the most evil people in both regimes gravitated toward the top.

Consider this the first of an essential one-two punch for anyone who has to face leftists in political discussion. Read this one for the political angle, then follow up with The Fatal Conceit to get the economic side. This is a much more solid read than the latter, though. It is quite dense, extremely factual, and riddled with citations. It is not quite so heady and detailed as The Constitution of Liberty, though, and clocks in at fewer than 300 pages. I breezed through it in just 4 days.

Acabei finalmente de ler o caminho para a servidão. Já tinha lido muito por alto, mas a ternura dos 40 deu-me coragem para ler “a sério” um dos velhos clássicos políticos.
 
O livro é um livro “velho”. Já ninguém, creio, escreve ensaios assim. As afirmações e o processo dedutivo são demasiados lineares, há pouco empirismo ou casos práticos. Livros deste género, hoje em dia, estão cheios de interpretações históricas e pequenas evidências – no conjunto as diferentes peças do puzzle só encaixam de acordo com a interpretação do autor. Aqui, neste livro, tudo é sempre tremendo e absoluto (e com pouca sustentação).

Apesar de compreender o que o autor quer dizer creio que a Liberdade não fica causa por cada dificuldade, e quem não liberal não é automaticamente nazi, fascista ou comunista.

Percebo o pq desta forma e de escrita se atender ao contexto e à escrita da época. Aliás , só olhando para o contexto se entende a raiva e com desespero com que alguns parágrafos são escritos .

Para que não restem duvidas, a maior crítica que tenho é de forma.

De facto, os diferentes argumentos fazem sentido e atendendo ao tempo em que o livro foi escrito, demonstra alguma, aliás, bastante, coragem. Gostei especialmente da forma como o autor sem complexos explica que a Liberdade e realização pessoal são formas de estar na vida ou de culturas. Os países de tradição inglesa têm essa cultura, os alemães (afirma o autor) não têm. E que essa tradição de Liberdade começou a perder-se com alterações da percepção histórica, da linguagem, da cultura, da confusão de conceitos.

O que mais gostei todavia é o facto do livro colocar os críticos liberais no seu sítio. Apesar de desejar um estado mínimo, não nega a sua importância em campos que normalmente os liberais são atacados por não ter coração:

- Sem ambiguidades o autor descreve que ninguém vai procurar ter uma doença para abusar de um sistema de saúde. (O exemplo é meu: ninguém vai ter um cancro para abusar dos serviços públicos de saúde). O sistema de saúde deve ser promovido. Noutro livro recomenda mesmo que o sistema de saúde seja compulsivo.

- Afirma ainda que compreende os keynesianos e política de aumento de estado. Acrescenta, no entanto, que outras formas são mais eficazes . Mas não as nega, pelo menos neste livro.

- Diz ainda que só há concorrência e economia de mercado só são possíveis se actores forem price takers. E que a organização da sociedade tem de ser nesse sentido. Os monopólios são assim erros de caminho (apesar de tenderem para o seu fim quando nao forem promovidos pelos Estados).

- etc

O livro é uma critica fortíssima a toda a forma de planeamento, estatismo, ao comunismo e ao nazismo. E uma defesa intransigente do liberalismo. Não é, como muitas vezes nos querem vender, uma defesa da ordem espontânea ou de um um mundo libertário. Alias, o autor é bem claro: deve haver planeamento, mas um planeamento para o não planeamento, para o mercado atomizado.

Ficaram algumas dúvidas:
. Como via as a concorrência oligopolista, e como o combater?
. Como contrariar a tendência para a captura do Estado, quando é evidente que apenas o Estado mínimo não é suficiente.

Tlvz os outros livros dêem a resposta.

Hayek's The Road to Serfdom was both prophetic and influential in its day, and its message is as timely now as it ever was. He offers a compelling warning that the collectivism required for centralized planning is incompatible with democracy and the individualism on which it's built. In so doing, he provides key insights into economic concepts rarely discussed or understood today in mainstream conversations, such as how the price system works as a means of conveying information, how the rule of command is diametrically opposed to the rule of law, and how the increased complexity of our system demands a technique based on decentralization and automatic, impersonal coordination.

Hayek's work is both profound and humane, and it deserves fresh revisiting in the twenty-first century, where its lessons are all too needed and applicable.

As a witness to the birth of political totalitarian regimes like Naziism, Fascism and Communism, and their terrible consequences to Europe, Hayek warns in this book of the dangers of central planning as a way to totalitarianism and loss of individual freedom.

He acknowledges that some planning is necessary though, as it would not be feasible for a Parliament to make every economic decision. According to his standpoint, the only virtuous planning is the planning for competition. Privileging competition does not mean the state remains idle, as the state can and should plan to ensure competition.

Keynes’s criticism sounds pertinent at this point: where to draw the line, then? What exact type of planning is acceptable as per Hayek’s views? I don’t find these ideas contradictory, though. Hayek’s assertions could be taken as the recognition of a principle, a tendency. Societies must defend individual freedom and fight the frequent temptation of over or unnecessary planning, oftentimes desired by well-intended though naïve or shortsighted people — as Hayek writes, the inevitable consequences of what they defend will shock them in the long run.

One criticism relates to his insistence on approximating Naziism and Socialism as faces of the same coin, even though he recognizes that their supporters hated each other like “hatred brothers”. In fact, it does not seem very precise to make such an approximation without a previous more in-depth assessment of both phenomena and underlining the differences between them. This is understandable, since Hayek’s concern and focus are on the individual freedom, so this approximation points out the dangers produced to it as both systems tend towards totalitarianism. He does mention some common traces, but a more thorough investigation of the historical processes or sentiments which resulted in their births and supported their continuity would have given the argument a more historical and sociological rigourosity and a least pamphleteering tone — or would have changed his conclusion, which seems more plausible. The fact is that dictatorships have as a necessary characteristic some degree of revocation of individual freedom regardless of their political or philosophical orientation, and this could have been clearer.

The book is not filled with economic technicalities as one could expect. It is more a philosophical defense of the rescue of the 19th century classic liberal principles both economically and morally — not as the term “liberal” ended up being understood in the US, i.e., morally progressive but economically interventive.

It does not address though that 19th century liberalism worked pretty well for the elite, which enjoyed its positive outcomes in full potential, but meant exploitation of the poor working class internally and colonies abroad, which saw human degradation through underemployment and unworthy salaries. It is a never ending discussion indeed, but the phenomenon was so evident in the 19th century English society that led Marx to write about this, what grounded one of the most disruptive revolutions ever which he so much criticizes. Perhaps that should have been considered by Hayek in the book too.

In any case, the book can be read as an important counterweight to many societies’ natural tendencies to have the state interfering in the private sector’s life. It remarkably vocalized the liberal — in the classic sense — argument in the endless debate with supporters of more state intervention, in defense of the freedom of the individual against tendencies of totalitarianism which are released inasmuch as central planning is implemented.

I have so much I want to say about this book that I don’t even know where to begin.

I finished it yesterday and started to write a review, but ultimately gave up because I couldn’t organize my thoughts. Today I woke up, reread all the highlights I made in this book and felt like I was more prepared to talk about it. Only slightly however, because really, there are so many things to consider in this book.

This book is marketed as political philosophy, intellectual and cultural history and economic theory and it is all of those things, but I would say that it is primarily a history of thought. Hayek is tracing thought patterns and showing what those thoughts, ideas and behaviors lead to. One of the best quotes in the book was this “Those who fail to understand the origins of ideas do so at their peril."

That is really true. Take for instance my young self, my young self happily engaged in discussion with others about universal sterilization. That all young people should be temporarily sterilized and then only those of sufficient intelligence would have that process reversed so that they could reproduce and gift their genes to the future generation. Sterilization sounds practical after all, we would decrease the number of abortions, the number of orphans, and the need to give welfare to people who couldn’t seem to learn to stop having babies that they couldn’t support. But what is the origin of that idea? The origin of that idea is that some people are better than others, that some people deserve to have families and that others do not, the idea that some authority figure should declare who is worthy and by force keep all the unworthy from experiencing the same richness of life. The origin of that idea was that I was somehow wise enough to distinguish the worth of someone’s value as a parent by their intelligence...I shudder to remember that I ever thought this way. How bloody arrogant of me.

That is one of the major points of this work, the difference between those who support collectivism and those who support individualism are divided by a more fundamental belief than just their views on which economic system would work the best, they are divided more fundamentally in how they view themselves. The collectivist either inherently sees them self as superior to other people, able to make decisions for others that are better than those others could make for themselves, capable of holding all the various factors, needs, and desires of all these people at once, or they never stop to think about the complexity of people and their interactions with one another at all. They are either arrogant in their estimation of themselves, or they underestimate everyone else, or both at the same time. The individualist on the other hand looks at the complexity of human behavior and is awed by it, instead of oversimplifying the systems of human interactions the individualist sees all of the complifying factors and throws up their hands in humility acknowledging that there is no way for anyone to comprehend human interactions in their totality and leaves each individual alone to make the decisions that seem best to them.

There is a term in human psychology known as the Dunning-Kruger effect. I don’t pretend to know everything about it because I haven’t really read in depth about it, but it is essentially the description of a state where people are so ignorant about something that they do not even possess the skills to recognize their incompetence in that area. I can’t help but think that those who believe that collectivism is the answer to all of humanity’s ills fall into this category. There are so many assumptions involved with it, the assumption that everyone will agree that collectivism is desirable, the assumption that everyone will agree with the stated goal such as a ‘livable wage’, the assumption that everyone will agree with the necessary intermediate steps in order to get to the goal, and the assumption that everyone will agree on the order of those intermediate steps are just some of the simplest that I can see. Can you imagine everyone agreeing with all of those things? I have worked in a committee, I can’t see that happening. Committees can’t even agree on what snack to provide.

But this isn’t the only problem with collectivism. Collectivism is inherently built on discrimination. Even those that espouse socialism today in the USA acknowledge this implicitly. They say things like ‘we need to make sure this group of people has a livable wage’. Okay, but why this group and why not that group? Why should fast food workers receive a livable wage and not janitors? Some try to get beyond this by saying ‘all low wage workers’, well then what about the people that are already earning more than them, say a medical doctor, their wages would not be allowed to go up, because that would create more disparity. One group of people has an advocate in the government and the other doesn’t. Is that not in itself discrimination? Some would say, well the rich don’t need an advocate, they have all the power. I would, like Hayek, point to a couple of other places in the world where people held that idea. The Jews in Germany, the Kulaks in the soviet union, the educated in Cambodia. All of those people were the ones that had ‘the power’ that didn’t need an advocate, all of those people were trampled under the heels of those who said that they just wanted equity for everyone.

And that’s just the point, the point is that what happens when people disagree? We can talk and try to convince them but not everyone is convincible. What do we do then? In a liberal and individual society we agree to disagree and move on with our lives, each choosing to act in the way that they see best, and when we disagree we can move away from that person, or defriend them, or take them to court in instances of harm caused by the disagreement, or, very rarely, stay friends and continue working together even though we disagree. But in a collectivist society, there can be no disagreement, all must work towards the same goal, and all who disagree are disappeared. All we have to do is look at history to see this. It’s everywhere. You have Solzhenitsyn who critiqued the soviet union and was sent to the gulags, you have Shostakovich, who just wanted to write music and was forced to change what he wrote to please the government. You have the Ughyurs in China being wiped out right now, the Hong Kongers in the fight of their lives against an authoritarian state that won’t let them vote how they wish, live how they wish, speak how they wish, and it’s so easy to end up in a place like that. All you have to do is agree that someone else knows better than you about how you should live your life and has the authority to dictate it to you. All you have to do is to be made to feel guilty for desiring to make your own decisions. It’s frightening how easily people give up their right to live as they choose because other people point at them and call them immoral.

"What our generation is in danger of forgetting is not only that morals are of necessity a phenomenon of individual conduct but also that they can exist only in the sphere in which the individual is free to decide for himself and is called upon voluntarily to sacrifice personal advantage to the observance of a moral rule."

Hayek is a difficult and controversial subject for review. He and Milton Friedman are heroes to advocates of free market economics, and they are villains to others. I’ll say a little more about contemporary relevance at the end, but I’ll do my best to stay focused on Hayek’s thought as expressed in The Road to Serfdom.

Hayek originally wrote The Road to Serfdom during World War II, for a British audience. He was warning his readers that the seeds of Nazi Germany were not exclusively German, that the danger was widespread throughout England itself and was coming to fulfillment in the Soviet Union, in a different form but still from the same seeds.

The seeds that Hayek identified have to do with “central planning.” Actually he uses three terms, “socialism,” “collectivism,” and “central planning” to identify different perspectives on what he regards as a dangerous way of thinking about and organizing a nation’s economy.

“Planning” is, I think, the core concept. Hayek views planning or “central planning” as essential to socialism. The insight behind socialism, as he discusses it, is that a rational economy is a planned economy, one organized efficiently toward some end by a central governing power. Coercion then becomes, in Hayek’s view, as essential as planning itself, in so far as the aspirations and activities of individuals must, for planning to succeed, be subservient to the decisions of the central governing power.

Given the importance of planning as the object of Hayek’s thinking, we need to know what “planning” means. Hayek distinguishes two types of economic rules or legislation on economic matters. “Formal rules” are instrumental. They have to do with that system of laws that establish and maintain the playing ground of economic activity, rules of competition for example. In one illustration, Hayek refers to such instrumental rules as “rules of the road” analogous to rules for highways — speed limits, rights of way, etc.

By contrast to rules of the road there are rules that would prescribe destinations — call them rules pertaining to ends rather than means or instrumental rules. As opposed to rules regarding speed limits and rights of way, these would be rules regarding where one should travel.

The latter rules would constitute “planning” or “central planning” if they have to do with the direction of the economic activities of a state toward a chosen particular goal or a set of goals.

Note that the means of legislation is not the crux of the matter for Hayek. Although he certainly favors democratic institutions, rules can be legislated by democratic bodies, or they could be set in place by dictatorships. In either case, for this discussion what matters is their scope and whether they constitute planning. Hayek is not blind of course to the greater likelihood that a dictatorship (or a select group of decision-makers) will pursue ends of its own choosing as opposed to a democratic body reaching agreement on those ends. But he expresses his opposition to democratic bodies engaging in planning, just as he does for dictatorial governments doing so.

In understanding this point, keep in mind that Hayek is writing this book during the reign of Hitler in Germany, and that the question of whether Hitler’s rise to power and securing of broad governmental power was achieved legally and even democratically was in debate. It's also worthwhile to keep in mind that Hayek’s objections to planning may override the value he places on democratic self-determination when we consider his much later embrace of non-democratically established governments like Pinochet’s in Chile (and its overthrow of a democratically elected socialist government).

Overstepping formal rules to engage in planning could happen in lots of ways. The most straightforward, and the one that Hayek gives most attention to, is when governments take it upon themselves to plan, to organize economies toward particular goals. This is “state socialism.” He criticizes both the very idea of a government organizing the economy toward specific goals and what he regards as the emptiness or vagueness of goals such as “the common good” or “the general welfare.”

Other ways, though, in which central planning might develop involve exertion of influence by particular individuals or entities in their own interests, to serve their particular economic ends. Thus corporations or wealthy individuals who exert influence over the legislative process to further their own advantages and ends would be guilty of “planning.” That sort of corruption (or “crony capitalism”) isn’t Hayek’s concern so much in this book, but it does fit his conception of governmental overstepping, or ‘planning” by his terms, and results likewise in coercion of some to support the goals of others.

Of course, all government is in some sense coercive. Laws coerce behavior. But a contrast between central planning and how Hayek understands “liberalism” will help.

Remember that “liberalism” for Hayek is meant in its nineteenth century use, not in its current popular use, especially in American politics. “Liberalism” is an organization of economic behavior in which Individuals are left free to pursue their own ambitions in a competitive environment. It is not an entirely unplanned economy — that competitive environment is maintained by “a carefully thought out legal framework.”

The key elements are individualism and competition. Hayek is proposing a legally maintained arena of competitive individuals each pursuing their own ambitions and plans, as opposed to a centrally planned economy, rationally organized to some end (e.g., general welfare, a high standard of living, or, I suppose, simply an egalitarian distiribution of goods).

Hayek is not a proponent of laissez faire economics. In rejecting that term, he says, “An effective competitive system is an intelligently designed and continuously adjusted legal framework as much as any other.” The role he allots to government and the legal system is to assure that “competition should work beneficially.” Laws to regulate monopolistic power, barriers to entry to markets, manipulation of prices, etc. are all fair game, in so far as they promote competition as a “beneficial” engine of economic activity.

Nor does he exclude from that legal framework provisions for minimum wages and other labor-facing protections so long as they do the same, that is, promote competition as a beneficial force.

He also does not think that prices (and here he may disagree with Friedman) provide a universal mechanism for preventing and controlling such things as environmental damage (Hayek specificaly calls out deforestation) or other harmful effects of economic production. These, he says, do require other mechanisms, namely legal authority and regulation.

It’s worth pointing out some of these points on which Hayek favors government action, not only just to get his position correct, but also to dissociate him from others who may take more extreme positions. Hayek is not an opponent of the welfare state per se. As he says, “ . . . there can be no doubt that some minimum of food, shelter, and clothing, sufficient to preserve health and the capacity to work, can be assured to everyone.” He would also include the provision of something he terms “social insurance” — “Nor is there any reason why the state should not assist the individuals in providing for those common hazards of life against which, because of their uncertainty, few individuals can make adequate provision.” He includes “sickness and accident” as examples.

He also discusses, in the same passage, the damages to individuals that arise from economic fluctuations. Hayek after all was writing in the aftermath of the Great Depression. He considers monetary policy interventions as well as large scale public works programs as measures that do not reach into the kind of planning he believes a threat to freedom, although he regards public works programs as experiments to be watched carefully.

He specifically rules out any kind of insurance or security that would protect individuals from a competitive loss of value in their trade or their products. That kind of intervention, like price or wage controls, he believes, would imperil the function of competition as the engine of free economic activity.

The key criteria that Hayek leans on to distinguish a healthy economic structure from an unhealthy one are competition and economic freedom (as distinct from central planning and coercion in the senses we’ve discussed).

Given that, let’s look more closely at Hayek’s central claim regarding freedom and coercion.

Hayek’s claim that central planning (“socialism” in his understanding of the term) inevitably leads to political fascism or totalitarianism is a claim about the interplay of political and economic freedom and power.

Hayek (and others) distinguish political freedom, e.g., the freedoms protected by the American Bill of Rights, from economic freedoms. The former provide for participation in self-determination (voting), speech or expression, etc. The latter provide for participation in specifically economic activities — buying, selling, practicing a trade, etc.

It is critical for Hayek that the two, economic and political power, are kept separate. Where political power assumes economic power, you have central planning and coercion.

The two are certainly distinguishable, but they also interact, even are entwined in practice. Hayek’s attention is more strongly focused on political power crossing the boundary to assume economic power. But the reverse is also dangerous.

In our own American system, the influence of economic power on political power is obvious. Manipulation of the rules of competition via political power, based on economic power, is in play. As is a vicious cycle in which economic power drives political power to tilt competition in the favor of powerful economic players (large companies), which contributes to gains for those players in economic terms, which drives more political influence, and so on. The kinds of political influence that economic players may exercise, it should be unnecessary to mention, include lobbying to push favorable legislation, influence over appointments to executive government positions, campaign finance and its regulation or deregulation, etc.

That argument in fact suggests a similar tendency to Hayek’s own argument for the inevitability of coercion in socialist economies, a tendency toward corruption in economies where economic and political power are not kept separate. In an economy grounded on competition, competitive advantage is prized. And if economic power, once attained, can be used to gain political power and skew the competitive playing field in someone’s favor, that’s presumably what they will do — an argument for the “inevitability” of corruption unless prevented by adequate laws or political structures like checks and balances.

So far as I see, Hayek does not address that danger here in this book, although his insistence on the separation of political and economic power implies its presence.

Bringing Hayek’s thinking here into the context of our own contemporary concerns is going to require close attention to the finer points of political and economic power relationships.

The boundary between harmful and beneficial economic regulation, or intervention in general isn’t always going to be clear. Hayek thinks that the engine that drives healthy economic activity is competition. Interventions that limit competition are harmful, and ones that promote competition are healthy. But it’s not always going to be clear which is which.

It’s also not clear that he would rule out public management of some areas of economic activity, where competition does not serve a beneficial purpose. Although, relevant to our contemporary concerns, it is clear that he sees some role for intervention in healthcare, for example, it’s not clear what that role is, whether it should be confined for example to catastrophic “social insurance” or something broader. And of course that’s for us to debate.

He does not favor government management of parts of the economy where monopolies develop organically, as in utilities where infrastructure investments or other factors favor the emergence of a dominant player. In such cases, he favors what he calls the “American” approach to regulation rather than public takeover.

Hayek himself doesn’t focus on these finer points of political and economic power in this book. At the time of writing this book, he was less concerned with the finer points than the larger ones — his concerns were more directly focused on Nazi Germany and the centrally planned economy of the Soviet Union.

He does mention, in a preface written later, economies like Sweden’s that do contain some elements of what he would consider central planning, and he warns that such countries will find their way inevitably to a broadening of central planning and coercion. Whether that is true of Sweden, for example, is something we could debate as well, although it seems a stretch to claim that Sweden is, or is on a trajectory toward, a totalitarian state.

Hayek’s own later work will fill in some holes from The Road to Serfdom, in particular, his theory of local knowledge and self-organization as the basis for stability in a competitive economy. That theory is also historically interesting in the light of Hayek’s peripheral participation in the Vienna Circle prior to World War II. The Vienna Circle, especially as influenced by Ludwig Wittgenstein (a second cousin to Hayek), often took anti-theoretical positions, the kinds that would support a rejection of the kind of knowledge presumed by central planning economic models.

Hayek mentions in The Road to Serfdom the claim that the kind of knowledge necessary to central planning is inaccessible, given the complexity and dynamism of a national economy, but he doesn’t flesh out his arguments here.

We could go on to much larger discussions of planning, economic and political freedom, competition, the “free market system”, the role of government, and more. I think, if you want to read something that furthers your thinking after reading Hayek, one contemporary book that would be helpful is Joseph Stiglitz’s recent book, The Road to Freedom. Stiglitz challenges Hayek’s notion of freedom, in fact arguing that that notion is unexamined and undeveloped, proposing his own conception of freedom as “opportunity sets.” He also challenges assumptions he believes necessary to the beneficial workings of a free market, assumptions not met by actual economies.

Hayek and Stiglitz are economists. If you want to pursue a more philosophical vein, Robert Nozick’s Anarchy, State, and Utopia is an updated (although now itself about 50 years old) argument for libertarianism and minimalistic government. And, by counterpoint to both Hayek and Nozick, John Rawls’ A Theory of Justice presents and defends a more active role for the state in providing for a just distribution of resources, while also respecting and enabling individualiastic life plans and conceptions of a good life. Rawls’ book is a classic and a touchstone for any modern discussion of political philosophy.

All grist for thought, and all the more needed at a time when political talk so far outpaces political thought.

Hayek’s black and white view of the world maybe too dark and not always accurate as liberal terms/theories evolved over the past eighty years but his work is very thought provoking and worth reading

The misanthrope takes his ball and goes home. No one notices.

It’s telling that the only willing publisher of angry little man Hayek’s retort to reality was the U of Chicago, home of other bankrupt and defunct, but unfortunately still influential and destructive far-right philosophies of economics.

The Road to Serfdom ends where it begins, as pseudo-intellectual propaganda (i.e. justification) for unfettered bugger-thy-neighbour capitalist “winners”.

The book started as an angry memo that made the argument that the 1930s fascist takeover in Germany in fact was a liberal socialist movement… Really. He may have even believed this. Many of his disciples certainly do believe it, contrary to reason.

The memo didn’t garner Hayek enough attention, so he turned it into an article, which was also largely ignored by anyone with a few brain cells.

Once the UK was pulled into the war, Hayek’s colleagues at the LSE were appointed as government advisors and given other wartime duties. Hayek was not selected, perhaps because he was a “foreigner”, but then, so were many of his colleagues that found useful roles. No one wanted Hayek. So, he wrote. Angrily, hyperbolically, and rather badly.

The angry memo / article became an angry book that no one wanted to publish, read, or edit. Hayek sorely needed editing, as he is all over the place: Pro-something in one section, anti-that something in another section. It is pure reaction, penned to incite reaction.

Hayek and his cognitive dissonance is perfect for aspiring far-right ideologues. They can cite angry, obscure Hayek to pretend their fascist policies have grounding in “sound” economic philosophy. These fascists can safely assume none of their ignorant supporters will ever read Hayek, or any book of actual merit, so Hayek becomes an imprimatur that represents far-right intellectualism. It fits, as it is all vapid, hollow, and counter-factual. A “freedom” how-to — but only if you do exactly what your leader says.