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F. A. Hayek (1899–1992) is undoubtedly the most eminent of the modern Austrian economists, and a founding board member of the Mises Institute. Student of Friedrich von Wieser, protégé and colleague of Ludwig von Mises, and foremost representative of an outstanding generation of Austrian School theorists, Hayek was more successful than anyone else in spreading Austrian ideas throughout the English-speaking world. He shared the 1974 Nobel Prize in Economics with ideological rival Gunnar Myrdal "for their pioneering work in the theory of money and economic fluctuations and for their penetrating analysis of the interdependence of economic, social and institutional phenomena." Among mainstream economists, he is mainly known for his popular The Road to Serfdom (1944).
The Road To Serfdom Summary and Study Guide
Friedrich Hayek
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1. Hayek believes that democracy will collapse under socialism, and he warns repeatedly that the collectivist trends that led to totalitarian Germany and Russia are similar to recent trends in England and America. Is planning winning the day, or is Hayek mistaken? Defend your assertion.
2. Economic planning tends to become much more difficult than theorists expect. What could cause this disconnect between theory and reality?
3. Can a socialist society protect individual freedoms? Suggest some safeguards and how they would work.
(Chapter 1, Page 66)
Liberal ideals about freedom had suffered erosion well before the great dictatorships arose. The liberal West, moving away from those ideals and toward socialism, had through inattention laid the groundwork for the totalitarian threat.
1. Hayek believes that democracy will collapse under socialism, and he warns repeatedly that the collectivist trends that led to totalitarian Germany and Russia are similar to recent trends in England and America. Is planning winning the day, or is Hayek mistaken? Defend your assertion.
2. Economic planning tends to become much more difficult than theorists expect. What could cause this disconnect between theory and reality?
3. Can a socialist society protect individual freedoms? Suggest some safeguards and how they would work.
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Definitive Edition Google Preview
The description below is written for the Definitive Edition of Road to Serfdom which is sold in the Mises Store and can be previewed here: Google Preview.
Finally, here is an edition of Road to Serfdom that does justice to its monumental status in the history of liberty. It contains a foreword by the editor of the Hayek Collected Works, Bruce Caldwell. Caldwell has added helpful explanatory notes and citation corrections, among other improvements. For this reason, the publisher decided to call this "the definitive edition." It truly is.
This spell-binding book is a classic in the history of liberal ideas. It was singularly responsible for launching an important debate on the relationship between political and economic freedom. It made the author a world-famous intellectual. It set a new standard for what it means to be a dissident intellectual. It warned of a new form of despotism enacted in the name of liberation. And though it appeared in 1944, it continues to have a remarkable impact. No one can consider himself well-schooled in modern political ideas without having absorbed its lessons.
What F.A. Hayek saw, and what most all his contemporaries missed, was that every step away from the free market and toward government planning represented a compromise of human freedom generally and a step toward a form of dictatorship--and this is true in all times and places. He demonstrated this against every claim that government control was really only a means of increasing social well-being. Hayek said that government planning would make society less liveable, more brutal, more despotic. Socialism in all its forms is contrary to freedom.
Nazism, he wrote, is not different in kind from Communism. Further, he showed that the very forms of government that England and America were supposedly fighting abroad were being enacted at home, if under a different guise. Further steps down this road, he said, can only end in the abolition of effective liberty for everyone.
Capitalism, he wrote, is the only system of economics compatible with human dignity, prosperity, and liberty. To the extent we move away from that system, we empower the worst people in society to manage what they do not understand.
The beauty of this book is not only in its analytics but in its style, which is unrelenting and passionate. Even today, the book remains a source of controversy. Socialists who imagine themselves to be against dictatorship cannot abide his argument, and they never stop attempting to refute it.
Misesians might find themselves disappointed that Hayek did not go far enough, and made too many compromises in the course of his argument. Even so, anyone who loves liberty cannot but feel a sense of gratitude that this book exists and remains an important part of the debate today.
The Mises Institute was honored that Hayek served as a founding member of our board of advisers, and is very pleased to offer this book again to a world that desperately needs to hear its message.
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The Road To Serfdom Symbols & Motifs
Market economy
A market economy—sometimes referred to as “capitalism”—is one essentially left to itself, save for government regulation against fraud, unsafe practices, and unfair monopolies. Only under such a system can goods and prices find their proper level and produce maximum efficiency. Market economies have generated unparalleled prosperity in the modern age, but inequalities that crop up cause many to prefer a planned economy. Hayek argues that the unfairness of a market economy pales in comparison to the outcomes in a collectivist system.
Liberalism
The old sense of the word “liberal” was of limited government and respect for individual freedom and initiative; it’s in that sense that Hayek uses the term. The more modern use of “liberal” refers to what Hayek calls “collectivism,” “socialism,” or “planning,” and, occasionally, “progressivism.”
The Editor’s Introduction states that “Hayek’s immediate objective was to persuade his British audience that their heritage of liberal democracy under the rule of law should be viewed as a national treasure rather than an object of scorn” (30).
The rule of law
A government that obeys the laws set forth by its own democratically-elected legislature is one that obeys the Rule of Law; a government run by the whims of its rulers does not.
The Road To Serfdom Summary and Study Guide
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OVERVIEW
As World War II raged around him, F.A. Hayek wrote and published The Road to Serfdom, which became a touchstone of the campaign to preserve personal and economic freedoms. The book argues that Western democracies’ attraction to socialism will take them down a path to authoritarian dictatorships like those in Soviet Russia and Nazi Germany. Government planning of economies, Hayek declares, must result in arbitrary and unfair edicts, as well as a loss of individual liberty.
?The Road to Serfdom was successful from the start and remains controversial to this day. It has been re-issued several times; the 2007 Definitive Edition contains six introductory essays that include useful background information about the book’s history.
The first three chapters discuss the revolt against freedom in Europe and the move toward centralized management of society. Democracies that were economically free had become so successful that people began to take their prosperity for granted, and chafed at the uneven distribution of wealth. Germany, Russia, and Italy adopted central planning and became dictatorships, but the West assumed that planning and tyranny were unrelated, and, heedless, moved toward implementing parts of socialism.
Chapters 4 through 6 deconstruct false beliefs about collectivism. It’s not inevitable, says Hayek, that the modern world must move toward collectivism, or that socialism is better than markets at allocating resources. Planning cannot realize a unified purpose because humans don’t share one single goal; further, planning will cause the breakdown of the Rule of Law, without which governments quickly descend into despotism.
In Chapters 7 through 9, Hayek examines the pitfalls of planning. Rather than achieving greater autonomy and respect, workers would be treated as cogs in the government machine, their freedoms curtailed. Fair wages would be reserved for groups favored by the planners. A guaranteed income would be possible only at the cost of freedom to choose one’s vocation.
Chapters 10 and 11 look at how central planning distorts political incentives. Instead of the best people achieving office, planning attracts the worst among us: those who crave arbitrary power. They, in turn, would encourage the populace to believe propaganda that furthers their plans, which would damage discourse and the search for truth.
In Chapter 12, Hayek presents evidence that Nazism is a form of socialism and not capitalism, as presumed by the West. Chapter 13 shows that many of the same principles espoused by the Nazis are being promoted by respected thinkers in democratic nations.
Modern socialists, as described in Chapter 14, persist in advocating for an idealized moral standard that would instead wipe out ethics altogether. Chapter 15 cautions that the campaign to create an international planning body would simply impose a magnified form of collectivism on the entire world. In Chapter 16, Hayek augments that idea with the warning that collectivism amounts to imitating Hitler.
The 2007 edition contains an appendix with several short essays and letters that provide further background, including the 1994 introduction by economist Milton Friedman, himself a bestselling American author.
CHAPTER 1 SUMMARY: “THE ABANDONED ROAD”
What caused the sudden rise of totalitarian regimes—Nazi Germany, fascist Italy, and Soviet Russia—during the early twentieth century? Hayek suggests that citizens of Western liberal democracies, stunned by these sudden upwellings in the midst of their progressive world, and galvanized into battle against the threat during World War II, were blind to the possibility that they may have contributed unwittingly to the buildup of those very dictatorships.
Instead, people in England, the United States, and other democratic countries simply assumed that the authoritarian world was disconnected from the liberal one. It was “easier and more comforting to think that they are entirely different from us and that what happened there cannot happen here” (66).
Yet the ideals of liberalism—personal autonomy, freedom from oppression, freedom of expression—had suffered steady erosion during the decades leading up to World War II. The growth of commerce and science had liberated people from “a rigidly organized hierarchic system” (69) to pursue prosperity under the new banner of personal liberty. This approach was so successful that citizens began to take their newfound wellbeing for granted, and progress began to seem too slow. The old ideal of freedom was challenged by a new concept,
CHAPTER 4 SUMMARY: “THE ‘INEVITABILITY’ OF PLANNING”
Hayek presents four arguments in favor of central planning, shows why each has its appeal, then demonstrates how the free market solves the problem in a better way.
The first argument claims that, as industries advance, they devolve into monopolies—the sheer size of large companies drive out smaller firms—and the only way to restore competition is for the government to control these markets. Hayek admits that, in recent history, many industries had, indeed, concentrated into the hands of a few.
He then cites multiple sources, including a report from the planning-oriented 1941 American Congress, that find no evidence that size creates monopolies. Hayek points out, instead, that “aspiring monopolists regularly seek and frequently obtain the assistance of the power of the state to make their control effective” (92). He highlights the case of 19th-century Germany, where a national policy of deliberate concentration of industry led directly to the very monopolistic abuses decried by socialists.
The second argument is that economies have become so complicated that some sort of central planning is required to prevent chaos. Hayek agrees that planning is important in certain areas but that highly-complex processes, such as modern markets, simply cannot be controlled from an office.
CHAPTER 7 SUMMARY: “ECONOMIC CONTROL AND TOTALITARIANISM”
People have argued that economics and money are lowly affairs that should be left to government administrators, while we focus on the higher things in life. But those inspiring pursuits also have costs, and Hayek points out that a planned economy “would control the allocation of the limited means for all our ends” (126). We would be restricted even in our loftier pursuits by government.
In a free market, our choices are limited by how much others are willing to pay for things we want, and we adjust our spending accordingly. A government that controls an economy has monopoly power over our purchasing decisions, and the government’s preferences, rather than our own, would control us.
Just as important is our freedom to choose our livelihood, which also would be curtailed in a planned economy: “The person whose qualifications are not of the standard type, or whose temperament is not of the ordinary kind, will no longer be able to come to special arrangements with an employer whose dispositions will fit in with his special needs” (129). Workers, far from being respected, “would more than ever become a mere means, to be used by the authority” (130).
Many a “bitter choice” people must make in the free market would be relieved in a planned economy, but only “through having the choice made for them by others” (130).
CHAPTER 10 SUMMARY: “WHY THE WORST GET ON TOP”
Collectivist sympathizers sometimes explain the failures of centrally-planned societies by blaming bad leadership. Well-meaning administrators, they explain, would have brought about much better outcomes.
Hayek replies that any authoritarian regime must make decisions that will cause pain and anguish to some groups, and only leaders with few inhibitions will have the stomach to make the tough calls. Autocracies thus tend to fill up with brutal people. It’s no surprise that German National Socialism became a vicious dictatorship. Hayek notes that “the whole moral atmosphere” of such a regime is completely different from that of Western liberal democracy (158).
During the early phases of a planned economy, impatience with the slow progress of parliamentary procedure makes citizens yearn for tough-minded autocrats. The logjam gets broken by a political group large enough to impose its will on the rest of society. Socialists with democratic scruples end up paving the way for a takeover by the ruthless.
The strong political group is likely to contain society’s worst elements for three reasons. First, unlike groups of the educated, with their variety of ideas and opinions, the unified group is less educated and more thoughtlessly uniform in its views. Second, the leaders expand their reach by convincing “the docile and gullible” to follow them (160).
CHAPTER 12 SUMMARY: “THE SOCIALIST ROOTS OF NAZISM”
Hayek denies that Nazism is mindlessly irrational. Instead, it is the distillation of an important trend of political thought, “simply collectivism freed from all traces of an individualist tradition which might hamper its realization” (181). Hayek cites a number of intellectuals outside Germany, including Thomas Carlyle, who helped lay the foundations of what grew into the Third Reich. But the main influence came from socialists inside Germany.
These believers finally saw that their collectivist dream could not be realized as long as socialism contained precepts of individual liberty: “It was the union of the anticapitalist forces of the Right and of the Left, the fusion of radical and conservative socialism, which drove out from Germany everything that was liberal” (182).
Hayek mentions several important 19th- and early 20th-century socialist thinkers who believed that, under a collectivist system, “the individual has no rights but only duties” (183). During World War I, socialist authors argued that the Germans ought to regain their warlike spirit in a battle against decadent British commercialism. One socialist believed the ideal of freedom and the ideal of organization were in conflict, that organization ought to win out, and that Germany would lead the way as the ideal industrial seedbed for socialism.
CHAPTER 14 SUMMARY: “MATERIAL CONDITIONS AND IDEAL ENDS”
In the modern age, people have become more resistant to conditions they used to accept. Hayek writes that “[m]an has come to hate, and to revolt against, the impersonal forces to which in the past he submitted” (211), but modernity is so complex that often we simply don’t understand conditions that frustrate our desires. This can lead to an unreasoning rebellion that may cause much more damage than it fixes: “a refusal to submit to anything we cannot understand must lead to the destruction of our civilization” (211).
We may rebel against our economic conditions, but “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” (212), which could be much worse.
Could we perhaps learn to master the forces of society the way we have mastered the forces of nature? Hayek answers that controlling a nation for a single such purpose would ruin what we’ve already accomplished and destroy personal freedom, and that doing so “at any price” is “likely to do the greatest harm” (213).
Laborers at the end of World War II might want to keep their high-paying jobs, even if they were no longer needed: “a socialist society would certainly use coercion in this position,” while a Western liberal democracy, straining to find a way to appease the workers, would have to distort the economic system, “which [would] seriously interfere with the most productive use of our resources” (214).
SUMMARY: BIOGRAPHICAL NOTE
The book restates deep principles that hark back to earlier centuries; one volume cannot expand on these and related precepts that have for so long been considered out of date. Therefore, Hayek suggests additional reading, including books old and new. The list reaches all the way back to the Federalist Papers; Hayek reminds us that freedom was not always taken for granted.
SUMMARY: APPENDIX: RELATED DOCUMENTS
Nazi-Socialism
This short 1933 essay by Hayek argues against the notion that Nazism is merely reactionary. Instead, “National Socialism is a genuine socialist movement” that fulfills the anti-liberal movements of previous decades (245). It coordinated with corporate forces partly because business leaders themselves fell for the bromides of collectivism. Nazis then quickly commandeered much of industry.
Nazis objected only to socialism’s liberal and internationalist sympathies; otherwise, they accepted the program. In Nazi propaganda, “the dominant feature is a fierce hatred of anything capitalistic” (246).
The anti-rational trend in Nazism came from the Marxian idea that bourgeois thought was conditioned by the social system and therefore invalid. Anti-rationalism makes simpler the idea that force, instead of tolerance, is the valid path.
Nazism allows for some private ownership, but this is largely due to the party’s dependence on middle-class shop owners and artisans, who soon enough find their lives heavily regulated.
The Road To Serfdom Key Figures
F.A. HAYEK
The author stands for freedom of the individual, especially in business and trade, which flies in the face of the more popular collectivist leanings of his fellow academics. Hayek is fair-minded, thorough, and detailed in his arguments, and passionate about his belief in freedom; he bemoans the ongoing attraction to economic systems that would destroy peoples’ freedoms. In effect, as socialist intellectuals brush past him impatiently on the way to their imagined paradise, Hayek waves his hands, trying to warn them that the society they hope for is in fact a political chamber of horrors.
THE INTELLECTUAL
Hayek’s nemesis is the academic or other intellectual who touts collectivist ideals. This person may believe passionately in the evils of capitalism and the remedies of central planning, but he ignores the threat to freedom raised by such programs. Given power, the Intellectual would likely resort to arbitrary and dictatorial edicts that would dismantle the very liberties to which he gives lip service.
THE PLANNER
The Planner wants to control all aspects of a society through government directive, believing he can better manage the economy than can the people, as they go about their business. At first, only the economy will be directed, but, as conflicts arise, the planner will begin to issue rules that forbid behaviors that interfere with the plan.
The Road To Serfdom Themes
THE ALLURE OF COLLECTIVISM
In modern times, people live crowded together in cities, where workers toil for low wages while their bosses luxuriate in wealth. It’s tempting to search for some grand solution that would put an end to the unfairness of capitalism. Collectivism offers such a solution: wages would be set, employment guaranteed, and the wealthy would lose their positions to government departments that command equality for all.
This ideal appeals strongly to academic thinkers, who often influence public debate. Standing against them is Hayek, who warns that the allure of central planning is dangerously misleading. But his is an uphill battle, as the idea of a centralized economic system—one that should force an economy to be more fair—is almost irresistible.
THE PERILS OF PLANNING
Hayek warns that central planning will not generate the benefits it promises, but instead will create a society in many ways the opposite of what its supporters want. Marketplaces are unpredictable systems, where prices fluctuate and workers migrate toward better opportunities. They are a daunting challenge for planners, who can never grasp in their hands the millions of threads that make up the fabric of trade among people.
The Road To Serfdom Symbols & Motifs
MARKET ECONOMY
A market economy—sometimes referred to as “capitalism”—is one essentially left to itself, save for government regulation against fraud, unsafe practices, and unfair monopolies. Only under such a system can goods and prices find their proper level and produce maximum efficiency. Market economies have generated unparalleled prosperity in the modern age, but inequalities that crop up cause many to prefer a planned economy. Hayek argues that the unfairness of a market economy pales in comparison to the outcomes in a collectivist system.
LIBERALISM
The old sense of the word “liberal” was of limited government and respect for individual freedom and initiative; it’s in that sense that Hayek uses the term. The more modern use of “liberal” refers to what Hayek calls “collectivism,” “socialism,” or “planning,” and, occasionally, “progressivism.”
The Editor’s Introduction states that “Hayek’s immediate objective was to persuade his British audience that their heritage of liberal democracy under the rule of law should be viewed as a national treasure rather than an object of scorn” (30).
THE RULE OF LAW
A government that obeys the laws set forth by its own democratically-elected legislature is one that obeys the Rule of Law; a government run by the whims of its rulers does not.
The Road To Serfdom Important Quotes
1.“Few are ready to recognize that the rise of fascism and naziism was not a reaction against the socialist trends of the preceding period but a necessary outcome of those tendencies.”(Introduction, Page 59)
Nazi fascism, far from being capitalist, was in fact a form of socialist collectivism. Believing otherwise has led Western intellectuals into a state of denial and a willingness to plunge into the dangerous experiment of central planning. Hayek saw, while living in Eastern Europe, the rise of collectivism and totalitarianism; moving to England, he recognized seeds of the same trends planted in new soil. Hayek wants to awaken the British to these dangers, lest they fall unthinkingly into traps laid by their pet theories about socialism.
2.“We are ready to accept almost any explanation of the present crisis of our civilization except one: that the present state of the world may be the result of genuine error on our own part and that the pursuit of some of our most cherished ideals has apparently produced results utterly different from those which we expected.”(Chapter 1, Page 65)
The West, focused on its efforts to improve the lives of its people through collective effort, persist in denying that the same practices have been put to sinister use in totalitarian countries. Those states achieve their despotic control because of, not despite, socialism.
3.“For at least twenty-five years before the specter of totalitarianism became a real threat, we had progressively been moving away from the basic ideas on which Western civilization has been built. That this movement on which we have entered with such high hopes and ambitions should have brought us face to face with the totalitarian horror has come as a profound shock to this generation, which still refuses to connect the two facts.”(Chapter 1, Page 66)
Liberal ideals about freedom had suffered erosion well before the great dictatorships arose. The liberal West, moving away from those ideals and toward socialism, had through inattention laid the groundwork for the totalitarian threat.
The Road To Serfdom Essay Topics
1.Hayek believes that democracy will collapse under socialism, and he warns repeatedly that the collectivist trends that led to totalitarian Germany and Russia are similar to recent trends in England and America. Is planning winning the day, or is Hayek mistaken? Defend your assertion.
2.Economic planning tends to become much more difficult than theorists expect. What could cause this disconnect between theory and reality?
3.Can a socialist society protect individual freedoms? Suggest some safeguards and how they would work.
The Road to Serfdom (German: Der Weg zur Knechtschaft) is a book written between 1940 and 1943 by Austrian-British economist and philosopher Friedrich Hayek. Since its publication in 1944, The Road to Serfdom has been popular among liberal (especially classical) and conservative thinkers, and remains referenced in modern discourse.[1] It has been translated into more than 20 languages and sold over two million copies (as of 2010).[2][3][4] The book was first published in Britain by Routledge in March 1944, during World War II, and was quite popular, leading Hayek to call it "that unobtainable book", also due in part to wartime paper rationing.[5] It was published in the United States by the University of Chicago Press in September 1944 and achieved great popularity. At the arrangement of editor Max Eastman, the American magazine Reader's Digest published an abridged version in April 1945, enabling The Road to Serfdom to reach a wider non-academic audience.
The Road to Serfdom was to be the popular edition of the second volume of Hayek's treatise entitled "The Abuse and Decline of Reason",[6] and the title was inspired by the writings of the 19th century French classical liberal thinker Alexis de Tocqueville on the "road to servitude".[7] In the book, Hayek "[warns] of the danger of tyranny that inevitably results from government control of economic decision-making through central planning."[8] He further argues that the abandonment of individualism and classical liberalism inevitably leads to a loss of freedom, the creation of an oppressive society, the tyranny of a dictator, and the serfdom of the individual. Hayek challenged the view, popular among British Marxists, that fascism (including Nazism) was a capitalist reaction against socialism. He argued that fascism, Nazism and socialism had common roots in central economic planning and empowering the state over the individual.
Initially written as a response to the report written by William Beveridge, the Liberal politician and dean of the London School of Economics where Hayek worked at the time, the book made a significant impact on 20th-century political discourse, especially American conservative and libertarian economic and political debate, being often cited today by commentators. Subject to much attention, the ideas advocated in The Road to Serfdom have been criticized and defended by many academics since the book was published.
Publication[edit]
Writing in the era of the Great Depression, the rise of autocracies in Russia, Italy and Germany, and World War II, Hayek wrote a memo to the director of the London School of Economics, William Beveridge, in the early 1930s to dispute the then-popular claim that fascism represented the dying gasp of a failed capitalist system. The memo grew into a magazine article, and he intended to incorporate elements of the article into a book much larger than The Road to Serfdom. However, he ultimately decided to write The Road to Serfdom as its own book.
The book was originally published for a British audience by Routledge Press in March 1944 in the United Kingdom. The book was subsequently rejected by three publishers in the United States,[9] and it was only after economist Aaron Director spoke to friends at the University of Chicago that the book was published in the U.S by the University of Chicago Press on September 18, 1944.[10][11] The American publisher’s expectation was that the book would sell between 900 and 3,000 copies. But the initial printing run of 2,000 copies was quickly sold out, and 30,000 copies were sold within six months. In 2007, the University of Chicago Press estimated that more than 350,000 copies had been sold.[12]
A 20-page version of the book was then published in the April 1945 issue of Reader's Digest,[13] with a press run of several million copies. A 95-page abridged version was also published in 1945 and 1946.[14] In February 1945, a picture-book version was published in Look magazine, later made into a pamphlet and distributed by General Motors.[15] The book has been translated into approximately 20 languages and is dedicated "To the socialists of all parties". The introduction to the 50th anniversary edition is written by Milton Friedman (another recipient of the Nobel Prize in Economics 1976).
In 2007, the University of Chicago Press issued a "Definitive Edition", Volume 2 in the Collected Works of F. A. Hayek series. In June 2010, the book achieved new popularity by rising to the top of the Amazon.com bestseller list following extended coverage of the book on The Glenn Beck Program. Since that date, it has sold another 250,000 copies in its print and digital editions.
Summary[edit]
Hayek argues that Western democracies, including the United Kingdom and the United States, have "progressively abandoned that freedom in economic affairs without which personal and political freedom has never existed in the past".[16] Society has mistakenly tried to ensure continuing prosperity by centralized planning, which inevitably leads to totalitarianism. "We have in effect undertaken to dispense with the forces which produced unforeseen results and to replace the impersonal and anonymous mechanism of the market by collective and ‘conscious’ direction of all social forces to deliberately chosen goals."[17] Socialism, while presented as a means of assuring equality, does so through "restraint and servitude", while "democracy seeks equality in liberty".[18] Planning, because it is coercive, is an inferior method of regulation, while the competition of a free market is superior "because it is the only method by which our activities can be adjusted to each other without coercive or arbitrary intervention of authority".[19]
Centralized planning is inherently undemocratic in Hayek's view, because it requires "that the will of a small minority be imposed upon the people".[20] The power of these minorities to act by taking money or property in pursuit of centralized goals, destroys the Rule of Law and individual freedoms.[21] Where there is centralized planning, "the individual would more than ever become a mere means, to be used by the authority in the service of such abstractions as the 'social welfare' or the 'good of the community'".[22] Even the very poor have more personal freedom in an open society than a centrally planned one.[23] "While the last resort of a competitive economy is the bailiff, the ultimate sanction of a planned economy is the hangman."[24] Socialism is a hypocritical system, because its professed humanitarian goals can only be put into practice by brutal methods "of which most socialists disapprove".[25] Such centralized systems also require effective propaganda, so that the people come to believe that the state's goals are theirs.[26]
Hayek argues that the roots of National Socialism lie in socialism,[27] and then draws parallels to the thought of British leaders:
Hayek believed that after World War II, "wisdom in the management of our economic affairs will be even more important than before and that the fate of our civilization will ultimately depend on how we solve the economic problems we shall then face".[29] The only chance to build a decent world is "to improve the general level of wealth" via the activities of free markets.[30] He saw international organization as involving a further threat to individual freedom.[31] He concluded: "The guiding principle that a policy of freedom for the individual is the only truly progressive policy remains as true today as it was in the nineteenth century."[32]
Role of government[edit]
Although Hayek believed that government intervention in markets would lead to a loss of freedom, he recognized a limited role for government to perform tasks for which he believed free markets were not capable:
While Hayek is opposed to regulations that restrict the freedom to enter a trade, or to buy and sell at any price, or to control quantities, he acknowledges the utility of regulations that restrict legal methods of production, so long as these are applied equally to everyone and not used as an indirect way of controlling prices or quantities, and without forgetting the cost of such restrictions:
He notes that there are certain areas, such as the environment, where activities that cause damage to third parties (known to economists as "negative externalities") cannot effectively be regulated solely by the marketplace:
The government also has a role in preventing fraud:
The government also has a role in creating a safety net:
He concludes: "In no system that could be rationally defended would the state just do nothing."[36]
Clarifications[edit]
Since publication, Hayek has offered a number of clarifications on words that are frequently misinterpreted:
- "Socialism", as Hayek used it, refers to state socialism and is used to mean state control of the economy, not a welfare state[39]
- "Classical liberal ideals", means liberty, freedom and individual rights, as Hayek understood them[40]
Reception[edit]
Impact[edit]
In 2007, the University of Chicago Press estimated that more than 350,000 copies of The Road to Serfdom have been sold.[12] It appears on Martin Seymour-Smith's list of the 100 Most Influential Books Ever Written, and it made number 1 on Human Events: Top Ten Books Every Republican Congressman Should Read in 2006.[41] It was influential enough to warrant mention during the 1945 British general election, when according to Harold Macmillan, Winston Churchill was "fortified in his apprehensions [of a Labour government] by reading Professor Hayek's The Road to Serfdom"[42] when he warned in an election broadcast in 1945 that a socialist system would "have to fall back on some form of Gestapo". The Labour leader Clement Attlee responded in his election broadcast by claiming that what Churchill had said was the "second-hand version of the academic views of an Austrian professor, Friedrich August von Hayek".[43] The Conservative Central Office sacrificed 1.5 tons of their precious paper ration allocated for the 1945 election so that more copies of The Road to Serfdom could be printed, although to no avail, as Labour won a landslide victory.[44]
Political historian Alan Brinkley had this to say about the impact of The Road to Serfdom:[45]
Reviews[edit]
The Road to Serfdom has been the subject of much praise and much criticism. It was placed fourth on the list of the 100 best non-fiction books of the 20th century[46] compiled by National Review magazine, was ranked number 16 in reader selections of the hundred best non-fiction book of the twentieth century administered by Modern Library,[47] and appears on a recommended reading list for the libertarian right hosted on the Political Compass test website.[48]
John Maynard Keynes said of it: "In my opinion it is a grand book ... Morally and philosophically I find myself in agreement with virtually the whole of it: and not only in agreement with it, but in deeply moved agreement."[49] However, Keynes did not think Hayek's philosophy was of practical use; this was explained later in the same letter, commenting: "What we need therefore, in my opinion, is not a change in our economic programmes, which would only lead in practice to disillusion with the results of your philosophy; but perhaps even the contrary, namely, an enlargement of them. Your greatest danger ahead is the probable practical failure of the application of your philosophy in the United States."[50]
George Orwell responded with both praise and criticism, stating, "in the negative part of Professor Hayek's thesis there is a great deal of truth. It cannot be said too often – at any rate, it is not being said nearly often enough – that collectivism is not inherently democratic, but, on the contrary, gives to a tyrannical minority such powers as the Spanish Inquisitors never dreamt of." Yet he also warned, "[A] return to 'free' competition means for the great mass of people a tyranny probably worse, because more irresponsible, than that of the state."[51]
Milton Friedman described The Road to Serfdom as "one of the great books of our time," and said of it:
Herman Finer, a Fabian socialist, published a rebuttal in his The Road to Reaction in 1946. Hayek called Finer's book "a specimen of abuse and invective which is probably unique in contemporary academic discussion".[52]
In his review (collected in The Present as History, 1953) Marxist Paul Sweezy joked that Hayek would have you believe that if there was an over-production of baby carriages, the central planners would then order the population to have more babies instead of simply warehousing the temporary excess of carriages and decreasing production for next year. The cybernetic arguments of Stafford Beer in his 1973 CBC Massey Lectures, Designing Freedom [53] – that intelligent adaptive planning can increase freedom – are of interest in this regard, as is the technical work of Herbert A. Simon and Albert Ando on the dynamics of hierarchical nearly decomposable systems in economics – namely, that everything in such a system is not tightly coupled to everything else.[54]
Mises Institute economist Walter Block has observed critically that while The Road to Serfdom makes a strong case against centrally planned economies, it appears only lukewarm in its support of a free market system and laissez-faire capitalism, with Hayek even going so far as to say that "probably nothing has done so much harm to the liberal cause as the wooden insistence of some liberals on certain rules of thumb, above all the principle of laissez-faire capitalism". In the book, Hayek writes that the government has a role to play in the economy through the monetary system (a view that he later withdrew),[55] work-hours regulation, social welfare, and institutions for the flow of proper information. Through analysis of this and many other of Hayek's works, Block asserts that: "in making the case against socialism, Hayek was led into making all sort of compromises with what otherwise appeared to be his own philosophical perspective – so much so, that if a system was erected on the basis of them, it would not differ too sharply from what this author explicitly opposed".[56]
Criticism[edit]
Jeffrey Sachs argues that empirical evidence suggests welfare states, with high rates of taxation and social outlays, outperform the comparatively free-market economies.[57] William Easterly wrote a rebuttal criticizing Sachs for misrepresenting Hayek's work and for criticizing the book on issues it did not actually address, such as welfare programs for the elderly or sick, something Hayek was not entirely opposed to. Easterly noted that the Road to Serfdom was about the dangers of centralized planning and nationalization of industry, including the media.[58] In Sachs' counter-rebuttal, he argued that he was addressing Hayek's foreword in the 1976 adaptation which stated that efforts to bring about large-scale welfare states would bring about serfdom, although much more slowly than under centralized planning. Sachs cited the Nordic states which remained economically free and relatively capitalist, despite a large welfare state that Hayek was wrong about such programs leading to serfdom.[59]
Gordon Tullock has argued Hayek's analysis incorrectly predicted governments in much of Europe in the late 20th century would descend into totalitarianism. He uses Sweden, in which the government at that time controlled 63 percent of GNP, as an example to support his argument that the basic problem with The Road to Serfdom is "that it offered predictions which turned out to be false. The steady advance of government in places such as Sweden has not led to any loss of non-economic freedoms." While criticizing Hayek, Tullock still praises the classical liberal notion of economic freedom, saying, "Arguments for political freedom are strong, as are the arguments for economic freedom. We needn’t make one set of arguments depend on the other."[60] However, according to Robert Skidelsky, Hayek "safeguarded himself from such retrospective refutation". Skidelsky argues that Hayek's argument was contingent, and that, "By the 1970s there was some evidence of the slippery slope ... and then there was Thatcher. Hayek's warning played a critical part in her determination to 'roll back the state.'"[61]
Economic sociologist Karl Polanyi made a case diametrically opposed to Hayek, arguing that unfettered markets had undermined the social order and that economic breakdown had paved the way for the emergence of dictatorship.[62]
Barbara Wootton wrote Freedom under Planning[63] after reading an early copy of The Road to Serfdom, provided to her by Hayek. In the introduction to her book, Wootton mentioned The Road to Serfdom and claimed that "Much of what I have written is devoted to criticism of the views put forward by Professor Hayek in this and other books."[64] The central argument made in Freedom under Planning is that "there is nothing in the conscious planning of economic priorities which is inherently incompatible with the freedoms which mean most to the contemporary Englishman or American. Civil liberties are quite unaffected. We can, if we wish, deliberately plan so as to give the fullest possible scope for the pursuit by individuals and social groups of cultural ends which are in no way state-determined."[65] Wootton criticizes Hayek for claiming that planning must lead to oppression, when, in her view, that is merely one possibility among many. She argues that "there seems hardly better case for taking for granted that planning will bring the worst to the top than for the opposite assumption that the seats of office will be filled with angels".[66] Thus, Wootton acknowledges the possibility that planning may exist alongside tyranny, but claims that it is equally possible to combine planning with freedom. She concludes that "A happy and fruitful marriage between freedom and planning can, in short, be arranged."[67] However, Frank Knight, founder of the Chicago school of economics, disputes the claim that Freedom under Planning contradicts The Road to Serfdom. He wrote in a scholarly review of the Wootton book: "Let me repeat that the Wootton book is in no logical sense an answer to The Road to Serfdom, whatever may be thought of the cogency of Hayek's argument, or the soundness of his position."[68]
Eric Zencey wrote that the free market economy Hayek advocated is designed for an infinite planet, and when it runs into physical limits (as any growing system must), the result is a need for centralized planning to mediate the problematic interface of economy and nature. "Planning is planning, whether it's done to minimize poverty and injustice, as socialists were advocating then, or to preserve the minimum flow of ecosystem services that civilization requires, as we are finding increasingly necessary today."[69]
