Wednesday, December 5, 2012

The Road To Serfdom; By F. A. Hayek


                                   The Road to Serfdom
Margaret Thatcher

Margaret Thatcher, the Conservative prime minister who dismantled Britain's socialist economy in the 1980s, once noted that "there can be no liberty without economic liberty."

In Thatcher's opinion, the freedom to employ one's resources as one sees fit is the hallmark of all other political rights. While Thatcher's observation is quite correct, it no doubt benefited from hindsight. By the 1980s, Thatcher had experienced the very real difficulties presented to freedom and prosperity in her efforts to dismantle Britain's cumbersome welfare state. Moreover, she had begun to see the crumbling of the socialist system in neighboring countries such as France and the Soviet Union.

F.A. Hayek
Some forty years earlier, however, before the United Kingdom implemented its vast system of planning, another Briton named F.A. Hayek made a similar point in his acclaimed treatise, "The Road to Serfdom." In the book, Hayek connects the concept of a planned economy with the Nazi rise to power in Germany in the 1930s. "The rise of fascism and Nazism," writes Hayek, "was not a reaction against the socialist trends of the proceeding period but a necessary outcome of those tendencies."

Writing in 1944, at a time when many Americas and Britons feared Hitler's totalitarianism and simultaneously supported a continuation of the wartime planning of the economy, Hayek invariably tied the two concepts together. According to Hayek, a state that assumes control over what is produced "would control what we consume almost as effectively as if it directly told us how to spend our income."
For Hayek, once economic freedom is lost, all other freedoms are soon to follow. In fact, "The Road to Serfdom" paints a clear picture of how even tentative steps towards socialism inevitably lead to totalitarianism.

    Socialism, says Hayek, exchanges society's supreme ideal of freedom for the vague concept of "fairness." But by focusing on fairness, society slowly abandons its respect for the rule of law. What is "fair" is determined by judges and the state and may very well conflict with an individual's right to property, prosperity, or political freedom. In other words, once a state can control competition, redistribute wealth, or plan aspects of the economy, it becomes the ultimate arbiter of right and wrong.

Hayek also points out that a democratic government cannot salvage freedom in a socialist system, despite the passionate arguments to the contrary on the left. Instead, notes Hayek, democracy must ultimately succumb to absolute planners because the legislative branch of democracy is simply unable to plan -- or decide what is fair for all of society -- on a massive scale. Even defenders of socialism, notes Hayek, acknowledge that an economic plan needs a unitary concept to be effective. "Planning leads to dictatorship because dictatorship is the most effective instrument of coercion and the enforcement of ideals and, as such, essential if central planning on a large scale is to be possible."
Even if a socialist government were able to maintain democracy, however, Hayek points out that the system would not necessarily preserve freedom. Unlike liberty, says Hayek, democracy is not the highest political end. In Hayek's words democracy merely is a "utilitarian device for safeguarding internal peace and individual freedom. As such it is by no means infallible or certain."
Such observations are worth remembering as the United States eagerly promotes democracy around the world. The Soviet Union, it is worth remembering, claimed to be the most democratic nation on earth. While democracy is certainly a useful political system it does not, by itself, create or protect liberty. As Hayek notes, economic freedom, not democracy alone, is the ultimate protector of human freedom.
Despite Hayek's passionate defense of liberty, he does not advocate an extreme laissez-faire approach to economic affairs. Hayek recognizes that some aspects of the economy and human interaction cannot be effectively resolved through competition. In these situations, Hayek advocates government intervention to address market failures. In a notable departure from classical liberalism or today's libertarianism, Hayek defends regulating poisonous substances or working hours as long as the measures are consistently and generally applied.
While this position of limited government intervention provides some insight into Hayek's personal views of the appropriate place for government, "The Road to Serfdom" is largely a reactionary work. Hayek vigorously attacks planning and totalitarianism, but he generally avoids stating his own position of government's place in the economy.
In some respects, of course, the absence of Hayek's own views highlights the importance and urgency of what he did say -- namely, that the continuation of wartime planning in America and Britain would lead to totalitarianism. In this light it is conceivable that Hayek did not want to distract the reader from his warning by introducing his own views into the argument. Still, Hayek's consistent focus on one topic and the negative tone of his writing makes the book somewhat repetitive.
In fact, for today's post-Reagan era readers, the more subtle remarks of Hayek's work may have the most impact. Hayek warns, for instance, against the leftist practice of vilifying capitalism by pointing to the negative aspects of the system such as unemployment or inequality. "It is essential," he writes, "that we should re-learn frankly to face the fact that freedom can be had only at a price and that as individuals we must be prepared to make severe material sacrifices to preserve our liberty."
Freedom, not government, has allowed Americans to achieve unmatched prosperity. By limiting government and relying on individual initiative, the United States has created a better society for all. Hayek's "Road to Serfdom," however, reminds us that freedom is a privilege that must always be safeguarded, not only from external forces, but also from ourselves. Freedom is too precious to be taken for granted.

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