The page numbers refer to the Fiftieth Anniversary Edition, University of Chicago Press; 1994; ISBN: 0226320618.
The Road to Serfdom
In the original introduction to “The Road to Serfdom“, Hayek describes this book as a “pamphlet”, which he wrote in his spare time. Yet as Hayek himself was aware much later, this book contained the gist of the argument to which he was to devote the rest of his life. “The Road to Serfdom” deals with so much material that it would be futile to attempt a review of the book in five pages, I can at most enumerate its most striking features and try to string them together in a semblance of order.
Order seems like a good place to begin. Many years after “The Road to Serfdom” was published, Hayek wrote the first volume of “Law, Legislation and Liberty” and gave it the title “Rules and Order”. The concept of the rule of law remains central to Hayek’s later work, and his emphasis on this institution is apparent in “The Road to Serfdom”. Hayek is convinced that the rules of the game cannot be arbitrary if individuals are to be able to function within a working market order. Though circumstances are constantly changing, the entities within any structure must be aware of limitations on other players if they are to be capable of forming plans. For Hayek these limitations are essentially restrictions on the powers of government to coerce specific individuals in order to achieve a particular outcome. Hayek contends that if we permit the state to invade the individual’s private sphere “in the interest of society”, the incentives to engage in market activity will largely disappear.
This argument that the rule of law serves as a means to facilitate the formation of plans which individuals can attempt to realize in the market, is supplemented by Hayek’s understanding of the nature of arbitrary power. Hayek does not fail to remind us of the dangers inherent in a structure that relies on the use of arbitrary power to achieve broadly defined objectives. Under a system where “society’s interests” are represented by the state, and where these interests take precedence over individual rights, we can be sure that these objectives will soon be perverted and the powers conferred on the state used to serve ends that they were not intended to serve. In Hayek’s own words, in a situation where the state is expected to plan out and solve the problems of the economic sphere, “As the coercive power of the state will alone decide who is to have what, the only power worth having will be a share in the exercise of the directing power” [pg. 92, F. A. Hayek, The Road to Serfdom, 1994]. Since it will often be necessary to exercise this power ruthlessly, Hayek believes that only those who are capable of using brute force shall be appointed to or attain positions of power, the gentler amongst the population would tend to drift away from posts where the use of force would be necessary. We can see how in replacing the dynamic of unaligned forces that constitute the market with a strict hierarchy it becomes necessary that the hierarchy have a ruler. Thus Hayek’s conclusion (and that of many socialists) that such a structure would of necessity turn into a totalitarian order.
Unlike the situation in a free market, a consistently planned order would force us to adhere to a common set of values. Whereas the market is capable of serving the needs and desires of numerous individuals by a process that achieves a relative ordering of these values with the aid of the price system, an enforced order would force us to choose “whether it shall be we who decide what is more, and what is less important for us, or whether this is to be decided by the planner” [pg. 100]. Thus the individual effectively abrogates all right to self-determination. If all actions are intended to serve one set of purposes, it is easy to see how the process of determining these ends constitutes the complete loss of individual liberty. Hayek is well aware that the degree of concurrence towards desirable ends that such a system requires simply does not exist. This is why we are warned of relying on the democratic procedure to guard against a deterioration to a totalitarian order. Once it has been demonstrated that such a system cannot function if it requires the approval of a large proportion of the population, the need for such approval will itself be questioned.
Since Hayek ascribes to the Mengerian notion that “civilization advances by extending the number of important operations we an perform without thinking about them” [pg 87, The Counter-revolution of Science, quote from A. N. Whitehead], a planned economy seems to him a step back as far as solving the “economic problem” is concerned. Since we would by opting for a planned economy, be refusing the services of the price system as a tool to convey pertinent information in a concise form, a planned economy would involve a degree of complexity that cannot perhaps be comprehended or abstracted by the human mind. In a mercurial environment –which the economic sphere is, if only because of our constantly shifting tastes and desires– it is essential that responses be quick and effective. Yet by making economic decisions on a large scale subject to conscious thought, indeed by giving such movements the character of a decision, destroying the only institutions capable of producing such responses. As Prof. Boettke notes in another essay on this book “rather than spontaneous adaptation” such an order ” requires conscious adaptation, and there are epistemological limits to this procedure”. As always Hayek remains aware of the sort of effect an imposed economic order will have on our understanding of our needs, how these are to be satisfied, and the very concept of justice itself. The market process Hayek believes is highly “impersonal”, yet an imposed order cannot but recognize the differences between individuals and treat them in different ways. In such circumstances it is highly likely that an individual’s dissatisfaction with her/his position will be channeled into attempts to improve that position by petitioning the state. If such attempts are unsuccessful however, it is easy to see how a violent conflict might arise between the individual and the authorities, or even among groups that have alienated themselves from one another. As Hayek himself stresses “Although competition and justice may have little else in common, it is as much a commendation of competition as it is of justice that it is no respecter of persons”.
“The Road to Serfdom” may appear to some as a prophetic text. Indeed Hayek’s convictions are portrayed with such strength that it is easy to believe Hayek is outlining a sequence of developments that is inevitable. Yet this book is not a prophecy, nor is it a theory of history and the nation-state. It is however an analysis of the sort of institutions that might develop in an environment where the individual is not free to choose. As such it demonstrates tendencies, not immutable consequences. After all, as Hayek himself said “if we can regain the belief in the power of ideas which was the mark of liberalism at its best, the battle is not lost” [The Intellectuals and Socialism].
This paper was written in Fall 1995 for Prof. Israel Kirzner’s class
“Foundations of Capitalism”. One grammatical error has been
corrected.