The Road to Serfdom was originally published in 1944. It was written to address what F.A. Hayek saw as the continuing fascination with Socialism of the intellectual elite in England. He was concerned with the direction of the English government after the second world war. As an Austrian emigre with experience in Germany, he wanted to counter some of the arguments that his peers in the London School of Economics were using to justify their theories on economic planning.
Consequently, most of the book is not bound by the time and events of when it was written. The modern reader need not be an expert in the German Historical School and Hegel, or its anti-thesis. the Austrian School, with which Hayek’s mentor, Ludwig von Mises is associated.
In the Definitive Edition, from the University of Chicago Press, which is being reviewed here, there are number of very interesting Introductions and Forwards, which were written in conjunction with the various editions that were published over the years. It was not until the 1950’s that the book made its debut in America. It is a testament to the caliber of the writing and erudition of the author that this book achieved the attention it did. The first Introduction was written by the books editor, Bruce Caldwell. In it, Caldwell makes reference to an essay written by Hayek in 1933, prior to the publication of The Road To Serfdom, and almost coincident with Hitler’s ascent to power. This short essay is included in an appendix in the back of the book. Hayek’s prognostications about the likely turn of events in Germany are chillingly accurate. The themes covered in the essay are expanded upon in The Road To Serfdom, and the validity of Hayek’s arguments is supported both by history and by the foresight in this of this early essay.
In the foreword to the American edition, Hayek feels it necessary to explain his use of the term “liberal”. He laments that the progressive movement has usurped its meaning to one “nearly opposite” to the original one. When the book was originally written, a British audience understood the term in its classical definition. In the years leading up to the time of the American edition, progressives had so completely adopted the word, that the modern reader must make a conscious effort to keep the original meaning in mind when reading this book.
Hayek also explains that The Road to Serfdom is a deviation of sorts from his chosen field of economics. He wrote The Road to Serfdom as a political book, rather than as a scientific treatise on economics. Consequently, even non-academes should find it accessible.
In the first chapter of the book, entitled The Abandoned Road, Hayek successfully lays out what set classical liberal thinking apart from other philosophies. Simultaneously, he also explains why classical liberalism was a victim of its own success. Once many of the basic needs of society were conquered, there developed a growing impatience for the gradual progress that non-directed economies yielded. Instead people forgot the class system that had gone before and the insurmountable barriers separating the classes. Astonishingly enough, even in the early 1940’s when he wrote The Road to Serfdom, Hayek answered many of the arguments still used today by people on the left, including the assertion that the people in Germany and Russia were “entirely different from us and that what happened there cannot happen here.” He makes a powerful argument that socialism entails a complete change in the direction of the evolution of our ideas and social order and leads inevitably to totalitarian horror.
To those who would argue for socialism and central planning, he reiterates that in so doing they are progressively abandoning “freedom in economic affairs without which personal and political freedom has never existed in the past”, effectively ignoring the warnings of some of the greets political thinkers of the 19th century. He points out that both Tocqueville and Lord Acton explained that “socialism means slavery.”
However, the first chapter is dedicated more to an explanation of why classical liberalism has been the only successful strategy for preserving and enhancing liberty. He contrasts the coercive requirements of central planning with the self-interested ordering of individual actions. “Wherever the barriers to free exercise of human ingenuity were removed, man became rapidly able to satisfy ever widening ranges of desire.”
Hayek laments the short-sighted impatience of those who would scrap classical liberal thinking for socialism. Consider the following quote and it’s applicability to today:
And, as the hope of the new generation came to be centered on something completely new, interest in and understanding of the functioning of the existing society rapidly declined; and, with the decline of the understanding of the way in which the free system worked, our awareness of what depended on its existence also decreased.
This sounds very similar to the situation we have today, where political leaders speak of “fundamental transformation” and dismiss the free market and capitalism as failures. The Founders understood that private property is necessary for both freedom and prosperity. The Takings Clause of the Fifth Amendment to the Constitution is quite specific about listing the limits of government action. It provides that no person can be “deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.”
In a recent column, Walter Williams wrote, “In 1794, when Congress appropriated $15,000 to assist some French refugees, James Madison, the acknowledged father of our Constitution, stood on the floor of the House to object, saying, “I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents.”
In the second chapter, The Great Utopia, Hayek explains how socialism has been sold as the panacea for all social ills and injustices. He juxtaposes these Utopian ideas with the discarded writings of Tocqueville and explains the how the left redefined freedom from freedom of action, to redistribution of wealth.
The subtle change in meaning to which the word “freedom” was subjected in order that this argument should should plausible is important. To the great apostles of political freedom the word had meant freedom from coercion, freedom from the arbitrary power of other men, release from the ties which left the individual no choice but obedience to the orders of a superior to whom he was attached. The new freedom promised, however, was to be freedom from necessity, release from the compulsion of the circumstances which inevitably limit the range of choice of all of us, although for some very much more than for others. Before man could be truly free, the “despotism of physical want” had to be broken, the “restraints of the economic system” relaxed.
In the remaining chapters, Hayek methodically examines the tenets of centralized planning and the logical conclusions of such policies. The writing is extremely lucid and cogent. He examines the progression of events that inevitably follow centralized economic planning and then shows them in practice where socialism has been attempted. He effectively demonstrates how impossible it is to separate economic freedom from freedom in the main. Because people do not willingly submit to having their career choices selected for them, coercion is necessary to achieve economic goals. In a planned economy, the variables must be eliminated to accurately determine the result of policy. Ultimately, people lose the ability to choose where they will work and how much they may charge for their goods and services.
He also chronicles how totalitarian regimes develop out of the need to continually justify policies that don’t work. Eventually, because disagreement with policy may make policy impossible to implement, such dissension becomes a crime against the state.
Chapters 13 and 14, are perhaps the most difficult for the modern reader uninformed about the time in which they were written. Both of these chapters address “current events” in Britain and world affairs then. Consequently, unlike the prior chapters, they are more specific and less general.
The last chapter is likely to make modern day conservatives wince. In it, Hayek suggests that an international body with real power is the best alternative to ameliorate the inequities between different countries. To be sure, he advocates for individual economic choices, but also sees no alternative to the inevitable squabbling amongst nation states over inequities.
Hayek’s ideas have currency today because he used them to reveal the threat that central planning poses to liberty. That threat, although cloaked in new catch phrases, is still virulent today. That is why more than 60 years after it’s publication, Hayek’s clear exposition of the principles of free market capitalism and his unmasking of the totalitarian reality behind the false promises of economic and social nirvana are as relevant today as when first published.
There is entirely too much in this book to thoroughly cover here. However, it is definitely worth reading, and no less salient today than when it was written.