The Road to Serfdom 40 and 80 Years Later
Hayek's warning is more timely than ever at a time when the left and some on the right dismiss so-called "neo-liberalism."
Editor’s note: Last week the Wall Street Journal noted that this fall is the 80th anniversary of the publication of Friedrich Hayek’s influential book The Road to Serfdom. German author Rainer Zitelmann concluded that the book is still deeply relevant:
It’s clear how relevant Hayek’s warnings remain today. Economic freedom—unlike in the 1980s and ’90s—is in retreat. Faith in “industrial policy” has come to dominate in China, the U.S. and Europe. At the same time, intellectual freedom is under threat as proponents of a woke ideology strive to politicize all of life. Mathematics is now considered “racist” by some, while freedom of speech is under threat. Opponents of economic freedom often oppose intellectual freedom as well.
As it happens, 40 years ago I wrote an essay for a meeting of the Mont Pelerin Society about The Road to Serfdom that I subsequently published in the Winter 1985 issue of Modern Age. I was still a youngish graduate student at the time, so some of the writing here is a bit immature. But much of it holds up—especially the point Hayek made in later work referenced here like The Constitution of Liberty (1961) that while “hot” socialism—the old fashioned nationalization of industries and detailed central planning—was already on its way out by the 1950s, a more insidious kind of socialist residue could be more dangerous.
I’ve left out the footnotes for this essay in the interest of readability, but if anyone wants them I can send them along.
—Steve
The Road to Serfdom Forty Years Later
IT IS A COINCIDENCE that has surely escaped no one that the fortieth anniversary of Friedrich Hayek’s The Road to Serfdom (1944) falls in the year made famous by Orwell's nightmare vision—probably the only year in history to achieve notoriety before it actually occurred. And it would not be an exaggeration to suggest that Hayek’s work is in good part responsible for preventing Orwell's prophecy from coming to pass. It is all the more remarkable that we commemorate the anniversary of The Road to Serfdom when one recalls its ignominious reception. The New Republic’s Alvin Hansen, for example, wrote that “Hayek's book will not be long lived.There is no substance in it to make it long lived.” An editor at a publishing firm dismissed the book as “unfit for publication by a reputable house.” And the University of Chicago’s Herman Finer even went as far as to write a hasty and abusive rebuttal, entitled, predictably enough, The Road to Reaction. Who could have foreseen, given this shabby treatment, that Hayek would go on to be awarded a Nobel Prize, that he would be saluted by a U.S. President, that The Road to Serfdom, defying the anathemas of its critics, would go through many printings. Indeed, Hayek’s impressive corpus of writing has established him as perhaps the greatest philosopher of classical liberalism since Adam Smith.
It was the burden of The Road to Serfdom to argue that centralized economic planning—collectivism or socialism—leads inevitably to the loss of freedom and the end of democracy. Hayek boldly suggested that Hitler’s rise to power in Germany had been necessarily preceded by the actions of the German socialists who had extinguished the desire for liberty during theWeimar Republic. To build his case Hayek compared Nazi socialism with pre-Nazi socialism and the similar ideas of British socialists—a comparison that was in many cases shocking. For instance, many in Britain agreed with the sentiment that "It goes without saying that only a planned economy can make intelligent use of all a people's strength." But the author of these words was Hitler, not some idealistic Fabian. Hayek's forewarning was naturally dismissed as alarmist: “See,” his critics could later claim, “Britain didn't become totalitarian after the war!” It is never admitted that Hayek's warning—along with Orwell's more impressionistic warnings, to which Hayek attributed more effect—engendered a more sober outlook.
But The Road to Serfdom is much more than a work of prophecy or speculation. At its core is classical liberal principle and a schematic analysis of the fatal consequences of collectivism. While occasionally the book reads like a period piece to day, it could easily be updated with contemporary examples of socialist thinking. The arguments persist but forty years later the preponderance of public opinion has shifted to Hayek's side. The integral relationship between economic freedom and political freedom is no longer seriously doubted. The idea of “democratic socialism” has been exposed as a myth by the experience of the modern world as well as by the persuasive reasoning of Hayek. The amount and the exercise of political power necessary to plan centrally the economy cannot be democratically allocated or controlled. “How could we ever have believed,” the philosopher William Barrett wrote a few years back, in repenting of his long-held belief in democratic socialism,
that you could deprive human beings of the fundamental right to initiate and engage in their own economic activity without putting every other human right in jeopardy? And to pass from questions of right to questions of fact: everything we know about the behavior of human beings in groups, everything we know about that behavior from history, should tell us that you cannot unite political and economic power in one center without opening the door to tyranny.
Another argument that is very nearly settled is the superiority of the free market to planned or managed economies. After disastrous experience with price controls and competitive regulation over the last twenty years in the United States, the watchwords today are decontrol and deregulation. The decontrol of the petroleum industry and the de-regulation of passenger airlines have: dramatically demonstrated the efficiency of free markets. It is true that some voices still clamor for government control, but pro ponents of control are increasingly forced to use disingenuous justifications.
Passenger airline unions, for instance, insist that competitive regulation is essential for insuring “safety standards,” while the trucking industry is fighting deregulation (which would mean an end to subsidies and protection from competition) by claiming that remote regions would lose trucking services.
However, the triumph of a few technical arguments does not a liberal society make, because there is much more at stake than merely the direction of. discrete economic policy. In the foreword to a later American edition of The Road to Serfdom Hayek reminds us that the greatest danger of socialist thought is that it slowly, ineluctably, undermines the spirit of liberty among the people.
This means, among other things, that even a strong tradition of political liber ty is no safeguard if the danger is precisely that new institutions· and policies will gradually undermine and destroy that spirit. The consequences can of course be averted if that spirit reasserts itself in time and the people not only throw out the party which has been leading them further and further in the dangerous direction but also recognize the nature of the danger and resolutely change their course. There is not yet much ground to believe that the latter has happened in England.
Yet in the very year that has come to.symbolize the apotheosis of liberty extinguished there was hope that the spirit of liberty may have awakened. The electorates in the two leading Western democracies have installed administrations that are committed, however imperfectly, to free-market principles and the Rule of Law. The question before us at present is whether this represents a durablevictory or a mere back-eddy in the onrushing stream of collectivism. The socialist impulse is resilient and mercurial: it darts aboutin new and unrecognized forms. That is why it is important to reconsider The Road to Serfdom today.
The “neoconservative socialist” Daniel Bell wrote recently that “the death of socialism is the most tragic - and unacknowledged -political fact of the twentieth century.” More than twenty years ago Hayek himself wrote in The Constitution of liberty that “Socialism in the old definite sense is now dead in the Western world. . . . Future historians will probably regard the period from the revolution of 1848 to about 1948 as the century of European socialism.” While it is true that the first half of the twentieth century saw the death of “hot socialism,” as Hayek calls it, the persistent reincarnation of socialist thought is reminiscent of Mark Twain’s comment that the rumors of his death had been greatly exaggerated.
In 1950 four European and two American writers published their memoirs of disillusionment with Communism, under the title The God That Failed. The book was a tour de force, signaling the death-blow for respectable fellow-traveling, and mandating anti-Communism among intellectuals just as anti-fascism had been essential a decade before. But in retrospect one serious deficiency of the book stands out: while the difference between Communism and socialism is a matter of degree and not of kind, the authors of The God That Failed wrote from a left perspective and did not repudiate utopian socialism. “But my faith in Socialism,” the Italian novelist Ignazio Silone wrote, "has remained more alive than ever in me I do not conceive Socialist policy as tied to any particular theory, but to a faith."
Silone’s comment shows how even the bitter experience of the failed utopias of modern times has not sufficed to thoroughly discreditsocialism, and he sug gests the form socialism has taken in the second half of the twentieth century. Socialism, which has largely failed to endure as a concrete political program, is now an amorphous, gnostic “faith,” more pervasively dangerous than when it was simply a progressive or reformist “policy.” Thus, in assessing the situation, it may be possible to apply the old adage about “winning the battle but losing the war.” Scientific socialism is dead, but socialism as ersatz religion lives on.
The practical agenda of socialism today is divided into small pieces, many of them unrecognized as socialist by proponents and opponents alike, but nevertheless unmistakably socialist in their prescribed policy effects. The current commotion in the U.S. over something called "comparative worth" is a perfect example. For many years feminists have complained that women in the labor force earn less than two-third5 the average income of men. (This figure ignores a number of crucial variables, the discussion of which is beyond the scope of the present essay.) Equal pay for equal work" statutes were enacted in an effort to eliminate sex discrimination, and,it was thought, to rectify this perceived income gap. However, the "equal pay" measures have not closed the aggregate income gap; so now feminists are clamoring for “equal pay for comparable work”; i.e., women should be paid more if their work is “worth” as much as men’s. This is simply a new costume for a very old appeal to envy and to “distributive justice.” It is ignorant of the vicissitudes of supply and demand and ignorant of the distinction between “value” and “merit,” so persuasively explained by Hayek in Chapter Six ofThe Constitution of Liberty. To enact a policy of “comparable worth” would require a central authority with Solomonic wisdom to gather and discern the relevant facts and strong arbitrary powers to reach within all sectors of the economy and set wages. Failing this1the enactment of legislative guidelines would result in a flood of litigation which would likely yield dubious results. It would spell the end of the labor marketplace; and, moreover, it would not likely result in a significant narrowing of the aggregate income gap between men and women. What proposals would then be advanced by the feminist elite? “Once introduced,” Hayek cautioned, “the principle of distributive justice would not be fulfilled until the whole of society was organized in accordance with it.”
It is precisely proposals such as “comparable worth” and “National Industrial Policy” that led Hayek to lament that socialism had "penetrated far too deeply into the whole structure of current thought to justify complacency'' and caused him to worry that we might still establish socialism, “albeit unintentionally.” It is relatively easy to expose the technical deficiencies of socialist policies, but it is notat all a simple task to combat socialism when it is an obscure. formless utopian attitude. An entire generation has been educated in the spirit of collectivism, wherein "commercial enterprise has been represented as disreputable and the making of profit as immoral.” The spirit of collectivism has even begun to permeate the thinking of traditional religion. To be sure, there has always been a utopian element latent in Christianity, often manifesting itself as "Christian socialism." But in the main religion has been an ally of economic individualism; the "Protestant work ethic0 (by no means limited to Protestants) celebrated those virtues that propelled the economic advance of liberal societies. More recently, however, prominent religious institutions have shown a growing interest in questions of political economy and have increasingly embraced socialism as the correct prescription for establishing the Kingdom of God. Liberation theology, which is simply revolutionary socialism fused with Christian terminology, is currently the hottest trend in seminaries in Europe and America. An entire generation of clergy is being indoctrinated with socialist ideology. And the American Catholic bishops, flush from the media success of their message on nuclear weapons, are at work on an evaluation of the American economy. The document is sure to appeal to 0social justice" as the chief criterion of judgment and certain to conclude with sentimental and utopian pronouncements. (The Canadian Catholic bishops recently produced just such a statement.) It is ironic to think that a serious threat to freedom today might come from a religion whose founder said he came to set people free.
All of Hayek’s works have testified to the inherent connection between economic freedom and the Rule of Law. Today, even when economic freedom is not under direct attack the Rule of Law often is, even if only by misunderstanding. The perennial temptation of democracy, Hayek has pointed out, is to confuse the Rule of Law with mere procedure. Legal education in America today is much along the lines of a trade school; law students are seldom exposed to classical legal philosophy or the “metalegal” principles behind the idea of the Rule of Law. Shortly after President Reagan made his famous speech calling the Soviet Union an “evil empire,” a Harvard law professor wrote in Newsweek that, to the contrary, the Rule of Law was advancing in the U.S.S.R.: “A general movement for law reform began under Khrushchev and attained even greater momentum under Brezhnev.... Legality has been increasingly strengthened. The Soviets have become much more insistent upon the enforcement of their legal rights.” When Hayek set out in the midst of the war to write The Road to Serfdom, he asked rhetorically if Hitler had obtained unlimited powers in a strictly constitutional manner, whether some “would suggest that the Rule of Law still prevailed in Germany?” Much to Hayek's amazement and dismay, he discovered ostensibly intelligent people who maintained precisely this, and the forty years since Hayek wrote have seen further deterioration in the understanding of the Rule of Law.
The goal of the Rule of Law is. to circumscribe as much as possible the exercise of arbitrary power of some men over other men. Government administration must of course be vested with reasonable discretion and competent powers to carry out its business, but this is the "gap" through which liberty may be driven out. For genuine Rule of Law to exist, ad ministrative discretion must be well defined and somehow limited at the margins. Hayek wrote in The Constitution of Liberty that "It is a problem of the scope of administration in general,” adding that “Coercion is admissible only when it conforms to general laws and not when it is a means of achieving particular objects of current policy. But today in the U.S. the objectives of current policy are given free rein, as administrative agencies promulgate “regulations”—which have the force of law—by the thousands. Everyone has his own favoritehorror story of bureaucratic blundering, so I won't recite a litany here. But the problem is worsening. Hayek wrote in 1960 that it may well be that legislative bodies are often overzealous in limiting the discretion of the administrative agencies and unnecessarily hamper their efficiency. One wishes such “overzealousness” still existed. For a time the Congress exercised a “legislative veto” over administrative regulations, but the Supreme Court struck down the legislative veto recently. Having endowed administrative agencies with broad mandates, undue discretion and extraordinary powers—making them autonomous mini-legislatures, in effect, Congress is now nearly powerless to limit them.
One of the main reasons the myth of socialism lives on for so many is the pervasive nihilism that characterizes so much of intellectual life in the West. “The crisis of the West,” Leo Strauss continually reminds us, “consists in the West's having become uncertain of its purpose.” In The Road to Serfdom Hayek detected this loss of confidence in the propaganda put forth by the Allies. “If we wish to convince them (the Germans), not only of our sincerity, but also that we have to offer a real alter native to the way they have gone, it will not be by concessions to their system of thought. We shall not delude them with a stale reproduction of the ideas of their fathers which we have borrowed from them - be it state socialism, Realpolitik, ‘scientific’ planning, or corporativism.” In the last forty years the situation has grown much worse, to the point where a moral relativism has engendered a fatal neutrality and indifference to freedom among the intelligentsia of the West. A perverse notion of the "convergence" of the two superpowers. has gained the ascendency in the West. The convergence theorists view the U.S. and the U.S.S.R. as moral equals on the world stage, differing only as to political procedures, and not in the inherent quality of their moral life. A free society cannot long survive thissort of corruption at the core of its self understanding.
The defense of liberty, which hitherto has been basically a negative critique of socialist errors of thought and action, must now move on to address this new philosophical ennui. The defenders of liberty have defaulted on one major point: too often liberty,primarily economic liberty, has been defended mainly as a means to greater material prosperity, rather than as a meaningful and comprehensive end in itself. Thus the debate has all too often become, as Arthur Okun framed it in the title of his famous book, one of “equality” (socialism) vs. “efficiency” (freedom), with the essence of the issue portrayed as a simple “tradeoff” between the two “values.” Viewed as such, society is reduced to its economic dimension, and socialism and capitalism become just twin branches of the tree of material prosperity.
Hayek’s vision of society has always transcended such one-dimensional views. The true measure of civilization is not, for Hayek, simple GNP figures or material prosperity, but its creativity and progress, which are a function of spontaneity and serendipity. Only a free society can nurture such creativity. The discovery, dissemination, and application of new knowledge is not something that can ever be foreseen or planned. That is why only a free society is truly a progressive society. Among Hayek's unique and impressive contributions to the literature of liberty has been his analysis of the nature and role of knowledge in society's advance and. of the impossibility of ever "managing" or planning man's progress:
We flatter ourselves undeservedly if we represent human civilization as entirely the product of conscious reason or as the product of human design, or when we assume that it is necessarily in our power deliberately to recreate or to maintain what we have builtwithout knowing what we were doing. Though our civilization is the result of a cumulation of individual knowledge, it is not by the explicit or conscious combination of all this knowledge in any individual brain, but its embodiment in symbols which we use without understanding them, in habits and institutions, tools and concepts, that a man in society is constantly able to profit from a body of knowledge neither he nor any other man completely possesses. Many of the greatest things man has achieved are the result not of a deliberately co-ordinated effort of many individuals, put of a process in which the individual plays a part which he can never fullyunderstand.16
But while liberal society advanced by way of the unplanned yet propitious activities of free individuals, the nature of liberalismunderwent a fundamental change during the nineteenth and early twentieth centuries. Liberalism changed when it became overly self-conscious of the individual as the operative moral frame of reference. This might not have entailed adverse consequences, except that liberalism in this century coupled with nihilistic modern philosophy has become a battering ram against the traditions and moral standards of the community This has result is a dramatic weakening of the family, religious institutions, and even government authority. It is into this confusion that socialism rushes as an emotional sentiment. Like Dostoyevsky’s Grand Inquisitor, socialism today promises not freedom but the fulfillment of the sentiments of fraternity, solidarity, and, especially, “community.” Indeed, the idea of the Rule of Law must include a consideration of those unwritten, unspoken, and unlegislated norms and traditions that guide individual behavior. (Virtues,they were once quaintly called.) Adam Smith recognized this function in The Theory of Moral Sentiments, and Hayek himself notes that “Paradoxically as it may appear, it is probably true that a successful free society will always in large measure be a tradition-bound society.” Both tradition and liberty, for instance, are strongly associated with the image of Britain. But freedom is no longer precious topeople in a society demoralized by nihilism, a society without reigning myths and revered traditions which bind people spiritually. That is why Jean-Paul Sartre, capturing the spirit of the age, could speak of man as being “condemned” to freedom. Thus the danger to freedom today is more subtle and insidious than when Hayek began. It very nearly takes the form of “Life is not worth living.” What is needed to combat this is to expand and extend Hayek's positive vision of the spontaneous community that coheres through the actions of a vigorous free people. Free societies, by all indices, much more closely emulate the values praised by socialism, such as fraternity and community. We would well ask: where do we find fraternal and voluntary service organizations, diverse charities, independent research, and philanthropic support for the arts and education—in the socialist East or the free societies of the West? Socialist thinkers always compare the performance of free societies with the ideal of socialism; they never compare the performance of socialism with the ideal of freedom.
Indeed, if this latter comparison were made, it would demonstrate that socialism actually retards the moral sentiments of men. “The most important change which extensive government control produces,” Hayek wrote in the foreword to a later edition of The Road to Serfdom, “is a psychological change, an alteration in the character of the people.” Socialism, in fact, exacerbates exactly those negative traits that socialists so deplore in the West. Socialism, by reducing the available paths to advancement and success, encourages rampant acquisitiveness, but for power rather than money. What are the consequences for a society where the chief object of ambition is power and political status instead of commercial success? Socialist societies also exhibit “consumerism” and envy, and they also seem apathetic.
Socialism seeks a sinless world, a world where man can do no evil—a return, literally, to the Garden of Eden. But this attitude, derived from the Rousseauist notion that evil is caused solely by faulty institutions and social structures, ignores the meaning of morality and the meaning of choice. To eradicate evil man must have his freedom of choice severely circumscribed. But if man has no freedom of choice, there is no good either, for good is not simply the absence of evil. Freedom is necessary for moral choice and true moral lifeto exist. Socialism is not amoral—it is anti-moral.
Moreover, socialism crushes creativity, and it must do so because individual creativity can only undermine the unitary purposes of thestate. The Marxist regimes of the world, for instance, cannot produce a literature, except indirectly, from the dissidents in the laborcamps whose manuscripts are banned. (It has been joked that Communist “literature” is along the lines of “girl-meets-tractor and lives happily ever after on the collective farm.”) Life in a collectivist society is appallingly prosaic and banal, the result of embracing the tedious egalitarian premise that life is about little more than economic relations between people. Collectivism dulls the aesthetic as well as the ethical sensibilities.
The great hazard is that a society need not be expressly collectivist to be infected by collectivism's enervating virus. Hayek warned of the disastrous consequences of educating an entire generation in the spirit of collectivism. ls it a mere coincidence that the decline of America's confidence in itself and its leadership in the world occurred simultaneously with the rapid and frantic expansion of social welfare exertions in the “Great Society”? The attitude that Western institutions and values are somehow illegitimate has become de rigueur among the fashionable intellectual and artistic elite. Much of current Western literature and art has degenerated so far that itnearly matches the literature of the Communist world for boredom and reductionism. The award-winning novelist Stanley Elkin, for instance, recently compared Disneyland to Auschwitz or Dachau. (“They put you in these little electric carts and trundle you around.”) This sort of mindless indulgence is enough to make one desire the Soviet’s “girl-meet-stractor” stuff.
It is clear, then, that in many ways the Road to Serfdom is paved wider and deeper than it was forty years ago. The Road to Freedomtoday is, to recall the poet, still "the road less travelled." The defense of freedom today must include a celebration of the inherentsuperiority of the moral life of free societies. Forty years after The Road to Serfdom, then we have some cause to rejoice— Orwell's nightmare has been prevented in the West - but we must redouble our efforts in the defense of liberty. The resonantphrase of John Stuart Mill remains as insightful and instructive today as when he wrote it nearly a hundred years ago: “A people, it appears, may be progressive for a certain length of time, and then stop; when does it stop? When it ceases to possess individuality. A State which dwarfs men, in order that they may be more docile instruments in its hands even for beneficial purposes—will find that with small men no great thing can really be accomplished.”
Another outstanding piece. Having been alive during the 50s and on, it would have never occurred to me that we would be on the brink of losing everything we fought and died for since the founding. The communists made the overthrow of the US their ultimate goal from about 1920 or so on. That they succeeded in taking control of the democrat party has been revealed in all its treasonous detail. May God Almighty forbid that Harris and her fellow travelers succeed in November.
Socialism is a form of religion based primarily on envy. It leads to resentment. Which often leads to violence. The Nazi’s exploited all of this obviously. And Hence TDS and the lefts desire to kill Trump. They seem deluded enough to believe that killing him will solve their perceived problems. Madness.