F.A. Hayek's "The Road to Serfdom"

This past Thanksgiving, I spent time reacquainting myself with F.A. Hayek classic, “The Road to Serfdom” and his last book, “The Fatal Conceit” and it was like revisiting old friends. The central theme of his books was that road to hell was paved with good intentions but he noted that behind the curtain was Satan, promising utopia on Earth.

For Hayek, central planning would prove inferior to market economy when it came to improving the lot of the average individuals and one intervention to improve the economy would lead to another and another before the whole interventionist leads down the road to serfdom or the economy crashing down, like what is happening in much of Europe today.

"The Road to Serfdom" was written in 1944, at a time that the belief in government interventionist policies were at its peak and just a short five years away from the end of the Great Depression. The belief in the free market was also at its nadir. Hayek dedicated the book to “Socialists of All Parties” but this dedication was never meant to be malicious, but a subtle means of pointing out the error of his opponent's thinking.

Those who are interested in history will note how Hayek in the "Road to Serfdom" dissected the root of Nazism and fascism and traces those roots to socialism by using references from the actual period of history that fascism and Nazism flourished. The connection was clear and unequivocal, but many historians often deny the connection, treating Nazism and Fascism as part of the Right, failing to see the direct connections seen by Hayek. These two evils ideology began on the left.

One of Hayek's chapters dealt with how the worst rose to the top in totalitarian governments, as Hayek noticed to succeed meant having leaders with no morality and the wiliness to use force to obtain their goal. Hayek observed that for a democratic politician to plan a whole economy, he will be confronted with a choice of either retreating from his plan or imposing his will by force, using tyrannical powers. Only the uninhibited can thrive in just a society in which the ends justify the means, and he noticed that in pre World War II Germany, the socialists merely retreated and allowed the Nazis to win.

"The Road to Serfdom" does not occur all at once but happens with the loss of one freedom at a time, often done in crisis mode and in national emergency. As one Democratic politician recently stated, “One should never waste a crisis”, and certainly over the past two years, we have seen a government taking over our health care, our lending institutions, the auto industry and while the administration declares that they have saved us from the Great Depression, they have merely slowed down the recovery while maintaining high unemployment, hardly an economic success. They have used the economic crisis to further government control over our lives. What we see today is the struggle between freedom and a slow road to serfdom in which a group of elites control all aspect of our lives.  "The Road to Serfdom" was the warning that is still ever prescient today.

"The Fatal Conceit" was Hayek’s final book, which provided his final lesson. Hayek thesis was that civilization was held together by influence of traditional moral codes and practices that evolved. Call it the evolution of the invisible hand. For Hayek, free markets evolved as he wrote, “Our morals are neither instinctual nor a creation of reason, but constitute a separate tradition - between instinct and reason - a tradition of staggering importance in enabling us to adapt to problems and circumstances far exceeding our rational capacities. Our moral traditions, like many other aspects of our culture, developed concurrently with our reason, not as its product. Surprising and paradoxical as it may seem to some to say this, these moral traditions outstrip the capacities of reason.”

While history writes about government activities to develop civilization, what is missing is the story of spontaneous cooperation of individuals that forms the basis of those civilizations. We read about how the Romans built the Coliseum, but we don’t read about the traders who went from one end of the empire to the other, expanding commerce. Hayek emphasized how rules developed as humanity grew from its most primitive form, in particular the development of rules governing property rights and economic dealings. Virtues just as honesty, contracts, exchange, trade and privacy developed to cope with a more extended society. Hayek showed how commercial and trade generated wealth which made population growth possible. (And he observed that in today’s world, population is only a problem in societies dominated by socialists’ thoughts, whereas free market societies allows for population to grow! He added that Socialism will result in disaster in a world with increasing population.)

Philosophers just as Plato and Aristotle denigrated trade and supported self-sufficiency within local markets. They did not view markets beyond the local community and these regressive ideas passed on to the Catholic Church through Saint Thomas Aquinas and the Church became detached from the evolution of a commercial society that was the underpinning of civilization.

The Fatal Conceit attacked the intellectuals and socialists who followed the mistakes of the philosophers by ignoring the contribution of the commercial class while returning to the ideas of the philosophers. It is the commercial class that looks to the future and the socialists, and the government interventionists who look to the past. Obama model is a 70 year old New Deal and a Democratic socialism that is collapsing in Europe whereas there is an unknown entrepreneur who is already discovering the next great thing that will revolutionize how we live.

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Hayek's book was "The Fatal Conceit", not Concept. Socialism be considered a fatal concept, butsocial planning is a form of hubris that stems from the errors of rational constructivism.
 

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