Analysis of Hayek's The Road to Serfdom - Term Paper Example

?Hayek’s The Road to Serfdom is not only a sincerely written piece of scholarly investigation; it is, in fact, a personal book written from the Austrian perspective of the destruction of freedom in Germany. Hayek wrote the book because he saw the same roots of enslavement in the United States that he saw abroad prior to the Second World War. He wrote, “We have progressively abandoned that freedom in economic affairs without which personal and political freedom has never existed in the past” (Hayek 67). From this perspective, Hayek continues to lay out his theories and beliefs about where the conception of the state is going based on its current trends. He outlines the beginnings of tyrannical states like the Soviet Union and Nazi Germany, and how they began in the noble ideal of collectivism in the form of centrally planned economies. Ultimately, Hayek believes that these two states and others did not intend to go down this road to serfdom; however, he thinks, it is the natural result of a certain philosophy and a particular concept of freedom. These inconsistent ideas make possible the kind of unjust distribution and allocation of resources resulting in the tyrannical socialist state: where conflict is unstopping, economic principles are ignored, and suffering is taken to be the norm. Hayek intended the content and theories in this work not only to apply to the climate in which he wrote it, but to the condition of societies as they exist decades and even centuries into the future. Hayek begins his work with a worry: that socialism and central planning is essentially a “road to serfdom” and that if one goes along this road, one will be travelling down the same road as the most brutal totalitarian states of the 20th century. Citing Hitler’s 1941 proclamation that “basically National Socialism and Marxism are the same”, Hayek begins his work with that basic theme. By the end of his Introduction and the beginning of the first chapter, “The Abandoned Road”, Hayek claims that states have abandoned the road to freedom or, in other words, the road of “how we can make best use of the spontaneous forces found in a free society” (Hayek 73). In fact, much of Hayek’s book and his work in general are based around the concept of “spontaneous order”, which refers to the more efficient outcome of economic and societal resource distribution than any design. Using this thrust of argument, Hayek analyzes the central planning aspect of many economies in the world. If societies might be better off using a spontaneous order, then what is the purpose of a central plan, Austrian economists might argue. The idea of spontaneous order is inherent in the “invisible hand” economic proposal in Adam Smith’s The Wealth of Nation; however, Hayek elaborates on the likelihood of acting on more complete information in the case of spontaneous order, whereas the centralized authority operates on a limited set of information, attempting to make decisions affecting the economy. Hayek’s second chapter deals with something he calls “The Great Utopia”, which is a reference to the socialist state that utilizes central planning. The most important part of this section is the argument that socialism and communism together are “an illusion” (Hayek 165). That is, they are merely a first step in a process that ultimately ends in fascism and tyranny. This is the lack of agreement on the ends but an agreement on the means. While many people in the centrally planned economy agree that socialism is a good idea, there may not be agreement on what the ultimate goal of that central planning is. Some may believe fascism is the best goal, whereas some others may think the equality of all is the proper goal. In this kind of environment, where the end state of the economy is not clear, conflict is treated as a given in daily life (Hayek 152). Lawmakers and planners disagree begin to disagree on what measures need to be taken because they disagree on why those measures need to be taken. From this process, the road to serfdom is paved where the process toward fascism starts. Insufficient knowledge on the part of the central planners also contributes to this lack of vision on the part of the state and, to account for this, this state reserves more power. It should be noted that Hayek targets not “central planning” as such, but planning against competition, or “the planning which is a substitute for competition” (Hayek 91). Planning as a substitute for competition reflects a view of society that competition is the source of evil; this kind of view reflects the road to serfdom. Although many liberals and socialists may be in broad agreement about the proper ends of society, they disagree about the method. For a liberal like Hayek, it is believed that “we should make as much use as possible of the spontaneous forces of society, and resort as little as possible to coercion” (Hayek 71). Although this notion is different for a socialist, who favors coercion over the spontaneous order of competition and decentralization, both the liberal and the socialist on this account favor some kind of social end as the ultimate good of society, such as the general welfare, the common good, or the greatest happiness of the greatest number. In times in which a society is not facing military or security threats, it is unclear whether society would benefit from a central planning sector as opposed to a well-constructed system of law and free enterprise (Hayek 104). Taking into account the spontaneous order concept once again, Hayek believes the immensely complicated task of planning for such a large economy would make the free enterprise method the more appropriate course. This inability to process such volumes of information, according to Hayek, would lead the state to petition for more power in order to access more information. This increase in power under socialism eventually results in the power of a “strong man” government that “would probably destroy personal freedom as completely as any autocracy has done” (Hayek 110). However, Hayek bases his opposition to central planning not on its difficulty or its place in the process towards fascism as such; for Hayek, freedom is an end in itself, especially not for marginally greater economic satisfaction. This condemnation of central planning is the primary result of valuing these higher goods like liberty and personal responsibility (Hayek 169). Salient to this point is the thought that central planning is not necessarily inevitable, but the result of deliberate actions taken on the part of the advocates of planning. Hayek says, “The movement for planning owes its present strength largely to the fact that, while planning is in the main still an ambition, it unites all the single-minded idealists, all the men and women who have devoted their lives to a single task” (Hayek 99). After addressing the issue of central planning and the possibility of spontaneous order in the market economy, Hayek addresses the topic of “Planning and Democracy” and again addresses the issue of disagreement on the ends of socialism. In the situation where individuals agree on the means of society but disagree on the ends, as many socialists do, fascism and tyranny are the result. He says, “Common action is thus limited to the fields where people agree on common ends” (Hayek 102). In a democracy, central planning is then not possible, since the purpose of a democracy is not to achieve absolute agreement but rather a compromise and the willingness to do so. Hayek claims that in a democracy, we would be “forced to produce agreement on everything in order that any action can be taken” (104). This kind of outcome is, of course, undesirable for the real world in which it is extraordinarily difficult to negotiate between individuals and groups that have conflicting values. The essential conflict between planning and democracy comes about because of the fact that the latter is an obstacle to the suppression of freedom that the direction of economic activity (and spontaneous order) requires. In other words, democracy and central planning are aimed at two different ends, even though individuals like democratic socialists believe the two to be interrelated. According to Hayek, of course, they are not only unrelated but rather contradictions of one another. Because democracy has its constraints (for example, the number of decisions that need agreement, the level of agreement that can be sought, etc.), central planning cannot accomplish everything it sets out to do. Lastly, Hayek’s chapter on “Planning and the Rule of Law” serves as a key component in his argument against the central planning notion advocated by socialism. The claim of this chapter is that planning may not follow the rule of law. The rule of law refers to the notion “that government in all its actions is bound by rules fixed and announced beforehand” (Hayek 112). Central planning, insofar as it is undemocratic, is necessarily incompatible with individual freedoms and the rule of law because it requires that the will of a small minority (the planners) be imposed on the people. In an environment of central planning, “the individual would more than ever become a mere means, to be used by the authority in the service of such abstractions as the ‘social welfare’ or the ‘good of the community’” (Hayek 130). In defense of capitalism, Hayek argues that the poorest in a free market society have more personal freedom than in a centrally planned society and, therefore, in spite of socialism’s hypocritical professed humanitarian goals, it can only be achieved by coercing all members of a society to accept those common values in violation of democratic ideals (Hayek 139). Part of Hayek’s purpose in constructing these arguments consists of their application to states in the wake of World War II, which he hoped to impart on those who favor socialist means toward noble ideals. The Road to Serfdom is constructed with the explicit goal of espousing the benefits of individual liberty, free enterprise, and spontaneous order. By claiming that central planning is only part of the process towards tyranny and fascism, Hayek makes a significant contribution to the political application of economic theory. In fact, he is one of the first public figures to question the distinction between economic freedoms and social freedoms; that is, centrally planning individuals’ economic lives reflects a belief that those people are not capable of responsibly making free decisions. By pointing out inconsistencies between collectivism and our commonly held notions about the good, Hayek makes a lasting and effective criticism. Works Cited Hayek, F.A. The Road to Serfdom: Text and Documents--The Definitive Edition. Vol. II. Chicago: University Of Chicago Press, 2007. Read More