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The Road to Serfdom ()

National Review's List of the Top 100 Nonfiction Books of the 20th Century

    If there are two things most people can agree on these days, they are that free market capitalism is the
    only practical way to organize a modern society and that the key to economic growth is "knowledge."
    So prevalent are these beliefs that their origins are rarely examined, which is somewhat surprising,
    since both statements can be traced back, in large part, to one man, Friedrich August von Hayek
        -John Cassidy, The Hayek Century

For anyone who's ever read Adam Smith's Wealth of Nations, there is little that is new in The Road to Serfdom.  Hayek's basic argument is that central planning is by it's very nature inefficient; only a free market allows for the exchange of information that can provide efficiency.   It is hard to believe that there are any serious political philosophers or economists who would still argue with this thesis.  Even John Cassidy, economics correspondent for The New Yorker, and no friend of capitalism, is forced to make the concession which appears in the epigrah above.  Indeed, it  was not Hayek's basic argument that made the book so controversial, instead what made this text a particular object of Left wing animus was Hayek's corollary that such central planning inevitably leads to totalitarianism.

The very title of the book refers metaphorically to his argument that Socialism, even the somewhat benign form of socialism that was popular in Europe at the time, represented simply a step along the path to the same kind of tyranny that held sway in Nazi Germany and the Soviet Union:

    It is the price of democracy that the possibilities of conscious control are restricted to the fields
    where true agreement exists and that in some fields things must be left to chance.  But in a society
    which for its functioning depends on central planning this control cannot be made dependent on a
    majority's being able to agree; it will often be necessary that the will of a small minority be imposed
    upon the people, because the minority will be the largest group able to agree among themselves on
    the question at issue.  Democratic government has worked successfully where, and so long as, the
    functions of government were, by a widely accepted creed, restricted to fields where agreement
    among a majority could be achieved by free discussion; and it is the great merit of the liberal creed
    that it reduced the range of subjects on which agreement was necessary to one on which  it was
    likely to exist in a society of free men.  It is now often said that democracy will not tolerate
    "capitalism."  If "capitalism" means here a competitive system based on free disposal over private
    property, it is far more important to realize that only within this system is democracy possible.
    When it becomes dominated by a collectivist creed, democracy will inevitably destroy itself.

This powerful idea, that every type of centralized authority is a deadly threat to democracy and freedom, is always timely, but it was especially important coming, as it did, towards the end of a Depression and a War which had seen most of the democracies come to increasingly depend on just such centralization.  To the extent that Hayek was responsible for sounding the alarm against complaisance in the face of the rise of the mammoth Social-Welfare State, he must be considered one of the most significant political philosophers of the Century.

Nor did he stop after stating the negative, that all central planning is necessarily the enemy of freedom, he went on to enunciate a philosophy of individualism:

    [Individualism] does not assume, as is often asserted, that man is egoistic or selfish or ought to be.  It
    merely starts from the indisputable fact that the limits of our powers of imagination make it impossible
    to include in our scale of values more than a sector of the needs of the whole society, and that, since,
    strictly speaking, scales of value can exist only in individual minds, nothing but a partial scales of
    values can exist--scales which are inevitably different and often inconsistent with each other.  From
    this the individualist concludes that the individuals should be allowed, withing defined limits, to follow
    their own values and preferences rather than somebody else's; that within these spheres the individual's
    system of ends should be supreme and not subject to any dictation by others.  It is this recognition of
    the individual as the ultimate judge of his ends, the belief that as far as possible his own views ought to
    govern his actions, that forms the essence of the individualist position.

and to describe the positive conditions that are required in order for free markets to flourish.  Most importantly, he recognized that the fundamental precondition for making free markets function effectively is a coherent and impartial legal system:

    It is important not to confuse opposition against...planning with a dogmatic laissez faire attitude.  The
    liberal argument is in favor of making the best possible use of the forces of competition as a means of
    co-ordinating human efforts, not an argument for leaving things just as they are.  It is based on the
    conviction that, where effective competition can be created, it is a better way of guiding individual
    efforts than any other.  It does not deny, but even emphasizes, that, in order that competition should
    work beneficially, a carefully thought-out legal framework is required and that neither the existing nor
    the past legal rules are free from grave defects.

This point is frequently misunderstood, both by libertarians, who tend to be absolutists about freedom, and by those, say in Russia, who think that free markets in and of themselves offer a quick fix and an easy solution to problems.  It is also ignored by those who wish to cast capitalism as little more than Social Darwinism.  But even as Hayek recognized that any legal system does inevitibly allow central authority to exercise power over individuals, which entails a significant risk, he ably explained why it is worth that risk:

    Nothing distinguishes more clearly conditions in a free country from those in a country under arbitrary
    government than the observance in the former of the great principles known as the Rule of Law.
    Stripped of all technicalities, this means that government in all its actions is bound by rules fixed and
    announced beforehand--rules which make it possible to foresee with fair certainty how the authority
    will use its coercive power in given circumstances and to plan one's individual affairs on the basis of
    this knowledge.  Though this ideal can never be perfectly achieved, since legislators as well as those to
    whom the administration of the law is intrusted are fallible men, the essential point, that the discretion
    left to the executive organs wielding coercive power should be reduced as much as possible, is clear
    enough.  While every law restricts individual freedom to some extent by altering the means which
    people may use in the pursuit of their aims, under the Rule of Law the government is prevented from
    stultifying individual efforts by ad hoc action.  Within the known rules of the game the individual is
    free to pursue his personal ends and desires, certain that the powers of government will not be used
    deliberately to frustrate his efforts.

For some reason people tend to interpret this tenet of free market capitalism as a psychic disconnect, but Hayek has used exactly the right metaphor there:  capitalism is the game, but it requires a set of rules.  It is only once that framework of rules has been established, and the players have been assured that the rules will be enforced as written, that the individual can be turned loose to pursue his own ends.

There isn't much that is new in Hayek's ideas as presented here--the antecedents can be found in Hobbes and Locke and Adam Smith--what was new at the time was that he applied these theories of classical liberalism to modern social planning and thereby illuminated the threat that such central planning posed to liberty.  Sadly for us, the threat remains even today--think of Hillary's Health Care Plan--and so this book remains, almost sixty years after it's publication, a vitally important restatement of the principles which guide free market capitalism.  At a time when everyone claims to be an adherent of these ideas, it is refreshing to see them laid out in such clear and convincing fashion so that we may measure folks' actions against these words.


Grade: (A+)


Friedrich Hayek Links:

    -WIKIPEDIA: Friedrich Hayek
    -PODCAST: The Hayek Puzzle (Jonathan Rée and Thomas Jones, The LRB Podcast)
    -PODCAST: Hayek’s Last Gleaming : "Why I Am Not A Conservative" essay comes under examination. (Jonah Goldberg, Jan 25, 2023, The Remnant)
    -PODCAST: Bruce Caldwell: The Life and Ideas of F.A. Hayek: Ep. 293 — Political Economy with James Pethokoukis (James Pethokoukis | Bruce Caldwell, January 18, 2023, Political Economy)
    -PODCAST TRANSCRIPT: LIBERTARIAN CROSSROADS? with Andrew Koppelman (hosted by Rachel Lu, Law & Liberty)
    -ESSAY: Hayek Among the Post-Liberals: The past two decades on the American right have been an extended exercise in mapping out Hayek's road to serfdom. (Rachel Lu, 4/30/24, Law & Liberty)
    -REVIEW ESSAY: Hayek Against the Planners: a review of F. A. Hayek: Economics, Political Economy and Social Philosophy by Peter J. Boettke (Anne Rathbone Bradley, January 24, 2019, Law & Liberty)
    -ESSAY: Predistribution: The New Road to Serfdom (John O. McGinniss, 6/26/24, Law & Liberty)
    -ESSAY: Who Was Hayek?: When presented with the choice of fascism or socialism, Hayek chose neither. (g. patrick lynch, 10/03/23, Law & Liberty)
    -ESSAY: The Road to Hayek: A Comprehensive History of Neoliberalism’s Forefather (BRUCE J. CALDWELL, HANSJOERG KLAUSINGER, November 28, 2022, ProMarket)
    -ESSAY: Taking a Step Toward a Better Understanding of Friedrich Hayek’s ‘Road to Serfdom’ (James Pethokoukis, January 25, 2023, AEIdeas)
    -ESSAY: I Misunderstood Hayek: It isn't only that information is distributed across markets, it is generated by markets too (JIMMY ALFONSO LICON, SEP 1, 2023, Uncommon Wisdom)
    -ESSAY: The Liberalism/Conservatism Of Edmund Burke and F. A. Hayek: A Critical Comparison (Linda C. Raeder, Humanitas)
    -ESSAY: Carl Schmitt and the Origins of Friedrich Hayek’s Thought on Rent-Seeking (DANIEL NIENTIEDT, May 5, 2023, PropMarket)
    -ESSAY: The Gang of Three: Mao, Jesus and Hayek (William McGurn, Policy)
    -ESSAY: A New Name for an Old Whig: Hayek once desribed himself as an 'unrepentent Old Whig'-with the stress on the 'old'. (Samuel Gregg, Autumn 2002, Policy)
    <-ESSAY: Conservatism and Classical Liberalism: A Rapproachment (Sam Roggeveen, Winter 1999, Policy)     -FRIEDRICH AUGUST VON HAYEK : 1974 Nobel Laureate in Economics (Nobel Internet Archive)
    -ENCYCLOPÆDIA BRITANNICA: Your search: "friedrich hayek"
    -ENCYCLOPÆDIA BRITANNICA: Hayek, Friedrich von
    -Hayek Papers (Hoover Institute)
    -LECTURE: Economics and Knowledge (Freidrich Hayek; Presidential address delivered before the London Economic Club; November 10 1936)
    -ESSAY: The Use of Knowledge in Society (Freidrich Hayek, American Economic Review, XXXV, No. 4; September, 1945)
    -ESSAY: Can We Still Avoid Inflation? (Friedrich A. Hayek, Polyconomics)
    -ESSAY: "Ludwig von Mises" (F. A. Hayek Lisbon, May 1977)
    -The Friedrich Hayek Scholars' Page
    -LSE Hayek Society (London School of Economics)
    -Friedrich A. von Hayek: A Centenary Tribute
    -PROFILE: Friedrich A. Hayek (1899-1992)(Peter J. Boettke, NYU)
    -Friedrich Hayek (Professor of Economics J. Bradford DeLong,  University of California at Berkeley)
    -Friedrich August von Hayek, 1889-1992 (New School)
    -The Salma Hayek versus Friedrich Hayek Scorecard
    -Friedrich Hayek Web Ring (bomis)
    -LINKS: Friedrich August von Hayek:  A listing of the best and most comprehensive online resources pertaining to Friedrich August von Hayek ( one-stop resource)
    -ESSAY: The Courage of Friedrich Hayek: William F. Buckley Jr. reflects on Friedrich Hayek's invaluable contributions to the fight against socialism-a fight that was still very much under way when Buckley delivered these remarks a quarter of a century ago (William F. Buckley Jr., Hoover Digest)
    -ESSAY: The Hayek Century: Economist and Hoover honorary fellow Friedrich Hayek spent seven decades extolling the supremacy of capitalism over socialism. For most of those decades, Hayek was a voice in the wilderness. Yet as John Cassidy argues, by the end of his life Hayek was vindicated to such an extent that "it is hardly an exaggeration to refer to the twentieth century as the Hayek century (John Cassidy, Hoover digest)
    -ESSAY: The Price Prophet (John Cassidy, The New Yorker)
    -ESSAY: We Are Not All Hayekians Now  (Virginia Postrel, Reason)
    -ESSAY: The road to freedom (Reuven Brenner, Forbes)
    -ESSAY: PLANNING, HAYEK AND THE CTC (David Warsh, Boston Globe)
    -ESSAY: Friedrich Hayek: a Panglossian evolutionary theorist  (Andy Denis, City University)
    -Karl Popper and Friedrich Hayek: an Interview with Jeremy Shearmur (Alberto Mingardi, Laissez Faire City Times)
    -TRANSCRIPT: HAYEK Saturday, June 26, 1999  (Think Tank, PBS)
    -ESSAY: HAYEK:  Social Theorist of the Century (Robert L. Formaini, Economic Insights, Dallas Fed)
    -ESSAY: Denationalisation of Money:  Friedrich Hayek's seminal work on Competing Private Currencies (Max More, Ph.D.)
    -ESSAY: The Significance of Myth and Misunderstanding  in Social Science Narrative: Opening Access to Hayek's Copernican Revolution in Economics (Greg Ransom, THE SOUTHERN ECONOMICS  ASSOCIATION)
    -LECTURE: The Meaning of Hayek (Gerald P. O'Driscoll Jr., dedication of Cato's F. A. Hayek Auditorium on May 9, 1995)
    -ARCHIVES: Hayek (Cato Institute)
    -ESSAY: F. A. Hayek: Prophet of the Modern World  (Tom G. Palmer, Cato)
    -ESSAY :  Markets and Morals  (Jonathan Sacks, First Things)
    -ESSAY : Defining Social Justice (Michael Novak, First Things)
    -ESSAY : National Review, R.I.P.  : Jonah Goldberg -- Need I Say More? (Justin Raimondo, Spintech)
    -SYNOPSIS: The Road To Serfdom by F.A. Hayek
    -REVIEW: of  The Collected Works of F. A. Hayek (Richard M. Ebeling)
    -REVIEW: of The Economics of Friedrich Hayek  by G. R. Steele (Roger W. Garrison, Southern Economic Journal)
    -REVIEW : Leonard Martin on John Cochran's and Fred Glahe's The Hayek-Keynes Debate: Lessons for Current Business Cycle Research (Journal of Markets and Morality)
    -REVIEW : of FRIEDRICH HAYEK:  A Biography.  By Alan Ebenstein (Robert Nash, Houston Chronicle)
    -REVIEW : of FRIEDRICH HAYEK: A Biography By Alan Ebenstein (Brian Doherty, Washington Post)
    -REVIEW : of  Friedrich Hayek: A Biography, by Alan Ebenstein (Deirdre McCloskey, Reason)
    -REVIEW: of Hayek: A Life, 1899-1950 by Bruce Caldwell and Hansjoerg Klausinger (Robert Skidelsky, Spectator)
    -REVIEW: of Hayek: A Life (Samuel Gregg, Law & Liberty)
    -REVIEW: of Hayek: A Life (Jesse Norman, The Critic)
    -REVIEW: Liberalism’s Last Man: Hayek in the Age of Political Capitalism, by Vikash Yadav (Alberto Mingardi, City Journal)

Book-related and General Links:


-History of Economic Thought
    -Cato Institute
    -Dead Economists Society
    -Ludwig von Mises Institute
    -Sir Karl Popper (1902-1994)
    -REVIEW: P.B. Medawar: Does Mind Matter?, NY Review of Books
       The Self and Its Brain: An Argument for Interactionism by Karl R. Popper and John C. Eccles
    -Polyconomics (Jude Wanniski)
    -John Stuart Mill, 1806-1873 (New School)
    -REVIEW: Gertrude Himmelfarb: The Enigma of J. S. Mill, NY Review of Books
       The Nature and Limits of Political Science by Maurice Cowling
       Mill and Liberalism by Maurice Cowling
       The Earlier Letters of John Stuart Mill, 1812-1848 edited by Francis E. Mineka
    -REVIEW:  Ronald Dworkin: Did Mill Go Too Far?, NY Review of Books
       On Liberty and Liberalism: The Case of John Stuart Mill by Gertrude Himmelfarb
    -ESSAY: English analytic philosophy and the Vienna Circle
    -ESSAY: Will Socialism Make a Comeback (Francis Fukuyama, TIME)
    -Philosophy of Science (Kelly Ross)
    -ESSAY: Creationism & Darwinism, Politics & Economics (Kelly Ross)
    -Economics Collection (Virtual School)
    -Library of Economics and Liberty: Links
    -Austrian Economic Theory Directory (Free Markets)
    -REVIEW:  T.M. Scanlon: Down from Liberalism, NY Review of Books
       A Conflict of Visions by Thomas Sowell
    -ESSAY: The Market is God:   Living in the new dispensation (Harvey Cox, The Atlantic)
    -ESSAY: Economics as Humanism (Michael Novak, First Things)
    -ESSAY: Social Ethics in a Post-Socialist World  (Peter L. Berger, First Things)
    -ESSAY: The Capitalist Threat: What kind of society do we want? "Let the free market decide!" is the often-heard response. That response, a prominent capitalist argues, undermines the very values on which open and democratic societies depend. (George Soros, The Atlantic)
    -ESSAY: Ideas Move Nations: How conservative think tanks have helped to transform the terms of political debate (Gregg Easterbrook, The Atlantic)
    -ESSAY: Really Reinventing Government: Both parties promise to reinvent government. We asked the father of corporate restructuring to show them how (Peter F. Drucker, The Atlantic)
    -ESSAY : Oops!  (Burt Solomon, National Journal, March 16, 2001)
    -REVIEW: of Behemoth: Main Currents in the History and Theory of Political Sociology. By Irving Louis Horowitz (Daniel J. Mahoney, First Things)
    -REVIEW: of In Defense of Political Reason: Essays by Raymond Aron. Edited by Daniel J. Mahoney (Brian C. Anderson, First Things)