The Road to Serfdom

I'm currently reading The Road to Serfdom, a book by the influential Austrian-British economist, Friedrich von Hayek, first published in 1944. It basically warns against the dangers of central planning by government and how it can lead tyranny.

He makes a valid point which has never occurred to me before - in times of war the competitive, capitalist economy is an encumbrance and government has to quickly impose a command economy, which to all intents and purposes is a pure collectivist one; it takes control of the means of production to direct it toward the production of war materiel, imposes price controls and implements strict rationing. The irony at the time of writing was that the British government had to turn itself into a facsimile of very government it was fighting. The danger comes once the crisis has passed and government is tempted to retain this unprecedented level of power.

He posits that socialism and fascism are but two faces of exactly the same collectivist religion, with each considering the other as heretical for having believed false prophets. They both have the same aim - it's only in the means by which they achieve those aims that they differ. Both lead to the citizens becoming serfs to the state.

While being an old style libertarian, he nonetheless promotes the belief that a certain amount of government regulation is necessary as a condition of liberty - an excerpt: 

"The successful use of competition as the principle of social organization precludes certain types of coercive interference with economic life, but it admits of others which sometimes may very considerably assist its work and even requires certain kinds of government action. 

"To prohibit the use of certain poisonous substances, or to require special precautions in their use, to limit working hours or to require certain sanitary arrangements, is fully compatible with the preservation of competition. The only question here is whether in the particular instance the advantages gained are greater than the social costs they impose. 

"Nor can certain harmful effects of deforestation, of some methods of farming, or of the smoke and noise of factories, be confined to the owner of the property in question, or to those willing to submit to the damage for an agreed compensation. 

"Even the most essential prerequisite of the market's proper functioning, the prevention of fraud and deception (including exploitation of ignorance), provides a great and by no means fully accomplished object of legislative activity. 

"There is no reason why, in a society which has reached the general level of wealth ours has, the first kind of security should not be guaranteed to all without endangering general freedom; that is: some minimum of food, shelter and clothing, sufficient to preserve health. Nor is there any reason why the state should not help to organize a comprehensive system of social insurance in providing for those common hazards of life against which few can make adequate provision."

Wise words - exactly the type of interference the EU performs and is berated for, and precisely the kind of interference the neo-liberals detest.

Another excerpt with a warning for this era:

"It's at times of national crisis when hard-won civil liberties are most likely to be all-too-easily given up. Even more troubling, politicians instinctively recognize the seductive power of war. Times of national emergency permit the invocation of a common cause and a common purpose. War enables leaders to ask for sacrifices. It presents an enemy against which all segments of society may unite. This is true of real war, but because of its ability to unify disparate groups, savvy politicians from all parties find it effective to invoke war metaphors in a host of contexts. The war on drugs, the war on poverty, and the war on terror are but three examples from recent times. What makes these examples even more worrisome than true wars is that none has a logical endpoint; each may be invoked forever. 

"The electorate needs to be wary of such martial invocations. For a war to be fought effectively, the power and size of the state must grow. No matter what rhetoric they employ, politicians and the bureaucracies over which they preside love power, and power is never easily surrendered once the danger, if there ever was one, has passed. Though eternal vigilance is sage advice, surely “wartime” or when politicians would try to convince us that it is such a time is when those who value the preservation of individual liberty must be most on guard. 

"In Germany it was largely people of good will, men who were admired and held up as models in the democratic countries, who prepared the way for, if they did not actually create, the forces which now stand for everything they detest. Yet our chance of averting a similar fate depends on our facing the danger and on our being prepared to revise even our most cherished hopes and ambitions if they should prove to be the source of the danger. There are few signs yet that we have the intellectual courage to admit to ourselves that we may have been wrong. Few are ready to recognize that the rise of fascism and Nazism was not a reaction against the socialist trends of the preceding period, but a necessary outcome of those tendencies. This is a truth which most people were unwilling to see even when the similarities of many of the repellent features of the internal regimes in communist Russia and National Socialist Germany were widely recognized. As a result, many who think themselves infinitely superior to the aberrations of Nazism, and sincerely hate all its manifestations, work at the same time for ideals whose realization would lead straight to the abhorred tyranny."

Ring any alarm bells?

While I heartily recommend the book, there are places where you can read three consecutive pages three times, and still not have a clue what he's saying.