Introduction
The assigned reading is a condensed version of The Road to Serfdom by Friedrich A. Hayek. The author mentions living in both Austria/Germany and the United States/England. He explains that the forces that destroyed freedom in Germany are also at work in the US and England. He argues that things considered “typically German” are now common in America and England, such as respect for the state and the organization or planning of everything. He explains that the tragedy of Germany came from the goodwill of the people and through socialist policies. The author argues that centralized power through planning is greater than the power exercised independently by many. He claims that decentralizing power and competition is the only system designed to minimize the power of one person over another.
How Economic Planning Threatens Democracy
The author contends that the power a millionaire has is much less than that of a small bureaucrat. He argues that in a free society, there should be no threats to freedom or individuals being confined by force to a task or environment. He claims that private property is the most important guarantee of freedom. Because the control of production is divided among many independent individuals, people can choose what to do with themselves. When all the means of production are centralized, whoever controls it has complete power over individuals. This creates dependence as the state becomes the sole employer. Currently, in democracies, many who support a free society still hold ideals that can lead to tyranny. He argues that most influential people believe that economic life should be directed through economic planning rather than competition. He claims that planners must create power over people on an unprecedented scale to achieve their goals, and their success depends on obtaining such power. Democracy acts as an obstacle to their plans. He argues that many socialists mistakenly believe that transferring power from private individuals to society eliminates power imbalance, but it instead concentrates power and makes it far-reaching.
The Rise of Socialism in Germany
The author explains that in the late 19th and early 20th centuries, Germany began to practice socialism. Socialists started collecting children into political organizations and sports to prevent exposure to other views. By the time Hitler came to power, liberalism had died, and those who witnessed the transition could identify the connection between the two. He explains that it is concerning to see England and the United States begin to use “conservative socialism” as a slogan for National Socialism. De Tocqueville stated that democracy provides freedom and value to every person, while socialism makes every person a mere agent. He explains that to make the idea of economic freedom under socialism possible, freedom becomes power or wealth.
The Role of Competition
The author stresses that opposition to central planning should not be confused with laissez-faire, as a legal framework is necessary to provide effective competition. He explains that competition allows individuals a chance to decide if the prospects of a particular occupation compensate enough for its disadvantages. He also explains that democratic assemblies cannot function as planning agencies because there are too many different possibilities. This stresses the importance of leveraging the collective knowledge of many. This, in turn, leads to a dictatorship as large-scale central planning becomes essential. A totalitarian leader will choose between disregarding morals and failing, making those with less regard for morals more likely to succeed. Even in democracies, “collective freedom” is not the freedom of the members but the unlimited freedom of the planner. The author claims that a significant change in moral values has occurred due to collectivism, such as the declining value of independence, self-reliance, and local responsibility. He argues that this has destroyed the national character of America and England.
Central Planning Restricts Freedom
The author says that planners argue that the complexity of modern civilization necessitates central planning. He counters that the very complexity means that competition is the only valid method. He also says that if we had used a central planning system, there would never have been so much variety and flexibility. He mentions that some say technological changes have made competition impossible, but argues that the growth of monopoly seems less a consequence of technology and more an issue with policy. I believe this is a strong point also made from the previous reading about monopolies. He also argues that the recipient of money in a socialist society does not get to determine how to enjoy their reward, controlling nearly every aspect of their lives. For example, an authority directing the economy would decide what people get and on what terms, allowing for discrimination. He claims that while there is improvement to be made, planning would take society in the wrong direction. He also argues that guaranteeing basic needs supports freedom, but protecting specific incomes can limit opportunity. Socialist ideas have fostered a preference for safe, salaried jobs and frame profit as immoral. This threatens freedom, as security only comes in controlled systems. To preserve liberty, society must recognize that freedom requires personal responsibility and risk.
Conclusion
Hayek’s The Road to Serfdom warns against the dangers of centralized economic planning, arguing that such systems inevitably lead to a loss of individual freedom. His perspective highlights how the desire for security and equality can foster tyranny by concentrating power in the hands of a few. While the book was written in response to the rise of socialism in the early 20th century, its message remains relevant today, emphasizing the importance of balancing social welfare with personal responsibility and free competition. Hayek’s work serves as a cautionary reminder that preserving freedom requires limiting the power of the state and valuing individual choice and responsibility.