Based on "The Road to Serfdom" by Friedrich Hayek
The Dangers of Centralized Economic Planning
I will not lie; this reading is way out of my range of knowledge. I did not know much about any of these concepts before reading this and had to look into what a lot of the terms meant afterward. Friedrich Hayek’s “The Road to Serfdom” warns of the dangers of centralized economic planning and how it simply will not work with democracy and individual freedom. I would say that Hayek was ahead of his time, especially for 1944. He argues that the more power that is in the hands of the state, the less power individuals have over their own lives. While many think that government systems like socialism and putting power in society’s hands would eliminate power inequality, Hayek says this idea would do the opposite and lead to greater oppression. The idea of democratic socialism ultimately leads to an elimination of personal liberties and the rise of authoritarian rule.
Economic Planning and Democracy
Hayek says that democracy cannot function in a system of economic planning because these economic decisions require oppression to be enforced. Hayek explains that these planners must override individual ideas and preferences to direct collective resources toward a communal goal, which embraces a sort of “economic dictator” or board with complete and total authority. This concentration of power leads to totalitarianism. Hayek gave the historical examples of figures like Mussolini and Quisling, who began as socialists before turning to fascism. He says that this shows how economic control can be used as a stepping stone toward an authoritarian rule instead of a protection against it. I do tend to see myself as very left leaning, but honestly, the more I look into these “leftist ideas”, the less I seem to see where I fit on the political spectrum.
Manipulating Society
Totalitarianism promotes ruthless leaders but also functions by forcing mass compliance on those who are easily influenced. Hayek describes how totalitarian leaders appeal to the lower classes, targeting individuals with less intellectual independence, and are susceptible to propaganda. These leaders often gain their support through fear tactics, like we have seen with the Jews in Nazi Germany or the kulaks in Soviet Russia, to pin their followers around a “common enemy”. In these systems, morality is pushed aside to promote collective goals, and acts of coercion, censorship, and oppression become tools for maintaining control.
Economic Freedom and Individual Choice
Beyond just political oppression, this idea of centralized planning also threatens individuals' basic freedoms, such as the ability to choose their own jobs and how to spend their own money. Hayek says that money is “one of the greatest instruments of freedom because it allows individuals to make their own decisions,” and I agree. I think that people often see money as “evil” because it can lead to greed, but it should not be taken from people’s hands because of a few bad apples. In a planned economy, financial incentives are replaced with state-assigned privileges, like where people live, what they buy, and how they work. This sounds like something you would read in “The Hunger Games” or “Divergent”. This makes individuals seem like pieces in a game, unable to change their circumstances without government approval. This whole idea sounds very dystopian and, honestly, scary.
The Myth
Hayek also rebuts the argument that modern economies are too complex to function without planning. He counters with the opposite and says that economic complexity can make competition and the price system even more important. He says that instead of this government planning leading to greater efficiency, it introduces decision-making that hinders innovation and economic growth. Without incensitives, what will make people want to create? This ties into our last assignment, the lecture by Dr. Russell Sobel, “Creative Destruction, Entrepreneurship, & Discovery.” We know that innovation is incentivized by profit, and that further shows why money should not be taken from people’s hands. The idea that planning is inevitable is just a flat-out lie created by political choices rather than necessity. All throughout history, monopolies and economic instability have resulted from too much government involvement rather than a natural market. This proves that free markets remain the best system for economic growth.
Between Security and Freedom
Ultimately, I agree with Hayek's warning that putting economic security over one’s freedom of choice leads to oppression. He acknowledges that societies could guarantee basic needs, like food, shelter, and medical care, but he warns against policies that attempt to provide a fixed standard of living for all, as these create strict social structures. Choosing between security and freedom is a terrible ultimatum and often makes societies become too reliant on state control. The people deserve their individual liberties. Hayek argues that rather than relying on central planning, societies should foster an environment that allows personal initiative and competition to thrive. Only by maintaining economic and political freedom can actual progress be achieved.