Hayek’s Road to Serfdom contains crucial warnings about fascism; is it time America heed them?
In his abridged book that appeared in the April 1945 version of Reader’s Digest titled The Road to Serfdom, F.A. Hayek explores how well-meaning central planning rooted in socialism has led to the formation and maintenance of fascists governments, notably Nazi Germany and Mussolini’s Italy. Hayek explains how the veneration of the state, acceptance of inevitable trends, and enthusiasm for the ‘organization of everything’ have inevitably corrupted socialist sentiments and turned them into dictatorships. Hayek warned in 1945 that America and England were showing warning signs of these early socialist sentiments, and Hayek argues that liberalism and competition are still the best means of ensuring individual freedom in society. I have included some other reflective highlights and insights below.
Is socialism the gateway drug?
Hayek begins by arguing that fascism is the logical outcome of well-meaning socialist policies. He explains that many who invoke or advocate for socialist policies do not intend for the end to become fascist governments, but through systemic transformation, they most certainly can end up that way. I think that the idea that well-meaning people with socialist ideas paved the way for bad-intentioned people with fascist ideas is convincing. Hayek primarily says that the best method of planning is to solely plan for competition. Socialists desire to plan everything and allow the state to make all decisions surrounding the economy, but all that should be planned for is competition.
Primarily, the socialist level of central planning is relatively impossible in a democracy. As Hayek explains, a collective democratic body cannot make collective decisions on the economy, so essentially, the decisions will be delegated to smaller and smaller groups of ‘experts’ until there is logically one person who makes decisions: a dictator. A dictator is the most effective way to make decisions in a planned society, but it is certainly the least free. When socialism seeks to control the means of production for the ‘collective good’, this inhibits the ability of individuals to make decisions on their own, and instead, relegates the decision to the state, which is anti-liberal.
Hayek also explains that socialism leads to fascism because it stifles competition. Competition and the prices set therein allow individuals to make their own decisions. Just as we have previously talked about this semester, there is no better metric to decide value than price, for it directly and immediately takes into account the sentiment of the consumer. Socialism deprives individuals of the ability to make these individualistic decisions and then leads to reliance on the state to make decisions for them, which is anti-democratic and can lead to fascism in nature.
The Millionaire or the Bureaucrat? Show me the money.
One area that I disagreed with Hayek on was that bureaucrats have more power than the millionaire in society. Hayek claimed that bureaucrats because they have the power of the state behind them, are more powerful than the millionaire. Generally, this implies that the state is more powerful than wealth, and I disagree with that sentiment. Money is value, but it is also power. Take a look at the current political landscape today and who sat in the front row at Donald J. Trump’s Inauguration in January 2024. Billionaires like Jeff Bezos, Mark Zuckerberg, and particularly the richest man in the world, Elon Musk, have cozied up to Donald Trump by granting his administration favorable policies, and in return, have gained proximity and influence with the most powerful person in the entire world. It is not just Republicans, either. Sure, the power of the state is important and has backing, but it is clear now, just as it was clear in the Gilded Age of the United States, that money can buy power and influence. So, I don’t think I buy Hayek’s argument that a bureaucrat like the Deputy Director of Housing and Urban Development is more powerful than Elon Musk who could likely buy (and eliminate, apparently) the entire department if he wanted to.
Mirror Mirror on the Wall: Should We Take a Look, America?
Hayek’s idea of a free market and anti-planning liberalism are particularly relevant today. However, it is not necessarily socialism that seems to be the ‘gateway drug’, but instead other anti-liberal ideas like protectionism and isolationism. President Trump has instituted tariffs on two of America’s closest trading partners – Canada and Mexico – as well as prominent competitors like China (of whom the US is its biggest consumer), all to boost American industry. I believe Hayek would agree that while tariffs aren’t inherently socialist, they are certainly anti-liberal and anti-free market. I would bet that Hayek would say to let prices and competition decide the future of American industry instead of arbitrary tariffs that will certainly raise prices for American consumers. This begs the question: why can’t American producers bring their prices down? If Americans prefer cheap plastic coolers over $500 Yeti portable fridges, why should the American government care? Sure, buying American boosts domestic industry, but it shouldn’t be boosted through international trade planning and should be encouraged on the free market.
The tactics that Hayek warned about that turn socialism into fascism – media control, silencing opposition, scoffing at the independence of judges, populist appeals to dissatisfaction and resentment, and the erosion of the rule of law – are not just historical warnings anymore and are seemingly present realities in the United States of America. Parallels to Hayek’s warnings and present signs of authoritarianism in America are hard to ignore. I think it is a fair point to say that America should take a look at itself and determine whether or not it is on the Road to Serfdom…or worse.
While I have explored various perspectives in this essay, it is important to note that I do not necessarily ascribe to any argument made here 100%. This is a writing exercise, and I sought to explore various perspectives after watching the lecture, as per the assignment instructions.