David R. Henderson  

The Road to Serfdom

Grasping the Nettle of Persona... Lectures on Macroeconomics, No...

My review of Friedrich Hayek's classic, The Road to Serfdom, is on-line.

In it, I summarize the book's message and discuss its relevance today. One passage:

In the United States today, the intellectuals' and the public's belief in freedom seems to be in decline and certainly freedom itself is in decline. On the civil liberties side, government agents monitor phone calls, often without a court's permission; SWAT teams invade people's homes; and a federal government agency insists that we get its permission before we board commercial flights. In economics, the federal government has become a much bigger decisionmaker in investments, choosing -- regardless of investor or customer desires -- to give billions of dollars to various firms. And both George W. Bush and Barack Obama embrace the "fatal conceit," to use one of Hayek's terms, that government can allocate hundreds of billions of dollars better than the owners of those resources can.

I also discuss his gentlemanly style--going on the offensive without being offensive--and his sense of humor:

While he is polite and generous to a fault toward those with whom he disagrees, he is not defensive. Instead, in page after page, he points out mistaken thinking and the horrible problems that arise from extensive government economic control. Throughout it all, he maintains a subtle sense of humor. Consider Hayek's statement about one of the main British totalitarian intellectuals: "It deserves to be noted that, according to Professor [Harold] Laski, it is "this mad competitive system which spells poverty for all peoples, and war as the outcome of that poverty" -- a curious reading of the history of the last hundred and fifty years."

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CATEGORIES: Political Economy

COMMENTS (11 to date)
Dan Weber writes:

The AIG thing from earlier this year reminded me of the very last panel:


Greg Ransom writes:

Note well that Keynes -- with the power advantage of the socialist and nationalist British elite standing behind him -- crushed Hayek rhetorically in the journals using the opposite of a gentlemanly or non-offensive style. Keynes attacked Hayek with insults and rhetoric and little more -- and the socialist and nationalist British elite ate it up.

Many elite leftist academics still see Keynes' insults and attacks as a sufficient dismissal of the ideas of Hayek.

Being non-offensive and being a gentleman is perhaps the only strategy someone in a weak position can take. But is it not the strategy those who defeated Hayek used.

David writes:

"I also discuss his gentlemanly style -- going on the offensive without being offensive"

hacs writes:

I read that book several times and cannot agree with that interpretation (the second part "In economics,..."). He was very clear regarding his explanations, concepts and historical facts founding his opinions. I am stunned with the cheap usage of concepts as socialism, individualism, totalitarianism, etc., is made in the US, mainly by the rightists.

hacs writes:

"I also discuss his gentlemanly style--going on the offensive without being offensive-..."

He confronted his opponents, but not in the game they wanted, that is, he played an expanded game where the setting was part of the game, and he chose a more intellectualized one, while Keynes and his followers played a more politicized contest. Those choices only reveal their comparative advantages and weaknesses, don't they?

El Presidente writes:

I can't imagine that anybody wants to disbelieve Hayek, but many of us are compelled to do so by experience. I say with sincerity that it is truly wonderful fiction; aspirational and inspirational thought. It is highly based in reality as the best fiction usually is. It is still fiction. It should guide us but not confine us.

Troy Camplin writes:

I"m re-reading this for the Hayek colloquium in June. Most notable (of what I've read so far) for the present day is his observation that any attempt at partial planning will inevitably lead to complete planning, precisely because of how integrated the economy is.

Think about it. The federal government just announced it will own about 70% of GM. For all intents and purposes, that's nationalization. GM will be run by the federal government. Now, GM is dependent upon all sorts of resources. Suppose, to get GM back on its feet, the bureaucrat in charge decides GM needs to sell cheaper cars. What is a good way to get cheaper cars? Cheaper materials. If GM cannot get steel for the price desired, what will it do? Since it a government company, it can rather insist on lower prices for steel. Perhaps threaten. Or perhaps find a steel company and nationalize it so that it can make steel at the cheaper price (how can it make steel at a cheeper price? subsidies, of course), or even open up its own steel company to make steel at subsidized prices, which, being cheaper, will drop the price of steel and drive out competitors, creating a government monopoly on steel (which is essentially nationalization of the industry). The government would then be able to determine who gets steel and who does not. But now, to cut the price of steel, we need cheaper iron and coal . . . you see where this is going?

Otto Maddox writes:

"It is still fiction."

Yet another Keynesian critique?

hacs writes:

Yes, I got it. The next step is to nationalize the OPEC (cheaper petroleum). Ops, that was Bush.

Don the libertarian Democrat writes:

"Nor is there any reason why the state should not assist the individuals in providing for those common hazards of life against which, because of their uncertainty, few individuals can make adequate provision. Where, as in the case of sickness and accident, neither the desire to avoid such calamities nor the efforts to overcome their consequences are as a rule weakened by the provision of assistance—where, in short, we deal with genuinely insurable risks—the case for the state’s helping to organize a comprehensive system of social insurance is very strong."

This is my current view. I'm often told that I can't be a libertarian because of this view. Frankly, I'm for a guaranteed income as well, like Milton Friedman.

My question is this: Was Hayek a libertarian as he presented his views in The Road To Serfdom? I know that he seems to have changed his mind, and who can blame him when he saw government getting bigger and bigger. But, still, I would have thought that The Road To Serfdom and Capitalism And Freedom were written by libertarians. Were they?

Jeremy, Alabama writes:

Don has interesting points. It increases my appreciation of Rothbard's work, who basically says that nothing - nothing! - is the rightful province of government.

Hayek and Friedman are much more compelling for me, but in opening the door (see Don above) they lose control of the argument. Does Hayek really believe government health care is optimal? No - I'm sure he means limited support for the most indigent. But having countenanced it, how do we prevent it becoming the appallingly expensive yet decrepit British NHS? We can't.

My answer to Don: Hayek shows throughout the book that a political expansion of power, demanded by the electorate, and systematized by a bureaucracy, becomes a tyranny of fonctionnaires and a tool of authoritarians. Who would have thought the EPA, when founded in 1970, would be regulating the gas that comes out of our mouths?

mp3 books writes:

Very insigtful information. I truly enjoyed reading it.

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