The Road To Serfdom

F.A.Hayek, “The Road To Serfdom” Univ. of Chicago Press (Paperback), 1944 (2007 paperback), 238 pp.

I found this book very hard to follow, but I read it anyway as I frequently come across references to it when reading other books on economics—The Road To Serfdom is considered a classic in economics.  When reading this book, it is important to always keep in mind that this book was written in 1944 and at that time socialism meant unambiguously the nationalization of the means of production and the associated central economic planning which this made possible and necessary—in other words, a socialist society, to operate, must be organized like the military or as a country is organized during a war such as WWII.  Hayek calls the capitalist system operating during peacetime, competitivism and maintains that state control over the means of production should only be exercised during wartime.  If the collectivist idea of empowering government during wartime continued after the war, a totalitarian system would have to arise to maintain the implementation of such associated central planning and control.

I found Hayek’s equal contempt for communism and fascism a bit surprising considering Russia was our wartime ally at the time he wrote this book.  Yet, within six months of this book’s publication over 30,000 books were sold and in April 1945 Readers Digest published a condensed version which resulted in an additional 600,000 readers. The book has now been translated into more than twenty languages, along the way becoming one of the most important and influential books of the century.  It is a necessary read for anyone looking for an alternative to Keynesian economics, Milton Friedman was a follower of Hayek.

More recently, many see the change towards more free-market ideas since the 1980s as the victory of Hayek's ideas over Keynes'—a process that has since reversed as a result of the 2008 Great Recession.

My Notes:

Pg. 50:  Hayek argues that “the unforeseen but inevitable consequences of socialist planning create a state of affairs in which, if the policy is to be pursued, totalitarian forces will get the upper hand.”  He goes on to stress that ‘socialism can be put into practice only by methods of which most socialists disapprove and most did not possess the ruthlessness required for the performance of their chosen task.’ 

Pg. 59:  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.

Pg. 63:  It was the prevalence of socialist views and not Prussianism that Germany had in common with Italy and Russia—and it was from the masses and not from the classes steeped in the Prussian tradition, and favored by it, that National Socialism arose.

Pg. 76:  Socialism has displaced liberalism as the doctrine held by the great majority of progressives.  It is rarely remembered today (1944) that socialisms origins were in the French Revolution as a reaction against the liberalism of the Revolution and socialism’s beginnings was frankly authoritarian.  The French writers who laid the foundations of modern socialism had no doubt that their ideas could be put into practice only by a strong dictatorial government.  To them socialism meant an attempt to terminate the revolution by a deliberate reorganization of society on hierarchical lines and by the imposition of a coercive spiritual power.  Freedom of thought they regarded as the root-evil of nineteenth-century society.

Pg. 148:  Hayek is not opposed to some level of social aid and that ‘there can be no doubt that some minimum of food, shelter, and clothing, sufficient to preserve health and the capacity to work, can be assured to everybody.”

Pg. 161:  The fact that German anti-Semitism and anti-capitalism spring from the same root is of great importance for the understanding of what has happened there.

Pg. 162:  One of the inherent contradictions of the collectivist philosophy is that, while basing itself on the humanistic morals which individualism has developed, it is practicable only within a relatively small group.  That socialism so long as it remains theoretical is internationalist, while as soon as it is put into practice, whether in Russia or in Germany, it becomes violently nationalist, is one of the reasons why ‘liberal socialism’ as most people in the Western world imagine it is purely theoretical, while the practice of socialism is everywhere totalitarian.  Collectivism has no room for the wide humanitarianism of liberalism but only for the narrow particularism of the totalitarian.

Pg. 215:  It should never be forgotten that the one decisive factor (at least as of 1944) in the rise of totalitarianism on the Continent, which is yet absent in England and America, is the existence of a large recently dispossessed middle class.  (This needs some thought: China? Russia (Kulaks?), Cuba, North Korea…etc.)