As World War II raged around him, F.A. Hayek wrote and published The Road to Serfdom, which became a touchstone of the campaign to preserve personal and economic freedoms. The book argues that Western democracies’ attraction to socialism will take them down a path to authoritarian dictatorships like those in Soviet Russia and Nazi Germany. Government planning of economies, Hayek declares, must result in arbitrary and unfair edicts, as well as a loss of individual liberty.
?The Road to Serfdom was successful from the start and remains controversial to this day. It has been re-issued several times; the 2007 Definitive Edition contains six introductory essays that include useful background information about the book’s history.
The first three chapters discuss the revolt against freedom in Europe and the move toward centralized management of society. Democracies that were economically free had become so successful that people began to take their prosperity for granted, and chafed at the uneven distribution of wealth. Germany, Russia, and Italy adopted central planning and became dictatorships, but the West assumed that planning and tyranny were unrelated, and, heedless, moved toward implementing parts of socialism.
Chapters 4 through 6 deconstruct false beliefs about collectivism. It’s not inevitable, says Hayek, that the modern world must move toward collectivism, or that socialism is better than markets at allocating resources. Planning cannot realize a unified purpose because humans don’t share one single goal; further, planning will cause the breakdown of the Rule of Law, without which governments quickly descend into despotism.
In Chapters 7 through 9, Hayek examines the pitfalls of planning. Rather than achieving greater autonomy and respect, workers would be treated as cogs in the government machine, their freedoms curtailed. Fair wages would be reserved for groups favored by the planners. A guaranteed income would be possible only at the cost of freedom to choose one’s vocation.
Chapters 10 and 11 look at how central planning distorts political incentives. Instead of the best people achieving office, planning attracts the worst among us: those who crave arbitrary power. They, in turn, would encourage the populace to believe propaganda that furthers their plans, which would damage discourse and the search for truth.
In Chapter 12, Hayek presents evidence that Nazism is a form of socialism and not capitalism, as presumed by the West. Chapter 13 shows that many of the same principles espoused by the Nazis are being promoted by respected thinkers in democratic nations.
Modern socialists, as described in Chapter 14, persist in advocating for an idealized moral standard that would instead wipe out ethics altogether. Chapter 15 cautions that the campaign to create an international planning body would simply impose a magnified form of collectivism on the entire world. In Chapter 16, Hayek augments that idea with the warning that collectivism amounts to imitating Hitler.
The 2007 edition contains an appendix with several short essays and letters that provide further background, including the 1994 introduction by economist Milton Friedman, himself a bestselling American author.
CHAPTER 1 SUMMARY: “THE ABANDONED ROAD”
What caused the sudden rise of totalitarian regimes—Nazi Germany, fascist Italy, and Soviet Russia—during the early twentieth century? Hayek suggests that citizens of Western liberal democracies, stunned by these sudden upwellings in the midst of their progressive world, and galvanized into battle against the threat during World War II, were blind to the possibility that they may have contributed unwittingly to the buildup of those very dictatorships.
Instead, people in England, the United States, and other democratic countries simply assumed that the authoritarian world was disconnected from the liberal one. It was “easier and more comforting to think that they are entirely different from us and that what happened there cannot happen here” (66).
Yet the ideals of liberalism—personal autonomy, freedom from oppression, freedom of expression—had suffered steady erosion during the decades leading up to World War II. The growth of commerce and science had liberated people from “a rigidly organized hierarchic system” (69) to pursue prosperity under the new banner of personal liberty. This approach was so successful that citizens began to take their newfound wellbeing for granted, and progress began to seem too slow. The old ideal of freedom was challenged by a new concept,
CHAPTER 4 SUMMARY: “THE ‘INEVITABILITY’ OF PLANNING”
Hayek presents four arguments in favor of central planning, shows why each has its appeal, then demonstrates how the free market solves the problem in a better way.
The first argument claims that, as industries advance, they devolve into monopolies—the sheer size of large companies drive out smaller firms—and the only way to restore competition is for the government to control these markets. Hayek admits that, in recent history, many industries had, indeed, concentrated into the hands of a few.
He then cites multiple sources, including a report from the planning-oriented 1941 American Congress, that find no evidence that size creates monopolies. Hayek points out, instead, that “aspiring monopolists regularly seek and frequently obtain the assistance of the power of the state to make their control effective” (92). He highlights the case of 19th-century Germany, where a national policy of deliberate concentration of industry led directly to the very monopolistic abuses decried by socialists.
The second argument is that economies have become so complicated that some sort of central planning is required to prevent chaos. Hayek agrees that planning is important in certain areas but that highly-complex processes, such as modern markets, simply cannot be controlled from an office.
CHAPTER 7 SUMMARY: “ECONOMIC CONTROL AND TOTALITARIANISM”
People have argued that economics and money are lowly affairs that should be left to government administrators, while we focus on the higher things in life. But those inspiring pursuits also have costs, and Hayek points out that a planned economy “would control the allocation of the limited means for all our ends” (126). We would be restricted even in our loftier pursuits by government.
In a free market, our choices are limited by how much others are willing to pay for things we want, and we adjust our spending accordingly. A government that controls an economy has monopoly power over our purchasing decisions, and the government’s preferences, rather than our own, would control us.
Just as important is our freedom to choose our livelihood, which also would be curtailed in a planned economy: “The person whose qualifications are not of the standard type, or whose temperament is not of the ordinary kind, will no longer be able to come to special arrangements with an employer whose dispositions will fit in with his special needs” (129). Workers, far from being respected, “would more than ever become a mere means, to be used by the authority” (130).
Many a “bitter choice” people must make in the free market would be relieved in a planned economy, but only “through having the choice made for them by others” (130).
CHAPTER 10 SUMMARY: “WHY THE WORST GET ON TOP”
Collectivist sympathizers sometimes explain the failures of centrally-planned societies by blaming bad leadership. Well-meaning administrators, they explain, would have brought about much better outcomes.
Hayek replies that any authoritarian regime must make decisions that will cause pain and anguish to some groups, and only leaders with few inhibitions will have the stomach to make the tough calls. Autocracies thus tend to fill up with brutal people. It’s no surprise that German National Socialism became a vicious dictatorship. Hayek notes that “the whole moral atmosphere” of such a regime is completely different from that of Western liberal democracy (158).
During the early phases of a planned economy, impatience with the slow progress of parliamentary procedure makes citizens yearn for tough-minded autocrats. The logjam gets broken by a political group large enough to impose its will on the rest of society. Socialists with democratic scruples end up paving the way for a takeover by the ruthless.
The strong political group is likely to contain society’s worst elements for three reasons. First, unlike groups of the educated, with their variety of ideas and opinions, the unified group is less educated and more thoughtlessly uniform in its views. Second, the leaders expand their reach by convincing “the docile and gullible” to follow them (160).
CHAPTER 12 SUMMARY: “THE SOCIALIST ROOTS OF NAZISM”
Hayek denies that Nazism is mindlessly irrational. Instead, it is the distillation of an important trend of political thought, “simply collectivism freed from all traces of an individualist tradition which might hamper its realization” (181). Hayek cites a number of intellectuals outside Germany, including Thomas Carlyle, who helped lay the foundations of what grew into the Third Reich. But the main influence came from socialists inside Germany.
These believers finally saw that their collectivist dream could not be realized as long as socialism contained precepts of individual liberty: “It was the union of the anticapitalist forces of the Right and of the Left, the fusion of radical and conservative socialism, which drove out from Germany everything that was liberal” (182).
Hayek mentions several important 19th- and early 20th-century socialist thinkers who believed that, under a collectivist system, “the individual has no rights but only duties” (183). During World War I, socialist authors argued that the Germans ought to regain their warlike spirit in a battle against decadent British commercialism. One socialist believed the ideal of freedom and the ideal of organization were in conflict, that organization ought to win out, and that Germany would lead the way as the ideal industrial seedbed for socialism.
CHAPTER 14 SUMMARY: “MATERIAL CONDITIONS AND IDEAL ENDS”
In the modern age, people have become more resistant to conditions they used to accept. Hayek writes that “[m]an has come to hate, and to revolt against, the impersonal forces to which in the past he submitted” (211), but modernity is so complex that often we simply don’t understand conditions that frustrate our desires. This can lead to an unreasoning rebellion that may cause much more damage than it fixes: “a refusal to submit to anything we cannot understand must lead to the destruction of our civilization” (211).
We may rebel against our economic conditions, but “the only alternative to submission to the impersonal and seemingly irrational forces of the market is submission to an equally uncontrollable and therefore arbitrary power of other men” (212), which could be much worse.
Could we perhaps learn to master the forces of society the way we have mastered the forces of nature? Hayek answers that controlling a nation for a single such purpose would ruin what we’ve already accomplished and destroy personal freedom, and that doing so “at any price” is “likely to do the greatest harm” (213).
Laborers at the end of World War II might want to keep their high-paying jobs, even if they were no longer needed: “a socialist society would certainly use coercion in this position,” while a Western liberal democracy, straining to find a way to appease the workers, would have to distort the economic system, “which [would] seriously interfere with the most productive use of our resources” (214).
SUMMARY: BIOGRAPHICAL NOTE
The book restates deep principles that hark back to earlier centuries; one volume cannot expand on these and related precepts that have for so long been considered out of date. Therefore, Hayek suggests additional reading, including books old and new. The list reaches all the way back to the Federalist Papers; Hayek reminds us that freedom was not always taken for granted.
SUMMARY: APPENDIX: RELATED DOCUMENTS
Nazi-Socialism
This short 1933 essay by Hayek argues against the notion that Nazism is merely reactionary. Instead, “National Socialism is a genuine socialist movement” that fulfills the anti-liberal movements of previous decades (245). It coordinated with corporate forces partly because business leaders themselves fell for the bromides of collectivism. Nazis then quickly commandeered much of industry.
Nazis objected only to socialism’s liberal and internationalist sympathies; otherwise, they accepted the program. In Nazi propaganda, “the dominant feature is a fierce hatred of anything capitalistic” (246).
The anti-rational trend in Nazism came from the Marxian idea that bourgeois thought was conditioned by the social system and therefore invalid. Anti-rationalism makes simpler the idea that force, instead of tolerance, is the valid path.
Nazism allows for some private ownership, but this is largely due to the party’s dependence on middle-class shop owners and artisans, who soon enough find their lives heavily regulated.
The Road To Serfdom Key Figures
F.A. HAYEK
The author stands for freedom of the individual, especially in business and trade, which flies in the face of the more popular collectivist leanings of his fellow academics. Hayek is fair-minded, thorough, and detailed in his arguments, and passionate about his belief in freedom; he bemoans the ongoing attraction to economic systems that would destroy peoples’ freedoms. In effect, as socialist intellectuals brush past him impatiently on the way to their imagined paradise, Hayek waves his hands, trying to warn them that the society they hope for is in fact a political chamber of horrors.
THE INTELLECTUAL
Hayek’s nemesis is the academic or other intellectual who touts collectivist ideals. This person may believe passionately in the evils of capitalism and the remedies of central planning, but he ignores the threat to freedom raised by such programs. Given power, the Intellectual would likely resort to arbitrary and dictatorial edicts that would dismantle the very liberties to which he gives lip service.
THE PLANNER
The Planner wants to control all aspects of a society through government directive, believing he can better manage the economy than can the people, as they go about their business. At first, only the economy will be directed, but, as conflicts arise, the planner will begin to issue rules that forbid behaviors that interfere with the plan.
The Road To Serfdom Themes
THE ALLURE OF COLLECTIVISM
In modern times, people live crowded together in cities, where workers toil for low wages while their bosses luxuriate in wealth. It’s tempting to search for some grand solution that would put an end to the unfairness of capitalism. Collectivism offers such a solution: wages would be set, employment guaranteed, and the wealthy would lose their positions to government departments that command equality for all.
This ideal appeals strongly to academic thinkers, who often influence public debate. Standing against them is Hayek, who warns that the allure of central planning is dangerously misleading. But his is an uphill battle, as the idea of a centralized economic system—one that should force an economy to be more fair—is almost irresistible.
THE PERILS OF PLANNING
Hayek warns that central planning will not generate the benefits it promises, but instead will create a society in many ways the opposite of what its supporters want. Marketplaces are unpredictable systems, where prices fluctuate and workers migrate toward better opportunities. They are a daunting challenge for planners, who can never grasp in their hands the millions of threads that make up the fabric of trade among people.
The Road To Serfdom Symbols & Motifs
MARKET ECONOMY
A market economy—sometimes referred to as “capitalism”—is one essentially left to itself, save for government regulation against fraud, unsafe practices, and unfair monopolies. Only under such a system can goods and prices find their proper level and produce maximum efficiency. Market economies have generated unparalleled prosperity in the modern age, but inequalities that crop up cause many to prefer a planned economy. Hayek argues that the unfairness of a market economy pales in comparison to the outcomes in a collectivist system.
LIBERALISM
The old sense of the word “liberal” was of limited government and respect for individual freedom and initiative; it’s in that sense that Hayek uses the term. The more modern use of “liberal” refers to what Hayek calls “collectivism,” “socialism,” or “planning,” and, occasionally, “progressivism.”
The Editor’s Introduction states that “Hayek’s immediate objective was to persuade his British audience that their heritage of liberal democracy under the rule of law should be viewed as a national treasure rather than an object of scorn” (30).
THE RULE OF LAW
A government that obeys the laws set forth by its own democratically-elected legislature is one that obeys the Rule of Law; a government run by the whims of its rulers does not.
The Road To Serfdom Important Quotes
1.“Few are ready to recognize that the rise of fascism and naziism was not a reaction against the socialist trends of the preceding period but a necessary outcome of those tendencies.”(Introduction, Page 59)
Nazi fascism, far from being capitalist, was in fact a form of socialist collectivism. Believing otherwise has led Western intellectuals into a state of denial and a willingness to plunge into the dangerous experiment of central planning. Hayek saw, while living in Eastern Europe, the rise of collectivism and totalitarianism; moving to England, he recognized seeds of the same trends planted in new soil. Hayek wants to awaken the British to these dangers, lest they fall unthinkingly into traps laid by their pet theories about socialism.
2.“We are ready to accept almost any explanation of the present crisis of our civilization except one: that the present state of the world may be the result of genuine error on our own part and that the pursuit of some of our most cherished ideals has apparently produced results utterly different from those which we expected.”(Chapter 1, Page 65)
The West, focused on its efforts to improve the lives of its people through collective effort, persist in denying that the same practices have been put to sinister use in totalitarian countries. Those states achieve their despotic control because of, not despite, socialism.
3.“For at least twenty-five years before the specter of totalitarianism became a real threat, we had progressively been moving away from the basic ideas on which Western civilization has been built. That this movement on which we have entered with such high hopes and ambitions should have brought us face to face with the totalitarian horror has come as a profound shock to this generation, which still refuses to connect the two facts.”(Chapter 1, Page 66)
Liberal ideals about freedom had suffered erosion well before the great dictatorships arose. The liberal West, moving away from those ideals and toward socialism, had through inattention laid the groundwork for the totalitarian threat.
The Road To Serfdom Essay Topics
1.Hayek believes that democracy will collapse under socialism, and he warns repeatedly that the collectivist trends that led to totalitarian Germany and Russia are similar to recent trends in England and America. Is planning winning the day, or is Hayek mistaken? Defend your assertion.
2.Economic planning tends to become much more difficult than theorists expect. What could cause this disconnect between theory and reality?
3.Can a socialist society protect individual freedoms? Suggest some safeguards and how they would work.