Table of Contents
Preface
Recently I came across a 1994 interview with Milton Friedman where he talked about working with Friedrich Hayek and how he ended up writing the introduction to one of Hayek’s most popular books: The Road to Serfdom. The video reminded me that I’d had this book on my to‑read list for years, so I finally decided it was time.
I’m not sure why I waited so long to read this book. Maybe it’s because the title felt a bit provocative, and I’m not a big fan of heated propaganda, even when it promotes ideas I generally support.
On the other hand, the title also sounds straight out of a dystopia, and I love dystopian stories. So I had a hunch I wouldn’t be disappointed, and in the end, my expectations were right.
First, I found the book surprisingly civil, its tone is quite moderate, and it appeals to logic instead of emotion or a shifting sense of “justice”. The core ideas have stood the test of time and are still relevant today.
The book’s main goal is to warn against the dangers of collectivism. It carefully explains the similarities between the most economically unfree countries of its time: Germany, the USSR, and Italy, all of which were collectivist regimes that tried to seize control of their economies from private hands and “plan” their way to success.
It’s clear that the intellectual context and even the core argumentative structure of this book were shaped by Hayek’s conversations with Popper and by reading Popper’s manuscript for The Open Society and Its Enemies (published in 1945, one year after The Road to Serfdom).
Quotes
The author neatly reminds us that having good intentions doesn’t always translate to having a good outcome:
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.
I liked Hayek’s take on the role on certain biases which may lead us to believe that planned economy might work:
In our predilections and interests we are all in some measure specialists. And we all think that our personal order of values is not merely personal but that in a free discussion among rational people we would convince the others that ours is the right one.
Another interesting idea expressed in this book is that we should be really careful with what the word “planning” actually means. This word sounds pleasing, who don’t like certainty and order? There is no doubt that planning is an effective tool but don’t we do it on the individual level already? What “planned economy” means is centralization of planning and such a system just can’t afford to respect everyone’s best interests, so it doesn’t make sense to give up our planning power and make it centralized which opens it to abuse by a single person or a small group of ruling elite:
If, on the other hand, the state were to direct the individual’s actions so as to achieve particular ends, its action would have to be decided on the basis of the full circumstances of the moment and would therefore be unpredictable. Hence the familiar fact that the more the state “plans,” the more difficult planning becomes for the individual.
The problem of centralization is one of the core topics of this book, there are so many problems that arise from centralization that we should think twice before allowing it to happen:
What our generation has forgotten is that the system of private property is the most important guaranty of freedom, not only for those who own property, but scarcely less for those who do not. It is only because the control of the means of production is divided among many people acting independently that nobody has complete power over us, that we as individuals can decide what to do with ourselves.
To split or decentralize power is necessarily to reduce the absolute amount of power, and the competitive system is the only system designed to minimize by decentralization the power exercised by man over man.
Another interesting take on the nature of our attitude to free market is that we usually don’t trust the things we don’t understand and no one understands the market completely which makes us suspicious of its “agenda”:
And it fails to see that, unless this complex society is to be destroyed, 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.
The market can be unpredictable on the short term, and it’s normal to be worried about it. Our jobs might be rendered obsolete in just a few years, and it can be painful to adjust to a new reality. Hayek thinks that the most freedom-preserving way to add more stability and protect us from the wild swings of the market is to introduce some kind of universal basic income. He also thinks that we should end the system of targeted privileges because it decreases the risks of certain groups by increasing the risks for the rest of society:
Let a uniform minimum be secured to everybody by all means; but let us admit at the same time that with this assurance of a basic minimum all claims for a privileged security of particular classes must lapse, that all excuses disappear for allowing groups to exclude newcomers from sharing their relative prosperity in order to maintain a special standard of their own.
Conclusion
Hayek’s core thesis, that collectivist economic planning inevitably leads to a loss of liberty, is less a proven historical fact than a powerful political warning. He may have oversimplified the complex origins of fascism and communism, but he correctly exposed the tyrannical logic inherent in the utopian planner’s mindset.