Book Review: The Road to Serfdom

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Recently I came across the 1994 interview with Milton Friedman where he spoke about his collaboration with Friedrich Hayek and how he come to write an introduction to one of Hayek’s most popular books: The Road to Serfdom. That video reminded me that I had this book on my to-do list for a few years already so I decided that it was time to finally read it.

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I’m not sure why I waited so long to read this book, maybe because it’s title sounded a bit provocative and I’m not a big fan of heated propaganda, even if it promotes the ideas, the spreading of which in my opinion is beneficial for society. On the other hand, the book title sounds pretty dystopian and I’m a big fan of dystopias so I expected that I wouldn’t be disappointed by this book and it turned out to be the case.

First of all, I found this book to be pretty civil: it is quite moderate in it’s tone and it appeals to logical arguments and not the emotions or sense of “justice” which usually changes with time. The core ideas of this book have stood the test of time and still remain relevant.

The main goal of this book was to warn the western people of dangers of collectivism and it goes a long way in explaining the similarities between the most unfree countries at the time of the book’s publication: Germany, USSR and Italy. All of those countries were collectivist and they tried to take over their economies from private hands and “plan” their way to success.

The author neatly reminds us that having good intentions does not 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 Hyek’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 of 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 in any area:

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

The Road to Serfdom is a great book which focuses on the conflicts between classical liberalism and collectivist ideas that led to formation of fascist and communist regimes. It looks like we were able to curb the spread of collectivism and destroy it’s nastiest forms but we should always be on guard because we’re all fallible for grand promises and seemingly easy solutions.

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