It is not often that I read a book I have already read five times, and it is certainly not often that I review such a book. Time does not enable me to do either of these things very often, so clearly I must have had a pretty good reason to pull down Hayek's 1944 masterpiece off my library shelves despite the dozens of books ahead of it on the "to be read list". I really have read the book multiple times, and I have been convinced of its basic tenets since the very first read nearly twenty years ago. But "a pretty good reason" I did have, and some pretty important thoughts, I now share.
Few books end up on the all-time list of serious masterpieces - books that no individual of any ideological substance whatsoever should dare skip. If that list was filled up with every really good book out there, the list would lose its meaning. The depth of the list is in the selectivity of books that make the list. There can be no doubt that The Road to Serfdom belongs on the list. It is not just Hayek's defining body of work; it is the best book on the subject written in the 20th century, and it is perhaps the very best book written in the 20th century - period. I am known for my liberal use of superlatives, and I have cried wolf in times past at my own risk, but this is not such a case. Even apart from the events of the last few months, The Road to Serfdom is a brilliant piece of economic, political, and cultural commentary. What I did not understand in past reads of this masterpiece is the brilliant piece of prophecy that it represents.
When my schedule allows me to speak and write these days, I am trying to speak and write exclusively on one topic: the war on economic freedom taking place right before our very eyes. What Hayek does in this book is challenge the need for putting the modifier "economic" before the noun "freedom", for Hayek knew better than any intellectual of the 20th century that assaults on economic liberty were assaults on the very fundamentals of liberty we hold dear. To Hayek, there was no distinction: political freedom was dependent upon economic freedom, and the suppression of one would inevitably lead to the destruction of the other. He was right then, and his words are right now. This was not a fight over political philosophy; it was a fight over the dignity of man.
Hayek's work was not fully appreciated until decades after its publication. The thesis that Hitler and Stalin were political oppressors whose rise to power could have been predicted by the European love affair with national socialism that preceded their reign was largely seen as melodramatic, harsh, and illogical. Intellectuals then wanted the same thing they want today: to believe that their precious collectivism can co-exist with peace and harmony - with benign governance and good citizenship. The underlying tenet of socialism was disproven then in the same way it can be disproven today: it discriminates between particular needs of different peoples, it presupposes a superior efficiency from government in central planning that flies in the face of common sense and history, and it massively distorts the risks and rewards that make society function. But to Hayek, the philosophical refutation of socialism was a refutation of all collectivism - not just its more extreme and unpleasant forms. Any economic system that distorted the price mechanism was doomed to fail, and Hayek's classic work on the merit of the price system is even more recognized today than yesteryear for its cogency and brilliance. The government can not accomplish its utopian ends by interfering with a price system, because only a price system can "register all the relevant changes in circumstances and provide a reliable guide for individual's actions." This is not the academic point of a philosophically-minded economist; government distorting of prices and wages has led to utter catastrophe for decades, from its present manipulation of mortgage market rates, to past Nixonian wage and price controls that put the country on the edge of economic disaster. To rob private parties of the ability to "sell and buy at any price that they can find a partner to the transaction" is to rob them of an essential element of a free society. Consumers, producers, employers, and employees are all victims to government intervention in this arena. Hayek predicted it sixty-five years ago, and the period of time since his prediction can be accurately described as "Hayek's vindication".
Hayek was not writing of Barack Obama in 1944. Barney Frank and present House leadership were just infants, if they were born yet at all. In fact, he was not even writing specifically about America, as the greater threat to liberty that he saw in 1944 was in the direction the European countries would take after the war inevitably ended. To Hayek, a series of economic policies were in motion that were intolerable. In 2009, it is this side of the pond now being tested by the challenges Hayek foresaw so long ago. The re-read of his book I just completed leaves one eerily feeling that perhaps Hayek saw into the future. While it may have been England in 1944 that he chastised for "losing her intellectual leadership", and becoming an "importer of ideas", can any of us deny that the same must now be said for America? Hayek believed that what England and Europe did from 1931-1939 created the mess they had from 1940-1944. Likewise, this reviewer confidently posits that, if not corrected, America is presently sowing the seeds for what will be a 2015-2020 that we will not believe if we do not change course. Will we have the "moral courage" for this change, as Hayek pleaded with his contemporaries to do?
Social justice and economic planning do not belong in the same sentence. Not only is the attempt to create the former through the latter completely impossible, it is patently immoral and discriminatory. Artificially attempting to equalize incomes will push income levels further apart, distort the incentive system that a free society depends on, and ignore the validity of prices that help guide the way for us. But Hayek was no Ayn Randian - he saw social justice as a key characteristic in any moral society, but he scoffed at the idea that coercion or centrism could ever create anything resembling "social justice". This was a problem of means and ends: the collectivists wanted to use means to create desired ends that neither worked, nor ought to work.
Hayek profoundly understood the self-refuting error of collectivism and central planning: the "very men most anxious to plan society are the most dangerous if allowed to do so", and they are the "most intolerant of the planning of others". I fondly think of Milton Friedman's famous appearance on Phil Donahue's show many years ago (a popular hit on YouTube), in which Friedman counters Donahue's claim that capitalism is flawed by the evil intentions of capitalists, with the hard facts regarding the evil intentions of central planners (you know, guys like Stalin, Mao, and Pol Pot). Collectivism is necessarily totalitarian, and this is a message that the nanny-state of 2009 will not tolerate young people learning. Hayek persuasively argues that in a collectivist society, it is the last people you would want doing central planning who are most eager to do so. "The lowest common denominator unites the largest amount of people."
Hayek was a keen critic of those who lambasted free trade purely out of their own protectionist motives. He was appalled by the willingness of the socialists of his day to sacrifice truth for propaganda (knowingly) if they thought it would advance an ideological agenda. For Hayek, truth was not negotiable.
Hayek understood the folly of using monetary policy to drive a social agenda, and it is frankly stunning to me that we are still operating with the absurd dual mandate of the Federal Reserve today that we had decades ago (by "dual mandate", I refer to the idea that the central bank's role is to maintain a stable currency, AND create full societal employment). Hayek understood as the great lovers of freedom in both the Chicago school and Austrian school have understood ever since: to subject the monetary policy to such a dual mandate would politicize the process, decimate one objective for the sake of the other, and put us on a continued cycle of booms and busts. Today, the rhetoric from Washington D.C. no longer offends our intellect by even pretending that they care about such prehistoric ideas as a stable currency. Free market realities that temporarily hurt one group while helping the overall society are mocked as "laissez faire", and the "politics of do-nothing". Hayek knew why "doing nothing" was so incredibly preferable to "doing the wrong thing".
The challenge of Hayek's day was a challenge of courage. He pleaded with his readers to have the courage to not accept the status quo, and to embrace contemporary problems with a fresh outlook, and with a long-term perspective. He never lost sight of the fact that a policy of individual freedom was the "only truly progressive policy". This exhortation is a powerful one, and one I pray on a daily basis that we will take heed of now. The great things that have made our Republic great are under attack. The enemy in 2009 is the same as the enemy of Hayek's day. Socialism and collectivism are parasites that appeal to man's most evil instinct: the impulse to surrender responsibility, and to simply be led. From the Israelites demanding a King to Americans demanding national health care, ancient history is no different than modern history. With warriors like F.A. Hayek on the side of freedom, I refuse to believe that history belongs to the socialists. But as Hayek taught us sixty-five years ago, the stakes are high. May God keep us off the road to serfdom.
"Independence and self-reliance, individual initiative and local responsibility, the successful reliance on voluntary activity, noninterference with one's neighbor and tolerance of the different, respect for custom and tradition, and a healthy suspicion of power and authority: Almost all the traditions and institutions in which democratic moral genius has found its most characteristic expression, and which in turn have molded the national character and the whole moral climate of England and America, are those which the progress of collectivism and its inherently centralistic tendencies are progressively destroying."
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