Where Are We on the Road to Serfdom?

• Author: Lemieux, Pierre

Can tyranny happen here? It's hard for a supporter of individual liberty to answer "no" definitively. In some ways, liberty has been shored up over the past hundred years, but at the same time the power of the state (the whole apparatus of federal, state, and local governments) has generally increased. The interventions following the 9/11 terrorist attacks and the recent COVID pandemic show how powerful governments have become. The change in the U.S. presidency earlier this year showed that, as apparently different as Donald Trump and Joe Biden are, they both want to use expansive government to intervene in people's lives. (See "You Didn't See It Coming," Winter 2018-2019; "Joe Biden's Economic Agenda," Spring 2021.)

One of the great warnings of government's threat to liberty, Friedrich Hayek's The Road to Serfdom, is more than 75 years old, yet it has renewed relevance. Although it was very popular after it was first published in 1944, Hayek complained that it was less well-received by the American intelligentsia than by their British counterparts. The future winner of the 1974 Nobel economics prize argued that economic planning and its supporting ideologies were a threat not only to prosperity, but also to individual liberty. Western societies, he claimed, were on the road to serfdom, the same road traveled by Germany.

Economic planning / Hayek began working on the book around the start of World War II. He argued that the growing popularity of government economic planning had deep intellectual roots in socialism, often traceable to Germany three-quarters of a century before. In the late 19th century, Germany was arguably the most advanced country in the world, where "all the social and political forces of modern civilization have reached their most advanced form," as Hayek quoted American theologian Reinhold Niebuhr observing. That seemingly made Germany inhospitable to a group of homicidal authoritarians--and yet, that's who came to power.

The experience of wartime planning boosted the reputation of economic planning. In the foreword to the 1956 edition of The Road to Serfdom, Hayek observed that in 1947 the United Kingdom's Labour government issued an order that could have allowed it to punish workers who would not accept jobs considered high priority. It is doubtful, he wrote, "whether it can be said that the Rule of Law still prevails in Britain." In both the UK and America, "only those whose memory goes back to the years before [World War I] know what a liberal world has been like."

Despite those strong words, Hayek was emphatically not an advocate of laissez-faire, the minimal state, or extreme libertarianism at the time he wrote The Road to Serfdom. He believed that the state had an active role to play in defining property rights, countering externalities (see p. 18), ensuring the conditions of competition and macroeconomic stability, preventing monopolies, and offering a safety net against poverty. In case of "war and other temporary disasters," freedoms could be suspended provided the suspensions were temporary and necessary to protect freedom itself. He said nothing against military conscription in wartime. (In many ways, he became more radical as his ideas later developed.)

The only minimal state envisioned in The Road to Serfdom was his proposal for an ideal world federal government, discussed in the book's last chapter. It is not the best chapter. Hayek's world government would only intervene to prevent war and tyranny and impose a minimum rule of law everywhere. How this world government would remain minimal, and how we could retreat from it if it did not, he did not explain.

Fatal conceit I Hayek was a classical liberal who still claimed the label "liberal," with its original content of economic freedom, limited government, and the rule of law. In America, the meaning of "liberal" had already drifted to meaning left-of-center, progressive, soft-socialist.

The economic problem of government planning is that the central planners do not and cannot have the required information on utility, costs, and local circumstances to make sound decisions. This information is dispersed in the minds of all consumers and...