Book

The Road to Serfdom - Friedrich Hayek

The vast majority of people, a long time ago, were serfs. Those who are rich still get richer, but those who lived in California knew they could never pay enough property taxes to keep their government solvent. In a war, with frequent incidents of destruction, political logic is easily portrayed as perverse. THE ROAD TO SERFDOM by F. A. Hayek was published in 1944, and its history up to the fiftieth anniversary is well summarized in the Introduction by Milton Friedman and Prefaces by F. A. Hayek that are included in the 1994 paperback. Due to new modes of triumph, some people have great expectations, but THE ROAD TO SERFDOM is about modern economic development leading to the stagnation of socialism. Military measures are a topic of concern in Chapter 9, Security and Freedom. The author's knowledge of Europe, where he was born and raised, prompted him to follow such considerations with Chapter 10, Why the Worst Get on Top, in which it is written: "In the Central European countries the socialist parties had familiarized the masses with political organizations of a semi-military character designed to absorb as much as possible of the private life of the members. All that was wanted to give one group overwhelming power was to carry the same principle somewhat further, to seek strength not in the assured votes of huge numbers at occasional elections but in the absolute and unreserved support of a smaller but more thoroughly organized body." (p. 151). Television hardly seems to be as threatening, no matter how weirdly the news and entertainment mix and match, but combined with the courts, the major political parties, and the American electoral college in 2000, it largely seemed to support the imposition of a geopolitical superpower over the rest of the world, comparable to what Europe experienced when Hitler showed, "The chance of imposing a totalitarian regime on a whole people depends on the leader's first collecting round him a group which is prepared voluntarily to submit to that totalitarian discipline which they are to impose by force upon the rest." (p. 151).

Hayek was writing far too early to consider television, but his book has an antiquated view of the role of law which seems to me absurdly scholarly. There is a big difference between legal training (his degree from the University of Vienna) and legal practice, mostly related to deals that involve real money. Hayek writes about privilege without referring to attorney-client privilege, a consideration which makes most lawyers reluctant to discuss fraud by the officers of any corporation that has ever hired a firm that pays its lawyers to do legal work with the usual great degree of confidentiality assumed by those who expect to get paid. Unexpected massive losses, no matter how likely in volatile times, don't get any consideration, even in this book. Hayek is more concerned about people who are granted privileges by a government which expects them to perform a task that others will not be allowed to do.

Assume that for Hayek, "liberalism" means that no one is entitled to such privileges, which were standard in a feudal society, and could be blamed for the position of the serfs in such kingdoms, and interpret for yourself what he meant in 1944 when he wrote, "Because of the growing impatience with the slow advance of liberal policy, the just impatience with those who used liberal phraseology in defense of antisocial privileges, and the boundless ambition seemingly justified by the material improvements already achieved, it came to pass that toward the turn of the century the belief in the basic tenets of liberalism was more and more relinquished." (p. 23). The turn of the century in 1900 was a time of restless thinking, when "the hope of the new generation came to be centered on something completely new, interest in and understanding of the functioning of the existing society rapidly declined; and, with the decline of the understanding of the way in which the free system worked, our awareness of what depended on its existence also decreased." (pp. 23-24). Financial speculation within the United States might have replaced manufacturing as the hope for the future, with an internet economy offering personal connections to whatever turned on the consumer becoming the ultimate shopping system for intimate personal interactions, by the year 2000, but on an individual level, each worker was assumed to have a financial interest in the Social Security system, with its lockbox for U.S. government bonds purchased with a portion of earnings and employers' contributions.

Defining the serfs, Hayek wrote, "It would indeed be privilege if, for example, as has sometimes been the case in the past, landed property were reserved to members of the nobility. And it is privilege if, as is true in our time, the right to produce or sell particular things is reserved to particular people designated by authority. But to call private property as such, which all can acquire under the same rules, a privilege, because only some succeed in acquiring it, is depriving the word `privilege' of its meaning." (p. 89). Hayek was writing long before anyone thought of a lockbox protecting social security benefits, but it is easy to see Hayek's exasperation with guaranteed incomes putting everyone on the downhill path. "Within the market system, security can be granted to particular groups only by the kind of planning known as restrictionism (which includes, however, almost all the planning which is actually practiced!)." (pp. 141-142). The biggest fraud to be guarded against is the devaluation of the lockbox by an utter collapse of fiscal discipline, recently observed in Argentina, suspected in the unbalanced budget of California, and bound to be worse in our future, but this is most likely, given the level of utter frustration with the economy we are rapidly approaching.

Bruce P. Barten