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Friedrich HayekThe Road To Serfdom
Nonfiction | Book | Adult | Published in 1944A modern alternative to SparkNotes and CliffsNotes, SuperSummary offers high-quality Study Guides with detailed chapter summaries and analysis of major themes, characters, and more.
Chapters 14-16Chapter Summaries & Analyses
Chapter 14 Summary: “Material Conditions and Ideal Ends”
In the modern age, people have become more resistant to conditions they used to accept. Hayek writes that “[m]an has come to hate, and to revolt against, the impersonal forces to which in the past he submitted” (211), but modernity is so complex that often we simply don’t understand conditions that frustrate our desires. This can lead to an unreasoning rebellion that may cause much more damage than it fixes: “a refusal to submit to anything we cannot understand must lead to the destruction of our civilization” (211).
We may rebel against our economic conditions, but “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” (212), which could be much worse.
Could we perhaps learn to master the forces of society the way we have mastered the forces of nature? Hayek answers that controlling a nation for a single such purpose would ruin what we’ve already accomplished and destroy personal freedom, and that doing so “at any price” is “likely to do the greatest harm” (213).
Laborers at the end of World War II might want to keep their high-paying jobs, even if they were no longer needed: “a socialist society would certainly use coercion in this position,” while a Western liberal democracy, straining to find a way to appease the workers, would have to distort the economic system, “which [would] seriously interfere with the most productive use of our resources” (214).
The only way to assure full employment involves adding money to the economy, which causes prices to inflate, forcing the government to add even more cash. This “is a policy which is certain in the end to defeat its own purposes” (214). Hayek fears that bad economic management would damage the middle class, which was part of the cause of the German decline into Nazism. In any case, for England’s postwar rebuilding effort, “all claims for a privileged security of particular classes must lapse” (215).
Another concern is that socialists will want to replace personal ethics with a planned code of morals. But what are virtues if we are forced to obey them? There is no merit “in being unselfish if we have no choice” (216). As Western societies move away from the old traditions—self-reliance, respect toward others, volunteerism, suspicion of authority—and toward more central planning, the ethics of their people become weakened and vague, their actions more self-indulgent. A collectivist system that seeks to mandate morality may have the opposite effect.
Instead, the new virtues “are the protected standards of this or that group […][a]ll this surely indicates that our moral sense has been blunted rather than sharpened” (218). Hayek suggests that “the moral values on which most […] pride themselves are largely the product of the institutions they are out to destroy” (220).
Postwar England will have trouble convincing the Germans to rebuild under Western ethics if England’s values increasingly come to resemble those of Germany: “We shall not delude them with a stale reproduction of the ideas of their fathers which we have borrowed from them” (221). What might convince Germans would instead be “our unwavering faith in those traditions which have made England and America countries of free and upright, tolerant and independent, people” (221).
Chapter 15 Summary: “The Prospects of International Order”
In the postwar world, many advocate the planning of trade between nations. Hayek acknowledges that previous trading arrangements were based largely on the selfish interests of separate nations. But planning, even by a well-meaning international body, is fraught with problems:
[I]f international economic relations, instead of being relations between individuals, become increasingly relations between whole nations organized as trading bodies, they inevitably become the source of friction and envy between whole nations (223).
The problems of central planning—dealing with competing group interests, avoiding unfairness—will multiply when applied to the world at-large. Governments would try to replace natural competition with force, but this “must end in clashes of power” (223).
If trade were put to a vote, powerful nations like Britain might suddenly be subject to the whims of faraway nations with interests completely different from their own. Would we “make the Norwegian fisherman consent to forgo the prospect of economic improvement in order to help his Portuguese fellow, or the Dutch worker to pay more for his bicycle to help the Coventry mechanic, or the French peasant to pay more taxes to assist the industrialization of Italy?” (225).
Some labor supporters believe that the workers will join across borders to overcome conflicts between ruling classes. Hayek points out that each country’s worker groups already get into disputes with each other, and this can only become worse when those involved live in separate national cultures. If one country’s workforce has better equipment and can out-compete another, that condition will be considered “as much ‘exploitation’ as that practiced by any capitalist” (227). Wealthier nations would soon be despised by the rest.
Planners might simply try to equalize international standards of living. This would require choosing who will get what, and when, so that some groups will chafe at being last in line, forced to work for the benefit of people in another country. The resulting rebellions would have to be put down by force supplied by the biggest nations, who would soon be regarded as oppressors. It’s one thing if an international body “merely keeps order and creates conditions in which the people can develop their own life,” but quite another “if the central authority doles out raw materials and allocates markets, if every spontaneous effort has to be ‘approved’” (229).
Such a body, subject to no one nation, would be very hard to control, and “would inevitably become the worst of all conceivable rackets”: “The controller of the supply of any such raw material as gasoline or timber, rubber or tin, would be the master of the fate of whole industries and countries” (229). Sovereign nations would never put up with such an arrangement.
Hayek argues instead for “an international political authority which, without power to direct the different people what they must do, must be able to restrain them from action which will damage others” (232). Such restraint would limit the authority to the sort typical of the “ultra-liberal ‘laissez faire’ state” (232). The best approach would be a federation, where the authority protects international trade while leaving individual nations to make their own internal decisions, effectively “a democracy with definitely limited powers” (232).
Chapter 16 Summary: “Conclusion”
Given the awful events involving the two world wars and the need to usher in “a world very different from that which we knew during the last quarter of a century,” Hayek proposes that we learn from our folly and “create conditions favorable to progress rather than to ‘plan progress, ’”as centralized planning amounts to “nothing better than to imitate Hitler” (237).
Respect for the ideal of liberty, “which, in fact, the younger generation hardly knows,” can still lead us into the future: “The guiding principle that a policy of freedom for the individual is the only truly progressive policy remains as true today as it was in the nineteenth century” (237).
Chapters 14-16 Analysis
The terrible irony of socialist goals is that they tend to destroy the very ideals they are meant to uphold. But the desire to control unfairness recurs endlessly, and each change in world affairs brings renewed calls for centralized planning. Thus, postwar Britain believed collectivism might work in peacetime as well as in combat, intellectuals argued that science would finally get planning right, and internationalists hoped that all humanity would be made fair through a socialist world government. Each time such dreams are enacted, however, progress slows, ethical standards deteriorate, and the lingering unfairness of the decentralized marketplace simply shifts to the halls of concentrated bureaucratic power.
Hayek doesn’t object to governments that protect their people from harm; he’s not a hard-core laissez-faire capitalist, as his opponents sometimes claim. He insists, though, that the best thing governments can do to encourage economic progress is to let it happen, rather than try to force it to happen.
