The Road To Serfdom

The Road to Serfdom is one of the most influential and controversial books on political economics written in the twentieth century. It warns against the coercive effects of central government planning and argues instead for a free market. First published late in World War II, Serfdom has sold more than 350,000 copies and gone through multiple editions. Reader’s Digest sent out more than one million copies of a condensed version (19). The 2007 edition contains six preambles: two forewords, two introductions, and two prefaces.

Serfdom began as a 1933 lecture delivered in London in the shadow of Hitler’s rise to power. The completed book was published in 1944 in the United Kingdom, America, and Australia, and went through multiple printings. Hayek lectured in the US to acclaim, but his book was widely dismissed in England as out of step with current thinking that favored a transition to socialism. Hayek belonged to the Austrian School of economics, which strongly supported freedom in the marketplace; British economists were mainly influenced by the German Historical School that wanted tight control over commerce and industry.

Hayek reasoned that centralized management of the economy would lead to a loss of freedom in all spheres of society. He agreed that government has its place in setting the ground rules, but that the price system of the free market is the best allocator of resources and should largely be left alone.

Most British intellectuals regarded the Nazi regime as a last gasp of capitalism, but Hayek argued that Nazism was in fact a type of socialism. As editor Bruce Caldwell puts it, Hayek noted Nazism’s “antagonism to liberalism, its restrictive economic policy, the socialist background of some of its leaders, and its antirationalism” (6).

When World War II began, the British government commandeered much of British industry and took general control of resources and prices. This was tantamount to socialism, which Hayek feared would remain in place after the war. His fears were partly realized, and Hayek’s postwar efforts acted as a pushback against the zeal for centralization.

Hayek’s overarching concern was not socialism but collectivism in general, “because socialism was only one of a subset of doctrines the book criticized. Central planning could be undertaken by parties on the right as well as the left” (17).

Hayek’s work has often been misinterpreted, with critics accusing him of being a reactionary and opposed to democracy. Others liked the book but wanted Hayek to be more specific about where to “draw the line” between government regulation and the free market (23). Hayek answered this query in subsequent books, where he deplored the growing trend toward coercive legislation that purported to favor social justice but in fact benefitted special interests.

Some of his more mainstream opponents were “market socialists” who believed in a middle path between pure socialism and a somewhat more open system. Hayek countered that “though market socialism sounded good, it would not work,” largely because a centralized pricing system would “always be playing catch-up” to rapidly changing real-world market conditions (25).

Hayek’s main critique was reserved for those who thought that the vague idea of “planning” was a good one: “planning, everyone’s favorite remedy for the ills of the world, might sound good in theory, but would not work in practice” (26). He warned that planners would devolve over time into dictators, but critics took him to mean that any sort of government participation in the marketplace would lead “inevitably” to totalitarian rule (28). Hayek denied this vigorously, but the accusation stuck, to his dismay.

Hayek’s book was a bellwether for dangerous times when freedom was under threat. Today, his book still resonates among defenders of the marketplace, and it retains its power to rankle central planners and socialists.

Hayek opens the book with two quotes about freedom, one from 18th-century philosopher David Hume (“It is seldom that liberty of any kind is lost all at once”) and one from 19th-century historian Alexis de Tocqueville (“I should have loved freedom, I believe, at all times, but in the time in which we live I am ready to worship it”) (35). Hume warns us that liberty can fade over time without our noticing the loss; de Tocqueville implies that freedom lovers ought to redouble their efforts to protect the liberty that has given the world so much. The theme of the book, then, will concern freedom and the threats to it that arise from overbearing governments.

(Hayek also begins each chapter with an epigram that serves as a quick summary of the chapter. The reader should pay attention to these, as such quotes sometimes are Hayek’s only concise statements of those chapters’ main ideas.)

Hayek dedicates the book “[t]o the socialists of all parties” (35). He means that socialism is not the only form of centralized planning that can threaten freedom.

Hayek’s 1944 Preface makes clear that he feels a duty to publish the book. Wiser economic voices, stifled for the moment by their war duties, have been replaced by hacks, and Hayek wishes to push back with a more reasoned analysis.

British intellectuals so favored a moved toward socialism that Hayek grew convinced they had blinded themselves to its dangers, and The Road to Serfdom was his rebuttal. At the time, Soviet Russia was a World War II ally, so Hayek toned down his critique of their system and instead points to the flaws of Nazism.

The British response was measured and polite, while the American reaction was much more extreme: US admirers lavished praise on the book while detractors lambasted it (sometimes without bothering to read it). Hayek reasons that the idea of collectivism is fairly new to Americans, for whom the debate is fresher and more vigorous.

After the war, dark truths about the Soviet system came to light, and enthusiasm for “hot socialism” faded (44). Despite this, many collectivist ideals, especially the Welfare State, had embedded themselves in popular thought, where they still could do damage. For these reasons, Hayek believed that a second edition of Serfdom would find a newly-sympathetic audience.

Hayek warns US readers that his use of the term “liberal” refers to the classical sense of respect for political freedom, and not the modern American notion of “the advocacy of almost every kind of government control” (45). He also advises us not to confuse a classical liberal with a conservative, who is “bound to be a defender of established privilege and to lean on the power of government for the protection of privilege” (45).

Hayek also notes that the 1956 edition is basically a reprint of the original 1944 version, as Hayek “could never again produce as short a book covering as much of the field” (46). He promises to flesh out some of the book’s concepts in other works (which he later released, in several volumes).

The postwar socialist government in Britain suffered the precise problems Hayek predicted, especially the need for coercion, and he points out that voices other than his own began to express fears of a slide toward totalitarianism. The socialists were voted out, but not, Hayek says, before their programs induced a certain complacency toward centralized planning, especially among the young.

Looking back thirty-two years after its first release, Hayek believes his book has stood the test of time. He notes, however, that one of the most important terms has changed its meaning:

At the time I wrote, socialism meant unambiguously the nationalization of the means of production and the central economic planning which this made possible and necessary […] [but] socialism has come to mean chiefly the extensive redistribution of incomes through taxation and the institutions of the welfare state” (54).

Hayek believes that both versions of socialism lead to the same problems addressed by the book.

Hayek reminds us that the book downplayed Communist Russia’s disastrous policies because “when [Hayek] wrote [the book], Russia was our wartime ally”; he regrets being so cautious, and warns that socialist ideas have made a comeback, and his book still stands as a refutation of those beliefs (56).

As a young man in Eastern Europe, Hayek witnessed the German central-planning movement become authoritarian. Moving to England, he once again saw the beginnings of that trend in his adopted country. Ironically, it was the German theorists whose ideas bedazzled his British hosts. Yet those ideas led directly to the Nazi regime.

The question has become not whether to have socialism, but how much is needed. Given this enthusiasm for government planning, Hayek asks, “Is there a greater tragedy imaginable than that, in our endeavor consciously to shape our future in accordance with high ideals, we should in fact unwittingly produce the very opposite of what we have been striving for?” (60).

The British, argues Hayek, made many prewar and wartime mistakes because they misunderstood Hitler as a capitalist, instead of a diehard collectivist. By writing off Germans as merely “vicious” and indulging in “[m]ere hatred of everything German instead of the particular ideas which now dominate the Germans” (61), the West misses the point of the war and may yet engender in its own societies the very evils which it now fights against. The problem is made worse by German refugees who, despite their opposition to the Nazis, still hold with theories of government planning that prop up Nazism.