Friday, January 4, 2008

Hayek's The Road to Serfdom

The Road to Serfdom by Friedrich Hayek is on my reading list. He won the Nobel Prize in Economics in 1974. From Wikipedia:

Hayek’s central thesis is that all forms of collectivism lead logically and inevitably to tyranny, and he used the Soviet Union and Nazi Germany as examples of countries which had gone down “the road to serfdom” and reached tyranny. Hayek argued that within a centrally planned economic system, the distribution and allocation of all resources and goods would devolve onto a small group, which would be incapable of processing all the information pertinent to the appropriate distribution of the resources and goods at the central planners’ disposal. Disagreement about the practical implementation of any economic plan combined with the inadequacy of the central planners’ resource management would invariably necessitate coercion in order for anything to be achieved. Hayek further argued that the failure of central planning would be perceived by the public as an absence of sufficient power by the state to implement an otherwise good idea. Such a perception would lead the public to vote more power to the state, and would assist the rise to power of a “strong man” perceived to be capable of “getting the job done”. After these developments Hayek argued that a country would be ineluctably driven into outright totalitarianism. For Hayek “the road to serfdom” inadvertently set upon by central planning, with its dismantling of the free market system, ends in the destruction of all individual economic and personal freedom.

Hayek argued that countries such as the Soviet Union and Nazi Germany had already gone down the "road to serfdom", and that various democratic nations are being led down the same road. In The Road to Serfdom he wrote: "The principle that the end justifies the means is in individualist ethics regarded as the denial of all morals. In collectivist ethics it becomes necessarily the supreme rule."

Let me submit some examples:
  • The government planted the seeds for terrorism by supporting Al Qaeda in the 1980's, maintaining military bases in hundreds of countries, supporting authoritarian regimes in the Middle East, and overthrowing democratically elected governments. When we were attacked, the answer wasn't to stop the behavior which provided a recruiting tool for radical terrorists. Instead, Congress passed the Patriot Act which allowed the government to spy on our own citizens and then gave the executive branch power to launch an aggressive war in Iraq.
  • George W. Bush didn't have enough authority to help New Orleans during Katrina. Therefore, we repealed parts of Posse Comitatus Act which now allows the President to use the U.S. Military against the American people if he declares the country is in any type of crisis.
  • The U.S. courts couldn't possibly handle processing a couple hundred suspected terrorists although our courts process tens of thousands of cases every year. Therefore, we had to suspend Habeas Corpus.
  • Our healthcare system that was created by the government is totally broken. Therefore, we need to give the government more power to control healthcare.
  • Our government provided education is terrible. Therefore, instead of adopting a free market approach to education, we need to give our central planners more control over how we educate our children.
  • Our government-run FAA and airplane security failed to prevent 9/11. Therefore, we needed to give the government more control over airplane security by creating the TSA and the Department of Homeland Security.
  • The Federal Reserve, Fannie Mae, Freddie Mac, misguided incentives in the tax structure, and the SEC-granted credit rating agency triopoly were the main causes of the housing bubble (I will post on this later). Therefore, we need to give these agencies more power in order to remedy the system.
So, yes, that pretty much sums the road we're heading down. The answer is always the same. The government caused the failures, but it's actually blamed on the free market and lack of government. Therefore, we need to give the government more power. As Hayek says, this is the road to serfdom.

1 comment:

Vijay said...

Great examples Jon. I really wish more people were exposed to Hayek's ideas. Time and time again, history has proved that people are duped into believing that the reason their government is failing them, often disasterously, is because we're not giving it enough power.

Unfortunately, as Bryan Caplan showed in "The Myth of the Rational Voter", democracy is at the heart of the problem.

Of course, those who've studied their civics know that America is a Republic, not a Democracy. Unfortunately that's a lesson not well heeded today. Today most people, including most politicians in Washington, think that America is a democracy. Worse yet, they think it's a good idea to export our "democracy" overseas using the barrel of a gun.