On 10 March 1944 Friedrich Hayek?s famed book, The Road to Serfdom, was published in England by Routledge Press, with an initial print run of 2,000 copies in a period of wartime paper rationing. In July of that year, Dymock?s published the book in Australia.
What started as a somewhat inconspicuous memorandum to Sir William Beveridge, of the London School of Economics, in 1931 became an international best?seller in book form almost fifteen years later. Today, it is no overstatement to suggest that The Road to Serfdom takes its right of place as an iconic treatise from the past century, but retains an enduring value concerning the political and social consequences of central planning over economic relationships.
To mark the seventieth anniversary of the publication of The Road to Serfdom, I wrote an opinion piece for the ABC Drum website (a copy can be found here). An extract of the piece is as follows:
When Hayek wrote the first edition of The Road to Serfdom in 1944, … central planning was equated with socialistic political attempts to comprehensively, and directly, control production processes, supplanting markets as the prime means of economic organisation.
For Hayek, this manifestation of socialism was a grave threat because:
?Our freedom of choice in a competitive society rests on the fact that, if one person refuses to satisfy our wishes, we can turn to another. But if we face a monopolist we are at his mercy. And an authority directing the whole economic system would be the most powerful monopolist imaginable.?
Importantly, Hayek also pointed out that central planning socialism cannot distil the economic knowledge needed to ensure that resources are allocated to their highest valued uses.
Hayek advised it is possible for nations to avoid central economic planning and political totalitarianism, and to even bring themselves back from the brink of socialism, but he equally warned of severe consequences from the dalliance with interventionism in the Western world.
As he indicated in the preface to the 1956 edition of The Road to Serfdom:
?The most important change which extensive government control produces is a psychological change, an alteration in the character of the people.?
Nowhere is this problem more apparent than in the area of government welfare policy.
Before I continue, I note the passing of this important historical moment in classical liberal philosophy had not gone unnoticed by others. Richard Ebeling (whose work is always worth reading) wrote a terrific summary of the several themes of Hayek?s classic work, and the anniversary was noted around the online traps, as it were, by several bloggers and some classical liberals on twitter.
Now, at the time of writing this blog post there were 354 responses on the ABC Drum website (you can see the fireworks here), and by my rough estimate 99 per cent of those were negative toward the piece I wrote about The Road to Serfdom.
As a rough guess, about 60 per cent of the responses were the usual ?well, you would expect Julie Novak to write in favour of Hayek, because she is paid to do so.?
These claims don?t deserve much attention, but for the implicit belief expressed here that nobody would publicly favour individual liberties and rights, free markets and civil society, and strictly limited government ? unless they were paid to do so. That these views are held by some is disturbing, but not altogether surprising in a world in which sentiments run decidedly in favour of the many socialistic deprivations of freedom, across all its dimensions.
I would venture to say another 20 per cent of the responses received merely repeated my arguments back at me, illustrating a significant tendency to misread or not to comprehend what was written.
It seemed the most popular argument I expressed, and duly recited back to me, was the idea that the nature of government intervention (or at least the aspiration to intervene) has shifted from outright state ownership of the means of production, to redistribution of surpluses generated by the private sector. But I did already say that!
The other 19 per cent disputed my suggestion that the rise of the governmental welfare state represents a ?road to serfdom,? whose pace of growth needs to be checked (in my view, reversed) in what would be a great correction to the prevailing age of entitlement.
There is plenty of discussion within the economics literature, both from conceptual and empirical perspectives, which suggest that a larger welfare state would tend to diminish economic performance, all other things equal, on several fronts.
Labour supply responses are curtailed, thanks to the opportunities to eschew work and opt for a life of dependency; economic resources are wasted as some people alter their circumstances, or lobby government, to obtain government payment; the bureaucratic?political class increasingly manipulate welfare subsidy settings to prescribe, and even proscribe, individual behaviours; and heavy tax burdens restrain private economic activity including entrepreneurship and innovation.
I will also indicate that I am, by far, not the only one who conceives that the continuing growth of the welfare state represents a threat to individual liberty, on an even broader scale.
A far more eloquent person than I, Theodore Dalrymple, characterised the welfare state as a big step towards the road to serfdom, in which private property and competitive markets (in heavily hampered form) coincide with a tax?subsidy churn regime leaving people a diminished scope to make real, consequential life decisions for themselves.
To the remaining one per cent (!) who responded positively to my piece, I cannot do much more than to say ?thank you,? and to say I fervently hope that some of those who were critical had subsequently picked up a copy of The Road to Serfdom and are duly checking, and in fact revising, their socialistic prejudices.