Review: Hayek’s Road to Serfdom

BIOGRAPHY

Friedrich Hayek (1899-1992) came from a bourgeois family in Vienna and was a pupil of anti-socialist economist Ludwig Von Mises (1881-1973). He helped form many right wing libertarian and neo-liberal think tanks in Europe and America. He was a major influence on Milton Friedman (1912-2006) and a friend of Karl Popper (1902-1994). Hayek was awarded a Nobel Prize in 1974 and a Presidential Medal of Freedom in 1991 by President George H. W. Bush.

INTRODUCTION

(All Page Numbers from Kindle Definitive Edition 2007)

Friedrich Hayek’s 1944 book “Road to Serfdom” begins with a dedication to “socialists of all parties,” merely the first of a long stream of untruths, tortured nonsense and crude dishonesties that constitutes the course of his dreary work of historical falsification and capitalist apologetics. 

The amalgamated “socialist of all parties,” is in large part a socialist who doesn’t exist except as a convenient strawman for Hayek’s cumbersome psychological sallies. It doesn’t take much insight to realize Hayek’s appeal to the unfortunate “socialist of all parties” can only be read as an appeal to those dime a dozen petty bourgeois fellow travelers of Stalinism of whom there was a preponderance in the late 1930s and 1940s. Those whose vision of socialism was about as enlightened as Hayek’s own. 

Given that his target audience was ignorant of the rich traditions of socialism and Marxism in particular, it is perhaps unsurprising that Hayek does not actually engage with Marxism or any of the outstanding representatives or works of the socialist tradition. Karl Marx’s name appears exactly ten times in the entire text of Road to Serfdom (298 pages in the Definitive Edition, 266 pages in the original).  He is not quoted once. Engels (whose name appears independently zero times in the text) is quoted once in a footnote, where a paragraph is lifted from a 1851 letter regarding Poland’s dependency on Russia (Poland was not an independent nation in 1851), which Hayek ludicrously compares to the Nazis’ view of Poland. Vladimir Lenin’s name appears four times in the main text. He is given a one sentence quote at the heading of a chapter in an apparent attempt to add some color. Leon Trotsky’s name appears zero times in the main text of the book, once in a chapter heading quote dishonestly ripped from context[1] and two times in footnotes. None of the brief appearances of these names, suffice it to say, is accompanied by anything remotely resembling an analysis of these thinkers or even a single substantive remark. 

Therefore we have a book purporting to be a critique of socialism that has no analysis of actual Marxism. The “socialism” critiqued by Hayek is a collection of fevered stereotypes derived from free association – primarily an invention of Hayek’s own imagination – with what little evidence for its existence in the real world gleaned from often opaque references to obscure figures and non-socialists. 

Rather than quote leading figures in the socialist movement, past or contemporary, Hayek focuses on a hodgepodge of tangentially pseudo-left figures, such as Fabian and pro-Stalinist Sidney Webb (1859-1947), science fiction author and tepid Labourite H.G. Wells (1866-1946), revisionist and later disgraced German economist Werner Sombart (1861-1941), who is quoted at length; sociologist and anti-Marxist Karl Mannheim (1893-1947), sociologist Johann Plenge  (1874-1963) whom Lenin called “extremely vulgar”  [Lenin’s Collected Works, 4th Edition, Moscow, 1976, Volume 38, pp. 388-391]) and expelled right wing, pro-war German Social Democrat Paul Lensch (1873-1926). If many of these names are unrecognizable in socialist circles today it is no coincidence. Hayek intentionally sought out what he regarded as the most convenient characters to illustrate his idea of socialism, no matter how dubious their place in history. 

His particular fascination with Plenge, Sombart and Lensch hinges on their having been supposedly “great…authorit[ies] on Marx” (pg 208) and who have allegedly “provided the leading ideas for the immediate masters of National Socialism” (pg 212).

It is the foremost task of Hayek to prove that Socialism and Fascism are identical. As a part of his elaborate imaginary framework precariously tying the two together, Hayek grasps at a common intellectual origin for the two movements.  

Already by 1933, Hayek was writing articles like “Nazi-Socialism,” which is included in the appendix of the definitive version of Hayek’s “Road to Serfdom.”  In “Nazi-Socialism” Hayek introduces his claim that  “the scare of Russian communism has driven the German people unawares into something which differs from communism in little but name… the long dreaded expansion of communism into the heart of Europe has taken place but is not recognised because the fundamental similarity of methods and ideas is hidden by the difference in the phraseology and the privileged groups.” (Pg. 276) 

Hayek spends most of Road to Serfdom treating the beginnings of the Welfare state in Western Europe, Russian Stalinism and Italian and German Fascism as economically, politically, culturally and morally identical. They are all subsumed under the heading of “planning.” The original sin of all humanity, as we shall see, is “planning.”

PLANNING AND FREEDOM

According to Hayek, collectivism has its origins in the cooperation of primitive tribes. The evils of “altruism” and “solidarity” have only been partially weeded out of true civilization by means of the slow evolution of market egotism independently from human agency. (Hayek, F. A.. The Fatal Conceit (The Collected Works of F. A. Hayek) (p. 6-18). University of Chicago Press. Kindle Edition.)

From Christianity and antiquity an inexplicable unconscious process of adaptation passed on through tradition has fostered the development of the civilized world. Reaching its height in the gilded age, the “extended order” of capitalist mores brought about the “rising of all classes.” Even if “the rising standard soon led to the discovery of very dark spots in society, spots which men were no longer willing to tolerate” (RTS pg. 86). Though Hayek certainly expects the working class to tolerate those “dark spots.”

Says Hayek: “No doubt it is true that even in the best of worlds this freedom will be very limited. Few people ever have an abundance of choice… the knowledge that we could escape if we only strove hard enough makes many otherwise intolerable positions bearable” whereas Hayek says under socialism the impossibility to become powerful and “free” to become a capitalist would make life unbearable. 

“The fact that the opportunities open to the poor in a competitive society are much more restricted than those open to the rich does not make it less true that in such a society the poor are much more free than a person commanding much greater material comfort in a different type of society.” (pg 154-155). In any case Hayek says that “the great majority are rarely capable of thinking independently… In any society freedom of thought will probably be of direct significance only for a small minority” (pg 201).

This incredible freedom, however, would be destroyed by the Pandora’s Box of planning.  “intellectual hubris… is at the root of the demand for comprehensive direction of the social process” (pg 202). Hayek believes that only the spontaneous price setting magic of the market can create individual spheres of freedom (he does not mention let alone critique the labor theory of value in “Road to Serfdom”). 

All freedoms, the rule of law, personal decision making and basic economic survival is threatened by planning. Once planning happens, society becomes a dictatorship of a single planner, who must construct a perfect plan dealing with every social contingency without any input from the rest of the world’s population (because democratic economic participation and coordination of the world’s population is fundamentally impossible, as Hayek repeatedly asserts.) 

A complete new moral code would have to be written which would encompass the utilitarian value of each member of society, reducing them to a number in a sprawling plan. Since the existence or even possibility of economic “plenty” is a socialist myth, the limited resources of society would have to be distributed according to arbitrary, discriminatory, and morally deprived criteria, taking from one group to give to another according to biases and prevailing circumstances. 

Specialists (who themselves will find it impossible to coordinate) would have to decide even the minutiae of life, no one could change their assigned occupation, there would be a limited array of products to enjoy and no sources of information that did not come from the planner. The purpose of the planner? Pure and absolute power, for its own sake.[2] Hayek asks in imagined profundity: “And who will deny that a world in which the wealthy are powerful is still a better world than one in which only the already powerful can acquire wealth?” (pg. 156). 

In Hayek’s 1944, the Western world stands on a precipice, staring down at the horrors of planning roiling beneath them. After expanding successfully for a hundred years across the globe, liberal ideas have been threatened by “Eastern” ideas that began asserting themselves even in the West, born from impatience with the progress of capitalism. “Organized Labor” and monopoly brought about the corruption of industry. “The recent growth of monopoly is largely the result of a deliberate collaboration of organized capital and organized labor where the privileged groups of labor share in the monopoly profits at the expense of the community… So long as labor continues to assist in the destruction of the only order under which at least some degree of independence and freedom has been secured to every worker, there is indeed little hope for the future.” (pg 231).  

Having identified organized labor as the main opponent of human freedom, Hayek makes clear that he does not blame capitalists for the descent of humanity into the abyss of planning. On page 136, Hayek says that preventing capitalists from exploiting workers is a form of “deliberate discrimination,” whereas capitalism “is not designed to affect particular people in a particular way” (pg 137). “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.” Blithely quoting Immanuel Kant he says “Man is free if he needs to obey no person but solely the laws.” By which he means the property laws of capitalism. Hayek asserts that with planning “the use of the government’s coercive powers will no longer be limited and determined by pre-established rules.” As if coercive powers under capitalism are limited and determined by pre-established rules above and beyond that of the class interests of the bourgeoisie (for Hayek, like all idealists, the state under capitalism is an independent entity standing above classes). Hayek instead claims “classism” is the same as “racialism” and a “collectivist program” will always benefit only a “limited group” (by which he means workers in relation to socialism) and is a form of “particularism.”

SOCIALISM AND FASCISM

To drive the point home that it is organized labor that bears the chief share of guilt for the sorry way of things. Hayek makes sure to explain “the author will not be suspected of any tenderness toward the capitalists if he stresses here that it would nevertheless be a mistake to put the blame for the modern movement toward monopoly exclusively or mainly on that class.” (p. 229) It is a tragedy rather than a fault of the capitalists that they chase after huge profits even if it leads them to conspire with organized labor to create monopolies (pg 228-229). Much as is the case with their support of Fascism in Germany. As Hayek says in “Nazi-socialism:”

“One of the main reasons why the socialist character of National Socialism has been quite generally unrecognized, is, no doubt, its alliance with the nationalist groups which represent the great industries and the great landowners. But this merely proves that these groups too—as they have since learnt to their bitter disappointment—have, at least partly, been mistaken as to the nature of the movement. But only partly because— and this is the most characteristic feature of modern Germany—many capitalists are themselves strongly influenced by socialistic ideas, and have not sufficient belief in capitalism to defend it with a clear conscience. But, in spite of this, the German entrepreneur class have manifested almost incredible short-sightedness in allying themselves with a movement of whose strong anti-capitalistic tendencies there should never have been any doubt.” (pg. 273)

In Germany, however, it is not primarily the fault of the mistaken “entrepreneur class” for Fascism, but rather, again, organized labor, to whose privilege Hayek claims Fascism is a reaction to. Acknowledging the middle class composition of Fascism, he calls Fascism a “socialism” of the middle class.

Indeed, for Hayek it was German social democracy which set the stage for Hitlerism, rather than the capitalists who abhorred socialism and feared a socialist revolution. The success of German Social Democracy spread socialistic ideas throughout the world. Hayek says Stalinism was mainly based on German Social Democracy. Hayek, as has been revealed already, made an amalgam of Socialism and Fascism. He claims the destruction of the Socialists and Communist Party in Germany by Hitler was a kind of “socialist infighting.” Social Democracy had rotted out democracy in Germany, according to Hayek, although he praises authoritarians Bruning and Von Pappen (the later who was charged at the Nuremberg trials and both of whom set the stage for Hitler by ruling by decree) as “sincere democrats” (pg 127).

Hayek claims that Nazism replaced hatred of the upper class with hatred of minority ethnicities, and the proletariat with the master race. “Whether we should wish that more of the good things of this world should go to some racial élite, the Nordic men, or the members of a party or an aristocracy, the methods which we shall have to employ are the same as those which could insure an equalitarian distribution.” (pg. 103). Despite remarking “It is probably preferable to describe the methods which can be used for a great variety of ends as collectivism and to regard socialism as a species of that genus” (pg. 103) Hayek spends the entire book conflating Fascism with socialism.

Among his scant evidence of shared roots is Mussolini’s youthful membership in the Socialist Party of Italy before World War One, and the presence of some minor anti-capitalist demagoguery among early Nazis who were later purged (although Hayek does not mention this inconvenience), while ignoring the endless militating of Fascists from the outset against socialism, particularly against Bolshevism, and the support for Fascism among the capitalists of the West as a bulwark against socialism. 

Indeed, German Fascism rose on the backs of a German capitalist class terrified of the threat of socialism. First the Nazis, who themselves arose out of the anti-socialists Freikorps, were enlisted to break the socialist parties by German capitalists, and when they came to power, the Nazis destroyed organized labor and put workers directly at the mercy of the employers.  As Adam Toozes states in “Wages of Destruction,” (Penguin Publishing Group, New York, 2006) a study in the German economy before and during World War II, that “The Nazi regime was a ‘dictatorship of the bosses’.” (WoD pg 109) Toozes remarks that despite state regulation during the Third Reich “we must be careful to avoid falling into the trap of viewing German business merely as the passive object of the regime’s draconian new system of regulation. As we have seen, profits were rising rapidly after 1933 and this opened attractive future prospects for German corporate management.” (WoD pg 114). “Indeed, by 1934 the bonuses being paid to the boards of some firms were so spectacular that they were causing acute embarrassment” to the Nazi regime “In the light of the far more modest increase in workers’ incomes” (WoD pg 108). Because it centered around preparations for war, “the dramatic increase in state control could be seen as an inevitable product of ‘historic necessity’ rather than conscious political choice.” (WoD pg 113-114). 

Hayek treats the war regulation of the German economy as socialist or collectivist measures throughout “Road To Serfdom.” However, Hayek shows a remarkable deference toward war “planning” by the West over the course of “Road to Serfdom.” Hayek says “The only exception to the rule that a free society must not be subjected to a single purpose is war and other temporary disasters when subordination of almost everything to the immediate and pressing need is the price at which we preserve our freedom in the long run” (TRS pg 241) and he praises the use of planning by generals and nations to achieve the ends of war. Nowhere does Hayek blame capitalism for the outbreak of either World War One or World War Two and it can only be assumed Hayek blames both on “collectivism.”   

As for the figures Hayek cites as intellectual forebears of Fascism, an example enough is provided by Plenge, who said during World War One that wartime Germany had achieved a so called “national socialism” through measures taken for the purposes of war (pg 208). Lensch was expelled from the SDP in 1922 for his right wing views, after having spent World War One in support of Germany’s war aims. Sombart was dismissed as a revisionist professor by Karl Kautsky. Sombart supported the Nazis at the end of his life. None were important political figures on the left. Hayek does not mention, for example, Heidegger or Nietzsche, or any other right wing philosophers who influenced or joined Nazism.  

MYTHICAL CAPITALISM AND MYTHICAL PLANNING

The road to serfdom’s overriding problem is that it presents a utopian view of capitalism. To even attempt to return to the mythical “free market” capitalism before monopoly or an interventionist state would require social upheaval most likely more extensive than that of a socialist revolution. Not only would it require a rollback of every reform of the Progressive Era and also an infringement on the precious capitalist privileges of monopolists (which Hayek, it would seem, would be terrified to advocate, and never did). It would require the dismantling and disentanglement of the entire world economy. In reality, as economist Michael Hudson has noted in books such as “J is for Junk Economics (2017),” neo-liberals following and citing Hayek have one-mindedly advocated stripping workers of rights, corporations of regulations and government of funding for social programs (not for war). The working class has been pushed toward genuine serfdom, that is, constant debt and exploitation, not away from it. 

“The Road To Serfdom” makes outrageous claims about the defects of planning, seemingly in complete ignorance of the economic progress even of planning in Russia. Which, despite its degeneration and centralization under Stalinism, experienced sharp growth unparalleled in history until the 1970s, and ensured a relatively high standard of living for all its citizens quite in contrast to the situation after the Soviet Union’s incorporation into world capitalism in 1992. For example, see R.W. Davies “Soviet Economic Development from Lenin to Khrushchev (New Studies in Economic and Social History) (Page 38, Kindle Edition): “Such a rate of social change and industrial expansion, achieved in spite of the destruction of industrial capacity brought about by the German invasion of 1941-5, was without precedent at that time…” Even deeper is Hayek’s ignorance of actual democratic planning as outlined by Marx. Hayek’s pompous rejection of the fact that there exists enough resources and wealth in the world to ensure the basis of socialist society is a foundation for his rejection of socialism. He insists, like the Soviet Union, all socialism must of necessity be nationally isolated and dependent on forced self-sufficiency. 

Hayek denounces the socialist party as a seed for totalitarianism, and can only imagine planning where there is a single all powerful dictator and a single infinitely detailed plan. This immature supposition is a cartoonish product of failing to study even Soviet planning, in which production was allocated through a process of departmental brokering, which Hayek states again and again is impossible. It is not nearly so hard as Hayek insists to picture clearly the substitution of proletarian control for the interconnected bureaucratic functioning of the Soviet economy. Having failed to study either degenerated centralized planning in Russia, or democratic socialist planning from the Marxist tradition, Hayek is unable to grasp the difference between monopoly capitalism, the welfare state, war economics and actual planning. His collectivism is nothing but a giant strawman, and his capitalism is equally a fiction. 

The threadbare musings of Hayek are an attempt to scare young people and working class people away from socialism, rather than an investigation into socialism or any kind of analysis of its supposed failings and impossibility. It is not a scientific book, it is not a philosophical book, but a hysterical screed. In its lines is revealed a contempt for the working class, a contempt for the possibilities of human progress and a deep complacency miscast as a perspective. Most of all “The Road to Serfdom” exhibits a dangerous, dismissive and idealist attitude toward the origin of social development and crises. Without the study and building of socialism, the historical resolution of these developments and crises is the only thing which is impossible.

[1] Leon Trotsky is quoted from Revolution Betrayed where in the original text, he criticizes Stalinism, but in Hayek’s quote he is made to appear to be describing socialism.

[2] “to… the liberal tradition, power itself has always appeared the archevil, to the strict collectivist it is a goal in itself…. It is even more the outcome of the fact that, in order to achieve their end, collectivists must create power—power over men wielded by other men—of a magnitude never before known, and that their success will depend on the extent to which they achieve such power….. What all those who argue in this manner overlook is that, by concentrating power so that it can be used in the service of a single plan, it is not merely transferred but infinitely heightened; that, by uniting in the hands of some single body power formerly exercised independently by many, an amount of power is created infinitely greater than any that existed before, so much more far-reaching as almost to be different in kind” (pg 186). 

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