“The Road To Serfdom” by Fredrick Hayek is a disappointing book. Conservative bloggers often race about it claiming it has great insights into modern politics. While I disagree with the Austrian school of economics I read it to here the other point of view. I found it a boring, out dated book that didn’t have anything particularly original or insightful to say. It’s mainly concerned with saying a totalitarian state where the government controls everything doesn’t work (you don’t say). The book might have been relevant when it was published, but I am at a loss to see its use today.
I think to a large extent Hayek has been misunderstood. I have regularly heard people use Hayek to criticize the growth of the state or the Obama administration. Yet Hayek makes it clear his problem is only with complete planning of the entire state by the government, in other words the Soviet Union. He does not criticize the welfare state or government regulations. In fact at the start of chapter 9, he says that “There is no doubt that some minimum of food, shelter, and clothing, sufficient to preserve health and capacity to work, can be assured to everyone.” No doubt if Obama said this he would be denounced as filthy socialist.
He also calls for social insurance in case of sickness and accident, as well as government assistance after a natural disaster. “But there is no incompatibility in principle between the state providing greater security in this way and preservation of individual freedom.” I think most advocates of Hayek have not read this passage and don’t realise he is not an extremist arguing against all forms of government. Let me repeat this, Hayek is arguing there is a good case for the government to get involved in healthcare, either in the form of universal healthcare or government insurance. It’s ironic that many people quote Hayek to denounce Obamacare.
Paul Ryan regularly quotes Hayek to criticize Obama, claiming this is the kind of socialist planning Hayek was opposed to. However it is unlikely that Hayek would endorse Ryan. He was opposed to complete central planning of the economy. At the time a few people supported this idea, arguing that it worked well in the Soviet Union. However nowadays it is a dead idea that not even socialists argue for. Hayek denounced communism, not every form of government intervention in the economy. He even declared the need to deal with large-scale unemployment and while stating a preference for monetary policies, he does not shoot down using fiscal measures. In fact he was offered a position at the University of Chicago but chose not to live in America due to the absence of government provided pensions and universal health insurance. This is a very different Hayek to the one commonly described.
Nor is he completely set against government regulation. He acknowledges that some regulation is justifiable so long as it is not used to control prices. “To prohibit poisonous substances, or to require special precautions in their use, to limit working hours or to require certain sanitary arrangements, is fully compatible with the preservation of competition.”He further points out the necessity of government building the roads and controlling pollution. Ironically, he says “In no system that could be rationally defended would the state just do nothing.” Hayek is less of an anti-government libertarian and more of some who simply doesn’t like communism.
Ironically Keynes endorsed this book. This is strange because many people use Hayek to criticize Keynesian economics. However Keynes did not support full government planning of the economy, only intervention in times of crisis. Likewise Hayek was not opposed to all forms of government intervention only complete control, ie communism.
Most of the book is dedicated the long, boring and tedious complaints about “planning”. This may have been a big issue in 1944, but the threat of communism died decades ago. In fairness he makes valid points about how the economy is too big and complex to be managed centrally. But these are very obvious points that everyone knows. This is no great insight and it’s likely no has argued in favour of central planning since Hayek’s time. This is not the revolutionary must read book many describe it as, rather it is a bland book that won’t tell you anything you don’t already know.