Before starting a long journey, it?s important to check a road map and make sure you know the best way to get where you?re going. A good map does more than highlight a path -- it warns of pitfalls ahead and helps you avoid them.
Sixty years ago, master mapmaker Friedrich Hayek gave us his seminal work ?The Road to Serfdom.? It was swiftly condensed by Reader?s Digest, and became an international best seller. Hayek?s insight would eventually earn him the 1974 Nobel Prize for economics (he?s probably the only Nobel-winning economist who?s also penned a bestseller), and because of him, we?ve been avoiding economic potholes ever since.
Hayek wrote the book at the height of World War II. At that time, virtually everyone in his adopted homeland of Britain was involved in the war movement in some way -- and Hayek saw the danger in that. At that time of national crisis, government management of the economy made sense. With millions of people carrying arms and those at home busy making the weapons, only a central government could direct the overall economy.
But Hayek feared that citizens of the western democracies would draw the wrong conclusions -- that, after the Nazis were defeated, too many people would call for continued state control of the economy. They would do so, he warned, in the mistaken belief that if they surrendered some measure of personal freedom to the government, the government would in return guarantee their personal and financial security.
Hayek correctly predicted that surrendering personal freedom to the government wouldn?t lead to greater security. It would lead merely to servitude -- what Hayek called serfdom.
After all, government can harm us much more than any employer, no matter how large, ever can. ?In every real sense a badly paid unskilled workman in this country [Great Britain] has more freedom to shape his life than many an employer in Germany or a much better paid engineer or manager in Russia,? Hayek wrote.
That?s because, in a free society, your employer can merely fire you. In a totalitarian one, a government bureaucrat can arrest you, beat you or even kill you.
Sadly, after the war an Iron Curtain dropped across Europe, and people on both sides found out just how right Hayek had been. For decades, those on the eastern side of that curtain labored under totalitarian governments.
Russians starved to death on collective farms; a series of ?five-year plans? promised prosperity just around the corner (while citizens stood in endless bread lines), and millions perished in concentration camps after they dared to speak out against their rulers.
The collapse of communism finally came in 1989. But in today?s world, another of Hayek?s warnings rings true. ?Our generation,? he wrote, ?has forgotten that the system of private property is the most important guarantee of freedom.?
That warning is a key reason why, a decade ago, The Heritage Foundation decided to publish an ?Index of Economic Freedom.? Our 10th annual edition came out this year, and our findings confirm what Hayek articulated so well: Countries with the most economic freedom have the highest rates of economic growth. On the other hand, countries where freedom is lacking struggle economically.
I was honored to get to know Friedrich Hayek, first as a member of the Mont Pelerin Society (he was the first president) and later when he became a Distinguished Fellow and served three separate times as a scholar-in-residence at The Heritage Foundation.
In print and in person, Hayek was eloquent in his explanations of why the road to prosperity is paved with freedom -- both economic freedom and personal freedom. Today, six decades after ?The Road to Serfdom? first hit bookshelves, it?s still a critical roadmap for where we should go and what we must -- and must not -- do.