America’s Road to Serfdom

Posted: Jun 21, 2010 12:01 AM

Thanks to the attention from Glenn Beck, a recent top seller on is Austria’s Friedrich Hayek’s The Road to Serfdom. The book was written in 1944 to fight the drift from individual freedom and free-market competition to a growing dependence on economies controlled by central planning authorities. To Hayek, Stalin’s Soviet Russia was no better than the Nazi “National Socialists.” In all its forms, the increasing spread of socialism has and would always be a threat to individual freedom and economic progress.

Hayek’s book remains a wakeup call to apathetic citizens who take for granted that the improvements achieved through democracy, individual freedom and capitalism have been “acquired once and for all.” Hayek knew what history confirms; freedom must be earned and reearned in every generation.

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Hayek conceded that citizens never consciously choose socialism, but that often well-meaning politicians launch subsidies and promises that create dependence and destroy the individual spirit necessary for political and economic liberty. To Hayek, such “progress” is frightening: “Perhaps the fact that we have seen millions voting themselves into complete dependence on a tyrant has made our generation understand that to choose one's government is not necessarily to secure freedom.”

According to President Obama, you’re not capable of providing for your own future. You need the government to provide your healthcare, spend your money to save companies too big to fail, strong-arm evil oil companies and protect you from global warming. Now, if you’re capable of taking care of yourself, you deserve to be taxed at a higher rate to support those who “can’t.”

To Hayek, the central planning socialism depends on will never work. First, no individual or group is smart enough and informed quickly enough to manage all of the variables impacting a country’s success. In a world that changes at the speed of the Internet, government planning and Congressional oversight takes months, not minutes. Secondly, economic planning restricts individual choices. As a result, excessive regulations and planning eventually become coercive involving freedom-killing compliance for “the common good.”

In 1988, while visiting the Soviet Union, our Soviet guide, Ludmila Nikonova, complained about the communist system, “They pretend to pay us, and we pretend to work.” To Ludmila, the ineptitude of Soviet central planning was evident in their “plan” to produce women’s dresses. Companies were paid for the number of dresses created at the cheapest cost. The solution was simple; make mostly small sizes using less fabric. The stores were full of dresses few Russian women could wear. Ludmila said, “Look at me. Do you think I can fit in a small dress?” Companies please bureaucrats not customers.

As Hayek warned, for socialism, "the question was no longer one of making competition work and of supplementing it but of displacing it altogether." The comments of CA Rep. Maxine Waters make his point. While grilling corporate executives, she said, “This liberal will be all about socializing…will be about…basically taking over, and government running all of your companies.”

Justice and the rule of law which applies to all “equally” gives way to “social justice” where people are treated differently to equalize outcomes—from some you take and to others you give. Hayek warned, “I am certain nothing has done so much to destroy the juridical safeguards of individual freedom as the striving after the mirage of social justice.”

Whether in sports or the game of life, for liberty to matter, some will do better than others. Capitalism fosters competition that rewards excellence and hard work. As Hayek warned, “Not only has liberty nothing to do with any other sort of equality, but it is even bound to produce inequality in many respects. This is the necessary result and part of the justification of individual liberty: If the result of individual liberty did not demonstrate that some manners of living are more successful than others, much of the case for it would vanish.”

Are some government regulations needed? Of course. To get the best out of economic competition as a means of coordinating and rewarding human effort, the legal system should be “designed both to preserve competition and make it operate as beneficially as possible.” But the rules should apply to all to encourage fair competition.

Hayek warned that the promoters of socialism use soft words and keep promising more “freedom,” but their efforts are a disaster to freedom and economic progress. Hayek warns that it would be a tragedy “if it should prove that what was promised to us as the Road to Freedom was in fact the High Road to Servitude?”

Having government ensure your security may seem attractive, but it comes at the cost of liberty, innovation and America’s future. Too many Americans are watching and waiting for President Obama’s administration to fix things. If you haven’t noticed, his central promising and planning isn’t working. Instead, President Obama ought to be encouraging American entrepreneurs to innovate and revitalize the private sector by allowing them to keep the rewards for their hard work. When Americans are allowed to thrive, they hire more people to make success possible.

Failing, starting over, recessions and recoveries, the end of certain careers and the start of new ones are guaranteed in a dynamic economy committed to innovation and progress. New innovations displace past winners. The canals gave way to railroads, the railroads to airplanes, snail mail to email and texting. There’ll always be winners and losers. To ensure equal results is to ensure shared obsolescence, not excellence and progress. For over two centuries, America’s capitalism has proved to be the best system for ensuring long-term prosperity. Unfortunately, the current administration has been doing everything to trade-in free enterprise for a version of soft socialism. In November, you’ll have a chance to stop that.

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