The Road to Serfdom
Edited by Bruce Caldwell
University of Chicago Press, 2007
I was in college when I first encountered socialism as a political philosophy. I was pursuing two degrees. One was in political science and the other was in history. Political science, at Hope College in the 1970’s, was significantly tilted toward the study of political philosophy, foreign affairs and political parties. Over those four years I learned about socialism as a political and economic ideology, and all its variants from the Commune in 1870 France, to the forms of democratic socialism in England and Scandinavia, to the totalitarian aspect in the Soviet Union, China, Fascist Italy and Nazi Germany. I also observed how socialism had affected the U.S., from the emerging labor union movement of the late 19th century, to the bold attempts of Eugene Debs and the eventual integration of socialist concepts in the FDR administration. Needless to say, aspects of socialism surround us and touch us every day: social security, Medicare and Medicaid, public housing, welfare, plus numerous other social services.
From the history angle, I focused on Russia and the Soviet Union. I read extensively Marx, Lenin, Trotsky, Stalin, Mao, and numerous contemporary advocates of socialism. Socialism still remains an important aspect of the reforms implemented in most developing countries, particularly in regards to land reform. It is pervasive throughout the Middle East. The Soviet Union was the first nation to take socialism seriously and advance Marxist thought to its extreme. Partially due to the limited access to information, the need for supporting the Soviets against Germany in WW II, and sympathy for socialist ideals in academia and the labor movement, socialism maintained a strong appeal in the West. History has proven, however, that the Siren’s call of a socialist utopia leads to totalitarianism and the most brutal exhibition of human cruelty known to man. Even in the 1970’s I could see that people hear only what they want to hear. We hear on a regular basis (as we should) the deaths of 4.6 million Jews during the Holocaust. Yet we hardly hear a whisper of the millions who have died due to socialism. A conservative estimate is 50 million. Some scholars would extend that count to 150 million. It is staggering.
I morphed the two degrees into a Masters degree in agricultural economics. I was schooled by the best and I have continued to this day to greatly admire their work. It was with this collection of savants that I saw the problem of central planning. It is in agriculture that the federal government has endeavored to tweak the market for grain or livestock so that an “equitable” outcome could be achieved, and that “price stability” can be maintained. In the pursuit of these goals, the quantitative tools, the extensive collection of production data, and the development of predictive models of production and price levels, all point to the key problem of central planning – can it be done? And is it really the best outcome? While what the U.S. does with agriculture is a far cry from centralized planning, working in academia gave you the impression that it was their sole purpose in life to do for the farmer what the farmer could not do for himself. Yet it was an honest endeavor, their models open to peer evaluation and the test of time. In many respects agriculture economists can probably tell you that central planning of agriculture is a pipe dream, but it sure is fun making the attempt.
It was also in college that I first encountered “conservatism.” This was classic conservatism. I actually heard it from the horse’s mouth when Russell Kirk came to Hope College and presented a lecture and a seminar. It got me to thinking, but I was struggling to survive college, much less indulge myself in a particular ideology. I wasn’t sure what I believed. Amongst all the struggle of determining what one believed, the central question was “What is reality?” The answer to that question would have to wait. Once it was addressed, then I could continue to explore what path to follow, whether that of statism (aka socialism) or conservatism (aka individual liberty). But I soon was introduced to the works of Milton Friedman during my graduate studies. The Chicago School of Economics was, and still is, a major player in the field of economics. The University of Missouri had considerable interaction with Chicago and that quickly led to Dr. Friedman. Well, I was once again just trying to survive graduate school, but what little I read by Friedman impressed me. He knew something that most everyone else was ignoring – that government interference in the economy was not going to have a good outcome. He challenged head-on the prevailing school of macro-economics which orbited the twin suns of Maynard Keynes and John Kenneth Galbraith. Since Chicago printed Hayek’s book, it was not long before I also encountered his writing in one of my classes. Like Friedman, he posed some difficult questions and challenged much of the mainstream teaching of economics.
What really got my attention was the economic mess created during the Carter administration. It wasn’t all his fault. Throughout the 70’s the federal government swallowed hook-line-and-sinker Keynesian economic theory. If you have high unemployment, just spend more money. And if you need to borrow, just print the money. These were the key contributors to the double-digit inflation rates of the early 80’s. It would be Dr. Friedman’s tough-love monetary theory that would tame the tiger of inflation, and pull the U.S. into a deep recession and then, eventually, out of the recession generating a decade-long surge in economic growth. Standing alongside this phenomenon was the administration of Margaret Thatcher in the United Kingdom. She totally dismantled their socialist structure. About the only remaining nationalized industry from those days is the National Health Service. Few young people today realize that at one time during the 70’s the British government had direct ownership of several key industries – and it was one big mess. The solution was to privatize British industry. Positive results would take years to bear out because it meant people admitting that maybe making three brands of cars in Britain was not a good thing, giving that up and looking for more productive things to do. They succeeded and Britain is today a prosperous nation.
Yet Hayek was just in the background. I would read his quotes on occasion in literature and often ask myself – “Who is this guy? Maybe I need to read his book?” So I did. And it opened my eyes. Reading Hayek is not easy. It is academic material, appropriate for college or graduate level studies. While rearing three children and having to go through a busy work schedule, it was difficult to absorb Hayek’s material. Yet it was difficult to put it down because he hit the nail on the head. He understood the problem.
Road to Serfdom is well titled. Socialism is the road to serfdom. It is mind-boggling that otherwise intelligent people could ever think that government owning or controlling markets can have a positive outcome. Yet people do. And they think that way over and over again. Socialism requires the use of power. A few people determine the actions of many: where they work, the products they can buy, the schools they can attend, even where they can live. Socialism requires obedience. How can a “planned” society tolerate random acts?
Today, as I write this essay, we suffer under an administration that advances policies that generates more money into an already swelling and inflated economy. As with socialism elsewhere and at other times, socialist policies seek to implement what a few elites consider of value, ignoring or not trusting what the marketplace has already determined. As policy proposals stalled in Congress, the President has used executive orders to literally destroy sectors of the economy because they do not meet social objectives. In canceling the permits to build the Keystone Pipeline, the President redirected the flow of investments from oil to whatever. The event sent a signal to the oil industry and investors who know what the outcome would be. People still needed energy despite what a few eggheads in Washington “felt.” Energy prices soared. As with inflation, the people who bear the burden are not the super-rich, but the middle and lower classes that have to buy the groceries and fill the gas tanks.
Parallel to the discussion on socialism is that of statism – the philosophy that the best outcomes for a society are when the State controls the market place. As with the Keystone Pipeline, this administration has deployed statist tactics to manage the COVID pandemic. Mandated vaccinations have reached to companies with 100 or more employees. The end is not to eradicate COVID, but it is to simply exert the power necessary to force Americans to conform, even if it means taking away their jobs, putting additional stress on first-responders, police departments, hospitals, the military and countless other industries.
Road to Serfdom kept coming up again and again in my life because Hayek understood the dangers of state power. Even when the elite are well-intended and highly informed, they will find having to implement policies in a dynamic world to be illusive, and will often revert to clumsy uses of state power. As with the EPA that has now managed to creep up from the major rivers it was directed to clean, to the creeks and brooks that feed into them, to the small farmer endeavoring to water his cattle or simply make a beaver pond. As with COVID vaccinations, they realize they have to migrate from recommendations to compulsion, that the so-called “social costs” are greater than the value of freedom or job security. The drive to force everyone to be vaccinated even risked police protection and military preparedness. Compulsive state administration of power would compromise schools, energy and transport.
The author of this essay is not necessarily anti-socialist. Socialism is used throughout the world to achieve economic and social objectives in many different ways. Socialism works in Mennonite communities and in Singapore. Degrees of socialism are usually more effective in smaller countries than in large ones. Socialism has matured and, in some situations, has succeeded because it’s advocates have understood certain boundaries. The “ownership of the means of production” are not the primary objective, replaced with a broader discussion of what is of value to society as a whole. Hayek recognizes that reality and, for that reason, will often not come across as virulently anti-socialist.
The author of this essay is also not anti-EPA and has been fully vaccinated. Yet in both cases, the author has observed the various ways state power is used to achieve objectives, a power often not administered by the oversight and will of an elected assembly, but by “experts” in bureaucracies. While on the surface these two expressions of state power are not socialistic, their regulations induce economic consequences where the individual risks everything to resist the will of the State.
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By Eric Niewoehner
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