This is the 60th anniversary of the publication of “Road to Serfdom,” by Friedrich Hayek. It is one of the most important books of the 20th century, as important as the publication of “Das Kapital” was, in its malign way, in the 19th.
Hayek’s intellectual blockbuster came out when it seemed Marxist socialism would displace capitalism as the world’s ruling economic doctrine. Sixty percent of the world’s population was living under socialism before the 1991 Soviet collapse. Hayek’s thesis drew on the words of Hilaire Belloc: “The control of the production of wealth is the control of human life itself.” In fact, he used Belloc’s maxim as an epigraph to one of the chapters in “Road to Serfdom.”
The defeat of socialism had actually started long before 1991. It began with the spread of Hayekism, the intellectual assault on the would-be “reign of virtue,” as Jean Jacques Rousseau might have put it. It began with a quasi-global plebiscite against Marxist socialism by millions of its victims who fled socialist countries any way they could, hurdling high-voltage fences, sailing in leaky tubs in the pirate-infested South China Sea and the Fidel Castro-infested Caribbean, risking asphyxiation in crowded freight cars, flying in home-made planes, anything to get away.
The Austrian-born Hayek who died in 1992, explained what he called “the extended order of human cooperation, an order more commonly, if somewhat misleadingly, known as capitalism.” In his later book, “The Fatal Conceit: The Errors of Socialism,” he elaborated on his thesis, namely socialism could never work, no matter how it came to pass, whether by revolution and dictatorship, as in the onetime Soviet Union, or by the ballot box, as in postwar Great Britain. Socialism to Hayek, a Nobel Laureate, had become a code word for the “economics of scarcity.”
For Hayek, the fatal conceit was to think a bunch of ideologized bureaucrats could through the machinery of what was called “central authority” — in other words, socialism — uncover the information needed to make the socialist system work. As the Economist summarized Hayekism:
“Socialism is factually flawed (because it is wrong in its description of why capitalism flourished) and logically flawed as well (because it must deny itself the information-gathering apparatus that it would need if it were ever to work).”
For Hayek, competition was the surest way for an economic system to work and competition could exist only under a free market system. In other words, as economist John Cassidy put it, “By allowing millions of decision-makers to respond individually to freely determined prices, it allocated resources, labor, capital, and human ingenuity — in a manner that can’t be mimicked by a central plan, however brilliant the central planner…. The view of capitalism as a spontaneous processing machine — ‘telecommunications system’ was how Hayek referred to it — was one of the real insights of the century.” Mr. Cassidy suggested, “It is hardly an exaggeration to refer to the 20th century as the Hayek century.”
Yet “socialism” is still the reigning dogma in the vast majority of social science departments of American universities. As Hayek once put it: “The higher we climb up the ladder of intelligence, the more we talk with intellectuals, the more likely we are to encounter socialist convictions.”
To remain a Marxist today or a Marxist fellow-traveler when the whole world has voted against the malice of Marxism raises the most profound questions as to the rationality of the true believer. Especially as we celebrate publication of Hayek’s irrefutable “Road to Serfdom.”
Arnold Beichman, a Hoover Institution research fellow, is a columnist for The Washington Times.