Economics

Alan Ebenstein – “The Road to Serfdom” (Hayek’s Journey)

“Hayek’s Journey. The Mind of Friedrich Hayek” (Part 9)

IN HIS AUTOBIOGRAPHICAL NOTES, WHICH HE BEGAN TO WRITE AFTER the success of The Road to Serfdom, Hayek said that the “light burden of teaching (there were very few students) and the short distances at Cambridge gave me more time for my own work than I ever had before.”

His best-known work was his response to World War II and the rise of totalitarian, militarily aggressive dictatorships. The Road to Serfdom was an advance, popular sketch of the intended second part of the larger “The Abuse and Decline of Reason” to be titled “The Nemesis of the Planned Society.” Hayek worked on The Road to Serfdom intensely during 1941 and 1942. In particular, he spent more time writing its early chapters than anything else he ever wrote. He insisted that when The Road to Serfdom was published in 1944, and became an international cause célebre over the next year and a half, he was surprised at the popular response. He may have hoped that the work would have broad impact, but it seems unlikely that he anticipated it would make him world-famous and the leading classical liberal.

The Road to Serfdom was not as important a work in Hayek’s thought as its popular acclaim implies. In the original preface, dated December 1943, he noted that it was a “political book” (as distinct from an “essay in social philosophy”) and that as a “professional student of social affairs,” it was his duty to say so. He was even more explicit in the preface to the 1976 edition. There he wrote, just after receiving the Nobel Prize in Economic Sciences in 1974, that in “spite of the wholly unexpected success of the book—in the case of the initially not contemplated American edition even greater than in that of the British one—I felt for a long time not altogether happy about it.” Indeed, he added that he had previously felt somewhat “apologetic” with respect to the work and had not reread it for twenty years. He had “long resented being more widely known by what I regarded as a pamphlet for the time than by my strictly scientific work.”

Originally, Hayek intended The Road to Serfdom as a polemic against the twin totalitarians of the East—Nazi Germany and the Soviet Union—contrasted to the liberal democracies of the West—the United Kingdom, United States, and France. However, then France fell, and, more significantly, the Soviet Union became an ally of Britain and America.Therefore, Hayek eliminated most negative references to the Soviet Union.

Among Hayek’s possible initial titles for the intended treatise of which The Road to Serfdom was an advance, popular sketch of the second part was “The Abuse and Decline of Reason or Through Socialism to Fascism (From Saint Simon to Hitler).” He greatly opposed the political system of the Soviet Union, considering that country an even worse tyranny than Hitler’s. Only the exigencies of the circumstances led him not to express this view.

Hayek did not intend to leave technical economic theory when he wrote The Road to Serfdom. It “unexpectedly” became for him the start of work in a new area, and he at first “tried hard to get back to economics proper.” For about a decade after he wrote it, he did not concentrate as much on social philosophy as he did after the middle 1950s or so, when political philosophy became his focus for the rest of his career.

From 1944 through the middle 1950s, he was focused on more practical endeavors, such as his divorce, moving to America from England, and starting the Mont Pelerin Society, as well as academic projects such as The Sensory Order and works in the history of ideas, of which his books on John Stuart Mill and his editing of Capitalism and the Historians were the most significant products during this period.

One of the paradoxes of Hayek is that he wrote better than he thought. That is, his writing is often more suggestive and stimulating than the thought that underlaid it.While his writing is, stylistically, difficult, it is also exceptionally profound, and its value lies in its profundity. He was one of the most significant writers on political and economic topics during the twentieth century in conveying new conceptions of optimal societal order and ways of understanding the sensory world. Hayek was, perhaps first of all, a great pure philosopher.

The idea that it is possible to write better than one thinks is truly paradoxical. What is meant by it, in this case, is that Hayek’s thought was not as profound or stimulating as the writing based on it. Hayek’s writings create ideas in the minds of others that were not necessarily in his own.

In the 1956 foreword to a new American paperback edition of The Road to Serfdom, he called “Planning and the Rule of Law,” chapter 6, its “central” chapter. For this reason, it is appropriate to pay special attention to it. “Nothing distinguishes more clearly conditions in a free country,” he began, “from those in a country under arbitrary government than the observance in the former of the great principles known as the Rule of Law. Stripped of all technicalities, this means that government in all its actions is bound by rules fixed and announced beforehand— rules which make it possible to foresee with fair certainty how the authority will use its coercive powers in given circumstances and to plan one’s individual affairs on the basis of this knowledge.”

Hayek’s essential political philosophy was that liberty is the supremacy of law.To some, this may appear a paradoxical conception of liberty, for liberty is too often considered to be the absence of law.This, however, was the exact opposite of Hayek’s view. He thought that liberty is not possible without law. Right law is liberty.

In “Planning and the Rule of Law,” he put forward the fundamental idea that “under the Rule of Law the government is prevented from stultifying individual efforts by ad hoc action.Within the known rules of the game the individual is free to pursue his personal ends and desires.” In addition, the “discretion left to the executive organs wielding coercive power should be reduced as much as possible.” These are crucial desiderata and remain applicable today. Far too often, government in contemporary society intervenes in a discretionary manner, perhaps especially at the local level. The diminution of arbitrary government and its replacement by set and known laws remains a vital component of the libertarian program and agenda.While he was still developing his thought in this area when he wrote The Road to Serfdom, Hayek recognized that without the fixity that law provides—both morally and in society—positive actions are impossible. In political society, state law creates the framework of legally permissible activity. Law creates a rational framework for individuals in society.With respect to his conception of the rule of law, the “important question is whether the individual can foresee the action of the state and make use of this knowledge as a datum in forming his own plans.” The idea of prediction was important for Hayek, who wrote later in “Degrees of Explanation” that “while it is evidently possible to predict precisely without being able to control, we shall clearly not be able to control developments further than we can predict the results of our action.” As Stephen Kresge, then the general editor of The Collected Works of F. A. Hayek, writes of this passage: “Arguments both for and against the efficacy of the central planning that socialism inevitably requires either stand or fall on the epistemological justification of the ability to predict the consequences of actions.”

Hayek was a philosophical utilitarian in his ultimate moral outlook. His criterion for rules, as he wrote in The Road to Serfdom, was whether they are “most likely on the whole to benefit all the people affected by them.” The utilitarian standard is the greatest happiness of the greatest number.

In the 1959 German edition preface of The Counter-Revolution of Science, he said that this “overview of the progressive abuse of reason, or socialism, was to be followed by a discussion of the decay of reason under totalitarianism, be it fascism or communism. The basic thought of this second major part was initially presented in popular form in my book The Road to Serfdom.” Once reason attempts to control its further advance, free thought is dead. It is inevitable, Hayek thought, that government control of the economy leads to suppression of freedom of thought and speech. Economic and political liberty are coincident, just as collectivist economics and totalitarian politics are.

The Road to Serfdom was initially published in England in March 1944 with a print run of 2,000 copies, which sold out within days. Hayek became famous in Britain as a result of the work. It was reviewed in leading papers, magazines, and journals. In September 1944, the American edition of The Road to Serfdom was published by the University of Chicago Press. It, too, became an overnight sensation, as it was given the lead review in the New York Times Book Review, with a rave review by Henry Hazlitt:“Friedrich A. Hayek has written one of the most important books of our generation.”

During April and May 1945, Hayek was scheduled to make an academic lecture tour of the United States. However, in April 1945, the Reader’s Digest—then a major force on the American cultural scene— published a condensed version of The Road to Serfdom as its lead feature. When Hayek got off the boat in New York, he had become a celebrity.

Ludwig von Mises, who was then living in the United States, experienced and foresaw Hayek’s success in this country. On July 27, 1944, he wrote Hayek that The Road to Serfdom was “really excellent,” noting that “even before the publication of the American edition your success in this country is remarkable.” Several references had been published in the New York Times. On December 1, 1944, Mises wrote Hayek that The Road to Serfdom “has had a tremendous success in this country. . . . But don’t be mistaken.The Veblen-Hansen ideology dominates public opinion in this country no less than does the Laski-Keynes ideology in Great Britain.”

Mises wrote Hayek in February 1945 that “news of your impending lecture tour is very gratifying. It is almost a public sensation. You probably do not realize how great the success of your book is and how popular you are in this county. The newspaper-men will watch all your steps and publicize all your dicta.”

Then the Reader’s Digest version of The Road to Serfdom appeared. After Hayek returned to Britain in May, he became a celebrity there, as well. In his first speech of the 1945 general election campaign (which he lost), Winston Churchill seemed to make reference to Hayek’s ideas. The next night, Labour leader Clement Attlee specifically referred to Hayek in his nationwide radio broadcast in response to Churchill’s speech.

During the next several years, The Road to Serfdom was translated into a number of languages, sometimes in authorized editions, sometimes in underground or handwritten versions. As a result of his fame, Hayek traveled to many academic institutions in Europe and the United States during the later 1940s. This made it possible for him to start the Mont Pelerin Society in 1947, which endures to this day as an international libertarian and classical liberal organization in which a number of practical political members, mostly in Europe, have been involved, including Ludwig Erhard in West Germany, Jacques Rueff in France, and Luigi Einaudi in Italy. Erhard was chancellor of his county, Rueff, a leading economic adviser, and Einaudi, president.

The society emerged from an idea Hayek had during World War II to establish a reeducation center in Vienna for German intellectuals. In time, this idea metamorphosed into an international society of intellectuals to bring German thinkers back into the mainstream of Western thought. From this latter concept, Hayek began to write letters to individuals he met on his travels, asking if they would find it beneficial to meet. Thus was born the Mont Pelerin Society in 1947, named after the site of its first meeting. Later in his career, while he was on the Committee on Social Thought at the University of Chicago, Hayek sought to re-create the lost intellectual tradition at the University of Vienna through the establishment of an academic center there, but little came of this effort.

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