Introduction
In Hayek’s internationally recognized writing, “The Road to Serfdom,” he explains his belief in economic freedom as the foundation for individual liberty. He argues that central planning in the economy is one of the first steps toward dictatorship and totalitarianism. He claims that “what is promised to us as the road to freedom is in fact the high road to servitude,” and by giving the government control over means of production and labor, people certainly must sacrifice their individual freedoms (Hayek 49). In this critical analysis of “The Road to Serfdom,” Hayek’s argument for a free market will be applied to the current political climate and social climate of 21st-century America.
What is Central Planning
Central Planning is a form of government intervention in the economy, in which a group of individuals tries to form an economic plan for the future. However, Hayek quickly explains that groups of intellectuals rarely come to a consensus on such matters, due to their higher-level thinking. In their inability to come to a decision as a group, the task of planning falls on a single individual. There are many ethical, social, and political issues with this, and Hayek does a good job of addressing most of them. He discusses how a single person could not possibly be able to understand the individual complexities of every industry; furthermore, taking individual plans for every industry and trying to mesh them into a single, unitary plan, is essentially impossible. He also goes on to explain that, in order to achieve the “greater equality” that socialism promises, there must be people who are negatively impacted by the plans made in government. However, it is well known that the people who are negatively impacted by the plan will never be able to speak out against it because they have no power to change it. This is the loss of individual liberty that leads to “serfdom.” By implementing central planning, the economy is controlled by the government, all transactions are pre-planned, and people no longer have any choice in what they do, or what they spend their money on – this leads to a total loss of market freedom as well as individual liberty.
Equality and Market Freedom
Hayek determines that individual freedom is directly correlated with free enterprise. By giving individuals the power to choose between competitors in a market, they are able to make decisions on their own on what to spend their money on. This is the freedom given by a free market. However, individual liberty is much more than just freedom in the market. Hayek fails to acknowledge the importance of social liberties in an individual’s personal freedom. He mentions it in the context of the economy by claiming that if anyone were to speak out against central planning, then the secret military would silence them. However, so much more has to happen behind the scenes in order for this to be the case. There is evidence that government intervention in the economy is a good thing. Such as in the Great Depression, when President Roosevelt implemented “The New Deal” as a way of increasing the number of jobs available to Americans while also increasing the infrastructure of the nation. While some may argue that this limited Americans’ choice in employment, it was necessary to stabilize the economy enough to prevent further collapse. Thankfully, social programs that have been successfully implemented in the United States have not led to a totalitarian dictatorship. In addition to this, some welfare programs are beneficial in giving Americans a basis for a given standard of living – however, this will be discussed in further detail (whether or not this should be required of the government) later in this article. There is no doubt that money grants people freedom: freedom to move, interact with the economy in the way they please, and save their money or invest it in public projects. However, there is much more to losing individual liberties than social programs, as Hayek so simply puts it.
Should the Government be Responsible for an Individual’s Quality of Life?
Hayek claims in his writings that there are two kinds of security offered by the government: “the certainty of a given minimum of sustenance for all and the security of a given standard of life,” (Hayek 66). However, he goes on to explain that the latter security is the dangerous promise that socialism thrives upon. The true beauty of freedom is that people can succeed or fail at their own expense. Why should the government be responsible for picking people up when they fail to succeed? There are opportunities in a free market for people to find ways to make money, even if their options are not ideal. Once someone makes enough money to move on to greener pastures, the freedom in the market allows them to do just that. The main problem with central planning in the economy is that people cannot fail. If someone were to fail to do what is required of them, the government will replace them with someone else who values the completion of the task and the ideals of the nation more. Central planning turns the nation into an economic machine with a narrow scope of success. Hayek attributes the fast-paced nature of revolutionary technology to the spontaneity of the free market. Without the ability of entrepreneurs to take advantage of gaps in the market, the progress of society as a whole will be hindered.
Central Planning Today – Not so Obvious
Central planning in the technical, and economic sense is not widely seen in the world today. One of the only countries with a truly centrally planned economy is North Korea. In addition to this, Russia is also leading toward a centrally planned economy, especially after its recent invasion of Ukraine. With a trend toward wartime, countries almost always begin to regulate their economy more strictly to preserve future freedoms (or to control the population) (Hayek 51). However, the presence of social media offers a new perspective on central planning and the idea that “by changing our institutions to satisfy the new demands, we [may] destroy values which we still rate higher,” (Hayek 69). This is seen in the current state of our public education system as it comes to issues regarding racism and gender theory. In an effort to avoid cancel culture, companies, and entire school districts are changing their curriculum to support a specific agenda. This idea that people would rather conform to what is considered to be right rather than deal with retaliation from society can also be considered a form of societal plunder. What happened to second chances, or the ability for someone to learn from their mistakes? By teaching gender theory to children, idealists are casting aside other more important topics that children should be focusing their time on. Instead, these new curriculums create confusion and limit the freedom of speech of others who may disagree. It can be said that cancel culture is the “secret police” of younger generations in our society today, and because people are afraid of what others will think of them if they express their true feelings about an idea, they indirectly limit their right to freedom of speech. This is how central planning has manifested itself in today’s climate, and if it continues to have such a strong hold on how individuals communicate, there is no doubt that a future politician could rally supporters in favor of this coddling and censorship.
Works Cited:
Hayek, F. A. The Road to Serfdom. Routledge & Kegan Paul, 1944. (pg. 39-89)
The Investopedia Team. “What Is a Centrally Planned Economy?” Investopedia, Investopedia, 20 May 2022.