In F.A. Hayek's The Road to Serfdom, he argues against central planning, stating that it can only ever lead to totalitarian control over society. He argues that government intervention in any manner is a step down the path to totalitarianism, and that every interventionist act requires further interventions by the planner in an attempt to maintain a sense of control over the economy and over society as a whole.

Planning and Power

Hayek, in this segment of his book, attacks the socialist belief that the centralization of power is the only way to ensure power cannot be unfairly "wielded" by private individuals. This is precisely the opposite of the truth however. Without distributing "power" through voluntary means to each individual participating in society, power will become concentrated at the top out of necessity. Centralization does not collectivize the power held by each individual towards a common goal, it strips the individual of their power and gives it to a planner at the top who then wields it in whatever destructive, uneconomical manner they deem fit. Hayek equates this to a form of slavery, which is an apt description in my view. To centralize power to such a degree that the state tells you how to participate in the economy and decides what you should receive in return is merely slavery with additional steps, as you are not free to take control of your own well-being under any circumstance, rather you are forced to prioritize the well-being of the collective with no guarantee you will receive what you need in return.

Background to Danger

In this part of The Road to Serfdom, Hayek claims that socialist ways of thinking destroy the concept of the individual. I entirely agree. It is only through each individual freely pursuing the life and ends they deem most suited to themselves that widespread prosperity has been able to occur in many places in the world. To take away this sense of individualism, to kill the "self-made man" and replace him with an individual forced to provide only that which he is compelled by force to an entity who may not even return to him the necessities of preserving his own life, is to take away the very spirit of a free and prosperous society. This can only result in ruin.

The Liberal Way of Planning

Hayek makes a valuable distinction between the two forms of economic planning he sees in society. He says that the state can only serve to plan against competition, whereas a liberal plans for competition to occur. In his view, only the liberal method is both ethical and economically viable. I am certainly inclined to agree. It is out of necessity that a central planner put a stop to any and all competition, for it is through competition that a better solution could arrive, therefore proving the incapability of the planner to solve the problems faced by society. The planner's only alternative to allowing the market to solve such issues is to destroy all threats to their rule whilst claiming they are the only possible solution.

The Great Utopia

Hayek, here, argues that the concept of "democratic socialism" is an unachievable utopia. This is due to the power vacuum created when centralized economic planning takes place. It is the tendency of a less authoritarian government to become more authoritarian in the pursuit of more refined control over the entire course of the economy. Taking a step in the direction of "freedom" by democratizing the centralization of power only serves to fuel the disagreements amongst democratic participants, of which none have the legitimate grounds to make any such decisions. This can only either stall progress in either direction or result in a totalitarian state all the same as the rest in an attempt to maximize control over the economy. Hayek further explores this idea in the following section of the book.

Why the Worst Get on Top

Here, we see Hayek attempt to explain the psychology of totalitarian rulers and why the "bad eggs" seem to most commonly rise to the top. He identifies a particular type of individual who he believes is most inclined to align themselves with such aspirations. He believes that it is only natural that the worst of society rises to the top under circumstances in which there are positions of coercive power to be held. I agree with Hayek's assessment. I do not think it possible for a central planner to even attempt to do what is best for society rather than himself and the ruling class to which he belongs solely because it is only at the detriment of society as a whole that he can further expand the reach of his own powers. To assume total control is to assume the responsibility of pleasing the planner's peers, not the bulk of society who is compelled to do his bidding regardless. Even entering such a role with good intentions can only result in the planner's ruin or compliance, as to act in any manner misaligned with the advancement of the state's rule is to injure himself and his fellow elite.

Planning vs. the Rule of Law

Here we see Hayek argue that centralized planning necessarily violates rule of law. This is due to the fact that there is such wild variation in the decisions left up to the central planner that must ultimately come at the expense of one group or another. To act toward some end is to invalidate the ends of some other individual or (more probably) a group of individuals. This necessarily eliminates equality under the law, as one group must necessarily see privileges at another's expense. This serves to further prove that centralization does not lead to greater equality, rather it leads to prosperity for a select few at the expense of the majority.

Is Planning 'Inevitable'?

In this section, Hayek argues that central planning is by no means the result of a societal necessity, rather it is the result of deliberate action to circumvent the workings of the free market. Competition is by far a better tool to ensure that the resources belonging to individuals in a society are allocated to their most value-productive ends. Central planning does not have access to the most crucial aspect of this process - the pricing mechanism. Without naturally occuring prices in a free market, the central planner will have no idea how to properly allocate resources to their most value-productive ends. This is an argument laid out by Ludwig von Mises known as the economic calculation problem. This proves precisely the opposite of what many socialists claim, rather it is free markets which are inevitable so long as suppression by a centralized power does not infect such processes with unworkable economic policies.

Can Planning Free Us From Care?

Hayek now attempts to tackle the question of whether or not planning can "free" individuals in society from having to bear direct personal responsibility for their own wellbeing. He concludes, and I agree, that this is far from the case and would not be a "freedom" by any means were it to be the case. This is a gross misuse of the term. Freedom is to carve your own path, make your own mistakes, and reap the rewards of your own merits. It is not to be confined to the role a central planner arbitrarily decides upon, to be coddled by the state and emptily promised everything you need to survive so long as you obey with unwavering loyalty. It is worth mentioning the inability of a central planner to possibly ascertain what it is that you desire or even need in many instances. Even if this could be done with some measure of certainty, you are only as free as a sheep in a pasture, aimlessly grazing for a sheppard who wishes to shear your wool.

Two Kinds of Security

Hayek articulates here two types of "security." they are as follows: a given minimum and a given standard. He believes it is the role of the state to provide only a given minimum, not to attempt to uphold all members of society to a given standard. I would go further to argue neither of these burdens fall onto the state, as in my view it is the responsibility of the individual to ensure they have access to the minimum needed to survive and that their life is up to the standard they see fit.

Toward a Better World

Hayek ends his book by calling for the maximization of individual freedom. This is a cause I can wholeheartedly support. To uplift society as a whole it is monumentally essential that individuals are allowed to pursue their own interests.

Critiques and Final Thoughts

There is one primary issue I hold with Hayek's The Road to Serfdom: he argues in favor of state welfare to some degree and, further, promotes democracy as an ideal nearly synonymous with freedom. In my view, a state-provided minimum only serves to worsen the issues faced by those who most need such support. While Hayek does not articulate his specific views on state welfare, I see the negative effects of state welfare in general and particularly in the models existing today to be intrinsic. As for his views on democracy, I believe it has been exaggerated beyond its true meaning. Democracy, ultimately, is nothing more than majority rule. Variations of democracy, such as democratic republics, are majority rule with a few safeguards. The bottom line is that any form of majority rule can only result in the potential oppression of the minority, which is a critique Hayek vehemently makes of central planning. I believe the same logic applies here.

In Class Discussion

1. I will discuss the superiority of the market mechanism over central planning.
2. I will discuss the impossibility of a functioning centrally planned economy due to the economic calculation problem.
3. I will discuss the ethical shortcomings of a centrally planned economy.
4. I will discuss the issues I have with democracy being upheld as a sort of golden ideal.