The Intellectuals and Socialism The Road to Serfdom

The Road to Serfdom
with The Intellectuals and Socialism
The Road to Serfdom
with The Intellectuals and Socialism
FRIEDRICH A. HAYEK
t h e c o n d e n s e d v e r s i o n o f t h e roa d t o s e r f d o m
by f . a . h ay e k a s i t a p p e a r e d i n t h e a p r i l 1 9 4 5
e d i t i o n o f r e a d e r’ s d i g e st
The Institute of Economic Affairs
5
This combined edition fi rst published in Great Britain in 2005 by
The Institute of Economic Affairs
2 Lord North Street
Westminster
London SW1P 3LB
in association with Profi le Books Ltd
This condensed version of The Road to Serfdom was fi rst published in Great Britain in 1999
in the ‘Rediscovered Riches’ series by The Institute of Economic Affairs, and reissued as
Occasional Paper 122 in 2001
This condensed version of The Road to Serfdom © Reader’s Digest,
reproduced by kind permission
The Road to Serfdom is published in all territories outside the USA by Routledge.
This version is published by kind permission.
‘The Intellectuals and Socialism’ previously published in Great Britain in 1998 in the
‘Rediscovered Riches’ series by the Institute of Economic Affairs
‘The Intellectuals and Socialism’ © The University of Chicago Law Review 1949.
Reproduced by kind permission.
All other material copyright © The Institute of Economic Affairs 2005
Every effort has been made to contact the copyright holders associated with this edition.
The IEA will be pleased to include any corrections in future printings.
The mission of the Institute of Economic Affairs is to improve public understanding of
the fundamental institutions of a free society, with particular reference to the role of
markets in solving economic and social problems.
The moral right of the authors has been asserted.
All rights reserved. Without limiting the rights under copyright reserved above, no part
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or transmitted, in any form or by any means (electronic, mechanical, photocopying,
recording or otherwise), without the prior written permission of both the copyright
owner and the publisher of this book.
A CIP catalogue record for this book is available from the British Library.
ISBN 0 255 36576 4
Many IEA publications are translated into languages other than English or are reprinted.
Permission to translate or to reprint should be sought from the Director General at the
address above.
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Printed and bound in Great Britain by Hobbs the Printers
The authors 7
Foreword by Walter E. Williams 10
THE ROAD TO SERFDOM
Foreword by Edwin J. Feulner Jr 19
Introduction: Hayek, Fisher and The Road to Serfdom
by John Blundell 22
Preface to the Reader’s Digest condensed version of
The Road to Serfdom 34
Summary 35
The Road to Serfdom (condensed version) 39
Planning and power 40
Background to danger 42
The liberal way of planning 45
The great utopia 47
Why the worst get on top 51
Planning vs. the Rule of Law 57
Is planning ‘inevitable’? 59
Can planning free us from care? 61
Two kinds of security 66
Toward a better world 70
CONTENTS
7
The Road to Serfdom in cartoons 71
THE INTELLECTUALS AND SOCIALISM
Foreword by Edwin J. Feulner Jr 93
Introduction: Hayek and the second-hand dealers in ideas
by John Blundell 96
The Intellectuals and Socialism 105
About the IEA 130
Friedrich A. Hayek
Friedrich A. Hayek (1899–1992) was born in Vienna and obtained
two doctorates from the University of Vienna, in law and political
economy. He worked under Ludwig von Mises at the Austrian
Institute for Business Cycle Research, and from 1929 to 1931 was
a lecturer in economics at the University of Vienna. His fi rst
book, Monetary Theory and the Trade Cycle, was published in 1929.
In 1931 Hayek was made Tooke Professor of Economic Science
and Statistics at the London School of Economics, and in 1950
he was appointed Professor of Social and Moral Sciences at the
University of Chicago. In 1962 he was appointed Professor of
Political Economy at the University of Freiburg, where he became
Professor Emeritus in 1967. Hayek was elected a Fellow of the
British Academy in 1944, and in 1947 he organised the conference
in Switzerland which resulted in the creation of the Mont Pèlerin
Society. He was awarded the Nobel Prize in Economics in 1974 and
was created a Companion of Honour in 1984. In 1991 George Bush
awarded Hayek the Presidential Medal of Freedom. His books
include The Pure Theory of Capital, 1941, The Road to Serfdom, 1944,
The Counter-Revolution of Science, 1952, The Constitution of Liberty,
1960, Law, Legislation and Liberty, 1973–9, and The Fatal Conceit,
1988.
THE AUTHORS
t h e roa d to serfdom with t h e i n t e l l e c ua l s a n d s o c i a l i s m
8 9
t h e authors
John Blundell
John Blundell is Director General of the Institute of Economic
Affairs. He was previously President of the Institute for Humane
Studies at George Mason University and the Atlas Economic
Research Foundation, founded by the late Sir Antony Fisher to
establish ‘sister’ organisations to the IEA. He serves on the boards
of both organisations and is a former Vice President of the Mont
Pèlerin Society.
Edwin J. Feulner Jr
Edwin J. Feulner Jr has served as President of the Heritage Foundation
since 1977. He is a past President of the Mont Pèlerin Society.
He previously served in high-level positions in both the legislative
and executive branches of the United States federal government.
He received his Ph.D. from the University of Edinburgh and was
awarded the Presidential Citizen’s Medal by Ronald Reagan in
1989 for ‘being a leader of the conservative movement by building
an organisation dedicated to ideas and their consequences . . . ’
Walter E. Williams
Walter Williams is John M. Olin Distinguished Professor of
Economics at George Mason University, Fairfax, Virginia. In
addition, he serves as an Adjunct Professor of Economics at Grove
City College in Grove City, Pennsylvania. He has also served on
the faculties of Los Angeles City College, California State University
Los Angeles, and Temple University in Philadelphia. He is the
author of over eighty publications that have appeared in scholarly
journals such as Economic Inquiry, American Economic Review,
Georgia Law Review, Journal of Labor Economics and Social Science
Quarterly, as well as popular publications such as Newsweek, The
Freeman, National Review, Reader’s Digest, Cato Journal and Policy
Review. Dr Williams serves on the boards of directors of Citizens
for a Sound Economy, the Reason Foundation and the Hoover
Institution, and on the advisory boards of the IEA, the Landmark
Legal Foundation, the Alexis de Tocqueville Institute, the Cato
Institute and others. He has frequently given expert testimony
before Congressional committees on public policy issues ranging
from labour policy to taxation and spending. He is a member of
the Mont Pèlerin Society and the American Economic Association.
10
foreword
11
order later expressed in the writings of British philosophers such
as John Stuart Mill and David Hume.
What happened in Germany? Hayek explains, ‘The supreme
tragedy is still not seen that in Germany it was largely people of
good will who, by their socialist policies, prepared the way for
forces which stand for everything they detest’. Hayek’s explanation
for the rise of Nazism was not understood and appreciated
in 1944, and it is still not fully understood and appreciated today.
Collectivism, whether it is in Germany, the former Soviet Union,
Britain or the USA, makes personal liberty its victim.
How do we combat collectivism? Hayek provides some
answers in The Intellectuals and Socialism. In a word or two, those
who support the liberal social order must attack the intellectual
foundations of collectivism. Hayek urges that an understanding
of just what it is that leads many intellectuals toward socialism
is vital. It is neither, according to Hayek, selfi sh interests nor evil
intentions that motivate intellectuals towards socialism. On the
contrary, they are motivated by ‘mostly honest convictions and
good intentions’. Hayek adds that it is necessary to recognise
that ‘the typical intellectual is today more likely to be a socialist
the more he is guided by good will and intelligence’. Joseph A.
Schumpeter differed, seeing Hayek’s assessment as ‘politeness to
a fault’.2
Hayek argues that the roots of collectivism have nowhere originated
among working-class people. Its roots lie among intellectuals
– the people Hayek refers to as ‘second-hand dealers in ideas’
– who had to work long and hard to get working-class people to
2 J. Schumpeter, review of The Road to Serfdom, Journal of Political Economy, June
1946: 269–270.
FOREWORD
Friedrich A. Hayek was one of the twentieth century’s greatest
philosophers. While he is best known for his work in economics,
he also made signifi cant contributions in political philosophy and
law. The publication for which Professor Hayek is most widely
known is The Road to Serfdom, written during World War II, the
condensed Reader’s Digest version of which is presented here along
with what might be seen as his follow-up, The Intellectuals and
Socialism, fi rst published by the University of Chicago Law Review
in 1949.
A focal point of The Road to Serfdom was to offer an explanation
for the rise of Nazism, to correct the popular and erroneous
view that it was caused by a character defect of the German people.
Hayek differs, saying that the horrors of Nazism would have been
inconceivable among the German people a mere fi fteen years
before Adolf Hitler’s rise to power. Indeed, ‘throughout most
of its history [Germany was] one of the most tolerant European
countries for Jews’.1 Other evidence against the character defect
argument is that the writings of some German philosophers, such
as Johann Wolfgang von Goethe, Wilhelm von Humboldt and
Friedrich Schiller, served as inspiration for ideas about the liberal
1 Thomas Sowell, The Economics and Politics of Race, William Morrow & Company,
New York, 1983, p. 86.
t h e roa d to serfdom with t h e i n t e l l e c ua l s a n d s o c i a l i s m
12
foreword
13
radio stations, on satellite and over the internet, reaching tens of
millions of people worldwide each week. Much to socialist dismay,
the most popular and successful talk radio shows are those hosted
by conservative/free market hosts. Then there are the bloggers
– the electronic equivalent of conservative/free market journalists
– who are constantly at the ready to challenge and reveal news
stories.
While there have been monumental changes in the ideas
marketplace, the last bastion of solidly entrenched socialism lies
on college and university campuses around the world. Hayek
argues that ‘It is perhaps the most characteristic feature of the
intellectual that he judges new ideas not by their specifi c merits
but by the readiness with which they fi t into his general conceptions,
into the picture of the world which he regards as modern or
advanced’.
Professor Thomas Sowell puts the argument in another way
that encompasses Hayek’s.3 Sowell says that there are essentially
two visions of how the world operates – the constrained vision
and the unconstrained. The constrained vision sees mankind with
its moral limitations, acquisitiveness and ego as inherent and
immutable. Under this vision, the fundamental challenge that
confronts mankind is to organise a system consisting of social
mores, customs and laws that make the best of the human condition
rather than waste resources trying to change human nature.
It is this constrained vision of mankind that underlies the thinking
and writings of Adam Smith, Edmund Burke and Alexander
Hamilton, among others.
3 Thomas Sowell, A Confl ict of Visions: Ideological Origins of Political Struggles, William
Morrow & Company, New York, 1987.
accept the vision they put forward. The intellectuals or secondhand
dealers in ideas to whom he refers are journalists, teachers,
ministers, radio commentators, cartoonists and artists, who
Hayek says ‘are masters of the technique of conveying ideas but
are usually amateurs so far as the substance of what they convey
is concerned’.
In 1949, when Hayek wrote The Intellectuals and Socialism,
the second-hand dealers in collectivist ideas were a dominant
force. He appeared to be pessimistic about the future of liberty
because those who were on the conservative/free market side of
the political spectrum were weak, isolated and had little voice. In
1947, Hayek, along with several other distinguished free market
scholars, addressed some of the isolation by founding the Mont
Pèlerin Society. The purpose of the Society was to hold meetings
and present papers and exchange ideas among like-minded
scholars with the hope of strengthening the principles of a free
society. The Mont Pèlerin Society now has over 500 members
worldwide, and can boast that eight of its members have won
Nobel Prizes in economics.
Since Hayek wrote The Intellectuals and Socialism there has
been nothing less than monumental change in the marketplace
of ideas. In 1949, there was only one free market organisation
– The Foundation for Economic Education, founded by Leonard
Read. Today there are over 350 free market organisations in 50
countries, including former communist countries. The major
media no longer has the monopoly on news and the dissemination
of ideas that it once had. Network television faces competition
from satellite and cable television. Talk radio has exploded.
The Rush Limbaugh Show, on which I have served as occasional
substitute host for over thirteen years, is carried on 625 different
t h e roa d to serfdom with t h e i n t e l l e c ua l s a n d s o c i a l i s m
14
foreword
15
the case, strongly defend polar opposite policies? I believe part of
the answer is that they make different initial premises of how the
world works. If one’s initial premise is that an employer needs so
many workers to perform a particular job, then enacting a higher
minimum wage means that all the workers will keep their jobs.
The only difference is that they will receive higher wages and the
employer will make less profi t. Thus, enacting a higher minimum
wage clearly benefi ts low-skilled workers. By contrast, if one’s
initial premise is that there are alternative means to produce a
product, and employers will seek the least-cost method of doing
so, then raising the minimum wage will cause employers to seek
substitutes such as automation or relocation overseas, thereby
reducing the amount of workers they hire. With the latter vision,
one can have the interests of low-skilled workers at heart and
oppose an increase in the minimum wage, because it reduces
opportunities for low-skilled workers. If Hayek is correct in his
assessment of socialists, it would appear that it is a simple task to
empirically show that there are alternative methods of production
and that employers are not insensitive to increases in the cost of
workers.
The second part of the strategy is to make better, unassailable
arguments for personal liberty. Any part of the socialist agenda
can be shown as immoral under the assumption that people own
themselves. The idea of self ownership makes certain forms of
behaviour unambiguously immoral. Murder, rape and theft are
immoral simply because they violate a person’s property rights to
himself. Government programmes such as subsidies to farmers,
bailouts for businesses, and welfare or medical care for the
indigent are also immoral for the same reason. Government has
no resources of its very own. The only way government can give
By contrast, the unconstrained vision sees mankind as capable
of perfection and capable of putting the interests of others fi rst.
Sowell says that no other eighteenth-century writer’s vision stands
in starker contrast to that of Adam Smith than William Godwin’s
in Enquiry Concerning Political Justice. Godwin viewed intention to
benefi t others as the essence of virtue that leads to human happiness.
Benefi ts to others that arise unintentionally are virtually
worthless. Sowell says, ‘Unlike Smith, who regarded human selfishness
as a given, Godwin regarded it as being promoted by the
very system of rewards used to cope with it’.4
In the last paragraph of The Intellectuals and Socialism, Hayek
says, ‘Unless we [true liberals] can make the philosophic foundation
of a free society once more a living intellectual issue, . . . . the
prospects of freedom are indeed dark’. If Hayek is correct that
neither selfi sh interests nor evil intentions motivate intellectuals
towards socialism, there are indeed grounds for optimism. Education
offers hope. We can educate them, or at least make others
immune, to the errors of their thinking.
I think the strategy has at least two principal components.
First, there is not a lot to be gained by challenging the internal logic
of many socialist arguments. Instead, it is the initial premises that
underlie their arguments that must be challenged. Take one small
example. One group of people articulates a concern for the lowskilled
worker and argues for an increase in the minimum wage
as a means to help them. Another group of people articulating the
identical concern might just as strongly oppose an increase in the
minimum wage, arguing that it will hurt low-skilled workers.
How can people who articulate identical ends, as is so often
4 Ibid., p. 24.
t h e roa d to serfdom with t h e i n t e l l e c ua l s a n d s o c i a l i s m
16
one person money is to fi rst take it from another person. Doing
so represents the forcible using of one person, through the tax
code, to serve the purposes of another. That is a form of immorality
akin to slavery. After all, a working defi nition of slavery is
precisely that: the forcible use of one person to serve the purposes
of another.
Well-intentioned socialists, if they are honest people as Hayek
contends, should be able to appreciate that reaching into one’s
own pockets to assist one’s fellow man is laudable and praiseworthy.
Reaching into another’s pocket to do so is theft and by
any standard of morality should be condemned.
Collectivists can neither ignore nor dismiss irrefutable
evidence that free markets produce unprecedented wealth.
Instead, they indict the free market system on moral grounds,
charging that it is a system that rewards greed and selfi shness and
creates an unequal distribution of income. Free markets must be
defended on moral grounds. We must convince our fellow man
there cannot be personal liberty in the absence of free markets,
respect for private property rights and rule of law. Even if free
markets were not superior wealth producers, the morality of the
market would make them the superior alternative.
wa lt e r e . w i l l i a m s
John M. Olin Distinguished Professor of Economics
George Mason University, Fairfax, Virginia
May 2005
The views expressed in Occasional Paper 136 are, as in all IEA
publications, those of the author and not those of the Institute
(which has no corporate view), its managing trustees, Academic
Advisory Council members or senior staff.
The Road to Serfdom
John Chamberlain characterised the period immediately
following World War II in his foreword to the fi rst edition of The
Road to Serfdom as ‘a time of hesitation’. Britain and the European
continent were faced with the daunting task of reconstruction
and reconstitution. The United States, spared from the physical
destruction that marked Western Europe, was nevertheless recovering
from the economic whiplash of a war-driven economic
recovery from the Great Depression. Everywhere there was a
desire for security and a return to stability.
The intellectual environment was no more steady. The rise
and subsequent defeat of fascism had provided an extremely wide
fl ank for intellectuals who were free to battle for any idea short
of ethnic cleansing and dictatorial political control. At the same
time, the mistaken but widely accepted notion that the unpredictability
of the free market had caused the depression, coupled
with four years of war-driven, centrally directed production, and
the fact that Russia had been a wartime ally of the United States
and England, increased the mainstream acceptance of peace-time
government planning of the economy.
At this hesitating, unstable moment appeared the slim volume
of which you now hold the condensed version in your hands,
F. A. Hayek’s The Road to Serfdom. Occupying his spare time
between September 1940 and March 1944, the writing of The Road
19
FOREWORD
t h e roa d to serfdom
with t h e i n t e l l e c ua l s a n d s o c i a l i s m
20
foreword
21
destinely behind the emerging iron curtain. It is no exaggeration
to say that The Road to Serfdom simultaneously prevented the
emergence of full-blown socialism in Western Europe and the
United States and planted seeds of freedom in the Soviet Union
that would fi nally bear fruit nearly 45 years later. Socialist catchphrases
such as ‘collectivism’ were stricken from the mainstream
political debate and even academic socialists were forced to retreat
from their defence of overt social planning.
But the true value of The Road to Serfdom is to be found not in
the immediate blow it dealt to socialist activists and thinkers – as
important as that was – but in the lasting impression it has made
on political and economic thinkers of the past 55 years. By Hayek’s
own admission, ‘this book . . . has unexpectedly become for me
the starting point of more than 30 years’ work in a new fi eld’.3
e d w i n j . f e u l n e r j r
November 1999
3 Although these words were written in 1976 it is safe to say that the infl uence of
The Road to Serfdom guided Hayek’s work until his death in 1992.
to Serfdom was in his own words more ‘a duty which I must not
evade’1 than any calculated contribution to his curriculum vitae.
As Hayek saw it, he was merely pointing out ‘apprehensions which

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