An Analysis of Friedrich Hayek’s The Road to Serfdom

• The key question concerning economists and political scientists* at the time Hayek wrote The Road to Serfdom was: “What is the proper balance between economic freedom and social justice?”

• Hayek was trying to work out the best way for the economy to help with social needs—and he was not coming from a fixed political viewpoint of right or left.

• Hayek saw threats to freedom when too much control was exerted by the state, whichever political doctrine that state followed.

The core question that Friedrich Hayek tries to answer in The Road to Serfdom is why political planning*—governments actively participating in shaping a country’s economy—is a danger to the concept of democracy.* In other words, how political planning can lead a society to serfdom. This question can be divided into three sub-questions:

• Why was there general sympathy for the concept of political planning at the time?

• How would planning lead to the gradual erosion of democracy and the rule of law?*

• How would this erosion of democracy eventually lead to a dictatorship that was indistinguishable from fascism*—an important concern at the time as the British public observed the consequences of fascism in Germany.

“It is almost universally felt that when we call a country democratic we are praising it; consequently, the defenders of every kind of regime claim that it is a democracy, and fear that they might have to stop using the word if it were tied down to any one meaning.”

George Orwell, Politics and the English Language

Hayek answers the first question with an account of how classical liberalism* at the beginning of the twentieth century was seen to have failed, leading to it becoming unfashionable in the world of politics. It had been replaced by socialism, which appealed to people because it offered a vision of a utopian society which classical liberalism suggested was not possible.

Responding to the second question, Hayek shows how planning leads to an erosion of democracy by gradually increasing the authority of the government at the expense of democratic institutions.

Finally, Hayek approaches the third question, about fears of dictatorship, by examining how democracy was already held in contempt in much British public debate of the time.

The core question—why political planning threatens democracy—is important because, by the time The Road to Serfdom was written, Europe had witnessed the transformation of democratic societies into dictatorships—fascist in Germany, communist in Russia. Hayek also wanted to address the fact that there were still people in the democracies that were left at the time who held views that were similar to those that had brought about dictatorships. He wasn’t the only person thinking this either, since “by 1940 no thoughtful person anywhere in the world could keep from wondering what had gone wrong.” Hayek, however, was driven to investigate why things had gone so badly wrong.¹

At the time The Road to Serfdom was published in 1944, the argument among intellectuals was between those who were in favor of an enlarged state—or more state involvement in the economy—and those who wanted to maintain the pre-war size of the state. But this was not just a division between the political left and right wings. The depression* of the 1930s had convinced Conservative* politicians such as future Prime Minister Harold Macmillan* that a middle way between left and right was needed. In 1938 Macmillan even published The MiddleWay, in which he proposed a minimum wage and insurance for the unemployed. The Road was shaped by this sense of the necessity for agreement between left and right. Hayek was addressing the book “to the socialists of all parties.” Like fellow Austrian economist Ludwig von Mises,* Hayek wasn’t sure it was possible to construct a society comprised of some elements of central planning and some of free markets.

In addition to von Mises, Hayek was also influenced by the philosopher Karl Popper,* whose 1945 book The Open Society and Its Enemies developed similar themes to The Road to Serfdom. According to Canadian philosopher Calvin Hayes, who has compared and contrasted the ideas of both men, Popper was interested in “what he later called ‘objective knowledge’” and Hayek was “concerned with subjective knowledge and how it affects economic authors.”² Popper believed knowledge was objective in the sense that it represented some kind of truth. Hayek, on the other hand, believed human perceptions of the objective world were by their nature incomplete. But both were concerned with how society wanted to limit the level of freedom within it. In the words of British philosopher Norman P. Berry, “the Great Society—that is Hayek’s name for Popper’s Open Society—is characterized by a very high level of abstraction of its rules. An abstract rule could be ‘political freedom’ or ‘human rights.’ In comparison, the rules of a primitive society are specific and concrete—you must not steal, for instance.”³ You could argue, then, that The Road to Serfdom and The Open Society and Its Enemies are very similar to each other and came from the same intellectual environment. When Popper received a copy of The Road to Serfdom he wrote to Hayek: “You were driven by fundamentally the same experience which made me write my book.”⁴

People who were disillusioned with the idea of socialism* had focused on the Soviet Union, although it was mostly journalists who were looking into the subject. People would not start writing about abandoning socialism, however, until during and after World War II,* notably with the 1941 publication of Darkness at Noon by the Hungarian émigré and playwright Arthur Koestler* and with George Orwell’s* novels Animal Farm (1945) and Nineteen Eighty-Four (1949). Hayek’s contribution to the debate follows on from these writings. As a European refugee he wanted to warn a British audience about developments in continental Europe. The Road to Serfdom is part of this tradition, then, but it is also unique in its academic ambition. While Orwell used the power of narrative storytelling to imagine a world where freedom was suppressed, Hayek simply used arguments to make the same points.

According to Hayek’s biographer Alan Ebenstein, The Road to Serfdom was an attempt “to reach beyond his fellow economists to a wider audience of social scientists and intellectuals.”⁵ But it was also an attempt to reach a wider non-intellectual audience of men and women who had taken part in the war effort and to convince them that the idea of planning was wrong. Originally, Hayek had wanted to compare Nazi* Germany with the Soviet Union* to show the similarities between Nazism and socialism. But he was stopped from doing so when the Soviet Union joined the Allies* in the war against Germany in 1941 because such comparisons between the enemy and an ally could jeopardize Britain’s war effort. So Hayek focused on Nazi Germany, even though he thought the Soviet Union was worse “in its suppression of dissenting opinions.”⁶

1 Stephen Kresge, Introduction to F.A. Hayek, Hayek on Hayek: An Autobiographical Dialogue – The Collected Works of F.A. Hayek, ed. Stephen Kresge and Leif Wenar (London: Routledge, 1994), 15.

2 Calvin Hayes, Popper, Hayek and the Open Society (London: Routledge, 2009), 67.

3 Norman P. Barry, Hayek’s Social and Economic Philosophy (London: Macmillan, 1979), 81.

4 Alan Ebenstein, Friedrich Hayek: A Biography (New York: PalgraveMacmillan, 2001), 160.