An Analysis of Friedrich Hayek’s The Road to Serfdom

• Hayek argued that planned economies* produce poor political leaders—that planning is incompatible with the rule of law.*

• He believes that socialist* rule itself depends on undemocratic methods.

• Hayek says people are allowed to fail in a free society, whereas in a society with excessive government control, failure would need to be punished.

Hayek’s book holds together as a coherent and persuasive work, with all of his secondary ideas that are there adding weight to his main theory. In general, Hayek’s ideas do not follow one from another—they stand alone—so it isn’t vital to understand his secondary ideas to absorb the central idea. Still, the richness of Hayek’s overall critique of socialism is that it is built on all of his smaller attacks.

The Road to Serfdom tackles a secondary idea that planned societies produce the worst kind of political leaders. This is because socialism needs power to be centralized if it is to exercise authority. Hayek believes this creates a system with “a degree of dependency scarcely distinguished from slavery.”¹ It is a system where the leaders “must create power—power over men wielded by other men—of a magnitude never before known.”² Hayek also looks at how incompatible planning* is with the Anglo-Saxon idea of the rule of law. He defines the rule of law as a set of “rules fixed and announced beforehand.” Contrary to this, planning would, he believes, create a system of arbitrary—or seemingly random—policies that are constantly changing to fit the needs of the government.³

“We were the first to assert that the more complicated the form assumed by civilization, the more restricted the freedom of the individual must become.”

Benito Mussolini, Grand Fascist Council Report

Hayek’s secondary ideas help to back up his main argument that planned societies lead to freedom being eroded. The first two of these secondary ideas—that planned societies produce abusive leaders and are incompatible with the rule of law—come from Hayek’s own intellectual background. At the University of Vienna, he witnessed both academic purges and the erosion of the rule of law by political groups, and became a strong defender of the idea of having established rules that could not be challenged. Both of these are expressed in a clear and direct way in order to underline the book’s main message.

In his discussion of what it takes to be a leader in planned economies, Hayek also claims that socialist rule requires undemocratic methods: “The old socialist parties were inhibited by their democratic ideals; they did not possess the ruthlessness required for the performance of their chosen task.”⁴ In order for socialist regimes to work properly, according to Hayek, “the question can no longer be on what do a majority of the people agree but what the largest single group is whose members agree sufficiently to make unified direction of all affairs possible.” So the logic of rule in a socialist regime is back to front: rather than reaching a compromise on the issues, leaders must find a leadership group in which compromise is unnecessary.

Hayek says this attracts poor leaders to socialist regimes for three reasons. First, people who are more intelligent will understand the idea and value of many and varied opinions, and so “if we wish to find a high degree of uniformity in outlook, we have to descend to the regions of lower moral and intellectual standards.”Second, increasing the size of the group requires converting others to a “simple creed,” which will attract the “docile and gullible.”⁵ Finally, Hayek argues that “it seems to be easier for people to agree on a negative program,” and so socialist organizations must build on the exploitation of human weakness rather than on a positive vision.⁶

Hayek’s argument that socialism is incompatible with the rule of law relies on a similar logic. To him, the rule of law is defined as “the absence of legal privileges of particular people designated by authority.” It protects citizens from “arbitrary government” of the kind defined by the Nazi* regime.⁷ When governments have to plan for everything in the economy—for example, how many pigs to raise—they must make decisions that balance the interests of multiple groups in society, and this necessarily interferes with the rule of law.

There is no real reason to reinterpret The Road to Serfdom today. The major theme of the text—that excessive government planning endangers freedom in society and therefore the existence of democracy—has stood the test of time and can be applied in a modern context. But there are three areas of the book (Chapters 1–7 and 9) that have been neglected, where Hayek discusses security and freedom, material conditions and ideal ends, and the prospects of an international order.

On the subject of security and freedom, Hayek expresses support for “some minimum of food, shelter, and clothing, sufficient to preserve health and the capacity to work” for everyone.⁸ But he rejects demands for greater social security, arguing that this would work as an obstacle to people’s freedom of employment. He backs this up with a quotation from the twentieth-century German philosopher William Roepke: “The last resort of a competitive economy is the bailiff, the ultimate sanction of a planned economy is the hangman.”⁹ By this he means that in a free society, people are allowed to fail, while in a society that is not free, the government would have to punish failure. In other words, in order for a society to be truly free, the institutions of that society must ensure that a certain amount of the material well-being of its citizens is left up to circumstance and chance, and is not prescribed by excessive social security.

With reference to material conditions and society’s ideal ends, Hayek wanted “to defend the ideals which our enemies attack.” He believed that supporters of what he called the “traditions which have made England and America countries of free and upright, tolerant and independent, people”—people who believe in individual liberty and free enterprise—must defend themselves against “new totalitarian* ideas.”¹⁰ Hayek urges his readers to maintain an “unwavering faith” in this “traditional” way of life and not to compromise.

Hayek also wrote about the international order and its prospects in the years after World War II: “In no other field has the world yet paid so dearly for the abandonment of nineteenth-century liberalism.”¹¹ This is because international relations at this time looked like they would depend more and more on increased government planning. Hayek warned that “we must not believe that we can at one stroke create a permanent organisation which will make all wars in any part of the world entirely impossible.”¹² Here it is likely that he was referring to the United Nations, established in 1945 to promote international cooperation.

1 F. A. Hayek, The Road to Serfdom: Texts and Documents – The Definitive Edition, ed. Bruce Caldwell (Chicago, IL: Chicago University Press, 2008), 166.

3 F. A. Hayek, The Road to Serfdom—Condensed Version (Reader’s Digest, 1999), 57.