Sunday, April 4, 2010

Book Review: The Road to Serfdom Part 1

Book Review: The Road to Serfdom
by F.A. Hayek

Since this review will be focusing on a classic my goal will be to present what I feel I gained from reading it more than to try to give a truly balanced review of it. Also, this review will be split into two parts. In the first, I will give a basic overview of the high points of the work and what I felt the good parts were and my view of its contributions to political and economic thought. The second part will be a critique of the work and the weaknesses I see in it. To some extent this second part will be unfair, critiquing a 70 year old book is rather too easy. However, the book has continued to be influential despite many elements that focus narrowly on the time period contemporary to it and those using it too often seem uncritical of the difficulties of applying it to the modern era. Also, Hayek himself noted in his 1976 forward that he saw much of it applying to the welfare state, which the book does not obviously apply to, so this makes me feel that critiquing the applicability of parts of it to modern political debates is fair game.

So on to the text itself. The major theme of the book is that economic planning erodes the realm of individual action and threatens to lead to totalitarianism (Hayek is careful to specify that planning does not inevitably lead to totalitarianism just that it moves society in this direction but not in a deterministic fashion). In the starting chapters he describes the contrast between individualism and collectivism and collectivism's role in both the developments in Nazi Germany and to avowedly socialist societies such as the Soviet Union. He also discusses how planning is incompatible with democracy and with time erodes democratic institutions as well as the difference between planning and the rule of law and why the rule of law is so essential to the proper functioning of both the economy and democracy. Other sections detail the links between planning and totalitarianism, why this results in bad leadership, the need for propaganda in planned societies, and he ends with a discussion of the links between material conditions and achieving other ends and the prospects for international order after the war.

That's enough for a short summary. The strongest parts are a discussion of why planned societies don't work. His observations here are quite strong, though they are of relatively little importance to modern discussions. The collapse of the Soviet Union proved these points better than words ever could. Of more interest is the chapter on planning and the rule of law. Here he draws a sharp distinction between laws meant to favor particular groups with those meant to establish rules of the game whose long run outcomes are unpredictable. Rules should apply to general types of situations and not to particular groups. In addition to the distinctions about the rule of law, another key point Hayek makes is the reasons that he favors decentralization. He regards the complexity of modern society not as an argument for planning but instead a factor making decentralization necessary. Centralized authority cannot gain enough information to plan effectively requiring that the market and competition be mobilized to allow for those with sufficient information to be the ones making key decisions. Another interesting point, which I would have missed if not for Bruce Caldwell's introduction in my edition, is Hayek's observations about the particular dangers that war poses to civil liberties. While not the only person to have expressed these views, Hayek links war to the growth of the state which can pose a longer term threat to liberal society even after the war's conclusion.

In addition to these ideas, I came across a few ideas that surprised me due to references I've heard about the book elsewhere. The first is his support for some degree of social insurance which he regards as consistent with individualism and democracy if it does not favor particular groups and accords with his views on the rule of law (148). He also notes that there are limitations to the fields where the conditions are such that private competition cannot sufficiently regulate them, such as pollution (p.87)

This has already gotten quite long so I will cut it off here rather abruptly. Tomorrow I will take up some of the criticisms I have of the work.

1 comment:

  1. That's a useful review. So far, it sounds lot like Milton Friedman, which isn't surprising.