Revisiting The Road to Serfdom | Part II : Hybridized Economies and Squabbling Planners

Are freedom and organization compatible principles? In other words, can competitive capitalism and centralized planning prosper simultaneously? These questions present, in a nutshell, the overarching theme of the third chapter of The Road to Serdom (1) titled “individualism and collectivism.”

Hayek begins by informing the reader that there are many socialists who are all but purely devoted to the ideals of socialism, seldom paying any heed to the methods or costs involved in its materialization, and often expressing a sort of “whatever the cost” attitude with respect to its grandiose aims. I am reminded of Orwell, who almost perfectly exemplifies this spirit in writing : “Socialism at least ensures our getting enough to eat even if it deprives us of everything else.” (2) Suffice it to say, from this perspective, the means (however coercive) invariably justify the ends.

Those opposed to socialism, on the contrary, are generally very supportive of its aims (such as greater equality). What pushes them to reject or even abhor the concept is largely a conflict which they sense would arise between the methods proposed to forward socialist ends and some of their most treasured values (such as freedom). Adam Smith highlighted that governments pursuing such ends, in order to “support themselves”, are “obliged to be oppressive and tyrannical.” (3) Adherents of this view may additionally posit that there are alternative methods of achieving specified ends which do not necessitate a reduction of freedom.

One dilemma all socialists must inevitably face is that of participating in the determination of a set of generally acceptable political aims. Hayek points to the conspicuous fact that socialists are by in large united in their contempt for competitive markets, however, they don’t appear to be on the same page about much else. This can easily lead to unceasing disputes among socialists regarding the nature of the change they hope to engender.

Hayek concludes the chapter by addressing the prevalent misconception that freedom and organization can successfully coexist, writing :

“Both competition and central direction become poor and inefficient tools if they are incomplete; they are alternative principles used to solve the same problem, and a mixture of the two means that neither will really work and that the result will be worse than if either system had been consistently relied upon.”

Dylan Shetler is a freelancing writer and Christian apologist. You can follow him on Twitter @shetler_dylan

References :

(1) (pp. 32)

(2) (pp. 154)

(3) Quoted in Dugald Stewart’s Biographical Memoir of Adam Smith from a memorandum written by Smith in 1755 [A reprint of Stewart’s 1793 memoir was released by Augustus M. Kelly in 1966, and the quotation from Smith may be found on p. 68.—Ed.]

(4) (pp. 42)


    1. I’ll second that! I sense that Hayek’s works aren’t receiving half the attention they deserve (especially, as you pointed out, during this time). Freedom is definitely being suppressed beyond reason! It’s frightening to contemplate how much longer all this could last.

      Liked by 2 people

  1. The “third-way” approach is treacherous cocktail for sure. Invariably it tends to lead to the increase growth and consolidation of government. As you note, something that both Hayek and Mises conveys eloquently.

    Once the government measures fail. We need more government action to correct for our previous errors.

    Liked by 1 person

      1. The million dollar question is how do we determine how much government is necessary?

        One of the better solutions ( I am not a fan of government at all) I have come across is probably Coase’s theorem. Even in applications where I disagree with the outcome it seems to be a rational approach.

        Enrique over at Prior Probability blogs relatively frequently about the theories of Ronald Coase.

        Liked by 1 person

      2. That’s undeniably the big question. I’ll make sure to allocate some time to evaluate Coase’s work, since It specifically relates to some of the questions I am currently pondering.

        Also, I am a frequenter of Enrique’s blog. He has both amusing and insightful content.

        Liked by 1 person

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