The Road to Serfdom

by Friedrich A. Hayek

He seemed particularly worried about being misinterpreted. Thus in a Chicago newspaper under a banner that read in part “Friedrich Hayek Comments on Uses to Which His Book Has Been Put” he stated, “I was at first a bit puzzled and even alarmed when I found that a book written in no party spirit and not meant to support any popular philosophy should have been so exclusively welcomed by one party and so thoroughly excoriated by the other.”68 He repeatedly emphasized in his talks before business groups that he was not against government intervention per se: “I think what is needed is a clear set of principles which enables us to distinguish between the legitimate fields of government activities and the illegitimate fields of government activity. You must cease to argue for and against government activity as such.”69

John Maynard Keynes read the book on the way to the Bretton Woods conference, and delighted Hayek when he wrote him that it was “a grand book” and that “morally and philosophically I find myself in agreement with virtually the whole of it; and not only in agreement with it, but in a deeply moved agreement.”86 Keynes went on to say, though, that “You admit here and there that it is a question of knowing where to draw the line. You agree that the line has to be drawn somewhere, and that the logical extreme is not possible. But you give us no guidance whatever as to where to draw it.”87

As he succinctly put it, “socialism can be put into practice only by methods which most socialists disapprove.”104 Even if it were to begin as a “liberal socialist” experiment (none of the real-world cases have ever done so, one might add), full-scale planning requires that the planning authorities take over all production decisions; to be able to make any decisions at all, they would need to exercise more and more political control. If one tries to create a truly planned society, one will not be able to separate out control of the economy from political control. This was Hayek’s logical argument against planning, one that he had succinctly articulated in 1939 in “Freedom and the Economic System.”

The proper way to evaluate Hayek’s logical thesis is to ask, How many actually existing, real-world political systems have fully nationalized their means of production and preserved both some measure of economic efficiency and freedom of choice over goods and occupations? Count them up. Then compare the number with those that nationalized their means of production and turned to extensive planning and control, and with it the curtailment of individual liberties. If one agrees that this is the right test, Hayek’s position is fully vindicated: full socialism can only be put into practice by using methods of which most socialists would disapprove.

I can discover no reason why the kind of society which seems to me desirable should offer greater advantages to me than to the great majority of the people of my country.

Opinion moves fast in the United States, and even now it is difficult to remember how comparatively short a time it was before The Road to Serfdom appeared that the most extreme kind of economic planning had been seriously advocated and the model of Russia held up for imitation by men who were soon to play an important role in public affairs. It would be easy enough to give chapter and verse for this, but it would be invidious now to single out individuals. Be it enough to mention that in 1934 the newly established National Planning Board11 devoted a good deal of attention to the example of planning provided by these four countries: Germany, Italy, Russia, and Japan. Ten years later we had of course learned to refer to these same countries as “totalitarian,” had fought a long war with three of them, and were soon to start a “cold war” with the fourth.

That hodgepodge of ill-assembled and often inconsistent ideals which under the name of the Welfare State has largely replaced socialism as the goal of the reformers needs very careful sorting out if its results are not to be very similar to those of full-fledged socialism. This is not to say that some of its aims are not both practicable and laudable. But there are many ways in which we can work toward the same goal, and in the present state of opinion there is some danger that our impatience for quick results may lead us to choose instruments which, though perhaps more efficient for achieving the particular ends, are not compatible with the preservation of a free society.

I hope that at least in the quieter atmosphere of the present it will be received as what it was meant to be, not as an exhortation to resistance against any improvement or experimentation, but as a warning that we should insist that any modification in our arrangements should pass certain tests (described in the central chapter on the Rule of Law) before we commit ourselves to courses from which withdrawal may be difficult.

I use throughout the term “liberal” in the original, nineteenth-century sense in which it is still current in Britain. In current American usage it often means very nearly the opposite of this. It has been part of the camouflage of leftish movements in this country, helped by the muddleheadedness of many who really believe in liberty, that “liberal” has come to mean the advocacy of almost every kind of government control.

It is true, of course, that in the struggle against the believers in the all-powerful state the true liberal must sometimes make common cause with the conservative, and in some circumstances, as in contemporary Britain, he has hardly any other way of actively working for his ideals. But true liberalism is still distinct from conservatism, and there is danger in the two being confused.14 Conservatism, though a necessary element in any stable society, is not a social program; in its paternalistic, nationalistic, and power-adoring tendencies it is often closer to socialism than true liberalism; and with its traditionalistic, anti-intellectual, and often mystical propensities it will never, except in short periods of disillusionment, appeal to the young and all those others who believe that some changes are desirable if this world is to become a better place. A conservative movement, by its very nature, is bound to be a defender of established privilege and to lean on the power of government for the protection of privilege. The essence of the liberal position, however, is the denial of all privilege, if privilege is understood in its proper and original meaning of the state granting and protecting rights to some which are not available on equal terms to others.

Perhaps I should also remind the reader that I have never accused the socialist parties of deliberately aiming at a totalitarian regime or even suspected that the leaders of the old socialist movements might ever show such inclinations. What I have argued in this book, and what the British experience convinces me even more to be true, is that the unforeseen but inevitable consequences of socialist planning create a state of affairs in which, if the policy is to be pursued, totalitarian forces will get the upper hand. I explicitly stress that “socialism can be put into practice only by methods of which most socialists disapprove” and even add that in this “the old socialist parties were inhibited by their democratic ideals” and that “they did not possess the ruthlessness required for the performance of their chosen task.”

The most representative example of British criticism of the book from a left-wing point of view is probably Mrs. Barbara Wootton’s courteous and frank study, Freedom under Planning, op. cit. It is often quoted in the United States as an effective refutation of my argument, though I cannot help feeling that more than one reader must have gained the impression that, as one American reviewer expressed it, “it seems substantially to confirm Hayek’s thesis.” See Chester I. Barnard, “Review of Freedom under Planning,” Southern Economic Journal, vol. 12, January 1946, p. 290. 6 [Hayek visited the United States as a student from March 1923 until May 1924. —Ed.]

[For more on the distinction between conservatism and liberalism, see F. A. Hayek, “Why I Am Not a Conservative,” postscript to The Constitution of Liberty, op. cit., pp. 397–411. —Ed.]

Alexis de Tocqueville, Democracy in America,

In the last twenty years, I have, I believe, learned much about the problems discussed in this book, though I don’t think I ever reread the book during this time. Having done so now for the purpose of this Preface, I feel no longer apologetic, but for the first time am rather proud of it—and not least of the insight which made me dedicate it “To the Socialists of All Parties.”

Where I now feel I was wrong in this book is chiefly in that I rather under-stressed the significance of the experience of communism in Russia—a fault which is perhaps pardonable when it is remembered that when I wrote, Russia was our wartime ally—and that I had not wholly freed myself from all the current interventionist superstitions, and in consequence still made various concessions which I now think unwarranted.

The supreme tragedy is still not seen that in Germany it was largely people of good will, men who were admired and held up as models in the democratic countries, who prepared the way for, if they did not actually create, the forces which now stand for everything they detest.

Few are ready to recognize that the rise of fascism and naziism was not a reaction against the socialist trends of the preceding period but a necessary outcome of those tendencies. This is a truth which most people were unwilling to see even when the similarities of many of the repellent features of the internal regimes in communist Russia and National Socialist Germany were widely recognized. As a result, many who think themselves infinitely superior to the aberrations of naziism, and sincerely hate all its manifestations, work at the same time for ideals whose realization would lead straight to the abhorred tyranny.

Have not the parties of the Left as well as those of the Right been deceived by believing that the National Socialist party was in the service of the capitalists and opposed to all forms of socialism? How many features of Hitler’s system have not been recommended to us for imitation from the most unexpected quarters, unaware that they are an integral part of that system and incompatible with the free society we hope to preserve?

Mere hatred of everything German instead of the particular ideas which now dominate the Germans is, moreover, very dangerous, because it blinds those who indulge in it against a real threat. It is to be feared that this attitude is frequently merely a kind of escapism, caused by an unwillingness to recognize tendencies which are not confined to Germany and by a reluctance to re-examine, and if necessary to discard, beliefs which we have taken over from the Germans and by which we are still as much deluded as the Germans were.

We are ready to accept almost any explanation of the present crisis of our civilization except one: that the present state of the world may be the result of genuine error on our own part and that the pursuit of some of our most cherished ideals has apparently produced results utterly different from those which we expected.

How sharp a break not only with the recent past but with the whole evolution of Western civilization the modern trend toward socialism means becomes clear if we consider it not merely against the background of the nineteenth century but in a longer historical perspective. We are rapidly abandoning not the views merely of Cobden and Bright, of Adam Smith and Hume, or even of Locke and Milton,5 but one of the salient characteristics of Western civilization as it has grown from the foundations laid by Christianity and the Greeks and Romans. Not merely nineteenth- and eighteenth-century liberalism, but the basic individualism inherited by us from Erasmus and Montaigne, from Cicero and Tacitus, Pericles and Thucydides, is progressively relinquished.6

Individualism has a bad name today, and the term has come to be connected with egotism and selfishness.7 But the individualism of which we speak in contrast to socialism and all other forms of collectivism has no necessary connection with these. Only gradually in the course of this book shall we be able to make clear the contrast between the two opposing principles. But the essential features of that individualism which, from elements provided by Christianity and the philosophy of classical antiquity, was first fully developed during the Renaissance and has since grown and spread into what we know as Western civilization—are the respect for the individual man qua man, that is, the recognition of his own views and tastes as supreme in his own sphere, however narrowly that may be circumscribed, and the belief that it is desirable that men should develop their own individual gifts and bents.

There is nothing in the basic principles of liberalism to make it a stationary creed; there are no hard-and-fast rules fixed once and for all. The fundamental principle that in the ordering of our affairs we should make as much use as possible of the spontaneous forces of society, and resort as little as possible to coercion, is capable of an infinite variety of applications.

The attitude of the liberal toward society is like that of the gardener who tends a plant and, in order to create the conditions most favorable to its growth, must know as much as possible about its structure and the way it functions.

Because of the growing impatience with the slow advance of liberal policy, the just irritation with those who used liberal phraseology in defense of antisocial privileges, and the boundless ambition seemingly justified by the material improvements already achieved, it came to pass that toward the turn of the century the belief in the basic tenets of liberalism was more and more relinquished. What had been achieved came to be regarded as a secure and imperishable possession, acquired once and for all.

It was no longer a question of adding to or improving the existing machinery but of completely scrapping and replacing it. And, as the hope of the new generation came to be centered on something completely new, interest in and understanding of the functioning of the existing society rapidly declined; and, with the decline of the understanding of the way in which the free system worked, our awareness of what depended on its existence also decreased.

Hayek was more hopeful at this time for the future path of the United States relative to Britain regarding free enterprise. For more on this, see his remarks in “Planning, Science, and Freedom,” Nature, vol. 143, November 15, 1941, pp. 581–82, reprinted as chapter 10 of F. A. Hayek, Socialism and War: Essays, Documents, Reviews, op. cit., p. 219. —Ed.]

[Hayek criticized the view that individualism is necessarily associated with egoism and selfishness in his article, “Individualism: True and False,” op. cit. —Ed.]

The author has made an attempt to trace the beginning of this development in two series of articles on “Scientism and the Study of Society” and “The Counter-Revolution of Science,” which appeared in Economica, 1941–44. [Revisions of these essays appear in The Counter-Revolution of Science: Studies in the Abuse of Reason, op. cit., on pp. 17–182 and 183–363, respectively. —Ed.]

To allay these suspicions and to harness to its cart the strongest of all political motives—the craving for freedom—socialism began increasingly to make use of the promise of a “new freedom.” The coming of socialism was to be the leap from the realm of necessity to the realm of freedom. It was to bring “economic freedom,” without which the political freedom already gained was “not worth having.” Only socialism was capable of effecting the consummation of the age-long struggle for freedom, in which the attainment of political freedom was but a first step. The subtle change in meaning to which the word “freedom” was subjected in order that this argument should sound plausible is important. To the great apostles of political freedom the word had meant freedom from coercion, freedom from the arbitrary power of other men, release from the ties which left the individual no choice but obedience to the orders of a superior to whom he was attached. The new freedom promised, however, was to be freedom from necessity, release from the compulsion of the circumstances which inevitably limit the range of choice of all of us, although for some very much more than for others. Before man could be truly free, the “despotism of physical want” had to be broken, the “restraints of the economic system” relaxed. Freedom in this sense is, of course, merely another name for power4 or wealth. Yet, although the promises of this new freedom were often coupled with irresponsible promises of a great in...

Walter Lippmann has arrived at the conviction that “the generation to which we belong is now learning from experience what happens when men retreat from freedom to a coercive organization of their affairs. Though they promise themselves a more abundant life, they must in practice renounce it; as the organized direction increases, the variety of ends must give way to uniformity. That is the nemesis of the planned society and the authoritarian principle in human affairs.”8

No less significant is the intellectual history of many of the Nazi and Fascist leaders. Everyone who has watched the growth of these movements in Italy10 or in Germany has been struck by the number of leading men, from Mussolini downward (and not excluding Laval and Quisling), who began as socialists and ended as Fascists or Nazis.11 And what is true of the leaders is even more true of the rank and file of the movement. The relative ease with which a young communist could be converted into a Nazi or vice versa was generally known in Germany, best of all to the propagandists of the two parties. Many a university teacher during the 1930s has seen English and American students return from the Continent uncertain whether they were communists or Nazis and certain only that they hated Western liberal civilization. It is true, of course, that in Germany before 1933, and in Italy before 1922, communists and Nazis or Fascists clashed more frequently with each other than with other parties. They competed for the support of the same type of mind and reserved for each other the hatred of the heretic. But their practice showed how closely they are related. To both, the real enemy, the man with whom they had nothing in common and whom they could not hope to convince, is the liberal of the old type. While to the Nazi the communist, and to the communist the Nazi, and to both the socialist, are potential recruits who are made of the right timber, although they have listened to false proph...

The characteristic confusion of freedom with power, which we shall meet again and again throughout this discussion, is too big a subject to be thoroughly examined here. As old as socialism itself, it is so closely allied with it that almost seventy years ago a French scholar, discussing its Saint-Simonian origins, was led to say that this theory of liberty “est à elle seule tout le socialisme” (Paul Janet, Saint-Simon et le Saint-Simonisme [Paris: G. Baillière et cie., 1878], p. 26 n.). The most explicit defender of this confusion is, significantly, the leading philosopher of American left-wingism, John Dewey, according to whom “liberty is the effective power to do specific things” so that “the demand for liberty is demand for power.” See John Dewey, “Liberty and Social Control,” The Social Frontier, vol. 2, November 1935, p. 41.

Eduard Heimann, “The Rediscovery of Liberalism,” Social Research, vol. 8, November 1941, p. 479. It deserves to be recalled in this connection that, whatever may have been his reasons, Hitler thought it expedient to declare in one of his public speeches as late as February, 1941, that “basically National Socialism and Marxism are the same.” Compare the article, “Herr Hitler’s Speech of February 24,” Bulletin of International News (published by the Royal Institute of International Affairs), vol. 18, March 8, 1941, p. 269. [Eduard Heimann (1889–1967) taught at the University of Hamburg from 1925 to 1933, when he fled Germany and took a position at the New School for Social Research in New York. —Ed.]

Before we can progress with our main problem, an obstacle has yet to be surmounted. A confusion largely responsible for the way in which we are drifting into things which nobody wants must be cleared up. This confusion concerns nothing less than the concept of socialism itself. It may mean, and is often used to describe, merely the ideals of social justice, greater equality, and security, which are the ultimate aims of socialism. But it means also the particular method by which most socialists hope to attain these ends and which many competent people regard as the only methods by which they can be fully and quickly attained. In this sense socialism means the abolition of private enterprise, of private ownership of the means of production, and the creation of a system of “planned economy” in which the entrepreneur working for profit is replaced by a central planning body.

Many don't hold as fast to nationalization these days.

We must centrally direct economic activity if we want to make the distribution of income conform to current ideas of social justice. “Planning,” therefore, is wanted by all those who demand that “production for use” be substituted for production for profit. But such planning is no less indispensable if the distribution of incomes is to be regulated in a way which to us appears to be the opposite of just. Whether we should wish that more of the good things of this world should go to some racial élite, the Nordic men, or the members of a party or an aristocracy, the methods which we shall have to employ are the same as those which could insure an equalitarian distribution.

It is probably preferable to describe the methods which can be used for a great variety of ends as collectivism and to regard socialism as a species of that genus. Yet, although to most socialists only one species of collectivism will represent true socialism, it must always be remembered that socialism is a species of collectivism and that therefore everything which is true of collectivism as such must apply also to socialism.

The question is whether for this purpose it is better that the holder of coercive power should confine himself in general to creating conditions under which the knowledge and initiative of individuals are given the best scope so that they can plan most successfully; or whether a rational utilization of our resources requires central direction and organization of all our activities according to some consciously constructed “blueprint.”

It is important not to confuse opposition against this kind of planning with a dogmatic laissez faire attitude. The liberal argument is in favor of making the best possible use of the forces of competition as a means of coordinating human efforts, not an argument for leaving things just as they are. It is based on the conviction that, where effective competition can be created, it is a better way of guiding individual efforts than any other. It does not deny, but even emphasizes, that, in order that competition should work beneficially, a carefully thought-out legal framework is required and that neither the existing nor the past legal rules are free from grave defects.

The successful use of competition as the principle of social organization precludes certain types of coercive interference with economic life, but it admits of others which sometimes may very considerably assist its work and even requires certain kinds of government action. But there is good reason why the negative requirements, the points where coercion must not be used, have been particularly stressed. It is necessary in the first instance that the parties in the market should be free to sell and buy at any price at which they can find a partner to the transaction and that anybody should be free to produce, sell, and buy anything that may be produced or sold at all. And it is essential that the entry into the different trades should be open to all on equal terms and that the law should not tolerate any attempts by individuals or groups to restrict this entry by open or concealed force. Any attempt to control prices or quantities of particular commodities deprives competition of its power of bringing about an effective coordination of individual efforts, because price changes then cease to register all the relevant changes in circumstances and no longer provide a reliable guide for the individual’s actions. This is not necessarily true, however, of measures merely restricting the allowed methods of production, so long as these restrictions affect all potential producers equally and are not used as an indirect way of controlling prices and quantities. Though all such contr...

There are, finally, undoubted fields where no legal arrangements can create the main condition on which the usefulness of the system of competition and private property depends: namely, that the owner benefits from all the useful services rendered by his property and suffers for all the damages caused to others by its use. Where, for example, it is impracticable to make the enjoyment of certain services dependent on the payment of a price, competition will not produce the services; and the price system becomes similarly ineffective when the damage caused to others by certain uses of property cannot be effectively charged to the owner of that property. In all these instances there is a divergence between the items which enter into private calculation and those which affect social welfare; and, whenever this divergence becomes important, some method other than competition may have to be found to supply the services in question.