The Road to Serfdom

by Friedrich A. Hayek

As the coercive power of the state will alone decide who is to have what, the only power worth having will be a share in the exercise of this directing power.

Who plans whom, who directs and dominates whom, who assigns to other people their station in life, and who is to have his due allotted by others?

The contrast between a liberal and a totally planned system is characteristically illustrated by the common complaints of Nazis and socialists of the “artificial separations of economics and politics” and by their equally common demand for the dominance of politics over economics.

But the alternative is not merely that there should be only one power but that this single power, the ruling group, should have control over all human ends and particularly that it should have complete power over the position of each individual in society.

There is only one general principle, one simple rule which would indeed provide a definite answer to all these questions: equality, complete and absolute equality of all individuals in all those points which are subject to human control.

No socialist movement which aimed at complete equality has ever gained substantial support.

Not equality in the absolute sense but “greater equality” is the only goal which is seriously aimed at.

While agreement on complete equality would answer all the problems of merit the planner must answer, the formula of the approach to greater equality answers practically none.

All it tells us in effect is to take from the rich as much as we can. But, when it comes to the distribution of the spoils, the problem is the same as if the formula of “greater equality” had never been conceived.

But there are few socialists today who believe that in a socialist society the output of each industry would be entirely shared by the workers of that industry; for this would mean that workers in industries using a great deal of capital would have a much larger income than those in industries using little capital, which most socialists would regard as very unjust.

This means, however, that he will necessarily exercise direct control over the conditions of the different people.

And although, no doubt, there would be some attempt at standardization by creating categories, the necessity of discrimination between individuals would remain the same, whether it were exercised by fixing their individual incomes or by allocating them to particular categories.

Then it soon becomes the one burning question which of the different sets of ideals shall be imposed upon all by making the whole resources of the country serve it.

In the tug-of-war between the various pressure groups which arises at this stage, it is by no means necessary that the interests of the poorest and most numerous groups should prevail.

Socialist theory and socialist tactics, even where they have not been dominated by Marxist dogma, have been based everywhere on the idea of a division of society into two classes with common but mutually conflicting interests: capitalists and industrial workers.

The means which the old socialist parties had successfully employed to secure the support of one occupational group—the raising of their relative economic position—cannot be used to secure the support of all. There are bound to arise rival socialist movements that appeal to the support of those whose relative position is worsened.

The old socialist leaders, who had always regarded their parties as the natural spearhead of the future general movement toward socialism, found it difficult to understand that with every extension in the use of socialist methods the resentment of large poor classes should turn against them.

The movement was able to attract all those who, while they agreed on the desirability of the state controlling all economic activity, disagreed with the ends for which the aristocracy of the industrial workers used their political strength.

In a country where the sole employer is the State, opposition means death by slow starvation. The old principle: who does not work shall not eat, has been replaced by a new one: who does not obey shall not eat.

It will be well to contrast at the outset the two kinds of security: the limited one, which can be achieved for all, and which is therefore no privilege but a legitimate object of desire; and absolute security, which in a free society cannot be achieved for all and which ought not to be given as a privilege—

there is particularly the important question whether those who thus rely on the community should indefinitely enjoy all the same liberties as the rest.

Many economists hope, indeed, that the ultimate remedy may be found in the field of monetary policy, which would involve nothing incompatible even with nineteenth-century liberalism.

Certainty of a given income can, however, not be given to all if any freedom in the choice of one’s occupation is to be allowed.

That security of an invariable income can be provided for all only by the abolition of all freedom in the choice of one’s employment is easily shown.

But if the changes in the distribution of men between different employments, which are constantly necessary in any society, can no longer be brought about by pecuniary “rewards” and “penalties” (which have no necessary connection with subjective merit), they must be brought about by direct orders.

As it is not he who makes the gain or suffers the loss dependent on his moving or not moving, the choice must be made for him by those who control the distribution of the available income.

The problem is, of course, even more important because in the world as it is men are, in fact, not likely to give their best for long periods unless their own interests are directly involved.

The application of the engineering technique to a whole nation— and this is what planning means—“raises problems of discipline which are hard to solve,”

As neither the risk nor the gain is his, it cannot be his personal judgment, but whether he does what he ought to have done according to some established rule, which must decide.

This security is, however, inseparable from the restrictions on liberty and the hierarchical order of military life—it is the security of the barracks.

That proposals of this sort have in the past proved so little acceptable is due to the fact that those who are willing to surrender their freedom for security have always demanded that if they give up their full freedom it should also be taken from those not prepared to do so. For this claim it is difficult to find a justification.

The reason for this is that with every grant of complete security to one group the insecurity of the rest necessarily increases.

And if, as has become increasingly true, in each trade in which conditions improve, the members are allowed to exclude others in order to secure to themselves the full gain in the form of higher wages or profits, those in the trades where demand has fallen have nowhere to go, and every change becomes the cause of large unemployment.

In consequence, instead of prices, wages, and individual incomes, it is now employment and production which have become subject to violent fluctuations.

Thus, the more we try to provide full security by interfering with the market system, the greater the insecurity becomes; and, what is worse, the greater becomes the contrast between the security of those to whom it is granted as a privilege and the ever increasing insecurity of the underprivileged.

The younger generation of today has grown up in a world in which in school and press the spirit of commercial enterprise has been represented as disreputable and the making of profit as immoral, where to employ a hundred people is represented as exploitation but to command the same number as honorable.

If we want to retain this, we must regain the conviction on which the rule of liberty in the Anglo-Saxon countries has been based and which Benjamin Franklin expressed in a phrase applicable to us in our lives as individuals no less than as nations: “Those who would give up essential liberty to purchase a little temporary safety deserve neither liberty nor safety.”10

Just as the democratic statesman who sets out to plan economic life will soon be confronted with the alternative of either assuming dictatorial powers or abandoning his plans, so the totalitarian dictator would soon have to choose between disregard of ordinary morals and failure.

The chance of imposing a totalitarian regime on a whole people depends on the leader’s first collecting round him a group which is prepared voluntarily to submit to that totalitarian discipline which they are to impose by force upon the rest.

others had already learned the lesson that in a planned society 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; or, if no such group large enough to enforce its views exists, how it can be created and who will succeed in creating it.

There are three main reasons why such a numerous and strong group with fairly homogeneous views is not likely to be formed by the best but rather by the worst elements of any society.

In the first instance, it is probably true that, in general, the higher the education and intelligence of individuals become, the more their views and tastes are differentiated and the less likely they are to agree on a particular hierarchy of values.

Here comes in the second negative principle of selection: he will be able to obtain the support of all the docile and gullible, who have no strong convictions of their own but are prepared to accept a ready-made system of values if it is only drummed into their ears sufficiently loudly and frequently.

It seems to be almost a law of human nature that it is easier for people to agree on a negative program—on the hatred of an enemy, on the envy of those better off— than on any positive task.

That in Germany it was the Jew who became the enemy until his place was taken by the “plutocracies” was no less a result of the anticapitalist resentment on which the whole movement was based than the selection of the kulak in Russia.

The fact

that German anti-Semitism and anticapitalism spring from the same root is of great importance for the understanding of what has happened there, but this is rarely grasped by foreign observers.

whether collectivism can exist in any form other than that of some kind of particularism, be it nationalism, racialism, or classism.

They all regard the capital as belonging not to humanity but to the nation—though even within the nation few would dare to advocate that the richer regions should be deprived of some of “their” capital equipment in order to help the poorer regions.

One of the inherent contradictions of the collectivist philosophy is that, while basing itself on the humanistic morals which individualism has developed, it is practicable only within a relatively small group.