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Market socialists are critics of capitalism, to be sure, but they accept as a starting premise that perfectly competitive markets have certain desirable efficiency characteristics.
One of his key complaints was that Lange had neglected to say how often prices would need to be adjusted in his proposed system. This was an important issue, for even with relatively quick adjustments (something that Hayek thought would be difficult to sustain) Hayek maintained that an extensive system of price fixing would still always be playing catch-up relative to the adjustments that would take place in a market system, and so would be less efficient.
But I have yet to find any socialist party which is willing even to consider using competition as the method for organizing economic activity, and until this is the case I cannot see that anyone but the specialist need be bothered with the objections to those ingenious schemes.
The ideals which I examined had long before come down to earth, and even their most enthusiastic adherents had already seen concretely some of the difficulties and unlooked-for results which their application produced.
It is now even widely recognized that democratic socialism is a very precarious and unstable affair, riven with internal contradictions and everywhere producing results most distasteful to many of its advocates.
Whatever merits this book possesses consist not in the reiteration of this thesis but in the patient and detailed examination of the reasons why economic planning will produce such unlooked-for results and of the process by which they come about.
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.
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.
am still puzzled why those in the United States who truly believe in liberty should not only have allowed the left to appropriate this almost indispensable term but should even have assisted by beginning to use it themselves as a term of opprobrium.
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.
“socialism can be put into practice only by methods of which most socialists disapprove”
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.
Is there a greater tragedy imaginable than that, in our endeavor consciously to shape our future in accordance with high ideals, we should in fact unwittingly produce the very opposite of what we have been striving for?
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.
Democracy and socialism have nothing in common but one word: equality. But notice the difference: while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude.”
The demand for the new freedom was thus only another name for the old demand for an equal distribution of wealth.
Socialism achieved and maintained by democratic means seems definitely to belong to the world of utopias.”
“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.
Fascism is the stage reached after communism has proved an illusion, and it has proved as much an illusion in Stalinist Russia as in pre-Hitler Germany.”
in social evolution nothing is inevitable but thinking makes it so.
But it must be admitted that it is possible that, by compulsory standardization or the prohibition of variety beyond a certain degree, abundance might be increased in some fields more than sufficiently to compensate for the restriction of the choice of the consumer.
And we all think that our personal order of values is not merely personal but that in a free discussion among rational people we would convince the others that ours is the right one.
From the saintly and single-minded idealist to the fanatic is often but a step.
Whether his interests center round his own physical needs, or whether he takes a warm interest in the welfare of every human being he knows, the ends about which he can be concerned will always be only an infinitesimal fraction of the needs of all men.
They are not asked to act where they can agree, but to produce agreement on everything—the whole direction of the resources of the nation.
The expedient of delegation cannot really remove the causes which make all the advocates of comprehensive planning so impatient with the impotence of democracy.
The belief is becoming more and more widespread that, if things are to get done, the responsible authorities must be freed from the fetters of democratic procedure.
is not that dictatorship must inevitably extirpate freedom but rather that planning leads to dictatorship because dictatorship is the most effective instrument of coercion and the enforcement of ideals and, as such, essential if central planning on a large scale is to be possible.
A true “dictatorship of the proletariat,” even if democratic in form, if it undertook centrally to direct the economic system, would probably destroy personal freedom as completely as any autocracy has ever done.
Nothing distinguishes more clearly conditions in a free country from those in a country under arbitrary government than the observance in the former of the great principles known as the Rule of Law. Stripped of all technicalities, this means that government in all its actions is bound by rules fixed and announced beforehand—rules which make it possible to foresee with fair certainty how the authority will use its coercive powers in given circumstances and to plan one’s individual affairs on the basis of this knowledge.
General rules, genuine laws as distinguished from specific orders, must therefore be intended to operate in circumstances which cannot be foreseen in detail, and, therefore, their effect on particular ends or particular people cannot be known beforehand.
Where the precise effects of government policy on particular people are known, where the government aims directly at such particular effects, it cannot help knowing these effects, and therefore it cannot be impartial. It must, of necessity, take sides, impose its valuations upon people and, instead of assisting them in the advancement of their own ends, choose the ends for them.
There can be no doubt that planning necessarily involves deliberate discrimination between particular needs of different people, and allowing one man to do what another must be prevented from doing.
To produce the same result for different people, it is necessary to treat them differently.
To give different people the same objective opportunities is not to give them the same subjective chance.
Often the content of the rule is indeed of minor importance, provided the same rule is universally enforced. To revert to a former example: it does not matter whether we all drive on the left- or on the right-hand side of the road so long as we all do the same. The important thing is that the rule enables us to predict other people’s behavior correctly, and this requires that it should apply to all cases—even if in a particular instance we feel it to be unjust.
But to call private property as such, which all can acquire under the same rules, a privilege, because only some succeed in acquiring it, is depriving the word “privilege” of its meaning.
Economic control is not merely control of a sector of human life which can be separated from the rest; it is the control of the means for all our ends.
Nothing makes conditions more unbearable than the knowledge that no effort of ours can change them; and even if we should never have the strength of mind to make the necessary sacrifice, the knowledge that we could escape if we only strove hard enough makes many otherwise intolerable positions bearable.
While the popular movement still profits by this false belief, the claim that a planned economy would produce a substantially larger output than the competitive system is being progressively abandoned by most students of the problem.
It is indisputable that if we want to secure a distribution of wealth which conforms to some predetermined standard, if we want consciously to decide who is to have what, we must plan the whole economic system. But the question remains whether the price we should have to pay for the realization of somebody’s ideal of justice is not bound to be more discontent and more oppression than was ever caused by the much-abused free play of economic forces.
It is significant that one of the commonest objections to competition is that it is “blind.” It is not irrelevant to recall that to the ancients blindness was an attribute of their deity of justice.
To believe that the power which is thus conferred on the state is merely transferred to it from others is erroneous. It is a power which is newly created and which in a competitive society nobody possesses.
And who will deny that a world in which the wealthy are powerful is still a better world than one in which only the already powerful can acquire wealth?
Once it becomes increasingly true, and is generally recognized, that the position of the individual is determined not by impersonal forces, not as a result of the competitive effort of many, but by the deliberate decision of authority, the attitude of the people toward their position in the social order necessarily changes.
There will always exist inequalities which will appear unjust to those who suffer from them, disappointments which will appear unmerited, and strokes of misfortune which those hit have not deserved. But when these things occur in a society which is consciously directed, the way in which people will react will be very different from what it is when they are nobody’s conscious choice.
In a planned society we shall all know that we are better or worse off than others, not because of circumstances which nobody controls, and which it is impossible to foresee with certainty, but because some authority wills it.
When a person’s income is guaranteed, he can neither be allowed to stay in his job merely because he likes it nor to choose what other work he would like to do. 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.
We must not deceive ourselves into believing that all good people must be democrats or will necessarily wish to have a share in the government.
There are strong reasons for believing that what to us appear the worst features of the existing totalitarian systems are not accidental by-products but phenomena which totalitarianism is certain sooner or later to produce.
