Hayek's Conception of Socialism as the "Road to Serfdom"

Hayek discusses socialism from two perspectives: as an ideal of social justice or as a method for achieving goals – equality and justice. He perceives socialism as an ideal and calls the means for achieving its goals collectivism. This encompasses all types of planned economy of any kind. According to Hayek, the problem with socialism is that, within central planning, it does not permit competition, which is the foundation of progress in society. He is willing to accept planning only when it is necessary for the effectiveness of competition. However, he rejects the replacement of competition by planning, as occurred in the countries of the socialist bloc, because this is the "road to serfdom." (1) Supply and demand, i.e., the free market, are the tools most capable of flexibly coordinating activity within the state and industry. Hayek warns against monopolies that arise precisely from state intervention and completely destroy competition, which in the final stage proves maximally unfavorable for the citizen as a consumer and for the citizen as an employee, ultimately depriving them of freedom. When a monopoly arises, the possibility of change disappears for a person dissatisfied with their working conditions, thereby affecting their individual freedom.

Planning is, for Hayek, a sign of unfreedom and domination over the individual, which is why he examines the characteristic features of planning in dictatorships. According to him, most planners claim that planning is unavoidable and that it is a necessity forced upon us by circumstances beyond our control. They turn the necessity of planning into the aforementioned competition and the emergence of monopolies. Dictatorships claim that the development of humanity is so great that there are fewer and fewer things we can manage on our own, and therefore planning is necessary. They seek to prove that monopolies are precisely capable of producing more goods at a lower price.

Although planning is dangerous, it nevertheless has its place even in a democratic open society. Here too, we collectively strive for the "common good." However, according to Hayek, this concept is so vague that it cannot be connected to a specific meaning. There exists only a mechanism for achieving it. The only solution, in his view, would be to create a moral code and a scale where every value would have a precisely determined place. The scale would have to be broad enough to encompass all human needs. But no such scale exists, and it is not possible to demand that every person grasp the entire range of needs and values.

Hayek sees the difference between totalitarianism and democracy in the observance of legal principles. In a democracy, state bodies are bound by rules that are established in advance and predictable, while in a totalitarian system, principles are adapted to power. In planning, conscious discrimination occurs because only certain needs of certain people are prioritized. Planning determines what people will do, which of them will fare well and which will not. Therefore, formal equality is incompatible with material equality. To achieve the same result for different people, they must be treated individually. Hence, objective opportunity does not equal subjective chance. Planning also disregards individual rights. Rather, the prevailing view is that only individual duties exist. Moreover, society and economic processes are today so complex that they "completely exceed the ability of any planner or planners to understand them." (2)

Hayek argues that socialist laws do not even satisfy the concept of the rule of law, because their aim is to bring about a specific state of affairs, thereby inevitably violating the privacy of the individual and "forcing people into some particular form of social organization." (3) In a rule-of-law state, unlike a socialist state, only certain rules of the social game are established, which do not, however, determine what society should look like. The socialist strives to achieve a specific form of a particular system, and must therefore change people (reduce them to mere instruments) and force them to act in a certain way, which is the very opposite of the rule of law.

A direct response to the rise of totalitarian regimes that seek to proceed from the principle of the welfare state as the sole means of ensuring justice and fair distribution in society is Hayek's The Road to Serfdom (1986). Here, Hayek understands the orientation toward the principles of the welfare state as a "road to serfdom," which in its very principle is an injustice. (4)

Hayek warns those who incline towards the ideas of socialism and believe in its ideals of equality and justice that, in the end, this system will plunge them into far greater unfreedom and dependence than the capitalism in which they find themselves. (5) In socialism, the state, by centrally planning, enters the private sphere of the individual because it thereby abolishes the principles of equal treatment before the law. Moreover, the legal system collapses in another sense as well – planners in such an economy must deliberately manage resources to achieve desired results, which means that in a planned economy, general rules do not function as they do in a market economy. From this, it is but a short step to the conclusion that where there is no economic freedom, there is also no social freedom: "Economic control is not merely control of a particular sector of human life which can be separated from the rest; it is the control of the means for attaining all our ends." (6)

In a functioning society, a person dissatisfied with their conditions can give up their job and find one that better suits their needs, which is not possible in a socialist society because tasks are already assigned. He points out that in democratic systems, however unjust and dominated by the idea of capitalism they may seem, there is always a chance that a person can become wealthy through their own effort. This prospect depends only on them. Their path to freedom is open, unlike the socialist interpretation, which leads a person to unfreedom, where others decide about them. In socialism, where planning completely suppresses invention and the possibility of self-development, the chance of becoming wealthy is drastically reduced. In the redistribution of money in totalitarian societies, the principle applies that money is not distributed according to the activity of individuals, but according to the work they perform. Thus, an incompetent person in a good sector will always have a higher salary than a capable person in a less lucrative sector. More work does not bring more profit, and therefore there is no need to work more. In comparison, in a competitive environment, there is an opportunity for talented individuals to excel, and this motivationally leads to increased work performance.

Hayek negatively evaluates such characteristic features of socialism as planning and the abolition of private property. He does not reject the goals of socialism in themselves; he criticizes only the methods by which socialism seeks to achieve its goals, because they deny human freedom and create injustice. At the same time, he warns against applying certain partial mechanisms of the socialist economy to other systems, because there is a risk that these partial mechanisms could modify economies into undesirable dimensions. (7) The market is the result of the activities of many people who pursue their own goals and cooperate with others to the extent they consider mutually beneficial. The general rules that oversee the actions of these people (e.g., the inviolability of property and contracts) allow a complex, integrated system to emerge. This system is so complex that it "exceeds the capacity of any individual mind to comprehend it." (8) This is the reason why the argument that society must be consciously planned because it has become very complex cannot be accepted. However, the fact that the economic system is not centrally managed does not mean it is unplanned. Hayek acknowledges a certain degree of planning, namely decentralized planning, at the individual, corporate, and multi-center levels.

Alongside socialism, Hayek also responds to the rising Nazism, which he characterized as a national-socialist revolution as a "counter-renaissance." (9) This step was important in the destruction of civilization that modern man had built and which was an individualistic civilization. Individualism, however, stands in opposition to socialism and collectivism, and Hayek does not perceive it as egoism, but as respect for the human being, the personality, and respect for their own views, and thus their freedom. In socialism, therefore, according to Hayek, there is no room for respect or for human freedom.

Also interesting is his parallel between communism and fascism. Hayek says that history has shown that Stalinism in its essence manifested itself as "super-fascism." He draws on history, showing that many Nazi leaders began as socialists (e.g., Mussolini, Quisling, and others) and ended as Nazis and fascists. It was very easy to turn a communist into a fascist and vice versa, because both regimes had many parallels. And therefore both regimes and political parties came into conflict with each other, because they attempted to appeal to the same mental types. For both, the enemy was the old-style liberal. Many people who embrace the ideals of socialism would turn away from it if they realized that this system would destroy freedom and that it is therefore popular only due to the ignorance of the masses.

Since today we strive for a liberal democracy not in the form it functioned in the 19th century, but for one that should function in the 21st century, it is clear that democratic society needs new defensive shields and new rules designed for the modern age and its problems. Every such renewal must begin with a return to history, to the struggle for freedom and democracy that began in the West, in order to spread further: "If we are to revive the eternal quest for life, liberty and the pursuit of happiness, we must first revive the forces that created them. Only when we understand the past of freedom can we help secure its future." (10)

As Hayek emphasizes, the axis of the new, so-called open society today should undoubtedly be at least three important institutions: the rules of private property, honesty, and the institution of the family. In this context, we are accustomed to emphasizing that we mean a democratic society. However, it must be recognized that liberalism and democracy cannot be understood as synonyms, because there are several differences between them that concern precisely the meaning of the concepts of freedom and justice. Liberalism speaks more about the scope of power and government, as we pointed out in the introductory sections, while democracy speaks more about who holds that power. Liberalism, even as presented by Hayek, is more about the way to preserve human freedom, ensure tolerance and justice, and limit the influence of the state on the individual, together with the recognition of private property. Democracy, on the other hand, is a system of institutions that ensure the separation of powers, delegation of power, and government of the people. Hayek emphasizes these differences, pointing out that the opposite of democracy is authoritarianism and the opposite of liberalism is totalitarianism. This means that a democratic government can act according to liberal principles. The principle on which liberalism stands or falls is the principle of private property, which is the cornerstone of justice. It is an area into which no one may interfere.

Hayek summarized the coercive function of government into three principles that affect individual freedom: peace, justice, and liberty. In order to achieve these basic principles, the government must be limited in its possibilities of using the instruments of power with which it enforces prohibitions to the extent that they are equally applicable to all members of society. According to Hayek, it is equally important that a contribution to the costs associated with other non-coercive services, which the government may provide at its discretion, can be demanded from all members.

In connection with socialism, Hayek also points to the intertwined line of personal and economic freedom of man throughout history and notes that personal freedom goes hand in hand with economic freedom and development. (11) Socialism stands against democracy also because it proceeds from the principles of authoritarianism. The French authors who laid the foundations of socialism had not the slightest doubt that these ideas could only be enforced by a strong, authoritarian regime. Hayek points out that while democracy expands human freedom, socialism restricts it. Both systems have one thing in common – equality. While democracy seeks equality in freedom, socialism seeks it in serfdom. According to him, socialism began to use the term "new freedom" as a pretext, meant to signify liberation from the shackles of exploiters, but in reality, socialism does not count on the growth of economic freedom, but on a new redistribution of wealth.

At the same time, a problem arises in that a dictatorial leader always emerges in socialism, because the conscious process of planning must be in the hands of an individual at the end of the chain. Since this fact could arouse feelings of resentment among the population, socialist planners try to convince people that this concerns only economic questions and that more energy will remain for addressing other issues. Hayek, however, points out that separate economic motives do not exist. Thanks to freedom, we can dispose of our property as we see fit and fulfill our needs and desires. If planning interferes with the economic sphere, it will, after a certain time, affect our consumption, property, and freedom. As he himself says, liberalism is not perfect, but the freedom that goes hand in hand with it is a far stronger value than the common good.

Although Hayek's conception of the individual and society may sometimes appear contentious, as Ďuriač states, "his entire theory expressing the free flourishing of the mind is marked by the originality of approach to the analyzed interaction. History, as well as contemporary practice, call into question the conclusions about the omnipotence of the market as the sole regulator of social relations, but at the same time they also confirm that the criterion of the measure of freedom can only be the individual." (12)

Nevertheless, the conviction that precise, rational planning can be applied to the economic process and that this process can be managed using existing or modified democratic institutions is no longer as strong today as it was when Hayek wrote The Road to Serfdom. Despite this, this conviction continues to have a certain influence; it has spread in Western countries, although the planning that is usually proposed is not as extensive as that proposed by reformers in the first half of the 20th century. (13) The "hot socialism" of that era has already cooled, but Hayek's observation remains largely valid. Socialism as a doctrine persists to this day only because people still believe that economic planning can be realized within democratic institutions. The acceptance of the ideals of socialism and central planning leads to a high concentration of power in the hands of governing bodies. The danger is that the socialist system rapidly degenerates into a system of power, personal arbitrary interference, and unequal interference within what remains of democratic legislation. Furthermore, central planning can never stop at economic control alone but must expand into the life of society. Economic control means total control over everything people strive for. Therefore, one must protect "freedom in economic relations, without which personal and political freedom has never existed in the past." (14) In this context, we may state that the vast majority of the insights Hayek offers the reader in the pages of The Road to Serfdom are timeless in nature, as they express necessary structural connections that are independent of time.

Author: PhDr. Jarmila Jurová, PhD. Department of General and Applied Ethics Faculty of Arts, Constantine the Philosopher University in Nitra References Butler, E.: Hayek a jeho prínos k politickému a ekonomickému mysleniu dneška. Bratislava: Inštitút liberálnych štúdií, 1996. ISBN ISBN 80-967459-8-0. Ďuriač, M.: Friedrich August von Hayek a jeho koncepcia vzťahu indivídua a spoločnosti. In: Človek, spoločnosť, myslenie. Banská Bystrica: UMB, 2002. ISBN 80-8055-692-X. Hayek, F. A.: Cesta do otroctví. Praha: Academia, 1990. ISBN 80-200-0264-2. Hayek, F. A.: Economic Freedom. Cambridge, Oxford: Basil Blackwell, 1991. ISBN ISBN 0-631-17109-6. Zakaria, F.: Budoucnost svobody. Neoliberální demokracie v USA i ve světě. Praha: Academia, 2005. ISBN 80-200-1285-0.

(1) He addresses this issue in his 1968 work The Road to Serfdom. (2) Butler, E.: Hayek a jeho prínos k politickému a ekonomickému mysleniu dneška, p. 82. (3) Butler, E.: Hayek a jeho prínos k politickému a ekonomickému mysleniu dneška, p. 43. (4) Hayek, F. A.: Cesta do otroctví, p. 35. (5) There is a well-known example pointing out that a multi-millionaire industrialist who provides employment to his workers has far less power over their personal lives than the lowest official who possesses the coercive power of the state and himself arbitrarily decides to whom to give work and to whom not, and what kind of work it will be. (6) Hayek, F. A.: Cesta do otroctví, p. 68. (7) For more on this, see Hayek, F. A.: Cesta do otroctví, pp. 56–66. (8) Butler, E.: Hayek a jeho prínos k politickému a ekonomickému mysleniu dneška, p. 83. (9) Hayek, F. A.: Cesta do otroctví, p. 27. (10) Zakaria, F.: Budoucnost svobody. Neoliberální demokracie v USA i ve světě, p. 34. (11) For more on economic freedom, see Hayek, F. A.: Economic Freedom. (12) Ďuriač, M.: Friedrich August von Hayek a jeho koncepcia vzťahu indivídua a spoločnosti, pp. 108–109. (13) Butler, E.: Hayek a jeho prínos k politickému a ekonomickému mysleniu dneška, p. 77. (14) Hayek, F. A.: Cesta do otroctví, p. 10.