Hayek’s second chapter opens with several important reminders about the nature and history of socialism: that its rise was achieved not by the West having forgotten liberal ideas or the historical consequences of collectivism, but by an active campaign of persuasion against liberalism as an ideal; that it has roots in the French Revolution as an authoritarian answer to that movement’s more individualistic elements; and that only through the democratic influences of the revolutions of 1848 did socialism shed its authoritarian origins and assume a democratic veneer.

From there, it proves somewhat of a novelty to one accustomed to today’s concrete-bound, anti-conceptual political rhetoric. The chapter is, fundamentally, a brief lesson in political epistemology, dealing with the historical abuse of concepts that facilitated the popular adoption of socialist ideas.

Chief among the distortions Hayek notes is the socialist reconfiguration of the notion of liberty itself. The alleged “new freedom” introduced by socialists “was to bring ‘economic freedom’ without which the political freedom already gained was ‘not worth having’” (19). Hayek astutely describes this distortion of the concept of freedom:

“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 supervisor 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… The demand for the new freedom was thus only another name for the old demand for an equal distribution of wealth” (19).

Hayek recognizes the epistemological methods by which socialists attained power, consisting largely of equivocation and anti-conceptual thinking, lumping together disparate concretes and attaching to them a single label—“freedom”—in order to pass off an intellectual package-deal on the general public, persuading them to embrace a contradiction. Though he does not go into this kind of detailed description of the process, Hayek at least acknowledges that the methods by which such intellectual smuggling is carried out form too large a subject to be discussed in the context of the chapter, and does not claim to have thoroughly explained it as a philosophical process but only as a historical one.

He proceeds to assess more recent, twentieth century distortions of the concept of socialism itself and how it has become muddled and confused by “progressives” who view fascism and communism as fundamental opposites, failing to recognize that both are merely species of the same genus. The processes of evasion and distortion, fueled by an excessive focus on concrete particulars at the expense of fundamentals, are thus seen to wreak as much havoc in the thinking of those twentieth-century advocates of socialism in their understandings of themselves and relations to one another as they did in the minds of nineteenth-century liberals who were persuaded to adopt socialist ideas. That statists are as much the victims of their own illogic as those they seek to oppress soon becomes clear.

In what might be one of the greatest compliments one could offer to liberalism, Hayek then points out, both in his own words and quotes by socialists themselves, how history and socialists’ experiences have shown time and again that despite their alleged fundamental opposition to one another, fascists and communists are known by the other to be prime targets for recruiting, fueling and perpetuating the hatred between them as each views the other as a competitor for the same pool of minds, but both are well aware of the immunity of true liberals to the propaganda of either. Liberals are viewed as resistant to their persuasions and unsuitable for the culture of perpetual compromise that characterizes socialist politics.

Again, in the end, Hayek effectively ties the subject back to contemporary Britain and how these same ideas, once prevalent in Germany between the two wars, are alive and well across the channel. “[I]n this country,” he writes, “the majority of people still believe that socialism and freedom can be combined… So little is the problem yet seen, so easily do the most irreconcilable ideals still live together, that we can still hear such contradictions in terms as ‘individualist socialism’ seriously discussed” (23).

Perhaps the only flaw in this second chapter consists of Hayek’s uncritical acceptance of the term “democracy” as being in any way synonymous with freedom or liberalism—a common error (even more so in today’s world!), and not one that deprives the chapter more generally of valuable insights, but one that it could have benefited from correcting. Hayek writes admiringly of Alexis de Tocqueville’s work, “Nobody saw more clearly than de Tocqueville that democracy as an essentially individualist institution stood in an irreconcilable conflict with socialism” (18).

Democracy, however, is not an essentially individualist institution. It is, in fact, not essentially anything except inclusive of a political process that allows for the popular, institutional expression of political preference and ideas. Democracy allows people to vote. Whether that vote is limited by a founding document protecting individual rights or any other principle is not inherent to democracy itself, and to think it so leads to many of the befuddled responses of policymakers today when they observe the imposition of democratic processes having failed to ensure peace, justice, or any other virtue of great political societies.

Let it not be forgotten that the first democracy in human history, that from which the concept derived and upon which its essentials rest, was Ancient Greece, where the life of a man such as Socrates could be voted away on grounds no more substantial than his having propagated ideas unwelcomed by the majority.

Democracy is thus neutral with respect to individualism, only upholding it when the republican qualities of a constitution, bill of rights, and limitations on the majority will are imposed. This leaves the phenomenon of democratic socialism, which Hayek sees as an oxymoronic distortion, rather justified in formal logic, if not in any rational morality or political ethic.

Overall, Hayek’s second chapter, “The Great Utopia”, is a dramatic improvement from his first. It sets out with a direct purpose to illustrate the epistemological errors that have aided the rise of socialism, and, with skilled application of political concepts and supporting evidence, it succeeds in that task. Whether this upward trajectory continues into his next chapter, “Individualism and Collectivism”, as he addresses subjects at somewhat of a conceptual middle-range between those of his first and second chapters, we shall see in the next installment.