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Thoughts on ‘The Road to Serfdom’: Chapter 4, “The ‘Inevitability’ of Planning”

In Arts & Letters, Austrian Economics, Book Reviews, Books, Britain, Economics, History, Humane Economy, Humanities, Liberalism, Libertarianism, Philosophy, Politics, Western Civilization, Western Philosophy on September 18, 2013 at 7:45 am

Slade Mendenhall

Slade Mendenhall is an M.Sc. candidate in Comparative Politics at the London School of Economics, with specializations in conflict and Middle Eastern affairs. He holds degrees in Economics and Mass Media Arts from the University of Georgia and writes for The Objective Standard and themendenhall.com, where he is also editor.

The following is part of a series of chapter-by-chapter analyses of Friedrich Hayek’s The Road to Serfdom. Other installments in the series can be found here: Introduction, Chapter 1, Chapter 2, Chapter 3.

In Chapter IV of The Road to Serfdom, entitled “The ‘Inevitability’ of Planning”, Hayek sets out to dispel the claim by advocates of socialist planning that controls are a necessary part of an advanced, modern economy and that without them the economy would cease to function. He recognizes that socialist claims as to the inevitability of planning can be broadly categorized into three types of argument, then proceeds to refute each. He does so thoroughly and effectively. In the course of reading his arguments, however, we unfortunately find more of the same sorts of errors that have punctuated previous chapters. Though these errors are not as numerous as those we have already seen from Hayek, they are fatal to the cause of liberty. Hayek’s flaws here confirm our earlier assertion that his view of the argument for freedom is so firmly rooted in an economic, cost/benefit framework as to make him unsuited to presenting the comprehensive defense that capitalism as a system of individual rights needs and deserves.

Hayek begins by accurately describing a circumstance quite familiar to us today: politicians who advocate central planning doing so on the claim that circumstances somehow demand controls, and that it is not a choice but a necessity that the government intervene if we are to retain a functioning economy. The familiarity one finds in reading his characterization of this mode of thinking reveals how constant and unchanging such arguments are across generations and throughout the Western world. The arguments he describes, though drawn from England in the 1940s, are replayed in the halls of the US Congress week after week, year after year to the detriment of the rights and success of private businesses, their vendors, customers, employees, investors, and all who share in the economy with them.

Distinguishing the various arguments used to support this insistence upon the need for planning, Hayek finds three purported bases for their claims: technological advancement, societal complexity, and the need for coercive monopoly.

Argument I: Technological Advancement

As to the first, he writes, “Of the various argument employed to demonstrate the inevitability of planning, the one most frequently heard is that technological changes have made competition impossible in a constantly increasing number of fields, and that the only choice left to us is between control of production by private monopolies and direction by the government” (32). The preeminence of this argument above the others may not hold the number one position that it did in Hayek’s day, as other arguments for market regulation have debatably become more prevalent, but it certainly remains one of the leading lines of thought in antitrust.

Hayek characterizes such arguments as resting largely on deterministic conceptions of economic progress, ones that in the early 20th century viewed Germany, with its coincidence of economic planning, a strong industrial sector, and large companies operating in collusion with the national government as the vanguard of human progress. He points to the roots of this thinking in Germans’ misconceptions of their own system: “It is largely due to the influence of German socialist theoreticians, particularly Sombart, generalising from the experience of their country, that the inevitable development of the competitive system into ‘monopoly capitalism’ became widely accepted” (34), Hayek offers several valid economic and historical arguments against this, refuting the suggestion by many that a free economy naturally, inevitably congeals into small number of sprawling monopolies.

Hayek points out that monopolies arising purely from efficiency and natural market forces are rare and very difficult to sustain, thus making competitive arguments the norm in a free economy. He acknowledges that most monopolies arise from government favors and protection—constituting what can best be termed coercive monopolies. “Not only the instrument of protection, but direct inducements and ultimately compulsion, were used by the governments to further the creation of monopolies for the regulation of prices and sales” (34).

He makes clear that the progress of the German economy was not such that monopolies resulted naturally and were subsequently checked by government controls, but rather that the companies in question attained their monopoly status through that very culture of political collusion. He points to the same mechanism of political influence and pull-peddling in the establishment of protectionist policies and the formation of inefficient, monopolized industries in the United States and Great Britain as well.

“That [in Germany] the suppression of competition was a matter of deliberate policy, that it was undertaken in the service of the ideal which we now call planning, there can be no doubt. In the progressive advance towards a completely planned society the Germans, and all the people who are imitating their example, are merely following the course which nineteenth-century thinkers, particularly Germans, have mapped out for them. The intellectual history of the last sixty or eighty years is indeed a perfect illustration of the truth that in social evolution nothing is inevitable but thinking makes it so” (35).

Making this and other points as to the origins of large monopolies, Hayek establishes a strong historical case against the belief that unchecked market forces lead naturally to the creation of monopolized industries. What he does not do, however, is take a stand in defense of naturally occurring, non-coercive monopolies when and where they do occur. This is to be expected. Influenced by ideas dominant in the field of economics both then and now, Hayek has already established briefly in previous chapters his support for employing antitrust policies to facilitate competition.

What Hayek and others of this persuasion fail to note, however, is the two-fold case for free market monopolies: the profound economic value they offer and the protection of individual rights. As rare as these monopolies are, they do occur. When they arise, they do so because a company has achieved such a profound degree of efficiency that no other company is able to compete in the same market and must exit the market place.

Such monopolies have not attained their status through force or the rule of law, but through so consistently providing the best product for the money that their appeal in a market overwhelms all potential competitors. It may not conform to the idealized, Platonic notion of ‘competitive markets’ to which modern economics has become so hidebound, but that is a paltry explanation to offer people as an apology for why the company they patronize had to be divested of its assets for offering them too much value, and for why they are now better off having to pay higher prices for the same goods and services. To the contrary: the achievement of the kind of superlative efficiency that defines free market monopolies, from which the customers and general population gain as surely as the company itself, should not be condemned but praised.

More than this, the proper defense of free market monopolies is based in the property rights of the owners of the company—be they the operators themselves, or shareholders of a publicly traded company. No matter the extent to which their operations do or do not conform to economists’ notions of which market forms are to be favored, neither they nor policymakers nor the general public have the right to take from them that which is rightfully theirs in the name of creating a more efficient allocation of resources.

In today’s debates, a derivative line of thinking from the technology argument usually takes the form, ‘If one company gains such a technological advantage as to offer its goods and services at a price and quality with which no other company can compete, shouldn’t the government intervene?’ Faced with such a question, any defender of liberalism—that is, anyone who value’s man’s life and individual rights above subservience to some ill-defined collective ‘good’—should offer a resounding “Absolutely not!” As in his earlier chapters, though, Hayek makes no mention of rights here and is thus unable to offer this kind of principled defense—or, for that matter, any defense.

Argument II: Societal Complexity

The second argument for the inevitability of planning addressed by Hayek is loosely related to the first, with an added macroeconomic dimension. He writes,

“The assertion that modern technological progress makes planning inevitable can also be interpreted in a different manner. It may mean that the complexity of our modern industrial civilisation creates new problems with which we cannot hope to deal effectively except by central planning” (35) [Emphasis mine].

This argument should be strikingly familiar to those in modern America, ringing from both right and left as both sides of the political spectrum apologize for our massive regulatory system with vague, arbitrary claims to the effect that there exists some unnamed, undefined essential quality to today’s economy that so fundamentally differentiates it from that of earlier periods as to require the forcible regulation of trade. What is this fundamental difference? How and at what point did it emerge? What about the complexity of the economy negates the organizational virtues of the price system? Blank out. The apologists have no causal explanation, only inherited and unchallenged bromides.

“What they generally suggest is that the increasing difficulty of obtaining a coherent picture of the complete economic process makes it indispensable that things should be coordinated by some central agency if social life is not to dissolve in chaos” (36).

Such unsubstantiated conjectures and baseless arguments never require much to be toppled, but fortunately Hayek provides a more than adequate shove, making the case that greater complexity in an economy is not an argument in favor of central planning, but rather an argument against it. The more complex an economic system, the more valuable it becomes that each party, knowing their own costs and values, conducts their own planning, achieving order through the natural coordination of prices, each communicating information as to the supply and demand of resources in an open economy.

Argument III: The Need for Coercive Monopoly

The last argument in favor of planning somewhat reverses the trend of the first two, justifying planning as a means of imposing monopolies rather than preventing them, and revealing the crux of the statists’ argument to be not the protection of competition throughout the economy, but the socialist planner’s ability to pick and choose when and in what sectors competition will prevail.

“There is yet another theory which connects the growth of monopolies with technological progress, and which uses arguments almost opposite to those we have just considered; though not often clearly stated, it has also exercised considerable influence. It contends, not that modern technique destroys competition, but that, on the contrary, it will be impossible to make use of many of the new technological possibilities unless protection against competition is granted, i.e., a monopoly is conferred” (37).

This particular argument for government planning is less common, as its applications are less frequent throughout economies. The most notable circumstance in which this argument is presented is with respect to so-called ‘natural monopolies’ (a term used by economists that ambiguates other kinds of natural monopolies produced in a free market, as we described earlier) in the utilities sectors of modern economies. Large-scale enterprises such as electric companies that require heavy, permanent or semi-permanent installations of infrastructure such as power grids are described by those who teach this model of the ‘natural monopoly’ as incapable of making such investments without a guarantee from the local government that all competition will be prohibited within the municipality.

The history of the electric power industry in the Unites States, however, shows a different story—one in which the major driver of the ‘natural monopoly’ model was not the inefficiency of competitive markets, but rather the political collusion between state legislatures and early power industry executives who were, in many cases, given no choice but to keep legislators happy with rewards and employment or face losing the investments they had already made.

Intriguingly, however, Hayek makes only a passing mention of this obvious and most frequent application of the ‘natural monopoly’ argument. He opts instead to dismiss most instances of its application (rightfully) as “a form of special pleading by interested parties” (37), then to proceed into a bizarre hypothetical about England allowing only one make of automobile if it meant lower prices on all automobiles. He presents this as a potentially valid application of the idea, arguing only that such cases are “certainly not instances where it could be legitimately claimed that technological progress makes central direction inevitable. They would merely make it necessary to choose between gaining a particular advantage by compulsion and not obtaining it—or, in most instances, obtaining it a little later, when further technical advance has overcome the particular difficulties” (38).

Hayek the economist seems to consider such an interventionist policy at least plausible, if debatably desirable. But what of Hayek the liberal political theorist? Under what conditions would he find such a policy acceptable? Would the strict prohibition of initiating force, so frequently invoked among libertarians, be the standard? Not quite. “[I]t must be admitted,” Hayek writes, “that it is possible that by compulsory standardisation 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” (38) [Emphasis mine.].

Let us ask: what level of abundance would you require to surrender your right to choose how you wish to dispose of your income? What is the exchange rate between degrees of efficiency and the right to trade freely? And for producers: how compensated will you feel at the knowledge your automobile is less expensive when your business is being shut down by the government for offering customers too much diversity in the marketplace? Many who read this in today’s mixed economy will likely have similarly mixed feelings and mixed premises in their responses to these questions. Thus, let us reframe the issue to put it in stark relief.

Imagine that you live in a society that enacts such a policy of homogenizing the nation’s automobiles. The government is left to decide who will remain in the automobile business in the ways it usually decides such matters. The last businessmen to grovel will be the first to go. There is no more choice in make or model. Competition in quality and unique features is gone. You, however, are left with a less expensive automobile, your neighbors are left with less expensive automobiles, and the supply of them to the general public skyrockets. (This is a fantasy, remember, so you’ll forgive me if I pretend a government program is successful even if only in the short term.)

Now imagine that instead of automobiles, the product is healthcare.

How much are you willing to trade of your rights for greater efficiency? What is your price? And how strong a defender of economic freedom is Mr. Hayek? The answer is clear and tragic.

Hayek establishes here firmly and conclusively that he is not, in fact, much of a political theorist. He is ultimately a dryly calculating economist plotting your rights on a utility curve.  Though many of Hayek’s admirers will no doubt reject this assessment, it is difficult to argue with his own words as he lays out his fundamental basis for liberalism as such. “[T]he argument for freedom,” according to Hayek, “is precisely that we ought to leave room for the unforeseeable free growth” (38).

To anyone who values man’s fundamental rights; who believes that those rights are derived from his nature and not subject to popular will; who thinks that freedom is rightfully his; who rejects force as a necessary or proper ingredient in human social relationships; who recognizes that the history of human innovation and progress has rested on the freedom of man’s mind to study and master the world around him; who claims the prerogative to pursue his own self-interest; who retains his self-esteem; who holds his own happiness as the purpose of his life: the only proper answer, the only moral answer is “Absolutely not!”

The argument for freedom, Mr. Hayek, is the assertion of man’s right to his own life, a life that is its own justification. Nothing else is required and nothing else will do.

Hayek’s fourth chapter, “The ‘Inevitability’ of Planning”, thus leaves us back at the low-point of Chapter I. It is impossible, based on the philosophical framework established in the introduction and first four chapters, that Hayek could at this point offer a proper defense of liberalism. Though I hesitated to make the comparison earlier, hoping he might redeem himself, it is fair to say now that Hayek is scarcely better than many of the pragmatist politicians today who argue for capitalism as a practical benefit, make no mention of its moral values, and ultimately treat principles as loosely-held guiding ideas with little more substance than campaign slogans. He may be much farther toward the liberal end of the spectrum than many of them; it would be inaccurate to say otherwise. Ultimately, though, half-hearted, half-formed defenses of freedom by advocates who lack the tenacity to defend their professed values only facilitate their destruction.

The real Road to Serfdom is paved with incomplete defenses of liberty, and once one has allowed them to serve as the foundation for the defense of a free society, matters of degree are only matters of time.

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Thoughts on ‘The Road to Serfdom’: Introduction

In America, Arts & Letters, Austrian Economics, Book Reviews, Books, Britain, Economics, Historicism, History, Humane Economy, Humanities, Liberalism, Libertarianism, Literature, Philosophy, Politics, Western Civilization, Western Philosophy on September 9, 2013 at 7:45 am

Slade Mendenhall

Slade Mendenhall is an M.Sc. candidate in Comparative Politics at the London School of Economics, with specializations in conflict and Middle Eastern affairs. He holds degrees in Economics and Mass Media Arts from the University of Georgia and writes for The Objective Standard and themendenhall.com, where he is also editor.

This piece commences a series of analyses on Friedrich Hayek’s The Road to Serfdom. For those unfamiliar with the work, first published in 1943, it details the famed Austrian economist’s observations, drawn from having lived in Austria in the years after World War I, witnessing firsthand the culture of political ideas that preceded and led to the rise of Nazism there, and then, some decades later, living in England, teaching at the London School of Economics, and observing the rise of similar ideas at work in English political culture at the onset of her own period of experimentation with socialism.

Britain was, at the time, feeling the onset of what would become a set of devastating postwar economic ailments: the loss of many colonies—sold off one by one to finance the war, severe physical destruction (though not as bad as on the Continent), a trade imbalance skyrocketing the prices of much-needed American goods, and an economy of permits and privation in basic commodities. The end of the war would bring the sweeping 1945 victory of Labour and greater troubles with the onset of the Brain Drain, a period of bitter class resentment, and nationalizations of industry. Shortly after the second edition of The Road to Serfdom was printed in 1946, England was facing strikes, falling exports, and almost £200m lost every week as dollar convertibility was introduced in 1947.

In the midst of it all was a growing culture of socialism in both major parties. As Hayek wrote, “the socialism of which we speak is not a party matter, and the questions which we are discussing have little to do with the questions at dispute between political parties” (3). Though Labour would be its more avowed exponents, the fundamentals of socialist ideology were well enough embedded so as not to be challenged at any basic moral or systematic level by either side. What’s more, many Britons would see this as a proud new political and economic identity for a Britain without an empire. Historian Norman Stone writes,

“the British were pleased with themselves, supposing also that their example was one to be widely followed as some sort of ‘third way’ between American capitalism and Soviet Communism… combining the ‘economic democracy’ of Communism and the ‘political democracy’ of the West: socialism without labour camps…. People who argued to the contrary [such as Hayek—ed.] were in a small minority… but even in the later 1940s these supposedly half-demented figures were starting to have reality on their side. It struck with a ferocious blow, in the second post-war winter. The money began to run out, and the government became quite badly divided as to priorities.”

It is easy to imagine how remorsefully vindicated Hayek must have felt in those first few years after the publication of The Road to Serfdom—affirmed and disappointed in the way that all those who warn of impending danger are wont to feel.

Though the book would be praised by proponents of liberalism from the time of its publishing to the present and cause a stir among his peers in academia, policymakers would be, as they ever are, roughly a generation late in feeling the aftershocks of this groundbreaking statement. By the time began its creep into the political lexicon, Hayek had moved on from the LSE, going on to teach at the University of Chicago (in its Committee on Social Thought, as the School of Economics vehemently opposed his hiring under their banner), the University of Freiburg, the University of California, and the University of Salzburg, where in 1974 he was awarded the Nobel Prize in Economics.

Since the onset of the 2007 recession, sales of The Road to Serfdom, along with other works that challenge the fabric and assumptions of modern Western philosophy, political culture, and economics such as Ayn Rand’s Atlas Shrugged, have skyrocketed. In 2010, 66 years after its publication, The Road to Serfdom became a #1 bestseller on Amazon.

As this and other such works grow in popularity, it is important to take a second look at them, assessing both their virtues and faults, their accomplishments and their shortcomings. The analysis that follows sets out to do just that. It is an overall favorable assessment, as this author agrees with many of Hayek’s basic political premises. However, for that reason, it will also more scrupulously critique and highlight perceived flaws, ambiguous wording, platitudes, and those floating abstractions common in political treatises that, though they seem plausible at first glance, prove deeply flawed when translated into concrete practice. Though these analyses will strive to give an adequate overall summary of what Hayek himself writes, the reader is encouraged to read Hayek’s words along with these critiques and to judge for himself their validity.

It is broadly understood that those concerned with the cause of liberty must be vigilant in our criticisms of its destroyers, but it is no less essential—if not more so—that we be judicious toward those authors and works on which we base our own beliefs, as every philosophy is a structure and every flaw in that structure a weakness. The closer our faults are to our foundations, the greater our vulnerability. As more and more libertarians and capitalists turn to works such as Hayek’s to form understandings and shape their beliefs, let us look carefully to what ideas we are resting upon. We have nothing to lose but our contradictions.

Note on citations: all page references, unless otherwise stated, are based on the February 1946 edition published by George Routledge & Sons LTD.

Introduction

Hayek’s introduction effectively sets the tone for the rest of the work by illustrating his own unique perspective, having come “as near as possible to twice living through the same period—or at least twice watching a very similar evolution of ideas,” (1) then giving us a brief summary of what wisdom that twice-lived experience has offered him: an understanding of the linkages between the spread of socialist ideas, the various debates it engenders in countries operating on similar philosophical premises, and the eventual rise of dictatorship.

The summary of events transpiring in the half-century leading up to World War II that Hayek describes is perhaps most powerful and most distinctive for its recognition of the role of ideas in man’s life. Hayek superbly recognizes the consequential nature of ideas in human life, writing “If in the long run we are the makers of our own fate, in the short run we are the captives of the ideas we have created. Only if we recognise the danger in time can we hope to avoid it” (2).

In this short passage, just a few paragraphs in, Hayek has already distinguished himself from the long and destructive philosophical and political tradition of determinism and, more subtly and implicitly, by viewing the connection between man’s ideas and actions, rejected the mind-body dichotomy, which has long divided philosophers and intellectuals between those who concerned themselves with the workings of man’s mind, dismissing his physical actions as inconsequential marginalia, and those concerned with man’s physical nature but who view the content of his mind as meaningless.

These abstract philosophical notes are crucial, allowing us to establish several inferences as to what misguided political camps and ideologies Hayek will successfully avoid being mired in. By denying the metaphysical premise of determinism (whether in its environmental or genetic forms), Hayek embraces the concept of free will and the essential premise that ideas matter, inviting us to commence his work with the presumption that what wisdom we glean from it individually might be actionable and applicable in our own lives and experiences. This quickly separates him from the philosophical premises of the Left (or, to indulge a common but unbearably ironic label, “progressivism”), whose policies largely rest upon some variant of determinist metaphysics, leading them perpetually to the conclusion that man, left to his own free will, is doomed to irrationality, but that the ideal society is achievable through the right amount of systematic tweaking and statist controls. It already begins to become clear what premises lead Hayek to become the symbol of liberalism he is today.

In embracing the importance of the mind and the function of ideas, however, he does not assume a mysticist rejection of reality. To the contrary, he presents to us the implicit proposition that the “ideas we have created” will have very real consequences, and that to change our fates we must scrutinize and perhaps alter our ideas and those of our culture. It rests on the recognition that man is not immune from his own illogic and that, to paraphrase Rand, while the practice of reason may be evaded, the consequences of evading reason cannot be. This acknowledgment separates him from the premises that underlie much of conservative political thought, also concerned with the perfection of man, but oriented toward controlling his thoughts and beliefs, viewing the force of government as a means of instilling values in the minds of its people to produce a more moral citizenry.

Hayek’s Road to Serfdom is a warning, and all warnings are fundamentally rejections of the determinist premise.  What’s more: it is an intellectual warning connecting certain ideas and beliefs to their metaphysical consequences. While common logic, particularly among those who recognize the practical benefits of liberty, would suggest that that which one values should be left free to flourish, to the contrary, both progressives and conservatives seek to control those aspects of man which they most value—progressives, man’s body; conservatives, man’s mind—relegating its opposite to a status of expendability.

If all philosophy can be thought of as the great duel between two men—Plato and Aristotle—both sides of the political spectrum in Hayek’s time, as in our own, are operating on a fundamentally Platonic premise that divides man’s physical and spiritual nature. True liberalism is fundamentally a diversion from this view in favor of the Aristotelian view of man as a unified entity, to be treated and thought of as such, his life and fate as his own, and his right to dispose of them as he sees fit unchallenged. Thus, Hayek, as an exponent of such liberalism, whether he recognizes and describes it as such himself, begins with this philosophical framework. Whether he maintains it in the chapters to come is a separate question, but his grounding is thus far solid.

Wasting no time, Hayek soon enters the fundamental comparison of his book: that of the ideological roots of Nazism and the rise of socialist thought in Britain precisely at a time when the two nations are at war.

Much equivocating in classrooms, editorial pages, and student coffee shops has transpired in the last seventy-plus years as to the differences between Nazism and true socialism, with socialist apologists quibbling about how Nazis abused what was a noble ideal in socialism. Most engage in such momentous evasions and distortions as to treat socialism and fascism as in any way opposites, portraying what is in fact a genus-type distinction as fundamentally inimical, when they are, in fact, merely differences in application of the same basic premises.

Hayek tolerates none of this, observing,

“Few are ready to recognize that the rise of Fascism and Nazism was not a reaction against the socialist trends of the preceding period, but a necessary outcome of those tendencies… As a result, many who think themselves infinitely superior to the aberrations of Nazism and sincerely hate all its manifestations, work at the same time for ideals whose realization would lead straight to the abhorred tyranny” (3).

Indeed, one cannot help but feel that little has yet changed in Western intellectualism when Hayek describes the parallels between Germany after World War I and England during World War II: “There is the same contempt for nineteenth-century liberalism, the same spurious ‘realism’, and even cynicism, the same fatalistic acceptance of ‘inevitable trends’… It does not affect our problem that some groups may want less socialism than others, that some want socialism mainly in the interest of one group and others in that of another. The important point is that, if we take the people whose views influence developments, they are now in this country in some measure all socialists” (2-3).

More familiarity ensues when Hayek notes how Germany was once held in England and other Western countries as an ideal to be pursued and how that idealized conception has since been transferred elsewhere: “Although one does not like to be reminded, it is not so many years since the socialist policy of [Germany] was generally held up by progressives as an example to be imitated, just as in more recent years Sweden has been the model country to which progressive eyes were directed” (2). One so often sees the case of Swedish socialism invoked as a statist ideal in today’s world, since the recession of 2008, but it is often forgotten how old this example is—mentioned here by Hayek in the 1940s, discredited for its proclaimed cultural superiority by Ayn Rand in the 1960s, but still going strong as part of statist mythology today.

In support of his parallel, Hayek rightly rejects the concrete superficial details of German National Socialism to which the broader abstraction of ‘fascism’ is so unproductively and irrationally married in the minds of most who refer to and write of it. More than any other ideology, the word ‘fascism’ has attained a pejorative quality that has overcome its literal meaning and distorted the popular understanding of it to such an extent that most today will readily proclaim that they reject it, but remain utterly incapable of defining it. Modern dictionaries and encyclopedias are similarly unhelpful, as much victims of the disintegrated epistemology of their times as those who reference them.

(This is not the place to go into a fuller explanation of the meaning of fascism, but those interested would do well to refer to my previous essay on the subject, “Understanding Fascism”.)

Thus, in Hayek’s understanding of National Socialism will be found no deterministic German racial explanations, recognizing both the influences of German fascist thought on the English and the early role played by Thomas Carlyle and Houston Stewart Chamberlain, a Scot and an Englishman, on the formation of fascist ideas.

A cautious approach is wise here, as while no racial explanation to the effect that some innate German-ness led to National Socialism can be held as rational, the role of culture and philosophy in German society is indispensable to understanding its rise. Hayek goes on to write, “It would be a mistake to believe that the specific German rather than the socialist element produced totalitarianism. It was the prevalence of socialist views and not Prussianism that Germany had in common with Italy and Russia—and it was from the masses and not from the classes steeped in the Prussian tradition, and favored by it, that National-Socialism arose” (7).

True as much of that is, to say “the socialist element produced totalitarianism” is perhaps only to scratch the surface by acknowledging that one political idea was connected to another It does not explain why the socialist element was accepted in the first place. For that, one must look to German culture. To that end, Leonard Peikoff’s The Ominous Parallels offers an incomparable philosophical genealogy of Nazism that would serve as a necessary complement to Hayek’s work, assuming Hayek continues down the path he is setting out here.

Perhaps the most detrimental statement in Hayek’s introduction is said rather in passing. After having written that “by moving from one country to another, one may sometimes watch similar phases of intellectual development… They suggest, if not the necessity, at least the probability, that developments will take a similar course” (1), “some of the forces which have destroyed freedom in Germany are also at work here” (2), and “our chance of averting a similar fate depends on our facing the danger and on our being prepared to revise even our most cherished hopes and ambitions if they should prove to be the source of the danger” (2-3), Hayek betrays the premise upon which he has built up his whole work by conceding, “All parallels between developments in different countries are, of course, deceptive; but I am not basing my argument mainly on such parallels” (3).

Certainly it must be admitted that parallels between such developments are not deterministic or without mitigating factors, not immune to changes in trajectory. But to suggest that they “are, of course, deceptive” is perilously asserting a skepticist rejection of the principle of causality and the recognition in earlier statements of the role of ideas. Hayek would do well to apply the same social scientific rigor to the subject of politics that he does in economics, recognizing that just as effects of supply and demand on prices are assessed by holding constant certain variables, so the effect of ideas presumes a measure of ceteris paribus, but this does not negate the principle demonstrated by such models or demand of the author some token measure of self-doubt.

In all, Hayek’s introduction is strong and offers much to think about, hope for, and consider proceeding onward into his analyses. His overall support for the importance of ideas, propensity (if somewhat unconfidently) toward conceptual integration and a comparative approach to political ideologies, and positive views of individual man and political freedom make for a promising start. Hayek even provides sound reasoning for why England should be interested in engaging in such self-critical analysis, arguing,

“[T]his will enable us to understand our enemy and the issue at stake between us. It cannot be denied that there is yet little recognition of the positive ideals for which we are fighting. We know that we are fighting for freedom to shape our life according to our own ideas. That is a great deal, but not enough. It is not enough to give us the firm beliefs which we need to resist an enemy who uses propaganda as one of his main weapons not only in the most blatant but also in the most subtle forms. It is still more insufficient when we have to counter this propaganda among the people under his control and elsewhere, where the effect of this propaganda will not disappear with the defeat of the Axis powers… It is a lamentable fact that the English in their dealings with the dictators before the war, not less than in their attempts at propaganda and in the discussion of their war aims, have shown an inner insecurity and uncertainty of aim which can be explained only by confusion about their own ideals and the nature of the differences which separated them from the enemy. We have been misled as much because we have refused to believe that the enemy was sincere in the profession of some beliefs we shared as because we believed in the sincerity of some of his other claims” (4).

Likewise, we begin to see his potential faults: a propensity to begin at the level of politics without looking more deeply toward philosophical and cultural ideas, and a creeping skepticism that may lead him to an unconfident defense of his comparative approach and, thus, the warning he seeks to achieve with it. Whether these virtues and potential faults continue, only time and further reading will reveal, but as for the introduction, Hayek hits all of his marks: providing context, provoking questions and challenges, establishing a conceptual framework, and enticing our curiosity. A solid start to a modern defense of classical liberalism.

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