The Roads to Serfdom
by Theodore Dalrymple
People in Britain who lived through World War II do not remember it with anything like the horror one might have expected. In fact, they often remember it as the best time of their lives. Even allowing for the tendency of time to burnish unpleasant memories with a patina of romance, this is extraordinary. The war, after all, was a time of material shortage, terror, and loss: what could possibly have been good about it?
The answer, of course, is that it provided a powerful existential meaning and purpose. The population suffered at the hands of an easily identifiable external enemy, whose evil intentions it became the overriding purpose of the whole nation to thwart. A unified and preeminent national goal provided respite from the peacetime cacophony of complaint, bickering, and social division. And privation for a purpose brings its own content.
The war having instantaneously created a nostalgia for the sense of unity and transcendent purpose that prevailed in those years, the population naturally enough asked why such a mood could not persist into the peace that followed. Why couldn’t the dedication of millions, centrally coordinated by the government—a coordinated dedication that had produced unprecedented quantities of aircraft and munitions—be adapted to defeat what London School of Economics head Sir William Beveridge, in his wartime report on social services that was to usher in the full-scale welfare state in Britain, called the “five giants on the road to reconstruction”: Want, Disease, Ignorance, Squalor, and Idleness?
By the time Beveridge published his report in 1942, most of the intellectuals of the day assumed that the government, and only the government, could accomplish these desirable goals. Indeed, it all seemed so simple a matter that only the cupidity and stupidity of the rich could have prevented these ends from already having been achieved. The Beveridge Report states, for example, that want “could have been abolished in Britain before the present war” and that “the income available to the British people was ample for such a purpose.” It was just a matter of dividing the national income cake into more equal slices by means of redistributive taxation. If the political will was there, the way was there; there was no need to worry about effects on wealth creation or any other adverse effects.
For George Orwell, writing a year before the Beveridge Report, matters were equally straightforward. “Socialism,” he wrote, “is usually defined as ‘common ownership of the means of production.’ Crudely: the State, representing the whole nation, owns everything, and everyone is a state employee. . . . Socialism . . . can solve the problems of production and consumption. . . . The State simply calculates what goods will be needed and does its best to produce them. Production is only limited by the amount of labour and raw materials.”
A few, equally simple measures would help bring about a better, more just and equitable society. Orwell recommended “i) Nationalization of land, mines, railways, banks and major industries”; “ii) Limitation of incomes, on such a scale that the highest does not exceed the lowest by more than ten to one”; and “iii) Reform of the educational system along democratic lines.” By this last, he meant the total prohibition of private education. He assumed that the culture, which he esteemed but which nevertheless was a product of the very system he so disliked, would take care of itself.
It would hardly be an exaggeration to say that, by the time Orwell wrote, his collectivist philosophy was an intellectual orthodoxy from which hardly anyone in Britain would dare dissent, at least very strongly. “We are all socialists now,” declared Bernard Shaw 40 years before Orwell put forward his modest proposals. And before him, Oscar Wilde, in “The Soul of Man under Socialism,” accepted as incontrovertible—as not even worth supporting with evidence or argument, so obviously true was it—that poverty was the inescapable consequence of private property, and that one man’s wealth was another man’s destitution. And before Wilde, John Ruskin had argued, in Unto This Last, that a market in labor was both unnecessary and productive of misery. After all, he said, many wages were set according to an abstract (which is to say a moral) conception of the value of the job; so why should not all wages be set in the same way? Would this not avoid the unjust, irrational, and frequently harsh variations to which a labor market exposed people?
Ruskin was right that there are indeed jobs whose wages are fixed by an approximate notion of moral appropriateness. The salary of the president of the United States is not set according to the vagaries of the labor market; nor would the number of candidates for the post change much if it were halved or doubled. But if every wage in the United States were fixed in the same way, wages would soon cease to mean very much. The economy would be demonetized, the impersonal medium of money being replaced in the allocation of goods and services by personal influence and political connection—precisely what happened in the Soviet Union. Every economic transaction would become an expression of political power.
The growing spirit of collectivism in Britain during the war provoked an Austrian economist who had taken refuge there, F. A. von Hayek, to write a polemical counterblast to the trend: The Road to Serfdom, published in 1944. It went through six printings in its first year, but its effect on majority opinion was, for many years to come, negligible. Hayek believed that while intellectuals in modern liberal democracies—those to whom he somewhat contemptuously referred as the professional secondhand dealers in ideas—did not usually have direct access to power, the theories that they diffused among the population ultimately had a profound, even determining, influence upon their society. Intellectuals are of far greater importance than appears at first sight.
Hayek was therefore alarmed at the general acceptance of collectivist arguments—or worse still, assumptions—by British intellectuals of all classes. He had seen the process—or thought he had seen it—before, in the German-speaking world from which he came, and he feared that Britain would likewise slide down the totalitarian path. Moreover, at the time he wrote, the “success” of the two major totalitarian powers in Europe, Nazi Germany and Soviet Russia, seemed to have justified the belief that a plan was necessary to coordinate human activity toward a consciously chosen goal. For George Orwell, the difference between the two tyrannies was one of ends, not of means: he held up Nazi Germany as an exemplar of economic efficiency resulting from central planning, but he deplored the ends that efficiency accomplished. While the idea behind Nazism was “human inequality, the superiority of Germans to all other races, the right of Germany to rule the world,” socialism (of which, of course, the Soviet Union was the only exemplar at the time) “aims, ultimately, at a world-state of free and equal human beings.” Same means, different ends: but Orwell, at this point in his intellectual development, saw nothing intrinsically objectionable in the means themselves, or that they must inevitably lead to tyranny and oppression, independently of the ends for which they were deployed.
Against the collectivists, Hayek brought powerful—and to my mind obvious—arguments, that, however, were scarcely new or original. Nevertheless, it is often, perhaps usually, more important to remind people of old truths than to introduce them to new ones.
Hayek pointed out that the wartime unity of purpose was atypical; in more normal times, people had a far greater, indeed an infinite, variety of ends, and anyone with the power to adjudicate among them in the name of a conscious overall national plan, allowing a few but forbidding most, would exert vastly more power than the most bloated plutocrat of socialist propaganda had ever done in a free-market society.
Orwell’s assertion that the state would simply calculate what was needed airily overlooked the difficulties of the matter, as well as his proposal’s implications for freedom. The “directing brains,” as Orwell called them, would have to decide how many hairpins, how many shoelaces, were “needed” by the population under their purview. They would have to make untold millions of such decisions, likewise coordinating the production of all components of each product, on the basis of their own arbitrary notions of what their fellow citizens needed. Orwell’s goal, therefore, was a society in which the authorities strictly rationed everything; for him, and untold intellectuals like him, only rationing was rational. It takes little effort of the imagination to see what this control would mean for the exercise of liberty. Among other things, people would have to be assigned work regardless of their own preferences.
Collectivist thinking arose, according to Hayek, from impatience, a lack of historical perspective, and an arrogant belief that, because we have made so much technological progress, everything must be susceptible to human control. While we take material advance for granted as soon as it occurs, we consider remaining social problems as unprecedented and anomalous, and we propose solutions that actually make more difficult further progress of the very kind that we have forgotten ever happened. While everyone saw the misery the Great Depression caused, for example, few realized that, even so, living standards actually continued to rise for the majority. If we live entirely in the moment, as if the world were created exactly as we now find it, we are almost bound to propose solutions that bring even worse problems in their wake.
In reaction to the unemployment rampant in what W. H. Auden called “the low dishonest decade” before the war, the Beveridge Report suggested that it was government’s function to maximize security of income and employment. This proposition was bound to appeal strongly to people who remembered mass unemployment and collapsing wages; but however high-minded and generous it might have sounded, it was wrong. Hayek pointed out that you can’t give everyone a job irrespective of demand without sparking severe inflation. And you can no more protect one group of workers’ wages against market fluctuations without penalizing another group than you can discriminate positively in one group’s favor without discriminating negatively against another. This is so, and it is beyond any individual human’s control that it should be so. Therefore, no amount of planning would ever make Beveridge’s goals possible, however desirable they might be in the abstract.
But just because a goal is logically impossible to achieve does not mean that it must be without effect on human affairs. As the history of the twentieth century demonstrates perhaps better than any other, impossible goals have had at least as great an effect on human existence as more limited and possible ones.
The most interesting aspect of Hayek’s book, however, is not his refutation of collectivist ideas—which, necessary as it might have been at that moment, was not by any means original. Rather, it is his observations of the moral and psychological effects of the collectivist ideal that, 60 years later, capture the imagination—mine, at least.
Hayek thought he had observed an important change in the character of the British people, as a result both of their collectivist aspirations and of such collectivist measures as had already been legislated. He noted, for example, a shift in the locus of people’s moral concern. Increasingly, it was the state of society or the world as a whole that engaged their moral passion, not their own conduct. “It is, however, more than doubtful whether a fifty years’ approach towards collectivism has raised our moral standards, or whether the change has not rather been in the opposite direction,” he wrote. “Though we are in the habit of priding ourselves on our more sensitive social conscience, it is by no means clear that this is justified by the practice of our individual conduct.” In fact, “It may even be . . . that the passion for collective action is a way in which we now without compunction collectively indulge in that selfishness which as individuals we had learnt a little to restrain.”
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