F.A. Hayek is one of the most influential figures in the field of social science. His works ranged from philosophy to economics to jurisprudence to psychology. He won the Nobel Prize in economics in 1974 and was probably the last major Austrian economist from Austria. He was not only important in Austrian economics but also in mainstream economics. One of his most popular works was the book The Road to Serfdom. Even though it was written in 1944, it is still read by many and was a bestseller in 2010 on Amazon.
With this book, Hayek brought the noise into the academia of social science and especially economics. During the Second World War, many scholars made excuses for the compulsory wartime economic system. Due to the Great Depression in the early 1930s, many had already lost their faith in capitalism and democracy. Some would prefer Keynes’s capitalist model, which focused on the demand side. Hayek himself was dispirited because he wasn’t included in contributions to the war efforts. This motivated him to write this legendary book.
This book reached places; it wasn’t just a success in the United Kingdom but was also a success in America. Politicians and scholars were well aware of the work of Hayek. However, with its rising popularity, the book was misinterpreted a lot too, leading to many great scholars to wrongly abstract the book and misinform the general public. Great names in economics like Paul Samuelson and Robert Solow alleged that Hayek wrote that with one small intervention of government in the economy, there would be serfdom in society. This is a very popular belief about Hayek’s book, but it is wrong.
Hayek never claimed anything as such. His book was a critique of authoritarian collectivism and the fallacies regarding totalitarianism and authoritarianism. He explained that socialism is not a system that supports the liberty of individuals, and if anyone dreams about socialism, then he has to be ready to sacrifice his freedom. Then, Hayek explains that any planning—even with a group of planners or a commission—would lead to chaos due to the problem of coordination. This would lead to the ultimate decision-making of a single planner, and thus the reality of any form of collectivism lies in the decisions of a single planner.
Hayek shows the importance of private property and how private property also gives choices to those who don’t own property. Then, one by one, Hayek broke the arguments for socialism into pieces. He critiques central planning, exhibits his famous work on knowledge problems, and asks how planners are capable of foreseeing the actions of individuals in a society. He argued that the planners’ claims that the political freedom of people wouldn’t be affected and only the economic freedom would be taken from them is false as both political freedom and economic freedom are complementary to one another. Without one, the other is impossible. He also argues based on law, explaining the reality of the Rule of Law and its importance in a free society. After that, he covered different issues like the socialist roots of Nazis, the ways the worst people rise to the top and rule over all, and the end of truth in a regulated society where people are deprived of truth or facts.
Hayek’s book was a critique of collectivism, but most importantly, it was dedicated “To the Socialists of all Parties.” Hayek understood very well that all forms of collectivism like socialism, communism, fascism, and nationalism oppose individualism and liberalism.
Hayek wrote this book during the Second World War when the Soviet Union was on the Allies’ side. Therefore, even though he criticized Adolf Hitler, he couldn’t do the same with Joseph Stalin. However, by reading the book, it seems like Hayek wanted to show that there is no difference between Hitler and Stalin. What many still fail to recognize today was well recognized by Hayek. He did regret not being fully open in putting his thoughts to the literature, but by showing the similarities between all types of collectivism and the socialist roots of Nazis, Hayek made his point quite well.
He challenged the popular beliefs of that time, but nowhere did he claim that a small step of government would eventually lead to serfdom. The book was not based on the evil side of government but on the illiberal impact of collectivism that would require a government that Hayek believed the socialist believers themselves wouldn’t like. There is another claim that Hayek criticized the welfare state, but there was no mention of it in the book either.
This incorrect interpretation of the book by scholars spread wrong information to those who haven’t yet read the book. This book is very important for the political economy in mainstream economics. If anyone asks why socialism isn’t considered in economics, it’s because of this book. It has helped in changing many opinions including the author of this write-up. The important issues Hayek covered are still relevant. However, it is a matter of misfortune that despite Hayek’s book being published in 1944, there are still many (that are increasing in number) that have fatal points of view toward socialism or any form of collectivism.