Continuing our article series on Benjamin Wiker’s “10 Books Every Conservative Must Read,” we come to Part III: The Place of Economics for Conservatives and Chapter 10, “The Road to Serfdom (1944),” by the Austrian economist and moral philosopher, Friedrich August Hayek, who unmasked the utopian socialism of Karl Marx’s Homo economicus declaring that “the most important change which extensive government control produces is a psychological change, an alteration in the character of the people,” a change that Wiker says “occurs when they willingly yield their freedom to a totalitarian state, even if it is the comfortable servitude of the welfare state.”
Regarding Hayek’s critical legacy in economics, Milton Friedman wrote: “There is no figure who had more of an influence … on the intellectuals behind the Iron Curtain than Friedrich Hayek. His books were translated and published by the underground and black-market editions, read widely, and undoubtedly influenced the climate of opinion that ultimately brought about the collapse of the Soviet Union.”
Following the intellectual traditions of Aristotle, the father of political conservatism, as well as Burke, Tocqueville, Chesterton, C.S. Lewis, Belloc and Voegelin, Hayek strongly advocated individual moral responsibility to expand people’s own abilities to take care of themselves and their society. Therefore, Hayek believed that the government should be a means “to help individuals in the fullest development of their individual personality,” rather than an end in itself. Hayek believed that socialism crushes the human spirit and the opportunity to develop one’s own intelligence and moral responsibility, to direct one’s own human potential and to contribute to the commonwealth.
Although initially unremarkable as a student at the University of Vienna, he considered himself an agnostic as well as a Fabian socialist: Marxism with a smiley face, which imposed socialism gradually through the democratic process rather than at the point of a gun through violent revolution. Eventually Hayek found his passion in studying economics and developed several key relationships at the famed Austrian School of Economics, including Carl Menger, Friedrich von Wieser and Ludwig von Mises. He would later form an intellectual discussion group with Eric Voegelin called the Geistkreis and attend von Mises’ private seminars, which further solidified his conservative economic worldviews.
Hayek earned his doctorate in law in 1921 (with a minor in economics) and a doctorate in political science in 1923. From 1923 to 1924 with von Mises’ help, he studied at New York University and later he worked briefly at the Federal Reserve while greatly improving his fluency in English. In 1927 he founded the Austrian Institute for Business Cycle Research with von Mises where he discarded any leftover Fabian socialist tendencies. As a professor at the London School of Economics, he frequently debated with the famous socialist economist Harold Laski. Later, at the University of Chicago, he was a professor in the Committee on Social Thought where his faculty seminar on the philosophy of science was attended by many of the university’s most notable scientists of the time, including Enrico Fermi, Sewall Wright and Leó Szilárd.
Wiker says of Hayek that humility defined his worldview, that “human beings are not gods. We are not, and can never be, all-knowing. For our own good, we need to accept, with humility, our own human intellectual limitations.” Hayek’s arguments favoring free-market capitalism, federalism and limited government were not based upon parochialism, anarchy or greed, but upon a vigorous recognition of the intrinsic limitations of the human condition. Hayek knew that the leviathan federal government was the antithesis of humility, and therefore could never recognize that it cannot possibly know and judge all things for all people nor have the deference to take a laissez-faire approach to an activist government seeking to solve all social ills.
On this point Wiker wrote:
Socialist government sees itself as a benevolent god; it becomes instead a malevolent tyrant, micromanaging the details of everyone’s life with all the blundering inefficiency, confusion, unintended consequences and plain idiocy (which we politely call “imprudence”) that have made the name “bureaucrat” a term of infamy. The bureaucrat truly becomes evil when he comes to believe that local people are too stupid to know what’s good for them and are better off ruled with the iron hand of the government’s experts.
Hayek isn’t against all forms of government and concedes a role for government in the economy. Hayek allows that government should assure that prices aren’t fixed by collusion, that monopolies don’t crush competition and that some regulatory safeguards are necessary to protect society against obvious dangers like poisons, food safety and dangerous products for the preservation of competition and antimonopoly.
Like Voegelin, Hayek understood that treating politics and economics as if they were branches of physics or chemistry was a dangerous fallacy and a fundamental left-liberal, or socialist, error. “Those who argue that we have to an astounding degree learned to master the forces of nature but are sadly behind in making successful use of the possibilities of social collaboration are quite right. … This is not only the path to totalitarianism but the path to destruction of our civilization and a certain way to block future progress.”
Hayek and C.S. Lewis both foresaw the inherent dangers in ever-advancing technology. Hayek wrote, “While there is nothing in modern technological developments which forces us toward comprehensive economic planning, there is a great deal in them which makes infinitely more dangerous the power a planning authority would possess.” This recalls Lewis’ repeated warning, that “each new power won by man is a power over man as well.”
If Hayek were alive today, he would be outraged that America, the world’s oldest republic and the greatest nation in the history of humanity, has descended so low from conservative free-market capitalism as to recklessly amass a $14.3-trillion-plus debt and have Secretary of State Hillary Rodham Clinton repeatedly beg our enemies, like China, to buy our debt so we can further bankrupt America by funding an unconstitutional and unsustainable socialist welfare state.