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Word Gems exploring self-realization, sacred personhood, and full humanity
F.A. Hayek The Road To Serfdom Economic Control and Totalitarianism
That the complex system of interrelated activities, if it is to be consciously directed at all, must be directed by a single staff of experts, and that ultimate responsibility and power must rest in the hands of a commander-in-chief whose actions must not be fettered by democratic procedure, is too obvious a consequence of underlying ideas of central planning not to command fairly general assent. The consolation our planners offer us is that this authoritarian direction will apply "only" to economic matters. One of the most prominent economic planners, Stuart Chase, assures us, for instance, that in a planned society "political democracy can remain if it confines itself to all but economic matter." Such assurances are usually accompanied by the suggestion that, by giving up freedom in what are, or ought to be, the less important aspects of our lives, we shall obtain greater freedom in the pursuit of higher values. On this ground people who abhor the idea of a political dictatorship often clamor for a dictator in the economic field. Yet, apart from the pathological case of the miser, there is no such thing. The ultimate ends of the activities of reasonable beings are never economic. Strictly speaking, there is no "economic motive" but only economic factors conditioning our striving for other ends. What in ordinary language is misleadingly called the "economic motive" means merely the desire for general opportunity, the desire for power to achieve unspecified ends. If we strive for money, it is because it offers us the widest choice in enjoying the fruits of our efforts. Because in modern society it is through the limitation of our money incomes that we are made to feel the restrictions which our relative poverty still imposes upon us, many have come to hate money as the symbol of these restrictions. But this is to mistake for the cause the medium through which a force makes itself felt. It would be much truer to say that money is one of the greatest instruments of freedom ever invented by man. It is money which in existing society opens an astounding range of choice to the poor man--a range greater than that which not many generations ago was open to the wealthy. We shall better understand the significance of this service of money if we consider what it would really mean if, as so many socialists characteristically propose, the "pecuniary motive" were largely displaced by "noneconomic incentives." If all rewards, instead of being offered in money, were offered in the form of public distinctions or privileges, positions of power over other men, or better housing or better food, opportunities for travel or education, this would merely mean that the recipient would no longer be allowed to choose and that whoever fixed the reward determined not only its size but also the particular form in which it should be enjoyed. So long as we can freely dispose over our income and all our possessions, economic loss will always deprive us only of what we regard as the least important of the desires we were able to satisfy.
And similarly with an economic gain. Economic changes, in other words, usually affect only the fringe, the "margin," of our needs. There are many things which are more important than anything which economic gains or losses are likely to affect, which for us stand high above the amenities and even above many of the necessities of life which are affected by the economic ups and owns. Compared with them, the "filthy lucre," the question whether we are economically somewhat worse or better off, seems of little importance.
This, however, is an erroneous conclusion. Economic values are less important to us than many things precisely because in economic matters we are free to decide what to us is more, and what less, important. Or, as we might say, because in the present society it is we who have to solve the economic problems of our lives. To be controlled in our economic pursuits means to be always controlled unless we declare our specific purpose. Or, since when we declare our specific purpose we shall also have to get it approved, we should really be controlled in everything. Economic planning would not affect merely those of our marginal needs that we have in mind when we speak contemptuously about the merely economic.
The authority directing all economic activity would control not merely the part of our lives which is concerned with inferior things;
Economic control is not merely control of a sector of human life which can be separated from the rest;
And whoever has sole control of the means must also determine which ends are to be served, which values are to be rated higher and which lower-in short, what men should believe and strive for. Central planning means that the economic problem is to be solved by the community instead of by the individual; but this involves that it must also be the community, or rather its representatives, who must decide the relative importance of the different needs. Since under modern conditions we are for almost everything dependent on means which our fellow-men provide, economic planning would involve direction of almost the whole of our life. There is hardly an aspect of it, from our primary needs to our relations with our family and friends, from the nature of our work to the use of our leisure, over which the planner would not exercise his "conscious control." The power of the planner over our private lives would be no less complete if he chose not to exercise it by direct control of our consumption. Although a planned society would probably to some extent employ rationing and similar devices, the power of the planner over our private lives does not depend on this and would be hardly less effective if the consumer were nominally free to spend his income as he pleased. The source of this power over all consumption which in a planned society the authority would possess would be its control over production. While we need probably not be afraid that such an authority would exploit this power in the manner in which a private monopolist would do so, while its purpose would presumably not be the extortion of maximum financial gain, it would have complete power to decide what we are to be given and on what terms. It would not only decide what commodities and services were to be available and in what quantities; it would be able to direct their distribution between districts and groups and could, if it wished, discriminate between persons to any degree it liked. If we remember why planning is advocated by most people, can there be much doubt that this power would be used for the ends of which the authority approves and to prevent the pursuits of ends which it disapproves? The obstacles in our path are not due to someone's disapproving of our ends but to the fact that the same means are also wanted elsewhere. In a directed economy, where the authority watches over the ends pursued, it is certain that it would use its powers to assist some ends and to prevent the realization of others. Not our own view, but somebody else's, of what we ought to like or dislike would determine what we should get. And since the authority would have the power to thwart any efforts to elude its guidance, it would control what we consume almost as effectively as if it directly told us how to spend our income. These two aspects of our lives cannot be separated; and as for most of us the time we spend at our work is a large part of our whole lives, and as our job usually also determines the place where and the people among whom we live, some freedom in choosing our work is, probably, even more important for our happiness than freedom to spend our income during the hours of leisure. Nothing makes conditions more unbearable than the knowledge that no effort of ours can change them; and even if we should never have the strength of mind to make the necessary sacrifice, the knowledge that we could escape if we only strove hard enough makes many otherwise intolerable positions bearable. Here as elsewhere the state can do a great deal to help the spreading of knowledge and information and to assist mobility. But the point is that the kind of state action which really would increase opportunity is almost precisely the opposite of the "planning" which is now generally advocated and practiced. Most planners, it is true, promise that in the new planned world free choice of occupation will be scrupulously preserved or even increased. But there they promise more than they can possibly fulfill. If they want to plan, they must control the entry into the different trades and occupations, or the terms of remuneration, or both. In almost all known instances of planning, the establishlnent of such controls and restrictions was among the first measures taken. If such control were universally practiced and exercised by a single planning authority, one needs little imagination to see what would become of the "free choice of occupation" promised. The "freedom of choice" would be purely fictitious, a mere promise to practice no discrimination where in the nature of the case discrimination must be practiced, and where all one could hope would be that the selection would be made on what the authority believed to be objective grounds. A rather plain girl who badly wants to become a saleswoman, a weakly boy who has set his heart on a job where his weakness handicaps him, as well as in general the apparently less able or less suitable are not necessarily excluded in a competitive society; if they value the position sufficiently they will frequently be able to get a start by a financial sacrifice and will later make good through qualities which at first are not so obvious. But when the authority fixes the remunerations for a whole category and the selection among the candidates is made by an objective test, the strength of their desire for the job will count for very little.
Conditions will be without exception what in some measure they inevitably are in a large organization-or rather worse, because there will be no possibility of escape. We shall no longer be free to be rational or efficient only when and where we think it worth while; we shall all have to conform to the standards which the planning authority must fix in order to simplify its task. To make this immense task manageable, it will have to reduce the diversity of human capacities and inclinations to a few categories of readily interchangeable units and deliberately to disregard minor personal differences.
That in a competitive society most things can be had at a price--though it is often a cruelly high price we have to pay--is a fact the importance of which can hardly be overrated. The alternative is not, however, complete freedom of choice, but orders and prohibitions which must be obeyed and, in the last resort, the favor of the mighty. That life and health, beauty and virtue, honor and peace of mind, can often be preserved only at considerable material cost, and that somebody must make the choice, is as undeniable as that we all are sometimes not prepared to make the material sacrifices necessary to protect those higher values against all injury. Nor can it be otherwise, since all our ends compete for the same means; and we could not strive for anything but these absolute values if they were on no account to be endangered.
In all this time not one of the many people who have used it has produced a workable plan of how production could be increased so as to abolish even in western Europe what we regard as poverty--not to speak of the world as a whole. The reader may take it that whoever talks about potential plenty is either dishonest or does not know what he is talking about. Yet it is this false hope as much as anything which drives us along the road to planning. Even a good many economists with socialist views who have seriously studied the problems of central planning are now content to hope that a planned society will equal the efficiency of a competitive system; they advocate planning no longer because of its superior productivity but because it will enable us to secure a more just and equitable distribution of wealth. This is, indeed, the only argument for planning which can be seriously pressed. It is indisputable that if we want to secure a distribution of wealth which conforms to some predetermined standard, if we want consciously to decide who is to have what, we must plan the whole economic system. But the question remains whether the price we should have to pay for the realization of somebody's ideal of justice is not bound to be more discontent and more oppression than was ever caused by the much-abused free play of economic forces. This is a dangerous illusion. Even during the periods of European history when the regimentation of economic life went furthest, it amounted to little more than the creation of a general and semipermanent framework of rules within which the individual preserved a wide free sphere. The apparatus of control then available would not have been adequate to impose more than very general directions. And even where the control was most complete it extended only to those activities of a person through which he took part in the social division of labor. In the much wider sphere in which he then still lived on his own products, he was free to act as he chose. The passion for the "collective satisfaction of our needs," with which our socialists have so well prepared the way for totalitarianism, and which wants us to take our pleasures as well as our necessities at the appointed time and in the prescribed form, is, of course, partly intended as a means of political education. But it is also the result of the exigencies of planning, which consists essentially in depriving us of choice, in order to give us whatever fits best into the plan and that at a time determined by the plan.
The economic freedom which is the prerequisite of any other freedom cannot be the freedom from economic care which the socialists promise us and which can be obtained only by relieving the individual at the same time of the necessity and of the power of choice;
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