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Word Gems
exploring self-realization, sacred personhood, and full humanity
F.A. Hayek
The Road To Serfdom
The Abandoned Road
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A program whose basic thesis is, not that the system of
free enterprise for profit has failed in this generation, but
that it has not yet been tried. — F. D. Roosevelt.
WHEN the course of civilization takes an unexpected
turn — when, instead of the continuous progress
which we have come to expect, we find ourselves
threatened by evils associated by us with past ages of barbar-
ism — we naturally blame anything but ourselves. Have we not
all Striven according to our best lights, and have not many of
our finest minds incessantly worked to make this a better
world? Have not all our efforts and hopes been directed to-
ward greater freedom, justice, and prosperity? If the outcome
is so different from our aims — if, instead of freedom and
prosperity, bondage and misery stare us in the face — is it not
clear that sinister forces must have foiled our intentions, that
we are the victims of some evil power which must be con-
quered before we can resume the road to better things? How-
ever much we may differ when we name the culprit — whether
it is the wicked capitalist or the vicious spirit of a particular
nation, the stupidity of our elders, or a social system not yet,
although we have struggled against it for half a century, fully
overthrown — we all are, or at least were until recently, certain
of one thing: that the leading ideas which during the last gen-
eration have become common to most people of good will and
have determined the major changes in our social life cannot
have been wrong. We are ready to accept almost any explana-
tion of the present crisis of our civilization except one: that the
present state of the world may be the result of genuine error
on our own part and that the pursuit of some of our most
cherished ideals has apparently produced results utterly differ-
ent from those which we expected.
While all our energies are directed to bring this war to a
victorious conclusion, it is sometimes difficult to remember
that even before the war the values for which we are now
fighting were threatened here and destroyed elsewhere.
Though for the time being the different ideals are represented
by hostile nations fighting for their existence, we must not for-
get that this conflict has grown out of a struggle of ideas within
what, not so long ago, was a common European civilization
and that the tendencies which have culminated in the crea-
tion of the totalitarian systems were not confined to the coun-
tries which have succumbed to them. Though the first task
must now be to win the war, to win it will only gain us another
opportunity to face the basic problems and to find a way of
averting the fate which has overtaken kindred civilizations.
Now, it is somewhat difficult to think of Germany and Italy,
or of Russia, not as different worlds but as products of a de-
velopment of thought in which we have shared; it is, at least
so far as our enemies are concerned, easier and more comfort-
ing to think that they are entirely different from us and that
what happened there cannot happen here. Yet the history of
these countries in the years before the rise of the totalitarian
system showed few features with which we are not familiar.
The external conflict is a result of a transformation of Eu-
ropean thought in which others have moved so much faster
as to bring them into irreconcilable conflict with our ideals,
but which has not left us unaffected.
That a change of ideas and the force of human will have
made the world what it is now, though men did not foresee the
results, and that no spontaneous change in the facts obliged us
thus to adapt our thought is perhaps particularly difficult for
the Anglo-Saxon nations to see, just because in this develop-
ment they have, fortunately for them, lagged behind most of
the European peoples. We still think of the ideals which guide
us, and have guided us for the past generation, as ideals only
to be realized in the future and are not aware how far in the
last twenty-five years they have already transformed not only
the world but also our own countries. We still believe that un-
til quite recently we were governed by what are vaguely called
nineteenth-century ideas or the principle of laissez faire. Com-
pared with some other countries, and from the point of view of
those impatient to speed up the change, there may be some
justification for such belief. But although until 1931 England
and America had followed only slowly on the path on which
others had led, even by then they had moved so far that only
those whose memory goes back to the years before the last war
know what a liberal world has been like.
The crucial point of which our people are still so little aware
is, however, not merely the magnitude of the changes which
have taken place during the last generation but the fact that
they mean a complete change in the direction of the evolution
of our ideas and social order. For at least twenty-five years
before the specter of totalitarianism became a real threat, we
had progressively been moving away from the basic ideas on
which Western civilization has been built. That this movement
on which we have entered with such high hopes and ambitions
should have brought us face to face with the totalitarian horror has come as a profound shock to this generation, which still
refuses to connect the two facts. Yet this development merely confirms the warnings of the fathers of the liberal philosophy which we still profess. We have progressively abandoned that freedom in economic affairs without which personal and political freedom has never existed in the past.
Although we had been warned by some of the greatest political thinkers of the nineteenth century, by De Tocqueville and Lord Acton, that socialism means slavery, we have steadily moved in the direction of socialism. And now that we have seen a new form of slavery arise before our eyes, we have so completely forgotten the warning that it scarcely occurs to us that the two things may be connected.
* Even in that year the Macmillan Report could already speak of "the change of outlook of the government of this country in recent times, its growing pre-occupation, irrespective of party, with the management of the like of the people" and add that ‘‘Parliament finds itself increasingly engaged in legislation which has for its conscious aim the regulation of the day-to-day affairs of the community and now intervenes in matters formerly thought to be entirely outside its scope.” This could be said before, later in the same year, England finally took the head-long plunge and, in the short space of the inglorious years 1931-39, transformed
its economic system beyond recognition.
How sharp a break not only with the recent past but with
the whole evolution of Western civilization the modern trend
toward socialism means becomes clear if we consider it not
merely against the background of the nineteenth century but
in a longer historical perspective. We are rapidly abandoning
not the views merely of Cobden and Bright, of Adam Smith
and Hume, or even of Locke and Milton, but one of the salient
characteristics of Western civilization as it has grown from the
foundations laid by Christianity and the Greeks and Romans.
Not merely nineteenth- and eighteenth-century liberalism, but
the basic individualism inherited by us from Erasmus and
Montaigne, from Cicero and Tacitus, Pericles and Thucydides,
is progressively relinquished.
* Even much more recent warnings which have proved dreadfully true have been almost entirely forgotten. It is not yet thirty years since Hilaire Belloc, in a book which explains more of what has happened since in Germany than most works written after the event, explained that “the effect of Socialist doctrine on Capitalist society is to produce a third thing different from either of its two begetters — to wit, the Servile State” [The Servile State 1913; 3d ed., 1927], p. xiv).
The Nazi leader who described the National Socialist revolu-
tion as a counter-Renaissance spoke more truly than he prob-
ably knew. It was the decisive step in the destruction of that
civilization which modern man had built up from the age of
the Renaissance and which was, above all, an individualist
civilization. Individualism has a bad name today, and the
term has come to be connected with egotism and selfishness.
But the individualism of which we speak in contrast to social-
ism and all other forms of collectivism has no necessary con-
nection with these. Only gradually in the course of this book
shall we be able to make clear the contrast between the two
opposing principles. But the essential features of that individ-
ualism which, from elements provided by Christianity and the
philosophy of classical antiquity, was first fully developed dur-
ing the Renaissance and has since grown and spread into what
we know jels Western civilization — are the respect for the indi-
vidual man qua man, that is, the recognition of his own views
and tastes as supreme in his own sphere, however narrowly that
may be circumscribed, and the belief that it is desirable that
men should develop their own individual gifts and bents.
“Freedom” and “liberty” are now words so worn with use and
abuse that one must hesitate to employ them to express the
ideals for which they stood during that period. “Tolerance”
is, perhaps, the only word which still preserves the full mean-
ing of the principle which during the whole of this period was
in the ascendant and which only in recent times has again
been in decline, to disappear completely with the rise of the
totalitarian state.
The gradual transformation of a rigidly organized hier-
archic system into one where men could at least attempt to
shape their own life, where man gained the opportunity of
knowing and choosing between different forms of life, is closely
associated with the growth of commerce. From the commer-
cial cities of northern Italy the new view of life spread with
commerce to the west and north, through France and the
southwest of Germany to the Low Countries and the British
Isles, taking firm root wherever there was no despotic political
power to stifle it. In the Low Countries and Britain it for a
long time enjoyed its fullest development and for the first time
had an opportunity to grow freely and to become the founda-
tion of the social and political life of these countries. And it was
from there that in the late seventeenth and eighteenth cen-
turies it again began to spread in a more fully developed form
to the West and East, to the New World and to the center of
the European continent, where devastating wars and political
oppression had largely submerged the earlier beginnings of a
similar growth.
During the whole of this modern period of European history
the general direction of social development was one of freeing
the individual from the ties which had bound him to the cus-
tomary or prescribed ways in the pursuit of his ordinary ac-
tivities. The conscious realization that the spontaneous and
uncontrolled efforts of individuals were capable of producing a
complex order of economic activities could come only after
this development had made some progress. The subsequent
elaboration of a consistent argument in favor of economic
freedom was the outcome of a free growth of economic activ-
ity which had been the undesigned and unforeseen by-prod-
uct of political freedom.
Perhaps the greatest result of the unchaining of individual
energies was the marvelous growth of science which followed
the march of individual liberty from Italy to England and be-
yond. That the inventive faculty of man had been no less in
earlier periods is shown by the many highly ingenious auto-
matic toys and other mechanical contrivances constructed
while industrial technique still remained stationary and by the
development in some industries which, like mining or watch-
making, were not subject to restrictive controls. But the few attempts toward a more extended industrial use of mechanical
inventions, some extraordinarily advanced, were promptly
suppressed, and the desire for knowledge was stifled, so long as
the dominant views were held to be binding for all: the beliefs
of the great majority on what was right and proper were al-
lowed to bar the way of the individual innovator. Only since
industrial freedom opened the path to the free use of new
knowledge, only since everything could be tried — if somebody
could be found to back it at his own risk — and, it should be
added, as often as not from outside the authorities officially in-
trusted with the cultivation of learning, has science made the
great strides which in the last hundred and fifty years have
changed the face of the world.
* The most fateful of these developments, pregnant with consequences not yet extinct, was the subjection and partial destruction of the German bourgeoisie by the territorial princes in the fifteenth and sixteenth centuries.
As is so often true, the nature of our civilization has been
seen more clearly by its enemies than by most of its friends:
“the perennial Western malady, the revolt of the individual
against the species,” as that nineteenth-century totalitarian,
Auguste Comte, has described it, was indeed the force which
built our civilization. What the nineteenth century added to
the individualism of the preceding period was merely to make
all classes conscious of freedom, to develop systematically and
continuously what had grown in a haphazard and patchy
manner, and to spread it from England and Holland over most
of the European continent.
The result of this growth surpassed all expectations. Where-
ever the barriers to the free exercise of human ingenuity were
removed, man became rapidly able to satisfy ever widening
ranges of desire. And while the rising standard soon led to the
discovery of very dark spots in society, spots which men were
no longer willing to tolerate, there was probably no class that
did not substantially benefit from the general advance. We
cannot do justice to this astonishing growth if we measure it
by our present standards, which themselves result from this
growth and now make many defects obvious. To appreciate
what it meant to those who took part in it, we must measure it
by the hopes and wishes men held when it began: and there
can be no doubt that its success surpassed man’s wildest
dreams, that by the beginning of the twentieth century the
workingman in the Western world had reached a degree of
material comfort, security, and personal independence which
a hundred years before had seemed scarcely possible.
What in the future will probably appear the most significant
and far-reaching effect of this success is the new sense of power
over their own fate, the belief in the unbounded possibilities of
improving their own lot, which the success already achieved
created among men. With the success grew ambition — and
man had every right to be ambitious. What had been an in-
spiring promise seemed no longer enough, the rate of progress
far too slow; and the principles which had made this progress
possible in the past came to be regarded more as obstacles to
speedier progress, impatiently to be brushed away, than as the
conditions for the preservation and development of what had
already been achieved.
There is nothing in the basic principles of liberalism to make
it a stationary creed; there are no hard-and-fast rules fixed
once and for all. The fundamental principle that in the order-
ing of our affairs we should make as much use as possible of the
spontaneous forces of society, and resort as little as possible to
coercion, is capable of an infinite variety of applications. There
is, in particular, all the difference between deliberately creat-
ing a system within which competition will work as beneficially
as possible and passively accepting institutions as they are.
Probably nothing has done so much harm to the liberal cause
as the wooden insistence of some liberals on certain rough
rules of thumb, above all the principle of laissez faire. Yet, in a
sense, this was necessary and unavoidable. Against the in-
numerable interests which could show that particular meas-
ures would confer immediate and obvious benefits on some,
while the harm they caused was much more indirect and diffi-
cult to see, nothing short of some hard-and-fast rule would
have been effective. And since a strong presumption in favor
of industrial liberty had undoubtedly been established, the
temptation to present it as a rule which knew no exceptions
was too strong always to be resisted.
But, with this attitude taken by many popularizers of the
liberal doctrine, it was almost inevitable that, once their
position was penetrated at some points, it should soon collapse
as a whole. The position was further weakened by the inevi-
tably slow progress of a policy which aimed at a gradual im-
provement of the institutional framework of a free society.
This progress depended on the growth of our understanding of
the social forces and the conditions most favorable to their
working in a desirable manner. Since the task was to assist,
and where necessary to supplement, their operation, the first
requisite was to understand them. The attitude of the liberal
toward society is like that of the gardener who tends a plant
and, in order to create the conditions most favorable to its
growth, must know as much as possible about its structure and
the way it functions.
No sensible person should have doubted that the crude
rules in which the principles of economic policy of the nine-
teenth century were expressed were only a beginning — that
we had yet much to learn and that there were still immense
possibilities of advancement on the lines on which we had
moved. But this advance could come only as we gained in-
creasing intellectual mastery of the forces of which we had to-
make use. There were many obvious tasks, such as our han-
dling of the monetary system and the prevention or control of
monopoly, and an even greater number of less obvious but
hardly less important tasks to be undertaken in other fields, where there could be no doubt that the governments possessed
enormous powers for good and evil; and there was every
reason to expect that, with a better understanding of the
problems, we should some day be able to use these powers suc-
cessfully.
But while the progress toward what is commonly called
“positive” action was necessarily slow, and while for the im-
mediate improvement liberalism had to rely largely on the
gradual increase of wealth which freedom brought about, it
had constantly to fight proposals which threatened this prog-
ress. It came to be regarded as a “negative” creed because it
could offer to particular individuals little more than a share in
the common progress — a progress which came to be taken
more and more for granted and was no longer recognized as
the result of the policy of freedom. It might even be said that
the very success of liberalism became the cause of its decline.
Because of the success already achieved, man became increas-
ingly unwilling to tolerate the evils still with him which now
appeared both unbearable and unnecessary.
Because of the growing impatience with the slow advance of
liberal policy, the just irritation with those who used liberal
phraseology in defense of antisocial privileges, and the bound-
less ambition seemingly justified by the material improvements
already achieved, it came to pass that toward the turn of the
century the belief in the basic tenets of liberalism was more
and more relinquished. What had been achieved came to be
regarded as a secure and imperishable possession, acquired
once and for all. The eyes of the people became fixed on the
new demands, the rapid satisfaction of which seemed to be
barred by the adherence to the old principles. It became more
and more widely accepted that further advance could be ex-
pected not along the old lines within the general framework
which had made past progress possible but only by a complete
remodeling of society. It was no longer a question of adding to
or improving the existing machinery but of completely scrap-
ping and replacing it. And, as the hope of the new generation
came to be centered on something completely new, interest in
and understanding of the functioning of the existing society
rapidly declined; and, with the decline of the understanding
of the way in which the free system worked, our awareness of
what depended on its existence also decreased.
This is not the place to discuss how this change in outlook
was fostered by the uncritical transfer to the problems of
society of habits of thought engendered by the preoccupation
with technological problems, the habits of thought of the
natural scientist and the engineer, and how these at the same
time tended to discredit the results of the past study of society
which did not conform to their prejudices and to impose ideals
of organization on a sphere to which they are not appropriate.'*
All we are here concerned to show is how completely, though
gradually and by almost imperceptible steps, our attitude to-
ward society has changed. What at every stage of this process
of change had appeared a difference of degree only has in its
cumulative effect already brought about a fundamental differ-
ence between the older liberal attitude toward society and
the present approach to social problems. The change amounts
to a complete reversal of the trend we have sketched, an entire
abandonment of the individualist tradition which has created
Western civilization.
According to the views now dominant, the question is no
longer how we can make the best use of the spontaneous forces
found in a free society. We have in effect undertaken to dis-
* The author has made an attempt to trace the beginning of this development in two series of articles on “Scientism and the Study of Society” and “The Counter-Revolution of Science” which appteared in Economical 1941-44.
pense with the forces which produced unforeseen results and to
replace the impersonal and anonymous mechanism of the
market by collective and ‘‘conscious” direction of all social
forces to deliberately chosen goals. The difference cannot be
better illustrated than by the extreme position taken in a widely
acclaimed book on whose program of so-called “planning for
freedom” we shall have to comment yet more than once. “We
have never had to set up and direct,” writes Dr. Karl Mann-
heim, “the entire system of nature as we are forced to do today with society Mankind is tending more and more to regulate the whole of its social life, although it has never attempted to create a second nature.”
It is significant that this change in the trend of ideas has
coincided with a reversal of the direction in which ideas have
traveled in space. For over two hundred years English ideas
had been spreading eastward. The rule of freedom which had
been achieved in England seemed destined to spread through-
out the world. By about 1870 the reign of these ideas had prob-
ably reached its easternmost expansion. From then onward it
began to retreat, and a different set of ideas, not really new
but very old, began to advance from the East. England lost her
intellectual leadership in the political and social sphere and
became an importer of ideas. For the next sixty years Germany
became the center from which the ideas destined to govern the
world in the twentieth century spread east and west. Whether
it was Hegel or Marx, List or Schmoller, Sombart or Mann-
heim, whether it was socialism in its more radical form or
merely “organization” or “planning” of a less radical kind,
German ideas were everywhere readily imported and German
institutions imitated.
Although most of the new ideas, and particularly socialism,
did not originate in Germany, it was in Germany that they
were perfected and during the last quarter of the nineteenth
and the first quarter of the twentieth century that they
reached their fullest development. It is now often forgotten
how very considerable was the lead which Germany had dur-
ing this period in the development of the theory and practice
of socialism; that a generation before socialism became a seri-
ous issue in this country, Germany had a large socialist party
in her parliament and that until not very long ago the doc-
trinal development of socialism was almost entirely carried on
in Germany and Austria, so that even today Russian discus-
sion largely carries on where the Germans left off. Most Eng-
lish and American socialists are still unaware that the majority
of the problems they begin to discover were thoroughly dis-
cussed by German socialists long ago.
The intellectual influence which German thinkers were able
to exercise during this period on the whole world was sup-
ported not merely by the great material progress of Germany
but even more by the extraordinary reputation which German
thinkers and scientists had earned during the preceding hun-
dred years when Germany had once more become an integral
and even leading member of the common European civiliza-
tion.
But it soon served to assist the spreading from Germany
of ideas directed against the foundations of that civilization.
The Germans themselves — or at least those among them who
spread these ideas — were fully aware of the conflict: what had
been the common heritage of European civilization became to
them, long before the Nazis, “Western” civilization — where
“Western” was no longer used in the old sense of Occident
but had come to mean west of the Rhine. “Western” in this
sense was liberalism and democracy, capitalism and individ-
ualism, free trade and any form of internationalism or love of
peace.
But in spite of the ill-concealed contempt of an ever increas-
ing number of Germans for those “shallow” Western ideals, or
perhaps because of it, the people of the West continued to im-
port German ideas and were even induced to believe that their
own former convictions had merely been rationalizations of
selfish interests, that free trade was a doctrine invented to fur-
ther British interests, and that the political ideals of England
and America were hopelessly outmoded and a thing to be
ashamed of.
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- "How sharp a break not only with the recent past but with the whole evolution of Western civilization the modern trend toward socialism means becomes clear if we consider it not merely against the background of the nineteenth century but in a longer historical perspective. We are rapidly abandoning not the views merely of Cobden and Bright, of Adam Smith and Hume, or even of Locke and Milton, but one of the salient characteristics of Western civilization as it has grown from the foundations laid by Christianity and the Greeks and Romans... The Nazi leader who described the National Socialist revolution as a counter-Renaissance spoke more truly than he probably knew." F. A. Hayek
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