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Word Gems exploring self-realization, sacred personhood, and full humanity
F.A. Hayek The Road To Serfdom Security and Freedom
Independence of mind or strength of character is rarely found among those who cannot be confident that they will make their way by their own effort. Yet the idea of economic security is no less vague and ambiguous than most other terms in this field; and because of this the general approval given to the demand for security may become a danger to liberty. Indeed, when security is understood in too absolute a sense, the general striving for it, far from increasing the chances of freedom, becomes the gravest threat to it. These two kinds of security are, first, security against severe physical privation, the certainty of a given minimum of sustenance for all; and, second, the security of a given standard of life, or of the relative position which one person or group enjoys compared with others; or, as we may put it briefly, the security of minimum income and the security of the particular income a person is thought to deserve. We shall presently see that this distinction largely coincides with the distinction between the security which can be provided for all outside of and supplementary to the market system and the security which can be provided only for some and only by controlling or abolishing the market. An incautious handling of these questions might well cause serious and perhaps even dangerous political problems; but there can be no doubt that some minimum of food, shelter, and clothing, sufficient to preserve health and the capacity to work, can be assured to everybody. Indeed, for a considerable part of the population of England this sort of security has long been achieved. There are many points of detail where those wishing to preserve the competitive system and those wishing to supersede it by something different will disagree on the details of such schemes; and it is possible under the name of social insurance to introduce measures which tend to make competition more or less ineffective. But there is no incompatibility in principle between the state's providing greater security in this way and the preservation of individual freedom. To the same category belongs also the increase of security through the state's rendering assistance to the victims of such "acts of God" as earthquakes and floods. Wherever communal action can mitigate disasters against which the individual can neither attempt to guard himself nor make provision for the consequences, such communal action should undoubtedly be taken. Many economists hope, indeed, that the ultimate remedy may be found in the field of monetary policy, which would involve nothing incompatible even with nineteenth-century liberalism. Others, it is true, believe that real success can be expected only from the skilful timing of public works undertaken on a very large scale. This might lead to much more serious restrictions of the competitive sphere, and, in experimenting in this direction, we shall have carefully to watch our step if we are to avoid making all economic activity progressively more dependent on the direction and volume of government expenditure. But this is neither the only nor, in my opinion, the most promising way of meeting the gravest threat to economic security. In any case, the very necessary efforts to secure protection against these fluctuations do not lead to the kind of planning which constitutes such a threat to our freedom. This demand for security is thus another form of the demand for a just remuneration-a remuneration commensurate with the subjective merits and not with the objective results of a man's efforts. This kind of security or justice seems irreconcilable with freedom to choose one's employment. Although the results achieved will often be commensurate with efforts and intentions, this cannot always be true in any form of society. It will particularly not be true in the many instances where the usefulness of some trade or special skill is changed by circumstances which could not be foreseen. We all know the tragic plight of the highly trained man whose hard-learned skill has suddenly lost its value because of some invention which greatly benefits the rest of society. The history of the last hundred years is full of instances of this kind, some of them affecting hundreds of thousands of people at a time. The general approval of these demands has had the effect that governments everywhere have taken action, not merely to protect the people so threatened from severe hardship and privation, but to secure to them the continued receipt of their former income and to shelter them from the vicissitudes of the market. Yet, although such a general guaranty of legitimate expectation is often regarded as the ideal to be aimed at, it is not a thing which is seriously attempted. What is constantly being done is to grant this kind of security piecemeal, to this group and to that, with the result that for those who are left out in the cold the insecurity constantly increases. No wonder that in consequence the value attached to the privilege of security constantly increases, the demand for it becomes more and more urgent, until in the end no price, not even that of liberty, appears too high. It would depend on the views held by some authority about what a person ought to have done, what he ought to have foreseen, and how good or bad his intentions were. Such decisions could not but be to a large extent arbitrary. The application of this principle would necessarily bring it about that people doing the same work would receive different remuneration. The differences in remuneration would then no longer present an adequate inducement to people to make the changes which are socially desirable, and it would not even be possible for the individuals affected to judge whether a particular change is worth the trouble it causes. When a person's income is guaranteed, he can neither be allowed to stay in his job merely because he likes it nor to choose what other work he would like to do. As it is not he who makes the gain or suffers the loss dependent on his moving or not moving, the choice must be made for him by those who control the distribution of the available income. What is more important is that if we want to leave them the choice, if they are to be able to judge what they ought to do, they must be given some readily intelligible yardstick by which to measure the social importance of the different occupations. Even with the best will in the world it would be impossible for anyone intelligently to choose between various alternatives if the advantages they offered him stood in no relation to their usefulness to society. To know whether as the result of a change a man ought to leave a trade and an environment which he has come to like, and exchange it for another, it is necessary that the changed relative value of these occupations to society should find expression in the remunerations they offer. The problem of incentives in this sense is a very real one, both in the sphere of ordinary labor and in those of the managerial activities. The application of the engineering technique to a whole nation--and this is what planning means--"raises problems of discipline which are hard to solve," as has been well described by an American engineer with great experience in government planning, who has clearly seen the problem. The powers the manager of any plant will have to be given will still be considerable. But no more than in the case of the worker can the manager's position and income in a planned system be made to depend merely on the success or failure of the work under his direction. As neither the risk nor the gain is his, it cannot be his personal judgment, but whether he does what he ought to have done according to some established rule, which must decide. A mistake he "ought" to have avoided is not his own affair; it is a crime against the community and must be treated as such. While so long as he keeps to the safe path of objectively ascertainable duty he may be surer of his income than the capitalist entrepreneur, the danger which threatens him in case of real failure is worse than bankruptcy. He may be economically secure so long as he satisfies his superiors, but this security is bought at the price of the safety of freedom and life. Either both the choice and the risk rest with the individual or he is relieved of both. The army does, indeed, in many ways represent the closest approach familiar to us to the second type of organization, where work and worker alike are allotted by authority and where, if the available means are scanty, everybody is alike put on short-commons. This is the only system in which the individual can be conceded full economic security and through the extension of which to the whole of society it can be achieved for all its members. This security is, however, inseparable from the restrictions on liberty and the hierarchical order of military life--it is the security of the barracks. Indeed, some voluntary labor service on military lines might well be the best form for the state to provide the certainty of an opportunity for work and a minimum income for all. That proposals of this sort have in the past proved so little acceptable is due to the fact that those who are willing to surrender their freedom for security have always demanded that if they give up their full freedom it should also be taken from those not prepared to do so. For this claim it is difficult to find a justification. If we want to form a picture of what society would be like if, according to the ideal which has seduced so many socialists, it was organized as a single great factory, we have to look to ancient Sparta, or to contemporary Germany, which, after moving for two or three generations in this direction, has now so nearly reached it. The reason for this is that with every grant of complete security to one group the insecurity of the rest necessarily increases. If you guarantee to some a fixed part of a variable cake, the share left to the rest is bound to fluctuate proportionally more than the size of the whole. And the essential element of security which the competitive system offers, the great variety of opportunities, is more and more reduced. "Control," i.e., limitation of output so that prices will secure an "adequate" return, is the only way in which in a market economy producers can be guaranteed a certain income. But this necessarily involves a reduction of opportunities open to others. If the producer, be he entrepreneur or worker, is to be protected against underbidding by outsiders, it means that others who are worse off are precluded from sharing in the relatively greater prosperity of the controlled industries. Every restriction on the freedom of entry into a trade reduces the security of all those outside it. And, as the number of those whose income is secured in this manner increases, the field of alternative opportunities which are open to anyone who suffers a loss of income is restricted; and for those unfavorably affected by any change the chance of avoiding a fatal diminution of their income is correspondingly diminished. And if, as has become increasingly true, in each trade in which conditions improve, the members are allowed to exclude others in order to secure to themselves the full gain in the form of higher wages or profits, those in the trades where demand has fallen have nowhere to go, and every change becomes the cause of large unemployment. There can be little doubt that it is largely a consequence of the striving for security by these means in the last decades that unemployment and thus insecurity for large sections of the population has so much increased. The utter hopelessness of the position of those who, in a society which has thus grown rigid, are left outside the range of sheltered occupation, and the magnitude of the gulf which separates them from the fortunate possessors of jobs for whom protection against competition has made it unnecessary to budge ever so little to make room for those without, can be appreciated only by those who have experienced it. It is not a question of the fortunate ones' giving up their places, but merely that they should share in the common misfortune by some reduction of their incomes, or frequently even merely by some sacrifice of their prospects of improvement. The protection of their "standard of life," of the "fair price," or the "professional income" to which they regard themselves as entitled, and in the protection of which they receive the support of the state, precludes this. In consequence, instead of prices, wages, and individual incomes, it is now employment and production which have become subject to violent fluctuations. There has never been a worse and more cruel exploitation of one class by another than that of the weaker or less fortunate members of a group of producers by the well-established which has been made possible by the "regulation" of competition. Few catch-words have done so much harm as the ideal of a "stabilization" of particular prices (or wages), which, while securing the income of some, makes the position of the rest more and more precarious. And the more security becomes a privilege, and the greater the danger to those excluded from it, the higher will security be prized. As the number of the privileged increases and the difference between their security and the insecurity of the others increases, a completely new set of social values gradually arises. It is no longer independence but security which gives rank and status, the certain right to a pension more than confidence in his making good which makes a young man eligible for marriage, while insecurity becomes the dreaded state of the pariah in which those who in their youth have been refused admission to the haven of a salaried position remain for life. This development has been hastened by another effect of socialist teaching, the deliberate disparagement of all activities involving economic risk and the moral opprobrium cast on the gains which make risks worth taking but which only few can win. We cannot blame our young men when they prefer the safe, salaried position to the risk of enterprise after they have heard from their earliest youth the former described as the superior, more unselfish and disinterested occupation. The younger generation of today has grown up in a world in which in school and press the spirit of commercial enterprise has been represented as disreputable and the making of profit as immoral, where to employ a hundred people is represented as exploitation but to command the same number as honorable. Older people may regard this as an exaggeration of the present state of affairs, but the daily experience of the university teacher leaves little doubt that, as a result of anticapitalist propaganda, values have already altered far in advance of the change in institutions which has so far taken place. The question is whether, by changing our institutions to satisfy the new demands, we shall not unwittingly destroy values which we still rate higher. However great the influence of the army may have been in the latter country, it is a grave mistake to ascribe what the Englishman regarded as the "military" character of German society mainly to that influence. The difference went much deeper than could be explained on that ground, and the peculiar attribute of German society existed no less in circles in which the properly military influence was negligible than in those in which it was strong. It was not so much that at almost all times a larger part of the German people was organized for war than was true in other countries, but that the same type of organization was employed for so many other purposes, which gave German society its peculiar character. It was that a larger part of the civil life of Germany than of any other country was deliberately organized from the top, that so large a proportion of her people did not regard themselves as independent but as appointed functionaries, which gave her social structure its peculiar character. Germany had, as the Germans themselves boasted, for long been a Beamtenstaat in which not only in the civil service proper but in almost all spheres of life income and status were assigned and guaranteed by some authority. Where distinction and rank are achieved almost exclusively by becoming a salaried servant of the state, where to do one's assigned duty is regarded as more laudable than to choose one's own field of usefulness, where all pursuits that do not give a recognized place in the official hierarchy or a claim to a fixed income are regarded as inferior and even somewhat disreputable, it is too much to expect that many will long prefer freedom to security. And where the alternative to security in a dependent position is a most precarious position, in which one is despised alike for success and for failure, only few will resist the temptation of safety at the price of freedom. Once things have gone so far, liberty indeed becomes almost a mockery, since it can be purchased only by the sacrifice of most of the good things of this earth. In this state it is little surprising that more and more people should come to feel that without economic security liberty is "not worth having" and that they are willing to sacrifice their liberty for security. But it is disquieting to find Professor Harold Laski employing the very same argument which has perhaps done more than any other to induce the German people to sacrifice their liberty. [footnote: H. J. Laski, Liberty in the Modern State (Pelican ed., 1937), p. 51: "Those who know the normal life of the poor, its haunting sense of impending disaster, its fitful search for beauty which perpetually eludes, will realise well enough that, without economic security, liberty is not worth having."] Some security is essential if freedom is to be preserved, because most men are willing to bear the risk which freedom inevitably involves only so long as that risk is not too great. But while this is a truth of which we must never lose sight, nothing is more fatal than the present fashion among intellectual leaders of extolling security at the expense of freedom. It is essential that we should re-learn frankly to face the fact that freedom can be had only at a price and that as individuals we must be prepared to make severe material sacrifices to preserve our liberty. If we want to retain this, we must regain the conviction on which the rule of liberty in the Anglo-Saxon countries has been based and which Benjamin Franklin expressed in a phrase, applicable to us in our lives as individuals no less than as nations: "Those who would give up essential liberty to purchase a little temporary safety deserve neither liberty nor safety."
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