The lessons that can be learned from F.A. Hayek’s The Road to Serfdom are so numerous it would be almost impossible to list them all. But after taking the time to dive into this classic piece of economic literature, I compiled a list of what I consider to be the most important lessons one can learn while strolling down The Road to Serfdom.
Trust the Process
For those who favor as little government intervention as possible, or no government intervention at all, there will be moments when reading Hayek may seem a bit challenging. As you follow his thought process throughout the book, you may find yourself agreeing and even cheering his apparent disdain for market intervention.
Yet, while his logic would make one assume that he favored almost no government intervention at all, Hayek tends to draw conclusions that often seem contrary to the processes that led him there. It is for this reason that when diving into Hayek, the reader needs to remember to focus on the arguments made by Hayek rather than the conclusions he derives therein.
In chapter two of The Road to Serfdom, for example, almost every argument made by Hayek would lead one to believe that he is against any form of state interference. Yet, he never quite gets there.
For readers who may prefer Mises’ uncompromising approach to market intervention, fear not. If you put your faith in Hayek’s process and less stake in the conclusions he draws, you will see a great deal of Mises’ influence.
What is Past is Prologue
Of all things, The Road to Serfdom serves as a warning to readers. But in order to properly heed Hayek’s warnings, the reader must be able to recognize that history repeats itself. And if we as a civilization cannot see this, we are doomed to revisit the mistakes of the past.
Hayek is not merely telling a story of the bad economic policies that led to the chaos and destruction in Europe before and during the Second World War. He is using the recent catastrophe to explain how we can avoid such horrors in the future.
As Hayek says, this book is an opportunity for readers to correct the errors of the past and to stand up to the critics and false philanthropists who claim that planned economies are good for all when, in reality, they are good for a small few.
Pericles said, “ You may not have an interest in politics, politics has an interest in you.” However, a more Hayekian approach to this quote would be to say, “You may not have an interest in economics, but it has an interest in you.”
Unless we completely isolate ourselves, there is almost no way for an individual to avoid participation in the economy. Every time we arrive at work we are conducting an economic transaction. By demonstrating value to our employer, we receive compensation. Each time we purchase food or clothing or pay rent we are also conducting economic transactions.
To simply dismiss economics as irrelevant to our lives is not only foolish, it allows state planners to legislate as they please without having to fear repercussion from individuals. And while many on the socialist side of the ideological spectrum may claim that individuals should not have to worry about such things, as we have seen, this is impossible because it impacts each of us constantly.
Understanding how totalitarians use the economy as a means to seize power is extremely important and requires at least a basic understanding of how the economy works and how we are each active participants.
Collectivism is Dangerous; Individualism is the Key
Above all, Hayek is an individualist. This comes across in The Road to Serfdom within the first few pages as well as in his essay “Individualism: True and False.” The greatest enemy of individualism has always been and will always be collectivism, which is why Hayek touches on this theme over and over again in his writing.
Collectivism seeks to belittle the individual by neglecting personal preference and spontaneous market order in favor of planned policies that are catered to groups of people rather than the individual person. The classical liberal traditions that America was founded on focus on the importance of individualism, something Hayek touches on often in this book.
Planned economies will always neglect the importance of the individual. The mere act of planning in itself assumes that a group of bureaucrats are familiar with the needs of each individual. But as Hayek has pointed out in his work on the knowledge problem, this is impossible.
No one can ever know the wants and needs of each person. The best any planner can do is base his policies on the wants or needs of the “greater good.” And while this happens all too often, this type of planning is harmful because it makes the individual subservient to the collective.
When we speak in terms of economic equality, many assume this means that resources and goods are divided evenly and distributed among people. And while socialists would claim that this is the only way to achieve true equality, they do not fully understand what this means.
For Hayek, and other supporters of the free market, equality means having an equal access to opportunity. To elaborate further, it means that each individual should be free to seek out his own economic prosperity without having to fear obstacles or retribution from the state.
No one should, for example, be forced to obtain an occupational license before having to work. This type of barrier prevents individuals from being able to provide for themselves and better their circumstances.
While socialism will claim to be the ideology most devoted to equality, the opposite is true. When state actors or authority figures seek to make everyone equal by force, they only succeed in making everyone equally miserable.
True equality comes from the individual’s ability to live, work, and function without a constant fear of state oppression. This equal access to happiness and fulfillment is the truest form of equality in existence.