Joseph Hansen

Hayek Pleads for Capitalism

(June 1945)

Source: Fourth International, vol.6 No.6, June 1945, pp.181-187.
Transcription/Editing/HTML Markup: 2006 by Einde O’Callaghan.
Public Domain: Joseph Hansen Internet Archive 2006; This work is completely free. In any reproduction, we ask that you cite this Internet address and the publishing information above.

The Road To Serfdom
by Friedrich A. Hayek
University of Chicago Press. Chicago. 250 pp. $2.75

Hayek dedicates his Road to Serfdom: “To the socialists of all parties.” Despite this dedication, which one might believe should have limited its reading public to the left wing political movement, the book has achieved popularity among circles long notorious for their hostility to socialism. The New York Times, for instance, praises its “rigor of reasoning,” its “remorseless logic,” its “impressive authority,” and judges it to be nothing less than “one of the most important books of our time.” Apparently agreeing with the verdict of the Times, local Chambers of Commerce are reported to be ordering the Road to Serfdom in wholesale lots.

Hayek’s message “to the socialists of all parties” in fact boils down to nothing but a variation of the ancient theme of Big Business that capitalism is superior to socialism. Hayek’s sudden vogue among reactionary circles undoubtedly is due to the apparent effectiveness with which he makes out a case for the familiar Chamber of Commerce arguments against socialism.

It must be admitted that Hayek’s presentation is somewhat unusual compared to that of most professional red-baiters and defenders of capitalism. Hayek selects his audience and limits his objectives. To understand the purpose of Hayek’s arguments, which in themselves are exceedingly weak and easily answered, it is first necessary to visualize the type of individual he addresses. It is not the class-conscious worker, still less the Marxist. He directs his propaganda to that section of the petty bourgeoisie which inclines toward socialism as the only means of ending the continual wars and depressions of capitalism. He attempts to block their further progress toward active participation in the socialist movement and to provide them with a bridge leading toward reaction. The book can thus be classified as a kind of transition propaganda that hopes to take the radical petty bourgeois step by step from a mood of doubt to rejection of socialism and outright support of capitalism.

Beginning of the Transition

The author early establishes his authority as an economist and successful professor; but he does not lean heavily on this authority until later when he comes to the crucial issues upon which his entire argumentation rests. In his opening he prefers to flatter the intelligence of his reader, speaking in the style of a logician and seeking common grounds of interest. In the preface he implies that he too was a socialist “as a young man.” He is still an idealist with “certain ultimate values.” He is self-sacrificing, having painfully carried out his “duty” to speak out despite “every possible reason for not writing or publishing this book.” [1]

In the introduction Hayek seeks additional emotional ties with his reader. To believe in socialism, it seems, is not an uncommon error. It is only too human. Moreover it arises from the best of intentions.

“If we take the people whose views influence developments, they are now in the democracies in some measure all socialists. If it is no longer fashionable to emphasize that ‘we are all socialists now,’ this is so merely because the fact is too obvious.”

The learned professor’s assertions bristle with falsehoods. Socialism, for instance, is not a common belief of our generation, at least not in America, the mightiest stronghold of capitalism. It is still promulgated only by the vanguard of the prole-lariat. The people “whose views influence developments” are not “all socialists.” This does not concern Hayek however. He is making an emotional appeal to the petty bourgeois sickened over the growth of Stalinism, confused by its superficial resemblance to Nazism, despairing over the apparent weakness of genuine Marxism and swept from his feet by the tidal waves of bourgeois war propaganda. The professor’s primary aim, as we shall see again and again, is the establishment of emotional rapport with his reader in order to convert him into an enemy of socialism. “Is it not possible,” he continues, “that if the people whose convictions now give it an irresistible momentum began to see what only a few yet apprehend, they would recoil in horror and abandon the quest which for half a century has engaged so many people of good will?” Observe the neat rationalization the professor provides for abandoning the “quest”: “Is there a greater tragedy imaginable than that, in our endeavor consciously to shape our future in accordance with high ideals, we should in fact unwittingly produce the very opposite of what we have been striving for?”

Most petty bourgeois who have begun to regret their socialist youth, we presume will hasten to agree with the professor that no greater tragedy is imaginable. Nevertheless, a soul sick petty bourgeois, who has not yet completely freed himself from the last traces of Marxism, might ask for convincing evidence that this tragedy, so difficult to imagine, is applicable to socialism. Hayek aims to provide such “evidence.”

“Sincere idealists,” explains Hayek, have sought socialism in order to bring greater freedom. But instead of bringing greater freedom, “socialism means slavery.” As proof, Hayek quotes capitalist political thinkers of last century’s “liberal” school to which he claims adherence and cites as confirmation of their warnings against the danger of socialism the instances of Nazi Germany and Fascist Italy, not forgetting of course to point his finger likewise at the Stalinist regime in the Soviet Union.

“But fascism and socialism are polar opposites!” might exclaim the reader in surprise. “It does not at all follow that what is true of fascism or degenerate Stalinism likewise holds for socialism.”

The logical professor of bourgeois economy replies imperturbably:

It is probably preferable to describe the methods which can be used for a great variety of ends as collectivism and to regard socialism as a species of that genus. Yet, although to most socialists only one species of collectivism will represent true socialism, it must always be remembered that socialism is a species of collectivism and that therefore everything which is true of collectivism as such must apply also to socialism.

This is what the New York Times admires as “rigor of reasoning” and “remorseless logic.” We can agree that it is logic of a kind – the logic characteristic of bourgeois thought in its period of utter decay. How well this logic reflects reality can be seen by any one able to read the press. Fascists and Nazis hunt down socialists in order to murder them. In the “democracies” the men who “influence developments” are now preparing to drown the rising European socialist revolution in blood. In Hayek’s logic, however, movements in absolute contradiction to each other are amalgamated and pronounced one and the same.

For a petty bourgeois in retreat Hayek’s method of thought is “probably preferable.” Once accepted, all else follows “remorselessly,” including the overthrow of Marxism.

Hayek, of course, is not original in his logic. He simply states more baldly the assumption at the bottom of the whole school which maintains Nazism and Marxism are twins; that Nazi Germany and Soviet Russia are species of one genus; that Stalinists and Nazis are both representatives of a new class hitherto unknown and unforeseen in history. Hayek’s method is characteristic of the petty bourgeois approach to this subject. Its appeal to petty bourgeois renegades from socialism has been demonstrated again and again, one of the most prominent recent instances being that of James Burnham, whom Hayek mentions favorably in a foot note.

Where his purposes require it, our bourgeois pundit not only amalgamates the unamalgamable, he divides the indivisible. This gives his logic a symmetry that should please the petty bourgeois eye. The petty bourgeois renegades from socialism have long pondered the question of means and ends in order to construct a suitable rationalization to cover their base retreat. Hayek does not overlook this powerful instrument of bourgeois propaganda. “All the consequences with which we shall be concerned in this book,” he declares, “follow from the methods of collectivism irrespective of the ends for which they are used.” Thus does Hayek drive an axe between means and ends. In dialectic logic on the contrary, means and ends reciprocate, are in mutual dependence. A revolutionary takes as his end the building of a political party of the working class so that it can become the means to reach a new end, the dictatorship of the proletariat, which in turn becomes the means to inaugurate the socialist society of peace and plenty. Hayek’s logic, however, makes an arbitrary abstraction of “means,” amputates it from “ends” and opens it up like an empty sack in which he can place whatever content he requires to “prove” his thesis.

Only a soul-sick petty bourgeois, unable to think clearly, could be taken in by logic as “remorseless” as this. But it is precisely such individuals Hayek addresses, and the efficacy of arbitrarily separating ends from means in driving the petty bourgeoisie from Marxism has been demonstrated many times over. I do not know of an exception among the renegades from Marxism who has not passed through the stage of sweating over “means and ends.” It is now a standardized argument in bourgeois propaganda.

Hayek deals quite concretely with the dangers, terrors and horrors of socialist means. Among his major exhibits is planning. This spokesman of the capitalist order holds that planning leads to the very opposite of what it sets out to accomplish. Instead of a means of achieving greater freedom, planning in the eyes of the professor becomes the means leading to slavery and chaos. Under the fascists freedom was lost, but the fascists are only one species of collectivism of which the socialists are another, therefore freedom would be lost under the socialists just as much as under the fascists. Or to drop more deeply with Hayek into the logical abyss: Since ends (by this Hayek implies good or bad intentions) have nothing to do with what happens from the use of certain means, and since planning is inherently a bad means, no matter who uses it evil results will follow; but planning is characteristic of socialism, therefore ...

The facts are so well known one is astonished that even the most delirious petty bourgeois could bring himself to accept such “reasoning.” The fascists in both Germany and Italy used “planning” to crush the working class, drive down the standard of living, intensify exploitation and unite the capitalist class in a bid for world power through imperialist war. This “end” had nothing to do with good or bad intentions. The capitalist class utilized fascist “planning” in order to preserve its rule.

Socialist planning, on the other hand, begins with the expropriation of capitalist property, the expansion of the productive machinery, the raising of the standard of living and the balancing of the economy through correlation of its various sections by means of a general plan. Planning in this case too has nothing to do with good or bad intentions. It is the means the working class must utilize to preserve itself from utter disintegration. At the same time it becomes the means to end the class struggle. Under fascism the class struggle continues; under socialism the classes eventually disappear.

It is not necessary to be a Marxist to see the fallacy in Hayek’s analysis of planning. Anyone who understands the class struggle, as do the capitalists, can see that the result of planning is not implicit in planning in and of itself as a means, but is implicit in what class does the “planning” and for what end. The class struggle in the Road to Serfdom, however, receives scant notice. “Remorseless logic” and “rigor of reasoning” replace the brutal facts of life in capitalist society. This rejection of class analysis is characteristic of petty bourgeois thought.

The petty bourgeois wants to exorcise the class struggle; he is sick of it. Hence Hayek’s argumentation, if it is to achieve its purpose, must inevitably follow the traditional pattern of petty bourgeois thought.

Hayek still has left the task of providing his reader with an arsenal of rationalizations “proving” the inherent evils of planning. This he accomplishes with a horror show. Human nature, it seems, is so constituted common agreement cannot possibly be reached on all the vast complexity of small details in the general plan; some regions would feel slighted and pained because they did not receive development of their resources equal to that of regions more favorably situated; authority would have to be delegated to a central body; this central body would rule arbitrarily; hence individual freedom would vanish. Thus any petty bourgeois, terrified at th.3 prospect of losing his individual “freedom,” can see that there is no “greater tragedy imaginable” than planning.

The Horror of Horrors

Hayek does not consider any of the teachings of the Marxists on the subject of planned society. He does not even consider the views of Leon Trotsky, author of the plans in the Soviet Union which enabled that backward country to accomplish in less than a quarter of a century the economic development of hundreds of years of capitalism. ‘Thus he presents a highly distorted picture of what planning is like in both theory and practice. First he divides up the planned economy among countries which would be at each other’s throats instead of positing a united world economy in which national boundaries no longer existed. Secondly, he envisages the continued existence of class divisions which would lead to internecine conflicts over planning within each isolated country. Thirdly, he insists on an economy of scarcity which would give rise to group struggles over the division of the national income. Hayek counts upon his readers to accept these omissions and distortions. Apparently the learned professor believes his audience to be completely unfamiliar with the literature dealing with planned economy.

Another means of achieving socialism, the building of a proletarian party, is likewise considered objectionable by our idealistic moralist. The subject naturally holds considerable interest for the bourgeois propagandist since the proletarian party constitutes the means whereby the working class will eventually dispose of capitalist anarchy. Moreover it is precisely in relation to the proletarian party that the sick petty bourgeois experiences most acutely his emotions of revulsion and his urge to flee. The building of the proletarian party is the crucial political problem of the day not only for the working class, but also, from the opposite side, the capitalist class. That is why the capitalists utilize every means to attack, hamper, prevent the building of such a party and to crush it with force and violence if necessary when it does appear. Hayek too places the question of the revolutionary party high on his agenda.

Pursuing his “remorseless logic” he again amalgamates polar opposites:

In Germany and Italy the Nazis and Fascists did, indeed, not have much to invent. The usages of the new political movements which pervaded all aspects of life had in both countries already been introduced by the socialists. The idea of a political party which embraces all activities of the individual from the cradle to the grave, which claims to guide his views on everything, and which delights in making all problems questions of party Weltanschauung, was first put into practice by the socialists.

Now it is true that socialism approaches all the problems of society from the viewpoint of the historic interests of the working class. From their opposing side the bourgeois statesmen do the same for the capitalist class. But what Hayek infers, namely, that fascist “usages” were introduced “by the socialists,” is not true. The “usages” of fascism are much older than the socialist movement. If one wishes to know, the real parallel can be found among the practices of any outlived oppressing class or caste in the periods when its rule was threatened by the oppressed. In the tradition of the Inquisition, fascism continues “usages” that are extremely ancient. To identify Nazism and socialism is not at all different from identifying the victims of the Inquisition with their persecutors. Nevertheless Hayek coolly declares: “The relative ease with which a young communist could be converted into a Nazi or vice versa was generally known in Germany ...” The only distinction Hayek makes between the Nazis and the anti-Nazis of Germany is to call the latter the “old” socialists and the Nazis their spawn, the “new” socialists. Their struggle is represented simply as a factional squabble in which the more dynamic won out.

Hayek assures his petty bourgeois audience that a socialist party “is not likely to be formed by the best but rather by the worst elements of any society.” As solemnly as a witch doctor probing for “reasons” in the entrails of a chicken, the learned economist lists three “causes” for the attraction of the worst elements to socialism.

First, “if we wish to find a high degree of uniformity and similarity of outlook, we have to descend to the regions of lower moral and intellectual standards where the more primitive and ‘common’ instincts and tastes prevail ... If a numerous group is needed ... it will be those who form the ‘mass’ in the derogatory sense of the term, the least original and independent, who will be able to put the weight of their numbers behind their particular ideals.” This will be recognized as the theme song of many a renegade from Marxism who ends up as a slavish supporter of the present order. Nevertheless, like the famed song of the Lorelei it seems to exercise a fatal attraction on these petty bourgeois mariners.

Secondly, such “elements,” in the lofty Hayek’s aristocratic opinion, require a “potential dictator.” This dictator “will be able to obtain the support of all the docile and gullible, who have no strong convictions of their own but are prepared to accept a ready-made system of values if it is only drummed into their ears sufficiently loudly and frequently. It will be those whose vague and imperfectly formed ideas are easily swayed and whose passions and emotions are readily aroused who will thus swell the ranks of the totalitarian party.” All this of course places a somewhat somber shadow on Hayek’s earlier pronouncements about the high idealism of socialists, his own erstwhile socialism and the good intentions of those of socialist views who “influence the development of events.” Nevertheless such propaganda undoubtedly has an emotional effect upon the petty bourgeois in process of rejecting socialism, uneasy over the “discrimination between members and non-members of closed groups.” Hayek’s purpose is to formulate and give expression to the mood of such an individual turning away from the proletarian party with its discipline, its singleness of purpose, its strenuous activity, its great demands on courage and indomitability in the face of world reaction’s powerful opposition.

Hayek’s third “cause” does not rise above the level of the rest of his remorseless logic. “It seems to be almost a law of human nature that it is easier for people to agree on a negative program – on the hatred of an enemy, on the envy of those better off – than on any positive task.” Socialism thus being negative appeals to negative natures in strict accordance with the law of human nature emphasized by Hayek to the exclusion of its correlative, that people under the pressure of events will unite on positive programs that sometimes completely reshape society. Hayek makes out the program of socialism to be simply destructive; it does no more than single out “Jews” and those better off, such as “Kulaks” and capitalists for attack. Hayek utters these poisonous slanders with the most “impressive authority” possible to a bourgeois professor. That he expects his readers to accept such garbage is an interesting indication of the low opinion bourgeois propagandists hold for the petty bourgeoisie and their knowledge of the program of socialism.

Personal Integrity and the Party

Hayek apparently has carefully studied the typical pattern of retreat from socialism followed by such renegades as Eastman, Lyons, Burnham, etc., for he caps his tale of horrors about the proletarian party with a lurid description of what happens to the moral character of its members.

The principle that the end justifies the means is in individualist ethics regarded as the denial of all morals. In collectivist ethics it becomes necessarily the supreme rule; there is literally nothing which the consistent collectivist must not be prepared to do ... no act which his conscience must prevent him from committing ...

Hayek seems to have forgotten the party attracted only the “worst elements” who presumably would lack the “conscience” that has now suddenly come into prominence. However, this is a mere bagatelle. When you open all the stops some of the chords are bound to sound discordant. The volume makes up for the lack of harmony.

The sensitive soul of the petty bourgeois in retreat must undoubtedly shrink at the thought of how close he came to sinking in the morass of the socialist movement when he reads Hayek’s description of the “typical German.” Yes, by strange coincidence, as the Allied armies neared their goal in Germany, Hayek’s description of the typical socialist became, in fact, that of the “typical German.”

Hayek’s amalgamation of Nazis and socialists does not permit his reader to distinguish just whom he refers to in any particular asseveration. His intention, however, is clearly to utilize all means available in his remorseless logic, no matter how despicable, in order to draw an evil picture of the socialist movement. Thus he declares:

Since it is the supreme leader who alone determines the ends, his instruments must have no moral convictions of their own. They must, above all, be unreservedly committed to the person of the leader; but next to this the most important thing is that they should be completely unprincipled and literally capable of everything. They must have no ideals of their own which they want to realize; no ideas about right or wrong which might interfere with the intentions of the leader.

Hayek emphasizes this point so strongly it would seem that bourgeois propagandists who have made a study of this field of their work believe it to be an unusually effective argument:

The general intellectual climate which this produces, the spirit of complete cynicism as regards truth which it engenders, the loss of the sense of even the meaning of truth, the disappearance of the spirit of independent inquiry and of the belief in the power of rational conviction, the way in which differences of opinion in every branch of knowledge become political issues to be decided by authority, are all things which one must personally experience – no short description can convey their extent. Perhaps the most alarming fact is that contempt for intellectual liberty is not a thing which arises only once the totalitarian system is established but one which can be found everywhere among intellectuals who have embraced a collectivist faith and who are acclaimed as intellectual leaders even in countries still under a liberal regime.

Once again it is to be noted that Hayek does not specify that these evils are peculiar to Nazism and to Stalinism, but on the contrary he incorporates socialism in his amalgam. Apparently he trusts the profound ignorance – or wishful thinking – of his petty bourgeois audience to act as fertile soil for such denigrations. As is well known, in the history of independent thought, of rebellion against the most colossal forces of oppression, the titans stand in the socialist movement. What figures in Hayek’s pale sickly world can reach the shoe tops of men like Marx, Engels, Luxemburg, Liebknecht, Debs, Lenin, Trotsky? or for that matter the shoe tops of any rank and filer of the socialist movement who stands against the stream?

Possibility of Plenty

Thus far the “rigor of reasoning” of our economic witch doctor has “proved” that planning leads to slavery, that a proletarian party attracts the worst elements, and that socialist morals lead “of necessity” to those “features of totalitarian regimes which horrify us.” This would seem enough to arm sufficiently the most wavering of the circle to which Hayek appeals. The professor, however, is aware that he must cross another hurdle.

In the final analysis the whole possibility for socialism in our epoch rests on the feasibility of enormously increasing the productivity of world society. Marxism has determined how this can be done through the efficient utilization of present resources, transport and factories, the elimination of unemployment, the cessation of war, the ending of economic chaos through rational planning and the early expansion of the productive system through the intensive application of science. Many surveys have been made of the possibilities of plenty; the most conservative revealing grandiose perspectives if no more were done than to run the existing machines at full capacity. The experience of war production has opened the eyes of every worker to the potentialities of the modern factory. He needs only imagine peace time goods in place of the present destructive products that are being poured out to get an inkling of what could be done under a truly rational system.

Our representative of capitalist economy, however, attempts to persuade his petty bourgeois reader to the contrary on this crucial point:

In their wishful belief that there is really no longer an economic problem people have been confirmed by irresponsible talk about “potential plenty” – which, if it were a fact, would indeed mean that there is no economic problem which makes the choice inevitable. But although this snare has served socialist propaganda under various names as long as socialism has existed, it is still as palpably untrue as it was when it was first used over a hundred years ago. 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.

Elsewhere, Hayek speaks about the “familiar cliches and baseless generalizations about ‘potential plenty’” ... and the “carefully fostered belief in the irrationality of our economic system ... the false assertions about ‘potential plenty’.” We will skip the untruth about no “workable plan” having been produced for Western Europe or the world to increase production, and confine ourselves to consideration of Hayek’s principal point about the “myth” of potential plenty. In view of the surveys that have been made, the practical experience of the Soviet Union, and the evidence of war production, an intelligent worker would expect at least an attempt by the bourgeois economist to prove his brazen assertions. But Hayek is not writing for the “worst elements” such as intelligent workers. Proof that humanity can never achieve economic plenty? Hayek offers none. Doubtless he calculates that the petty bourgeois to whom he is appealing will be satisfied by the publisher’s declaration on the jacket that Hayek is a “world-famous economist,” former “Director of the Austrian Institute for Economic Research and Lecturer in Economics at the University of Vienna,” at present “a member of the faculty of the London School of Economics.” In the words of the New York Times this is “impressive authority.” Only in the “regions of lower moral and intellectual standards where the most primitive and ‘common’ instincts and tastes prevail” do you find elements capable of demanding proof from such a distinguished bourgeois professor. Hayek simply evades discussing the basic assumption upon which his entire argumentation rests. It would be hard to find a more contemptuous way of dismissing the intelligence of Hayek’s petty bourgeois audience.

Having established in his remorseless manner that potential plenty is only a “myth,” Hayek proceeds to the next link of his logic. It concerns the “inevitability” of socialism, another breathing point in the flight of petty bourgeois radicals from socialism. If economic plenty is unrealizable it follows that socialism is not inevitable. Full planning is an inevitable stage of economic development only in the event that such abundance is produced no basis is left for the formation of selfish groups such as castes, classes. So long as scarcity prevails, ruthless struggle for the major share endures. When this drive wheel comes to a halt, however, then rational planning of world society not only becomes feasible, but inevitable.

For the benefit of a petty bourgeois brooding remorsefully over “inevitability,” Hayek propounds a different view. Man “knows of no laws which history must obey,” he states flatly in his introduction. “No development is inevitable.” This view constitutes the utter breakdown of science, the denial of the possibility of determining the course of development of any phenomena.

The truth is, Hayek announces triumphantly that “planning” is not inevitable.

“The conviction that this trend is inevitable is characteristically based on familiar economic fallacies – the presumed necessity of the general growth of monopolies in consequence of technological developments, the alleged ‘potential plenty,’ and all the other popular catchwords ...”

Are you sure the “growth of monopolies in consequence of technological developments” isn’t a manifestation of the organic tendencies of capitalist economy? might ask the petty bourgeois reader, hoping to have his last doubts removed. Absolutely, assures the comforting professor. “Competition” is being eliminated not by organic changes inherent in the capitalist economic system, but as the “result of deliberate policy.” The growth of statism, however, which seems to be what Hayek means by “deliberate policy,” is not an indication of lawlessness and lack of inevitability in economic and political developments. On the contrary it is irrefutable proof that the means of production have become so vast, complex and highly socialized that the irresistible tendency is to bring in the general controls of society, i.e. government. This can occur under the domination of an exploiting class, which simply exacerbates the class struggle, temporarily resolving it in bloody conflict as in Germany, or under the domination of the majority who establish the dictatorship of the proletariat and begin the elimination of class divisions and the development of planning in the interests of the new society as a whole.

In Hayek’s opinion all that is required to prevent planning from becoming inevitable is to change government policy.

Hayek’s petty bourgeois audience should feel comforted over this moth-eaten assumption that the government is not the executive instrument of the ruling class but an independent force above the classes which can be persuaded to restore “competition” by changing policies without halting “technological changes.”

Besides attacking socialism head on, Hayek counterposes a Utopia in order to leave his petty bourgeois client with a positive program. The Utopia he advocates is nothing less than “competitive” society.

Competitive Utopia is quite hazy. The classes are never clearly outlined. We don’t know whether they even exist in this snug realm. It seems to consist of small merchants, artisans and farmers all competing with fairly equal resources on the market, all competing according to the Rule of Law, i.e., fixed rules of the game set down in advance so that only “luck” and “enterprise” shall determine who will be the most successful. Hayek labels such a system one of “freedom” and claims it would be the most moral of possible worlds, one where his “certain ultimate values” would find greatest expression. Foggy as is this Utopia, at least the content of its “freedom” is clear, this “freedom” Hayek has been pounding into the ears of his petty bourgeois reader from the beginning of the Road to Serfdom. It is the freedom to buy, the freedom to sell, the freedom to exploit, the freedom to make a profit, and the freedom to wage an occasional war. It is the kind of freedom Hayek wants instead of the “slavery” of planned economy. He believes correct government policy can achieve it.

Competitive Utopia resembles more than anything the free world the corner grocer day dreams about when the chain store across the street takes away his customers with a special sale. In brief it is a petty bourgeois Utopia. Professor Hayek hopes it will appeal to the petty bourgeois radical who reads the Road to Serfdom and thus furnish him with an ideal to fight for in place of the united world order of socialism.

Unfortunately it is a reactionary Utopia, as can easily be proved from Hayek’s own proclamations. “What our generation has forgotten is that the system of private property is the most important guaranty of freedom, not only for those who own property, but- scarcely less for those who do not.” Competitive Utopia is thus based on private property, i.e., single individuals owning, controlling and exploiting the national resources and economic system. Private property is the cornerstone of capitalism.

This system, as is only too well known, does not stand still but develops glaring inequalities. Hayek justifies inequalities:

“In a system of free enterprise chances are not equal, since such a system is necessarily based on private property and (though perhaps not with the same necessity) on inheritance, with the differences in opportunity which these create.”

Thus the snug little realm of Competitive Utopia has already grown into a very real murderous capitalist society in which 60 families can and do constitute, with Hayek’s permission, a ruling oligarchy. Listen to this panegyric, worthy of the pen of Henry Ford: “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 ...” Still further, “who will deny that a world in which the wealthy are powerful is still a better world than one in which only the already powerful can acquire wealth?”

Competitive Utopia even has its unemployed. Hayek feels considerable sympathy for these unfortunates and thinks something should be done for them, in fact he even proposes a solution for unemployment which should have a familiar ring to those who have never suffered unemployment in Competitive Utopia but know its rigors under America’s 60 families. Our “world famous” economist believes, for instances, that “those who can no longer be employed at the relatively high wages they have earned during the war must be allowed to remain unemployed until they are willing to accept work at a relatively lower wage.” This solution would undoubtedly satisfy Hayek’s “ultimate moral values,” the freedom of the lucky to offer what wages they wish and the freedom of the unlucky unemployed to starve.

Competitive Utopia is not quite as rosy as its author pretends. It even has its emergencies when it appears both freedom and competition may be temporarily suspended in order of course to preserve freedom and competition. “The only exception to the rule that a free society must not be subjected to a single purpose,” declares our humanitarian, “is war and other temporary disasters.” By “disasters” we presume he refers to strikes, unemployed demonstrations, and proletarian uprisings.

Hayek and Imperialist War

Having brought his petty bourgeois convert to embrace the principle of private property, Hayek carries through his transition to support of the present order, no doubt hoping his convert will trustingly follow. In passing he attacks the trusts – how can you appeal to the petty bourgeoisie without a demagogic attack on the trusts? – but this does not swerve him from his main purpose, that is, to win support for the Second World War which is being waged by some very real trusts far removed from petty bourgeois Utopias. He does the job boldly, not hesitating to state his purpose in the opening sections of his book:

There is an even more pressing reason why at this time we should seriously endeavor to understand the forces which have created National Socialism: that this will enable us to understand our enemy and the issue at stake between us. It cannot be denied that there is yet little recognition of the positive ideals for which we are fighting.

Perfidious purpose is apparent in amalgamating Hitler’s National Socialism with proletarian revolution. It is ideological preparation for the crushing of the European workers under guise their revolution is in reality simply a new form of Hitler’s movement. Hayek even lays the basis for Allied persecution of the Jews:

“We should never forget that the anti-Semitism of Hitler has driven from his country, or turned into his enemies, many people who in every respect are confirmed totalitarians of the German type.”

In other words, don’t permit the fact that anti-Nazis have been bitterly persecuted by Hitler lull you into handling them in any other way than Hitler did. In Hayek’s logic they are simply another species of collectivism, twins of Nazism! Hayek tries to reinforce this ideology by demagogic assertions about “former socialists who have become Nazis.” This demagogy is strangely coincident with inspired stories in the Allied press about Nazis going underground and disguising themselves as socialists.

As part of his support of the Allied imperialists, Hayek justifies the war time measures restricting the freedom he moralizes over. “In wartime ... of course, even free and open criticism is necessarily restricted.” This has been the position of petty bourgeois “liberalism” since the outbreak of the war. It is characteristic of the servility of the petty bourgeois mind before imperialism as soon as the master raises his whip.

Hayek, however, carries his servility to extreme ends, leaving the road open for support of a Third World War of imperialism in preference to socialism which would forever eliminate wars.

“As is true with respect to other great evils, the measures by which war might be made altogether impossible for the future may well be worse than even war itself.” This perspective of unending wars is quite in accordance with Hayek’s “rigor of reasoning” since the imperialist rivalries that lead to World War simply carry “competition” to its logical conclusion.

Thus we arrive at the true appreciation of Hayek’s work, his economics, his logic and his science – it is war propaganda; war propaganda especially aimed at the socialist movement. All the arguments about means and ends, morals, independent thinking, the impossibility of planning, the inevitability of economic inequality, the possibility of “freedom” under capitalism are seen to be a bridge leading to support of the imperialists in their war for profits, markets and colonies. It is crassly apparent in Hayek’s book. Nevertheless the New York Times and the Chamber of Commerce expect the petty bourgeoisie will swallow it as “one of the most important books of our times.”

How far does Hayek wish to take his readers in support of the dying order of capitalism? He swears again and again and again that he is opposed to fascism. However, in rejecting socialism and in amalgamating it with fascism, Hayek opens the road to reaction. An invariable characteristic of petty bourgeois thought is its oscillation between the poles of socialism and fascism. If it rejects socialism, it seems almost a political law it must advance in the direction of fascism by whatever name it may be called. A critical eye can detect phrases in the Road to Serfdom which could well appear in Social Justice, organ of the fascist demagogue Father Coughlin. Like Coughlin, Hayek attacks both capital and labor:

“When capital and labor in an industry agree on some policy of restriction and thus exploit the consumers, there is usually no difficulty about the division of the spoils.”

Another sentence indicates the tendency:

“By destroying competition in industry after industry, this policy puts the consumer at the mercy of the joint monopolist action of capitalists and workers in the best organized industries.”

The direction of thought is still more explicit in the following observation:

“The recent growth of monopoly is largely the result of a deliberate collaboration of organized capital and organized labor where the privileged groups of labor share in the monopoly profits at the expense of the community and particularly at the expense of the poorest, those employed in the less-well-organized industries and the unemployed.”

The fascist demagogue promises to “free” the “little man” from both the trusts and the “labor czars.” Hayek’s “liberal principles” even envisage an “active” state that would not permit “the use of violence, for example, by strike pickets.” He does not mention what this active state would do about the violence of capitalists who precipitate strikes.

In scientific politics such ideas as these are classified as part of the intellectual preparation of the petty bourgeoisie for fascism. Fascist demagogy drums into the ears of its dupes that labor and capital are equally enemies of the “little man” although the actual blows of fascism are always directed against the labor movement.

The professor himself seems to have been thinking along lines he does not completely reveal in his book. He states enigmatically:

“If I had to live under a Fascist system, I have no doubt that I would rather live under one run by Englishmen or Americans than under one run by anybody else.”

Even in his ostensible campaign against totalitarianism as a whole the worthy professor has his national preferences which he states well in advance of all eventualities. Just in case fascism does come to power in Britain or America, Professor Hayek makes clear he has already run up the white flag and will be able to get along without making trouble.

How popular Hayek’s propaganda will prove among the petty bourgeoisie of America is not year clear. His support of the war with all its filth, blood and unholy profits will not add to the attractiveness of the Road to Serfdom among those layers of the petty bourgeoisie beginning to feel sick at the stomach over the millions of casualties, the colossal destruction and the astronomical costs. Its arguments against socialism, however, may well influence those who have already shifted away from the socialist camp under the impact of the war propaganda. Their vague emotions and confused thoughts are here formulated in what the New York Times terms a “remarkably fine” English style.

Among class-conscious workers, however, the book will be listed as another of the series that began about the time of Roosevelt’s “Quarantine the Aggressors” speech, when the war preparations got seriously under way, munitions orders were placed by the government with the big bourgeoisie and the petty bourgeois intellectuals began their retreat from the camp of Marxism.



1. Apparently the declaration that the author will lose popularity, will be understood only by a few “elite,” is speaking unpalatable truths, etc., heightens the appeal of a book of this type to petty bourgeois readers. Lawrence Dennis, leading theoretician of self-acknowledged American fascism, utilizes similar expressions in his writings. James Burnham, whose thought closely parallels that of Dennis, likewise has a few phrases on the theme of unpopularity in his pot-boiler, The Machiavellians.


Last updated on: 20.2.2006