Planning and power
In this section, Hayek describes that planners must create power to achieve their goals. He talks heavily about what power is, and the transferring of power from the individual to society. He claims that the socialists have an illusion that depriving people of their power and putting it into society will distinguish their power, but this thought process isn’t correct. Rather, concentrating the power for the services of the whole heightens the power held.
Hayek says “To decentralize power is to reduce the absolute amount of power, and the competitive system is the only system designed to minimize the power exercised by man over man.” This idea is then expanded by saying that when the individual holds economic power it can turn into an instrument for coercion, yet this coercion is not all-consuming of the self. It is rather when the power is centralized from the political when it creates dependence that he compares to slavery.
Background to danger
Hayek claims that individualism is based on the Christian idea of free will, and the man doing what he can with the gifts and abilities he holds. The original idea of the new knowledge expanding in the West was to create an idea that man has power over his own fate. Hayek writes “It might be said that the very success of liberalism became the cause of its decline.” in this, Hayek says that liberalism was killed in Germany because socialism killed it, about the transition from socialism to fascism.
“They do not realize that democratic socialism, the great utopia of the last few generations, is not only unachievable, but that to strive for it produces something utterly different-- the very destruction of freedom itself.” This part of the section is said in response to the people who believe socialism and freedom can be combined. This section makes his idea clear that the two are not compatible.
The liberal way of planning
The liberal argument is making the best possible use of forces to create competition to coordinate human efforts, it is based on the idea that effective competition can be created and used to guide individuals in a way that other plans cannot. Though this section talks about creating competition, he explains that while liberalism is for competition, they aren’t for “supplanting competition” to guide economic activity. Hayek explains that if we are to resort to direct regulation by authority, where the conditions for the “proper working” of competition cannot be created does not prove that we should suppress competition where it can be made to function. But rather we must find a middle ground between competition and central direction. He writes; “Planning and competition can be combined only by planning for competition, not by planning against competition.”
The great utopia
In this section, Hayek describes that in its beginning stages, socialism was authoritarian. He writes about the connection between democracy and socialism saying that “Democracy seeks equality in liberty, socialism seeks equality in restraint and servitude.” In this section, he explains that freedom has taken on a new meaning and that it has become another name for power or wealth.
The goal of planning, Hayek explains, is the need for central planning. This is because democratic assemblies cannot function as planning agencies, they wouldn’t agree on anything and end up satisfying nobody, so thus this wouldn’t work. He says; “The cry for an economic dictator is a characteristic stage in the movement toward planning.” He says this, explaining that ultimately planning leads to dictatorship and dictatorship leads to coercion because dictatorship is the vessel for coercion. This is ultimately why he ends this section by saying; “Democratic socialism, the great utopia of the last few generations, is simply not achievable.”
Why the worst get on top
Hayek states that the totalitarian leader would soon have to choose between disregarding of ordinary morals and failure. He says that the principle that the ends justify the means becomes the main ethics. To follow through he writes that “once you admit that the individual is merely a means to serve the ends of the higher entity called society or the nation, most of those features of totalitarianism which horrify us follow of necessity.” Because of this, for totalitarianism to work, the person has to be willing and able to break every moral rule he has if he is going to be able to reach the end that is set out for him. Though this would be a big ask, for a person to go against their morals, so they convince people that they already had the morals they just didn’t know it, and use this to coerce them.
Hayek wrote that “collectivism means the end of truth”, and explains that it is essential that people come to this conclusion because “Collective freedom is not the freedom of the members of society, but the unlimited freedom of the planner to do with society that which he pleases. This is the confusion of freedom with power carried to the extreme.”
Planning vs. the Rule of Law
This section covers the idea of the Rule of Law. This idea is that the planning authority cannot tie itself down in advance to general rules which prevent arbitrariness. Using the Rule of Law, he explains that under central planning the government cannot be impartial because of the inherent idea that the government is a piece of utilitarian machinery that deliberately discriminates between people.
If the law says that anything the board does is okay, then it can do anything and it is still legal. This is the concept that states that its actions are not subject to the rule of law. Hayek states that the rule of law was consciously evolved only during the liberal age and is one of its greatest achievements. It is the legal embodiment of freedom. As Immanuel Kant put it, ‘Man is free if he needs to obey no person but solely the laws.’”
Is planning ‘inevitable’?
Is planning inevitable? Hayek says that not many recent planners will say that central planning is good, because “the division of labor has gone far beyond what could have been planned.” The question becomes if we should use the technique of competition and not depend on conscious control.
He makes a few references in this section to monoplists, and how they will seek assistance from the state as well as talking about the growth of monopolies and how “the movement toward planning is the result of deliberate action. No external necessities force us to it.” This is to say that it wasn’t inevitable because this wasn’t a forced situation.
Can planning free us from care?
This section he describes that the consolation our planners offer us is that this authoritarian direction will apply only to economic matters. The argument is trying to appeal to our best interests, though he asks the question if planning freed people from the less important cares and made it easier to live and think, why would anyone dislike this plan? But economic ends cannot be separated from the other ends of life.
Hayek describes that freedom of choice goes away in a monopoly and that in a competitive society, most things can be had at a price. The only general principle that Hayek writes needs to be implemented is that we have to have equality with all individuals. With this need to be implemented, he says that socialism promises not complete quality but rather the idea of greater equality. He ends this section by saying; “It must be that freedom of economic activity which, together with the right of choice, carries also the risk and responsibility of that right.”
Two kinds of security
This short section described the idea that people will give up liberty to purchase safety and that there are two types of security; certainty for standard of life, or protecting individuals or groups against diminutions of their incomes. To summarise, he puts a Benjamin Franklin quote saying that “those who would give up essential liberty to purchase a little temporary safety deserve neither liberty nor safety.”
Toward a better world
“The guiding principle in any attempt to create a world of free men must be this: a policy of freedom for the individual is the only truly progressive policy.”
Thoughts
For this reading, I don’t so much as have an argument to be made against Hayek, but rather a curiosity about the Rule of law. He puts an Immanuel Kant quote in this section saying that “man is free if he needs to obey no person but solely the laws,” but what does this mean? Is obeying laws not inherently obeying a person or a collective group? Is the Rule of Law morality, and if so is this still not different for everyone? Who is making the laws that people follow, is it the individual? Is it a higher power or deity? What exactly does this idea have to do with laws, the liberal age, and planning?