“The Road to Serfdom (1944) – F.A. Hayek, Chapter 14 – Material Conditions & Ideal Ends

  • Our generation attaches less weight to economic matters than previous ones. The “End of Economic Man” is becoming one of the governing myths of our time. Before accepting that phrase, let’s examine it.
    • When thinking of the claims for social reconstruction being made, we’ve already seen “reinterpretation in economic terms” of past ideals of liberty, equality & security is one of the main demands of people who proclaim the end of economic man. There can’t be much doubt in their belief in the irrationality of our economic system through false assertions about potential plenty, pseudo-theories about the inevitability of monopoly & the depletion of raw materials blamed on competition (& wouldn’t that be worse under government-aided monopolies?)
    • Our generation is less willing to listen economic arguments than previous ones. It’s unwilling to sacrifice any demands to economic arguments. It’s impatient & intolerant of all restraints on ambitions & unwilling to bow to economic necessities. It’s a refusal to recognize any obstacles or conflict that might impede their desires.
    • “Econophobia” is more suitable. Man has come to hate & revolt against the impersonal forces he’s been forced to submit to.
    • The revolt is a new unwillingness to submit to any rule man doesn’t understand. It’s felt in many fields, especially in morals. As the world becomes more complex, our resistance against the forces that interfere constantly interfere with individual hopes. A complex civilization like this one has to be based on the individual adjusting to changes (changing jobs, changing scarcity, etc.) that will be connected to circumstances too numerous & complex for one man to understand.
      • Those affected will blame the immediate cause while ignoring deeper & more complex relationships.
    • Men’s submission to impersonal force of the market that made civilization’s growth. But submitting we’re helping to build something we can’t completely understand. It doesn’t matter why (religion, blind obedience, faith in economics, etc.). It may be a sign of intelligence to admit lack of understanding.
      • Refusal to submit is a product of incomplete & erroneous rationalism. It’s incomplete because it fails to understand that coordination of individual efforts must take into account things no one can survey individually unless complex society is to be destroyed. The only alternative is to submit to impersonal forces, which seems to be the arbitrary power of other men.
        • However, he doesn’t realize new authoritarian restraints will be deliberately impose in their place will be way worse.
      • Those who argue we’ve learned to master forces of nature also think we can do the same with social collaboration. This is the path to totalitarianism & the destruction of civilization. Those who demand it show they don’t understand how much we need the coordination of impersonal forces to preserve our society.
  • Individual freedom can’t be reconciled with the supremacy of one single purpose society has to be subordinated to. The only exception is during war & temporary disasters when subordination is the price for preserving freedom in the long run. That’s why so many phrases about doing in peace what has been done in war. It can be temporary & never permanent.
    • While tackling unemployment is important, it shouldn’t dominate us at any price. The fascination of vague but popular phrases like full employment will lead to extremely short-sighted measures with which the single-minded idealist is likely to do the greatest harm.
    • We should be open-eyed with what will have to be done after the war. But the war brought hundreds of thousands of people into specialized jobs that earned relatively high wages. There’s no way to employ the same numbers. There’ll be a need to transfer them to other jobs that get paid less. Even retraining will be have to be done at a large scale wages will have representative relative value to society.
    • If unions successfully resist lowering wage, only 2 alternatives are available:
      • A – Coercion will have to be used.
      • B – Those who can no longer be employed must be allowed to remain unemployed until they’re willing to work at a lower wage.
        • This would happen in a socialist society as well as any other. Socialist society would use coercion. If we’re determined not to allow unemployment at any price & not willing to use coercion, we’ll be forced to use all sorts of desperate methods. That would interfere with productive use of resources.
        • Monetary policy would only work through inflation which is done via a concealed & underhanded fashion. Raising wages in this manner would only make things worse.
    • After the war, giving people high paying jobs through monetary expansion can only be kept up through a progressive inflationary expansion to keep the redistribution of labor in industries. This, so long as people are free to change jobs, will always result in some unemployment. This tends to lower productivity & wages are completely artificial.
  • After the war, wisdom in management will be even more important than before & that will depend on how we solve economic problems.
    • The British will be very poor at first & the problem of regaining & improving former standards may prove for difficult than other countries. If they act wisely through hard work & devoting efforts to overhauling & renewing their industrial apparatus, they’ll be able to return & surpass the level they’d reach. That presupposes they’ll be satisfied to consume currently no more than is possible without impart the task of reconstruction.
      • They shouldn’t by short-sighted attempts through by a redistribution so depress large classes as to turn them into determined enemies of the existing political order. One decisive factor in the rise of totalitarianism on the Continent is the existence of a large dispossessed middle class.
  • Our hopes of avoiding the fate threatening us rest on the prospect we can resume rapid economic progress & the main condition for such progress we should all be ready to adapt to a very much changed world that no considerations for the accustomed standard of particular groups must be allowed to obstruct this that we learn to turn all our resources to wherever they contribute most to make us all richer.
    • The adjustments needed will be greater than any adjustments we had to make in the past & only if everyone of us is read to obey the necessities of this shall we be able to get through a difficult period. Let a uniform minimum be secured to everybody. But all claims for a privileged security of particular classes must lapse, all excuses disappear for allowing groups to exclude newcomers from sharing their relative prosperity.
    • It may sound noble to say “damn economics” but it’s irresponsible. Our only chance of building a decent world is to continue to improve the general level of wealth. What modern democracy won’t bear without cracking is the necessity of lowering standards of living in peacetime.
  • People who admit that present political trends constitute a serious threat to economic prospects & through their economic effects endanger higher values are yet likely to deceive themselves we’re making material sacrifices to gain ideal ends. It’s doubtful that 50 years of an approach toward collectivism has raised our moral standards or maybe the change has had the opposite effect. We pride ourselves on sensitive social conscience but it’s not clear that it’s justified by individual conduct. We get indignant about inequities of the existing social order. But the effect of morals, individual conduct & how we uphold moral principles against expediencies & demands of social machinery is difficult.
    • We’re in danger of forgetting that morals are a phenomenon of individual conduct & can only exist where an individual is free to decide for himself & can voluntarily sacrifice personal advantage according to morals. Outside of this there is no good or bad, no moral merit, etc. Only when we are responsible for our own interests do our actions & decisions have moral value.
    • We can’t be selfish at someone’s expense & there’s no moral merit in being unselfish if we have no choice when we are made to do something good we have no merit to praise.
      • Freedom to order our own conduct when there’s no choice & responsibility to live one’s life on those lines is the only way moral sense exists.
    • The effect of collectivism has been entirely destructive. It’s promised relief from responsibility – making it anti-moral. Feeling of personal obligation to remedy injustices had been weakened & willingness to bear responsibility & consciousness of duty damaged.
      • We’ve become tolerant toward abuses & indifferent toward inequalities in individual cases since we see that only the state will set everything right.
    • The virtues individualism rests on (independence, self-reliance, willingness to bear risks, readiness to back one’s conviction against a majority & willingness of voluntary cooperation with neighbors) are less esteemed & less practical.
      • Collectivism hasn’t replaced them. It destroyed them & left a void with nothing but demand for obedience & compulsion of the individual to do what the collective says is good.
      • Periodical election of representatives is not where an individual’s morals are tested or where needs reassert & prove values.
    • Rules of conduct evolved by individuals are the source where collective political actions derives its moral standards. Every generation puts some values higher or lower than before.
      • The “19th Century illusions@ are the moral values we’re told to disregard.
      • What is sacrosanct? What do we dare not touch? It’s no longer the liberty of the individual, freedom of movement & freedom of speech. It’s now protected standards of special groups & their right to exclude others to provide countrymen with what they need. It’s discrimination between members & non-members of closed groups, foreign nationals, injustices inflicted by government on individuals.
    • Our moral sense has been blunted. We are reminded that you can’t make an omelette without breaking an eff. The eggs broken are the essential bases of civilized life. What atrocities have “liberals” no condoned?
  • Collectivism has brought about one change in our morals. The virtues that the Anglo-world excelled in are held in less & less esteem. Almost all of the traditions & institutions democracy found its characteristic expression in & which molded the national character of England & America are being destroyed.
    • Some of the most precious things England has given the world are now held in contempt even in England itself.
    • Compared to the rest of the world, almost all Englishmen were liberals 20 years ago. Even an English socialist today will feel more at home in a liberal society than in one he actually advocates for.
    • Loss of belief in British civilization is most apparent in the ineffectiveness of British propaganda. In order for it to succeed it should how a proud acknowledgement of its characteristic values.
      • The left has worshiped foreign gods for so long they seem unable to say anything good about English traditions & institutions. The moral values most pride themselves in they are out to destroy but the socialists won’t admit. Unfortunately, it’s not just confined to the socialists.
    • Such pathetic propaganda will never work against Germany. It is essentially abandoning vaunting English tradition & institutions as a selling point & saying that England should be doing what the Germans have already mastered.
      • If we’re to succeed, we need to regain belief in our societies & traditional values & defend them from attack from the enemy.
      • We should not apologize or compromise. We can only win by keeping unwavering faith in what made our society free, tolerant & independent people.

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