“The Road to Serfdom (1944) – F.A. Hayek, Chapter 15 – The Prospects of International Order

  • The world was paid the most for the abandonment of liberalism in the field of international relations. We’re starting to see that economic planning has an aggregate harmful effect in producing international friction. There’s little hope for peace & order when every country only works in its own immediate interest of others. It essentially builds up the restrictions on the movement of men & goods.
    • It’s bad enough when blocs of opposed interests within one country. But when international borders mark sharp differences in standards of living & national membership seems to entitle one group to a better standard. If resources of different nations are exclusive properties, international borders will bring friction & envy between nations. It’s delusional to think negotiations between countries would make international frictions any better than competition.
      • Economic transactions between national states, who are also supreme judges of their own behavior & bow to no superior law & whose representatives aren’t bound to anything other than immediate interests will end in clashes of power.
      • Instead of economic struggle of individuals we’re going to put armed nations in control of trade?
    • Even people who see this political danger argue for international economic planning by a super-national authority. It might avoid some national planning problems but those who want this ignore that problems seem to scale as planning scales, i.e. problems grew with the scale of the planning.
      • There are few problems in planning for a family or a small community. As the scale grows, the amount of agreement decreases & the necessity to rely on force grows. In a small community, views will exist in agreement on many things. But as the size grows, the move it’ll have to rely on force.
      • Even the people of a single might be convinced to sacrifice to help domestic industries & preserve national living standards. But as long as people are only asked to do for people of the same ways of life & thinking, they’re usually ready to make sacrifices.
      • But once you expand to an area the size of Western Europe, the moral bases for the undertaking disappear.
    • If most people can’t see the difficulty, it’s because they assume that they’d be the ones who’ll settle questions for others & are convinced of their ability to do so. But a country will heavily resent another country dictating their economic to them from an international authority.
    • Planning on an international scale can only be done through force from a small group on the rest. The German are doing this now but it’s not because Germans are innately brutal. It’s just what happens when people decided to direct economic life of people with divergent ideals & assume responsibilities requiring force. Even the best intention can’t stop you from being forced to act immorally.
      • Even if power is idealistic & unselfish. But the temptation for abuse is too great. Many in England are arguing that victory should be used to allow British industry to use mobilization for the war & reconstruction of Europe to secure the country high wages. But this requires brutal force to bring about.
  • There’s a popular delusion that central direction through democratic means would allow the interests of the working class to overcome differences between the ruling class. With world planning, the clash of economic interests would appear in a clash between people only to be decided by force.
    • International planning would have to decide not only which classes will be treated favorably but from which countries workers in poor countries will want protection through legislation which will actually work against the by denying them the ability to underbid workers from richer nations.
    • The wealthier & more powerful nations would become the object of hatred & envy by the poorer ones. The poor ones would be convinced that they could do better if only allowed to do so. If an international authority has the duty to bring about distributive justice between different peoples, a consistent development of socialist doctrine would translate class strife to struggle between working classes of different countries.
      • Talk of “planning to equalize standards of life” has one particular detail. Let’s consider the Danube River Bases & SE Europe. It’s clear things need to get better for many reasons. But it’s another thing to say “let’s use a single master plan.” You can’t use a Danube version of the Tennessee Valley Authority there without determining beforehand the relative rate of progress of the different races of people there.
      • Planning like this needs to being by fixing an order of priorities. Plans to equalize living standards means different claims will have to be ranked over other & those on the bottom will have to wait their turn. They might become convinced they could reach their goal sooner if they were free to do so.
        • Someone has to balance the merits of the claims deliberately, decide on plans & put them into action without exemptions for those who feel they can do better for themselves.
        • In such a state everyone will feel worse off than if some other plan had been adapted. To attempt this for a region with several small nations, with each thinking itself superior, would require the use of force. There will be many who’ll see the particular order chosen as unjust & might even turn against those with the power.
      • No doubt there’ll be some who believe they could handle these problems justly. They’d be shocked to see all the hatred turned on them & would be forced to use coercion for implementation.
      • Dangerous idealists don’t see that when there’s an assumption of moral responsibility using one’s moral views with force over others. To impose a moral task on the victors is certain to corrupt them morally & discredit them.
        • Let’s help the poor & raise living standards. An institutional authority can help but only if it maintains the conditions where people can develop their own lives. It won’t be just if it’s used to dole out resources & every economic effort has to be approved.
  • These difficulties can’t be met by conferring to authorities just specific economic powers. It’s wrong to think it’s just a technical task to be solved by experts & all vital things will be left to political authorities. Any international authority not subject to a superior political power could easily become tyrannical. Exclusive control of an essential commodity or service is one of the most far-reaching powers given to an authority. There’s nothing that wouldn’t be justified by “technical necessities”.
    • The kind of organization of resources now in favor is a system of comprehensive monopolies recognized by all national governments but subject to none would be a racket.
    • Innocuous proposals seen as essential for economic order, are conscious control & distribution of supply of raw materials, could result in political difficulties & moral dangers. The controller of supply would be master of the fate of whole industries & countries. In controlling prices & quantities, he’d be able to decide which industries can start or not.
      • While “protecting” standards of living of some, he’ll deprive many. If all resources are to be controlled like that, there’d be no new industries, technological developments, etc. It’s worse at an international level.
    • Those who claim to be realists ridicule “Utopianism” of the possibility of a liberal international political order but see planning as more practicable. They believe the one undreamed-of power given to international government (which at a national level, can’t even maintain Rule of Law) will be used unselfishly to command common consent. Nations might abide by formal rules but will never submit to international planning.
    • “Realists” who advocate for international planning know nations won’t submit but will be forced by the irresistible force given to international planning authorities.
      • Great powers will impose their will on smaller nations within their hegemony. They disguise any individual guilt for a nation by giving it an international appearance so as to make some believe it’s generally acceptable to all.
      • Even those in favor of a New Order for Europe will admit that small countries will lose their rights. These countries will resent strong allies who liberated them from Nazis only to re-enslave them.
  • Those ready to violate the rights of small states are right about one thing. We can’t hope for peace if states have unfettered sovereignty. There must be a power to restrain different nations from harming their neighbors. A set of rules must be estimated for what a state may do & it must be a negative authority – be able to say “no” to actions.
    • The international economic authority that allows nations to keep unrestricted political sovereignty, is not what we need. We need a superior a political power that can economic interests in check without participating in the economic game.
    • The powers given to authority must be enough to maintain laissez-faire powers of the state to enforce Rule of Law.
    • This authority will be a federation which is nothing but the application to international affairs of democracy with definitely limited powers. This is not just some wishful thinking. To prevent people from killing each other, we have to give authority to prevent it, which requires power.
      • Division of power under a federation is a limitation on the whole & the state. It’s not an obstacle to all planning. It makes the most harmful planning difficult & the helpful planning free. It confines international planning to fields where true agreement can be reached. Desirable planning can only be local & without restrictive measures. It can actually reverse the centralization that’s been going on.
        • Remember, finding peace through the absorption of separate states in large federated groups was the ideal of liberal thinkers. While they weren’t aware how a federal organization is essential, they still saw it as an ultimate goal.
  • We don’t have to rebuild civilization. We preserve democracy & foster its growth if all power & decisions rests with an organization too big for one man to understand. Democracy doesn’t work without local self-government. Only where responsibility can be learned & practices can an ordinary man take part in public affairs – the world he knows.
    • The small nation can only be independent internationally within a true system of law that guarantees certain rules be enforced & authority can pervert it.
    • International authorities must be designed so they don’t become tyrannical. That requires limiting powers for both good & bad ends.
    • These organizations are ambitious & need to stick maintaining peace through maintaining international Rule of Law.

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