Hayek's Slippery Slope

Hayek's Slippery Slope

Mini Teaser: Friedrich Hayek's ideas,  particularly those set out in The Road to Serfdom, have been subject to extraordinary ups and downs in learned, as well as in popular and political, estimation.

by Author(s): Neil McInnes

This is another story about a book, a curious book that went from
bestseller to oblivion and back several times over. The millions of
copies it sold in a score of languages "completely discredited" its
author, exactly as he foresaw it would. Although he was regarded as
one of the leading theoretical economists of the century, the
economists of the University of Chicago (whose university press had
published the offending book) refused to have him on their faculty.
No matter, by living to be over ninety he buried not only them but
also the very notion of a planned economy, which had been the target
of his essay. The book in question is Friedrich Hayek's The Road to
. Looking back to its publication fifty-four years ago one can
easily see the reasons both for its enduring fame and for the
discredit it brought on its author.

Published in the United States and Britain while the war against Nazi
Germany was still raging, the book said that the democracies risked
going the same way as Germany because their politicians and their
intellectuals had fallen for the idea that an economy could be
centrally planned, and they would soon be putting that idea into
practice under the name of postwar reconstruction. In fact, Hayek
said, central planning led, via cumulative attempts to mend its
inevitable failures, to "a servile state" (he recalled Hilaire
Belloc's 1913 book of that name). It led to serfdom, to a condition
"scarcely distinguishable from slavery." Moreover, any attempt at
getting a little bit pregnant in this domain, by toying with moderate
planning and a "middle way" between capitalism and socialism, would
set the democracies on a slippery slope that would end, more slowly
but just as surely, in that same serfdom. The free market was not
only more efficient economically but indispensable for political and
cultural freedom. Its enemies were intellectuals, meddling
politicians--and unbridled democracy, which is to say, oppression and
spoilation by demagogues invoking the unrestricted will of the

Hayek began by saying, "This is a political book." That is what
economists say when they want to disarm criticism, and to be judged
by looser standards. In fact, it was not a political book but a quite
unpolitical one, in that it took no account of the political climate
of the day--which happened to be a climate that would persist for the
next thirty years, "les trente glorieuses", as they are now called.
Schumpeter's review noted that it "takes surprisingly little account
of the political structure of our time", and Eric Roll meant the same
thing when he called it "a wholly unhistorical book." Still, Hayek
was right to see that it contained enough politics, cut across enough
academic demarcation lines, to outrage the economists--especially
since most of them at the time were working for the government and
taking its view of the economy. It would, he said, "damage my
professional standing" and "alienate my colleagues." Indeed, it did:
"After The Road to Serfdom, I felt that I had so discredited myself
professionally I didn't want to give offense again. I wanted to be
accepted in the scientific community." He never was: "I can feel it
to the present day [1979]. Economists very largely tend to treat me
as an outsider, somebody who had discredited himself by writing a
book like The Road to Serfdom. . . . Some of my more leftish
acquaintances (with considerable cheek) gave me to understand that in
their opinion I had ceased to be a scientist and had become a

Similar prejudice had almost prevented the book being published at
all. Like Orwell's Animal Farm a few months later, and for comparable
reasons, it was turned down by several publishers, one of whose
readers said it was "unfit for publication by a reputable house." In
the event, it was an instant popular success on both sides of the
Atlantic and has been continuously in print in one or other of twenty
languages ever since; there was a new French edition in 1993 and a
fiftieth anniversary edition in English in 1994. Most readers
probably knew it through a Reader's Digest condensation, prepared by
Max Eastman, of which over one million copies were distributed
through the American Book of the Month Club. Hayek got no money out
of that version, for the University of Chicago gave it to the
Reader's Digest for nothing. This led to accusations that the
publication was being subsidized by Big Business, which it probably

Though always available, Hayek's ideas have been in and out of
fashion to a degree unusual even in the modish subject of economics.
He was Keynes' peer as a technical economist in the 1920s but he
disappeared under "the Keynesian avalanche" of the 1930s. He
resurfaced as a prophet in 1944 but thereafter fell to the rank of an
intellectual outcast and hate figure whose new books, said Samuel
Brittan, were greeted with scorn that constituted "an intellectual
disgrace." The Nobel Prize of 1974 (which Hayek had to share with
that arch-economic planner Gunnar Myrdal) prepared his resurrection
as a cult figure of the Radical Right, supposedly influential in the
counsels of Ronald Reagan and Margaret Thatcher. The collapse of
communism was seen as vindicating his work and, more importantly, it
produced a new generation of Hayekians among the economists of the
former Soviet empire. In the West, however, he is now promised a new
spell in oblivion by the communitarians and by all those who dismiss
as mere "Cold War liberalism" the impressive achievement of Isaiah
Berlin, Arthur Koestler, Karl Popper, and Friedrich Hayek. The last
named would no doubt have taken this vicissitude as he took all the
others, with the patient courtesy of the petty nobility of
Austro-Hungarian Vienna.

Born there in 1899 into a family of academics on both sides, Hayek
fought for the Habsburgs in the Great War as an airborne artillery
spotter on the Italian front. In chaotic postwar Vienna he had Fabian
sympathies until he came under the formidable influence of Ludwig von
Mises, for whom he worked as a researcher after taking degrees in
economics and law. His brilliance at theoretical economics induced
Lionel (later Lord) Robbins to offer him a chair at the London School
of Economics in 1931. His assignment was to take on Cambridge, from
where Keynes reigned supreme. He did so, and if Keynes won the
ensuing stoush, some economists are no longer sure he deserved to.
Hayek moved to Chicago (not the economics department) in 1950, and
later taught at Freiburg in Breisgau and Salzburg. He died in 1992,
too far into dotage to appreciate that his ideas had won out in the
Soviet Union. Those ideas had first been set before the public from
the LSE, a school founded by the Webbs, where, after working for
years under the administration of William Beveridge (father of
Britain's welfare state) and alongside Harold Laski (chairman of the
Labour Party), Hayek had produced The Road to Serfdom, an
extraordinary solecism.

The way it came about helps to explain the book's odd mixture of
sound theory and wild exaggeration. The LSE was evacuated to
Cambridge when London was bombed, and Hayek found himself in quarters
generously provided by Keynes, with very few students and fewer
colleagues, because economists were called up for war duties. Hayek
always said that working for the government corrupted economists, and
in this case war service had won them over to planning, no doubt
necessary for victory but which many now contemplated extending into
peacetime. There was no danger of Hayek being called up because,
although he had taken out British nationality in 1938, he was too
recently an enemy alien to be trusted. After all, other refugee
scholars had been rounded up and shipped on the infamous Dunera to
concentration camps in Australia, and Popper was in New Zealand.

"I was in an extraordinarily privileged position", he said later. It
produced in him the conviction that he was alone on the watch; all
the other competent men were busy, economic questions had fallen into
the hands of "amateurs and cranks", and a vast socialist conspiracy
was afoot to hand free markets over to the planners. He wrote, said
Samuel Brittan, "as if he were a voice crying in the wilderness, as if
most of his friends were socialists, as if almost all intellectuals
are socialists, as if socialism had become a kind of official

Essay Types: Book Review