In Hayek’s 1976 preface to the Road to Serfdom, he wrote “It has frequently been alleged that I have contended that any movement in the direction of socialism is bound to lead to totalitarianism. Even though this danger exists, this is not what the book says.” People still accuse Hayek of saying this. What I think Hayek was actually saying is that implementing an economic plan requires flexibility that democracy and the rule of law do not provide. If government attempts to plan under such institutions, people will tend to become unhappy with the institutions, and may abandon them. Basically, democratic planning under the rule of law is unworkable. If Hayek wasn’t saying this, then he should have.
Where this differs from the straw man (“Any movement in the direction of socialism is bound to lead to totalitarianism”) is, first, that it does not involve “any movement in the direction of socialism,” or any sort of government intervention. We are talking about comprehensive planning. Second, it does not involve inevitability. If people want planning, and find their current institutions not up to the task, there is danger that they will turn to a strong man to make things right, but there is also the possibility that they will abandon planning. The British, whose moderate degree of planning post-War is said to have disproven Hayek’s thesis, went through quite a bit of disfunction in the 70s, then elected a rather Hayekian prime minister and made a radical departure from their planning ways.
Lefty economist Brad DeLong thinks Hayek was just covering himself when, in 1976, he said he was never claiming that slight moves in the direction of socialism would lead to totalitarianism. DeLong does not cite the text of RTS to support his objection, instead turning to Hayek’s preface to the 1956 edition of the book:
Of course, six years of socialist government in England have not produced anything resembling a totalitarian state. But those who argue that this has disproved the thesis of The Road to Serfdom have really missed one of its main points: that “the most important change which extensive government control produces is a psychological change, an alteration in the character of the people.” This is necessarily a slow affair… attitude[s] toward authority are as much the effect as the cause of… political institutions under which it lives…. [T]he change undergone… not merely under its Labour government but in the course of the much longer period during which it has been enjoying the blessings of a paternalistic welfare state, can hardly be mistaken…. Certainly German Social Democrats… never approached as closely to totalitarian planning as the British Labour government has done…. The most serious development is the growth of a measure of arbitrary administrative coercion and the progressive destruction of the cherished foundation of British liberty, the Rule of Law… [E]conomic planning under the Labour government [has] carried it to a point which makes it doubtful whether it can be said that the Rule of Law still prevails in Britain…
Does this contradict Hayek’s 1976 claims? DeLong thinks it does on its face, but it actually depends on what thesis Hayek thinks he is defending here. Is he defending the thesis that “any movement in the direction of socialism is bound to lead to totalitarianism?” If so, 1976 Hayek is contradicting 1956 Hayek (but maybe not 1944 Hayek.) Yet there is nothing in the above (ellipses are DeLong’s) indicating inevitability. Maybe the people’s character changes, and then they, of their own free will, change it back and elect Margaret Thatcher.
What he does say is that “economic planning under the Labour government [has] carried it to a point which makes it doubtful whether it can be said that the Rule of Law still prevails in Britain.” So is Hayek right or wrong? He doesn’t have to show that a dictator has come to power or that Britain has a totalitarian government, only that circa 1956 it did not have the Rule of Law. DeLong doesn’t engage the question, but it is an important one. Comprehensive government plans will require bureaucracies that are removed from the turbulence of interest group politics, and who have discretion rather than being governed by rigorous laws. It doesn’t have to be a binary question of totalitarian versus free societies, where we are okay as long as society is “basically” free. Government bodies can remove themselves from republican institutions without imposing totalitarianism; both totalitarianism and free institutions are unusual arrangements in history.
Here is some of what Hayek actually wrote in the chapter Planning and Democracy (Road to Serfdom, chapter five):
It may be the unanimously expressed will of the people that its parliament should prepare a comprehensive economic plan, yet neither the people nor its representatives need therefore be able to agree on any particular plan. The inability of democratic assemblies to carry out what seems to be a clear mandate of the people will inevitably cause dissatisfaction with democratic institutions. Parliaments come to be regarded as ineffective ‘talking shops,’ unable or incompetent to carry out the tasks for which they have been chosen. The conviction grows that if efficient planning is to be done, the direction must be ‘taken out of politics’ and placed in the hands of experts—permanent officials or independent autonomous bodies….
It is important clearly to see the causes of this admitted ineffectiveness of parliaments when it comes to a detailed administration of the economic affairs of a nation. The fault is neither with the individual representatives nor with parliamentary institutions as such but with the contradictions inherent in the task with which they are charged. They are not asked to act where they can agree, but to produce agreement on everything—the whole direction of the resources of the nation. For such a task the system of majority decision is, however, not suited. Majorities will be found where it is a choice between limited alternatives; but it is a superstition to believe that there must be a majority view on everything….
Nor can a coherent plan be achieved by breaking it up into parts and voting on particular issues. A democratic assembly voting and amending a comprehensive economic plan clause by clause, as it deliberates on an ordinary bill, makes nonsense. An economic plan, to deserve the name, must have a unitary conception….A complex whole in which all the parts must be most carefully adjusted to each other cannot be achieved through a compromise between conflicting views.
I don’t see any talk here about anything being inevitable, nor about “any movement in the direction of socialism;” again, we are talking about comprehensive planning. Hayek wrote similar things about planning in relation to the rule of law, in the next chapter.