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Hayek: When Planning Undercuts Society’s Successes

How many times have we heard a bloviating politician say something like, “In the wealthiest nation on earth, it is unacceptable that (fill in the blank with whatever social ill the politician is calling attention to)”?

We hear this frequently when the topic is healthcare or the income gap. Resident talking-head Arianna Huffington used this exact language while arguing for a public option on Larry King Live this week. Another good example is President Obama last month saying, "In the United States of America, no one should have to worry that they'll go without health insurance - not for one year, not for one month, not for one day. And once I sign my health reform plan into law - they won't.''

F.A. Hayek (1899-1992) was a Nobel Prize-winning economist and a leading political philosopher of classical liberalism/anti-collectivism of the twentieth century. In his seminal work, The Road to Serfdom, Hayek writes in the first chapter about the danger of liberalism’s new-found prosperity:

“It might even be said that the very successes of liberalism became the cause of its decline. Because of the success already achieved, man became increasingly unwilling to tolerate the evils still with him which now appeared both unbearable and unnecessary.” (1) 

These evils included first and foremost that some people had more money and comforts than others, and this was seen as an inequality which could be corrected. The result was the benefactors of liberalism sought to right these wrongs through legislative do-goodery, and moved quickly towards the belief that liberalism needed to evolve into a more collectivist, socially-minded system. Much like today’s Baby Boomers, the early twentieth century progressives (specifically in Germany) Hayek is writing about had experienced more economic and material success than any previous generation. So then, as the most comfortable in society, they sought to correct lingering imperfections in society through central planning. Hayek warns this mindset is taking a sledgehammer to the foundation of a prosperous, liberal society. 

Not only did this move their society to collectivism, it stifled the successes of nineteenth century liberalism. Furthermore, in arguing for more collectivist do-goodery, progressives co-opted the language and rhetoric of morality to frame the debate—a tactic still frequently used today.

On this, Hayek wrote:

“The states ceases to be a piece of utilitarian machinery intended to help individuals in the fullest development of their individual personality and becomes a ‘moral’ institution—where ‘moral’ is not used in contrast to immoral but describes an institution which imposes on its members its views on all more questions.” (2)

So while we’ve been sold something like health reform as a major plank on the platform of a “new” politics, the reality is that these ideas have been around for over a century, and there is nothing unique about waging these battles.


(1) Friedrich Hayek, The Road to Serfdom (Chicago: U. Chicago Press, 1994), 23.

(2) Hayek, 85.

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