The central idea of Hayek in his book “The Road to Serfdom” is that any form of control by government is a manifestation of dictatorship and totalitarianism. Hayek, particularly focuses on the government’s initiatives to plan and control the economy. The concept is anchored on socialism that gradually leads to a dictatorship since markets ought to be free and devoid of any government influence. Indeed, controlling the markets implies that the authority monitors factors of production such as labor. In this way, the government dictates the occupation of its citizens. That form of control is worse in socialism system. Hayek insists that socialism is a clear form of totalitarianism that enhanced democracy could eliminate.
Chapter two of the book “The Great Utopia.” Highlights the threat of socialism. Hayek explicitly states that one cannot combine socialism and democracy. In other words, the two are contrasted forms of governance. As an illustration, democracy is based on equality through freedom while socialism uses servitude and restrains to achieve equality (Hayek, 2007). Elements of socialism are common in countries where the authorities plan economic policies which they later implement the market. That leads to dissatisfaction and lack of creativity in the market system.
According to Hayek, a utopian society is dangerous to the citizens since it is a recipe for totalitarianism. Authorities take advantage of crises to establish control over the naïve citizens. Typically, with a crisis in place, citizens begin to believe that the solution to their problems depends upon the government power to resolve them. Under these circumstances, the government subsequently takes power by establishing economic policies perceived tackle the problem. In the end, it legitimizes economic control restrains personal freedom.
Naturally, it is difficult to manage the flow of money between the private and public sector. In a utopian society, the government controls the prices of goods to establish some form of balance in the market.
Achieving that is difficult; hence, it prompts the government to have some authoritarian figures at the top. In the end, the state treats people as a means to an end and not as an end in themselves (Hayek, 2007).
Ultimately, they have little say in the direction of the economy. In view of this, citizens should be alert and protest against any form of socialism that seeks to control the economy. It can manifest in various forms such as regulating national health care plan or financial banking institutions.
Hayek’s concepts of economic freedom are imminent in the current events in Washington. In January 2018, President Trump announced a series of deregulations that will allow free market operations. At the top of his list, Trump insisted on tax cuts to allow companies to operate freely without the influence of the government (Appelbaum & Tankersley, 2018). The previous years of increased regulation hindered investment and job creation in the country. Many American companies shifted their production to countries with fair tax rules such as China, India, and Mexico. However, following the direction of President Trump to cut down taxes and remove other regulations, the prospects of business growth and employment are high.
In addition to tax cuts, Trump has pulled the country out of the Paris Climate Accord. His move is consistent with Hayek’s argument against imposing regulations to control businesses. The country’s exit from the treaty allows American coal companies to operate with minimal intervention from the Environmental Protection Agency (EPA) that seeks to control pollution (Appelbaum & Tankersley, 2018). It is now systematically difficult for the government to control the production of coal companies in the country. The events in Washington are consistent with Hayek’s argument that government should limit economic policies and regulations to allow markets to operate freely.
Appelbaum, B., & Tankersley, J. (2018). The Trump Effect: Business, Anticipating Less
Regulation, Loosens Purse Strings — the New York Times.
Hayek, F. (2007). The road to serfdom (1st ed.). Illinois: University of Chicago Press.