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Friedrich A. Hayek: Champion of

Individual Liberty, Limited Government, and Free Markets

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However, I really cannot understand how those who believe theft through legal confiscation of property by government, to transfer that property for use by others who have not earned it, is either moral or ethical.

 Fulfilling the "needs" of one man by violating the property rights of another, is not and should not ever be considered moral or ethical.  No person should have the right to impose an obligation upon another without their consent - doing so in essence imposes involuntary servitude (slavery) upon the individual who is paying for the other's needs.

 There can be no such thing as a right to enslave!

'...The main point of my argument is, then, that the conflict between, on one hand, advocates of the spontaneous extended human order created by a competitive market, and on the other hand by those who demand a deliberate arrangement of human interaction by central authority based on central command over available resources is due to a factual error by the latter about how knowledge is and can be generated and utilized. As a question of fact, this conflict must be settled by scientific study. Such study shows that, by following the spontaneously generated moral traditions underlying the competitive market order (traditions which do not satisfy the canons or norms of rationality embraced by most socialists), we generate and garner greater knowledge and wealth than could ever be obtained or utilized in a centrally-directed economy whose adherents claim to process strictly in accordance with "reason." Thus socialist aims and programmes are factually impossible to achieve or execute; they also happen, into the bargain as it were, to be logically impossible.*

*From The Fatal Conceit: The Errors of Socialism, 6–7.

The Tempting Road to Serfdom

It is a revealing fact that few planners are content to say that central planning is desirable. Most of them affirm that we can no longer choose but are compelled by circumstances beyond our control to substitute planning for competition. The myth is deliberately cultivated that we are embarking on the new course not out of free will but because competition is spontaneously eliminated by technological changes which we neither can reverse nor should wish to prevent. This argument is rarely developed at any length–it is one of the assertions taken over by one writer from another until, by mere iteration, it has come to be accepted as an established fact. It is, nevertheless, devoid of foundation. The tendency toward monopoly and planning is not the result of any 'objective facts' beyond our control but the product of opinions fostered and propagated for half a century until they have come to dominate our policy.

...[O]nce government has embarked upon planning for the sake of justice, it cannot refuse responsibility for anybody's fate or position. In a planned society we shall all know that we are better or worse off than others, not because of circumstances which nobody controls, and which it is impossible to foresee with certainty, but because some authority wills it. And all our efforts directed toward improving our position will have to aim...[a]t influencing in our favor the authority which has all the power. The nightmare of English nineteenth-century political thinkers, the state in which 'no avenue to wealth and honor would exist save through the government,' would be realized in a completeness which they never imagined–though familiar enough in some countries which have passed to totalitarianism.*

*From The Road to Serfdom, 43 and 107.

Decentralized Knowledge and the Economic Planning Problem

The peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess. The economic problem of society is thus not merely a problem of how to allocate 'given' resources–if 'given' is taken to mean given to a single mind which deliberately solves the problem set by those 'data.' It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know. Or, to put it briefly, it is a problem of the utilization of knowledge which is not given to anyone in its totality...[I] should briefly mention the fact that the sort of knowledge with which I have been concerned is knowledge of the kind which by its nature cannot be conveyed to any central authority in statistical form. The statistics which such a central authority would have to use would have to be arrived at precisely by abstracting from minor differences between the things, by lumping together, as resources of one kind, items which differ as regards location, quality, and other particulars, in a way which may be very significant for the specific decision.*

*From Individualism and Economic Order, 77–79.

For example, a man in rural Nova Scotia had a little business making and selling highland paraphernalia, such as sporrans, daggers, and belt buckles. One day, his eye fell on a newspaper ad calling for tenders for the making of aircraft parts. He quickly realized that, with the equipment he possessed, he could easily make the parts described, and he submitted a bid. He is now successful in both lines of work. Note, however, that no planner sitting in Halifax or Ottawa would have included this man in their inventory of aircraft parts makers, because he did not know himself that he possessed this capacity. By the chance act of reading the ad, he learned something about himself, and transformed the tiny part of the economy of which he is the centre. The economy as a whole is composed of billions of such individuals whose true circumstances are never fully known to themselves, let alone to distant planners.

 All our vast ability to satisfy human wants and needs is created by our knowledge of how to do things, but that knowledge is — and must be — widely dispersed and locked in the minds and experiences of billions of individuals. With minds so limited, and knowledge so vast, variegated, and incapable of comprehensive statement, we are condemned to growing specialization as individuals and, the corollary of that, to a growing dependence on others similarly specialized in their fields. Hayek's Viennese contemporary, and LSE colleague, the philosopher of science Karl Popper, put it this way: "Our knowledge can only be finite, while our ignorance must necessarily be infinite."  

 Only a decentralized system — in which people are free to make the most of opportunities, often known only to themselves, and in which people voluntarily agree to exchange their goods, services, and ideas with one another, and in which new information is constantly being discovered and integrated — can achieve the needed coordination. Such decentralization of power and resources among competing organizations and individuals encourages each person to make maximum use of the opportunities and resources available to them. Hayek called this economic competition a "discovery procedure," a process by which society finds and puts to work the useful knowledge throughout the social order. A centralized organization, by contrast, can act only on the information possessed by decision makers at the top. Paradoxically, the blooming, buzzing, decentralized confusion of the marketplace masks a profound and wide-ranging order. 

To allay these suspicions and to harness to its cart the strongest of all political motives--the craving for freedom -- socialists began increasingly to make use of the promise of a "new freedom." Socialism was to bring "economic freedom," without which political freedom was "not worth having."

To make this argument sound plausible, the word "freedom" was subjected to a subtle change in meaning. The word had formerly meant freedom from coercion, from the arbitrary power of other men. Now it was made to mean freedom from necessity, release from the compulsion of the circumstances which inevitably limit the range of choice of all of us. Freedom in this sense is, of course, merely another name for power or wealth. The demand for the new freedom was thus only another name for the old demand for a redistribution of wealth.

Planning leads to dictatorship because dictatorship is the most effective instrument of coercion and, as such, essential if central planning on a large scale is to be possible.

 There is no justification for the widespread belief that, so long as power is conferred by democratic procedure, it cannot be arbitrary; it is not the source of power which prevents it from being arbitrary; to be free from dictatorial qualities, the power must also be limited. A true "dictatorship of the proletariat," even if democratic in form, if it undertook centrally to direct the economic system, would probably destroy personal freedom as completely as any autocracy has ever done.

 To those who have watched the transition from socialism to fascism at close quarters, the connection between the two systems is obvious. The realization of the socialist program means the destruction of freedom. Democratic socialism, the great utopia of the last few generations, is simply not achievable. {So why are we still trying to achieve it 60 years later!!!}

 

All information on this and referred pages should be distributed widely (with appropriate references to sources) to spread Hayek's principles to as many people as possible and move our countries toward more ideal conditions for all people.

Feel free to contact me with questions and comments: longanimous@hotmail.com St. Augustine, Florida, USA - These pages last updated: July 17, 2003.

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