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Walking down the road to serfdom

December 13, 2011

Over 60 years ago Hayek wrote “The Road to Serfdom“, which attempted to glimpse into the future of the western world. He predicted that if a country gave over significant control of it’s economy to central planners, then eventually the country would start to drift away from democracy. In the decades that followed, the UK and the rest of the west steadily gave more economic power to government but remained democratic, and so some concluded that Hayek’s predictions of doom were wrong.

Perhaps they were just premature.

Hayek argued that democracy can be slow and messy, but that economic decisions often need to be made quickly and decisively. If the government controls the economy, then the people have a choice between slow and messy economic decisions, or making the government less democratic so that leaders could “get things done”. As we look at the economic problems in Europe and America today, the lessons of Hayek seem very appropriate.

From American towns to the European countries of Greece and Italy, elected leaders are being replaced by technocrats. With growing debt problems, the idea that some Europeans may start to look for a “strong leader” to make “tough decisions” without having to deal with those “meddling and bumbling politicians” doesn’t sound too outlandish. Even in Australia, we have seen one commentator hint at the idea of suspending democracy so that leaders can take strong action.

Now even simpletons like Jeff Sparrow are starting to notice the trend.

Of course, Jeff thinks that “neoliberals” are to blame. Again. He goes on to say that neoliberals are also to blame for Kevin Rudd’s 2020 talk fest, and the idea of Labor Party primaries, and modern democratic campaigns, and anything else you don’t like. It’s actually quite amusing. You can see that Jeff is 100% committed to two causes — opposing “neoliberalism” and also not knowing what the word means. The fact that he remains so proudly ignorant raises some interesting sociological questions, but that’s a topic for another day.

The anti-democratic trends in Europe and America (and to a lesser degree in Australia) should not be a surprise.

The truth is that our current “neo-socialism” is simply unsustainable. It would be easy to point to the unprecedented amount of welfare spending, and business controls, and nanny-state regulations, and police-state intrusion, and show how these are leading the west to fiscal ruin. Greece and Italy know the story all too well, and I have written about this before. However, as Hayek warned, it is also becoming increasingly apparent that our ever-growing government is also culturally and politically destructive.

Even Simple Jeff notes that the golden age for social organisation and civic involvement was the nineteenth century — the same time as the golden age for market capitalism. Since then we have seen a consistent story of growing government, and shrinking community. Instead of actually pursuing social goals, many “non-government organisations” now concentrate on lobbying the government. Instead of people coming together in their neighbourhood to directly fix local problems, we are building a culture of complaint and inaction while we wait for a government solution.

At the same time as the government crowds out community, they are also taking a larger role in trying to “manage” the economy. Keynesians have the world convinced that politicians can solve the business cycle by micro-managing demand. Intellectual leaders debate about how the government should drive growth, or restrict growth, or create sustainable growth, but they all seem to accept the idea that it is the responsibility of the government to do something. And so expectations rise. People assume that the government should “do something” and politicians are eager to offer to “do something” in the hope of picking up a few more apathetic votes.

Each election, politicians promise that big government will solve our problems. This leads to two inevitable results — (1) people become less involved in the broader civil society because they outsource those responsibilities to politicians and bureaucrats, and so government crowds out community; and (2) when the government inevitably fails, people become disillusioned with politics. These factors explain why fewer and fewer people join political parties.

As the government grows, politics becomes big business and playing political games brings more rewards. This creates a power dynamic of “insiders” and “outsiders”. Those outside of political power can neither control their own lives nor control the government (which controls their lives), and so as Frank Furedi has noted they increasingly feel disempowered. With less control comes less responsibility, further undermining civic engagement.

In such a situation it is not surprising that civil society and democratic institutions are decaying. Hayek was right.

  1. Oliver
    December 15, 2011 at 4:17 am

    How can we reverse the trend towards central planning?

    Who do we vote for that sees the bigger picture and is willing to take unwavering steps towards a more liberal society?

    Who is Australia’s Ron Paul?

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