Golden autumn october, since ancient times is the harvest season, not only in the whirlpool of the Sino-US trade war soybeans can finally excitedly shake the full bell, all kinds of experts and scholars have begun to look forward to who will spend this year's Nobel Prize laurels.
As of 2017, among the 79 laureates of the 49 Nobel Prizes in Economics, it may be difficult to determine who has made the greatest contribution to humanity, but if it is the most influential and controversial, the controversy about the answer to this question may be much smaller. Obviously, the answer is Hayek. In 1974, the Nobel Prize in Economics was awarded to Hayek and Gunnar Muirdahl for "their in-depth study of monetary theory and economic fluctuations, and their in-depth analysis of the interdependence of economic, social and institutional phenomena", a result that almost shocked many people: Hayek won the prize?! And it was Muirdal who won the prize together?! Not to mention that Hayek had not studied economics for thirty years, his most important and influential works did not belong to the traditional field of economics, and the Austrian school he represented had been suppressed by his academic opponent Keynesianism for nearly forty years; what was even more puzzling was that his winning partner, Former member of the Royal Swedish Academy of Sciences and representative of the Swedish School, Muirdal, had always held high the banner of "left-wing" and "progressive", which could almost be said to be like Hayek.
The enraged Murdal did not pay any attention to Hayek at the award ceremony; what made him even more infuriating was that the Nobel Prize two years later was awarded to Hayek's colleague Friedman. Unable to bear it, he turned his pen into a gun and turned anger into gunfire, and immediately threw a critical letter to the Nobel Prize committee, directly calling for the cancellation of the Nobel Prize in Economics, a prize he had worked so hard to establish.
In the corner of the temple of economics, Hayek, who has inhabited like an ugly duckling for nearly three decades, is quite pleased with this laurel that has fallen from the sky, but he does not have much respect for the economic community that has snubbed him for so long, and even the Nobel Prize in Economics itself. In the title of his acceptance speech, he unabashedly called "intellectual arrogance," he made it clear that the growing threat of inflation that the free world faced at the time, which could not be escaped, was the inevitable consequence of the policies that most economists had recommended, or even vigorously promoted, governments; some of those economists had already won the prize, and many more would continue to be favored by the committees of the prize in the future. At the end of his speech, he even loudly appealed that the social researcher, recognizing that there were insurmountable obstacles to his knowledge, should know the truth of humility and not be an accomplice to the arrogant who desperately wanted to control society; such an act would not only make him a tyrant of his own countrymen, but would also make him a destroyer of civilization, which had grown not by the design of any individual mind, but by the free efforts of millions of individuals.
As mentioned earlier, Hayek's most influential work was not strictly economics. What exactly is that book? It is this far-reaching and timeless classic book that I recommend to you today: The Road to Slavery.
Let's briefly introduce the background of the book' creation. The book was published in 1944 and was mainly written in 1942. From the background of academic thought, in 1942, the famous Austrian writer Stephen Zweig committed suicide in Brazil; in 1945, the famous British writer George Orwell's famous allegorical novel "Animal Farm" and the Austrian philosopher Carl Popper's "Open Society and Its Enemies" were published in the same year. Going back in the history of ideas, from John Locke in the second half of the 17th century to David Hume and Adam Smith in the 18th century, especially Adam Smith's "The Wealth of Nations" came out in 1776, the traditional mercantilist economic theory gradually gave way to the free market economy theory characterized by free economy and free trade, and the "invisible hand" of the market has almost become the most recognized belief in the economic community. Subsequently, modern economics blossomed and gradually became an explicit science, and even realized the so-called "economic imperialism". In the more than one hundred years after Adam Smith, economics mainly developed along two lines, on the one hand, the free market economy continued to mature and improve under the pen of David Ricardo, Alfred Marshall and others; on the other hand, marxist political economy represented by Marx and Engels also began to form a huge influence. The first two-volume Principia of Economics in 1890 and the three-volume Capital published between 1867 and 1894 represent two paths to the development of economics in the 19th century. In the 20th century, as Marshall's student, Keynes's 1936 General Theory of Employment, Interest, and Money, and Hayek's 1944 book The Road to Slavery, became the two culminations of modern Western economics.
From the perspective of economic activity practice, after the First World War and the "Great Depression", Germany, under the control of totalitarianism, wrapped the entire Western world into the nightmare of World War II; the United States enthusiastically embraced Keynesianism and actively participated in the "Roosevelt New Deal"; Russia, which successfully achieved revolution during World War I, achieved remarkable economic achievements and burst forth with powerful energy in the invasion of German fascism; at that time, France was still occupied by Nazi Germany. In that kind of international environment, the core countries of the free market economy, the British academic circles, after the fermentation of Keynesianism in the past decade, have given birth to various trends of thought on the relationship between the state and the market. Whether faced with its own economic crisis or the statism of Nazi Germany or Soviet socialism, the once omnipotent "invisible hand" is becoming overwhelmed and powerless.
Is nationalism the road to prosperity? It is not difficult to imagine that in that special era, this problem has hovered and wandered in the hearts of many people.
No! That's the road to slavery! A voice appeared, Hayek, who had lost to Keynes, and this time replied in an unmistakable tone.
In other words, who is Hayek? Hayek was born in 1899 to an intellectual family in Vienna, Austria. A year earlier, with the death of Bismarck, the Iron-Blooded Chancellor of Germany, the German Empire was like a horsepower battleship, under the control of Kaiser Wilhelm II, rushing at full speed to the historical vortex of The First World War. German historians generally agree that the eight years from Bismarck's descent to his death were a crucial period in the entire history of Germany. As the German writer Sebastian Hafner describes in his book From Bismarck to Hitler:
"The factors that propelled the German Empire to a new diplomatic line in that era were not domestic unhappiness or internal crises, but the excessive confidence of germans in their own power and internal harmony. ...... The Germans of Bismarck's time and before were essentially a humble and simple people whose highest goal was to unite under one roof, and they had fulfilled their wishes. However, since Bismarck went to the wilderness, they have developed a great power mentality. All the different classes of Germans suddenly appeared before their eyes a great vision of the country, a national goal: we want to become a world power, we want to expand to the whole world, Germany must enjoy priority in the whole world!" 」
It was this change of mentality, or mindset, that sparked World War I, the superinflation of the Weimar Republic, and the abyss of Nazi totalitarianism. This process of transformation is the main object of Hayek's criticism in this book.
During World War I, at the age of 1917, at the age of 18, he joined the Austro-Hungarian Army and served on the Italian front. This experience led Hayek to decide to pursue a career in academia, hoping to figure out how to lead to future war tragedies. Hayek later said: "The most crucial factor that made me decide to become a scholar was the First World War, which made me pay attention to the issue of political structure." At about the same time, in the peaceful island of Switzerland, in the home of a shoemaker in a dilapidated alley behind the Komat River in Zurich, Zweig's small, extremely low-key man, on his way to and from the library, was racking his brains to find the ideal path back to his native Tsarist Russia. The German train led the little man all the way through Germany, like a powerful cannonball, towards the Russian city of Petersburg. Ten days after shaking the world, the world order was completely reconstructed. That little man was, of course, the Lenin we know, and his Russia and later the Soviet Union became another target of Hayek's pen.
After World War I, Hayek received his doctorate in law and political science from the University of Vienna in 1921 and 1923, respectively. It was also at this stage that he became acquainted with Mises, who had a profound influence on his scholarly thought. As the leader of the third generation of the Austrian School, Mises witnessed "the whole situation inevitably slide into the abyss", but when Zweig, who was born in the same country as him in the same year, chose to defend his inner beauty by suicide, Mises used his pen as a gun to launch a deadly struggle against the harsh reality. "How will people live in the face of the inevitable catastrophe? It's a matter of temperament. When I was still in middle school, I used to choose a poem by Virgil as my motto: Don't bow to evil, and summon up more courage to continue to fight it."
Among the mantle that Mises passed on to Hayek was not only the economic theory of the Austrian School, but also a determination never to bow to evil. On the one hand, he inherited the classical liberalism inherited by Carl Menger; on the other hand, he did not miss any opportunity to go to war with theories that he considered evil or that could lead to evil. In 1932, hayek, 33, and Keynes, who was 16 years older, had a debate in the Times, refuting Keynes's proposals for a government-funded public construction plan. After Austria was annexed by Nazi Germany in 1938, Hayek renounced austrian citizenship and spent his entire life as a British citizen, active in Britain, the United States, and later in Germany. In 1944, Hayek published The Road to Slavery. In 1950, he went to the United States to teach at the University of Chicago, and since then, his research scope has gradually deviated from economics, focusing on philosophy, political philosophy and intellectual history. In the golden period of western economic development for more than two decades after the war, Hayek and the Austrian school he represented were lonely hidden in the shadow of the huge aura of Keynesianism, and the mainstream economic theory, whether intentional or unintentional, kept a certain distance from him.
Practice is the only test of truth. In the 1970s, when the collapse of the Bretton Woods system and the oil crisis followed, the Western world realized for the first time that history would not end even in the long run, and that Keynesianism, which was beautiful in the short term, might be cruel in the long run. The wheel of history finally came to 1974, and the Nobel Prize in Economics Jury, which had been established for only five years, accurately grasped the pulse of history and geniusly awarded the medals of the year together with huge prizes to Hayek and Murdal, a pair of rivals. Although this move did not bring the goodwill of the two laureates, and even both of them threatened that the prize should be cancelled at all, at least for Hayek, it was precisely because of the Nobel Prize that the neoclassical liberalism he represented ushered in a golden period of development for the first time in history. Five years later, the country of his citizenship, which was also the homeland of Keynes, ushered in Margaret Thatcher, who regarded him as a mentor, and the significance is particularly significant if Churchill was frustrated by quoting his book; two years later, the United States, where he taught for more than a decade, also ushered in Reagan's New Deal.
Well, the background of the creation of this book and the author's situation are introduced here, so let's open the book and revisit the road to slavery.
There are 15 chapters in the book, and the following is a brief introduction to the theme content of each chapter.
In the first chapter, The Road to Abandonment, the author not fails to argue with apprehension that the goal of all our efforts and hopes is more freedom, justice, and prosperity, but that the road to that goal was not only severely damaged by World War II, but also seriously threatened long before World War II. In fact, "at least in the 25 years before the shadow of Totalitarianism in Europe became a real threat, we have increasingly deviated from the basic ideas that are the foundation of European civilization": classical liberalism. This kind of liberalism is completely different from egoism or selfishness, and there is also a fundamental difference between it and laissez-faire. Liberalism means that "in arranging our affairs, we shall use as much spontaneous social force as possible, with as little coercion as possible, and deliberately create a system in which competition can proceed as beneficially as possible."
In the next two chapters, the author further points out through comparative analysis that true liberalism favors the use of competitive forces as much as possible as a tool to coordinate human efforts, rather than advocating letting things go unchecked. As long as effective competition can be created, it is the best way to guide individual efforts. Liberalism does not deny, and even emphasizes, that in order for competition to function effectively, there must be a well-designed legal framework; and that in places or areas where it is not possible to create conditions for competition to function effectively, governments must adopt other methods of directing economic activity.
However, economic liberalism is adamantly opposed to restricting or even banning free competition. In the author's view, in most cases free competition is not only the most effective way to reconcile relations between people, but also the only way in which individual activities can be coordinated without coercion and arbitrary intervention by the authorities. The successful use of free competition as a general principle of social organization precludes meaningless coercive intervention by the government in economic life. What the government needs to enforce is the orderly functioning of the market and fair and free competition among individuals. These acts of government are not only possible, but especially necessary. Infrastructure and services, such as money, market systems and information channels, which are unlikely to be provided by private enterprises, as well as an appropriate legal regime and its enforcement measures. Only the coercive binding force of the legal system can ensure the benign operation of free competition and make competition play its role to the greatest extent. It is not enough for the law to recognize private property and freedom of contract, but also to rely on the clear definition of property rights.
At the time of writing, Hayek was convinced that money must be provided by the government, but by the 1970s he had already become skeptical, and in 1976 he published his only economic book since 1945, The De-Stateization of Money, in an attempt to draw money, a natural ally of government, to the market. Although he was just crowned the Nobel Prize in Economics two years ago, the book didn't get much attention at the time because his ideas were so far ahead of its time. Until 2008, when the digital cryptocurrency represented by Bitcoin came out, scientific and technological progress provided greater possibilities for the non-state of digital, and the book suddenly became popular like many of his time-honored works.
In short, the hand of government should create the conditions to make competition as effective as possible, while complementing it where it does not work. In addition, the hand of the government should be as restrained as possible.
In the fourth chapter, the author refutes several reasons for the "inevitability" of the plan. One reason is that technological changes have made competition impossible in more and more fields, leaving us with no choice but whether to be controlled by private monopolies or by governments. However, the authors found that studies by some authorities showed that this view that mass production was more efficient was what made competition disappear and was difficult to support in any evidence at the time. In addition, the historical order in which the decline of competition and the rise of monopolies have emerged in various countries also does not support the "inevitability" of the planned economy.
In the next two chapters, the author focuses on the relationship between the free state and the rule of law. One of the hallmarks of a free nation is the great principle of strict adherence to the rule of law. The rule of law, in Hayek's view, means that the government is bound by rules laid down and announced in advance in all its actions, which enable individuals to foresee how the government will use its coercive power in a given situation and thus plan personal affairs. The true rule of law should minimize the freedom of movement left to the executive bodies exercising coercive powers in order to prevent the Government from taking special action to undermine the efforts of individuals.
In the next two chapters, the authors dismiss some of the objections about competition. The authors point out that competition is similar to justice and treats all people equally. In the process of competition, whether they are favored by the goddess of luck or hit by an unpredictable disaster, it depends only on their talents and luck, and they are not subject to special care or illegal persecution by certain authorities. In addition, the author argues that in competitive societies, the poor have far more potential opportunities than the restrictions imposed on the rich; moreover, the poor in competitive societies are much freer than those who enjoy great material pleasures in other societies. Although under the system of competition the poor are far less likely to become rich than those who own the inheritance, not only is it possible for the former to become rich, but only under the system of competition can he succeed by freedom alone and not by the favor of the powerful, and only under the system of competition can no one hinder his efforts to become rich.
In the ensuing chapter IX, Social Security and Liberty, the author dialectically points out that the more governments try to provide fuller security by interfering with the market system, the more insecure some people become; the greater the antagonism between the security of those who are guaranteed as a privilege and the increasing insecurity of those who do not. Moreover, the more privileged the nature of the guarantee, the greater the danger faced by the unprivileged, and the more the guarantee is cherished. As the number of privileged people increases, the difference between the protection of these people and the insecurity of others increases, and a new set of social value standards is gradually formed. It is no longer self-reliance that gives status and identity, but security, and a young man's right to a definite annual salary is more qualified to marry than his confidence in soaring, while insecurity becomes a terrible situation for dalits, in which those who are rejected from the asylum-sheltered wage earners in their youth have to spend their entire lives.
In the next two chapters, the author points out that the fundamental point at which intellectual freedom plays a major role in promoting the progress of knowledge is not that everyone may have the ability to think or write something, but that anyone can argue about anything or opinion. As long as dissent is not prohibited, there will always be people who question the opinions of their contemporaries who dominate them and put forward new opinions to be tested by debate and propaganda. What brings thought to life is the interaction between individuals with different knowledge and different insights. The growth of reason is a social process based on the existence of such differences. The essence of this growth is that its outcome is unpredictable, and we cannot know which opinions will help this growth and which opinions will not.
In the next three chapters, the authors analyze issues such as the limitations of economic policies to achieve material goals. He believes that whether it is fiscal policy or monetary policy, or industrial policy, it has its own limitations. For example, if we reduce unemployment through economic policies at all costs, they will not only have a lasting solution, but will seriously hinder the optimal use of our productive resources. In particular, the author argues that monetary policy cannot really cure this difficulty, but that it can do nothing more than to impose a general and massive inflation, to raise all other wages and prices to a sufficient extent relative to that part of the wages that cannot be reduced, and that, even so, it can only reduce in a tacit and private way the real wages which are impossible to directly reduce, so as to achieve the results we expect. And raising all other wages and incomes to a degree sufficient to adjust the position of the groups concerned will bring about an extreme expansion of inflation, which will cause turmoil, hardship and injustice far greater than the problems themselves which are to be cured.
On this point of monetary policy, I am sure that Hayek must have had a deep understanding of the superinflation in the German Weimar Republic, and thus bred a deep hatred. After the defeat of the new government of the Weimar Republic, in order to avoid large-scale unemployment after the war and the disguised reduction of war reparations, all printing presses were fully powered, starting in 1919, a dollar could be exchanged for ten German marks; by January 1923, it could already be exchanged for 20,000 marks; by August, it had broken through the million mark; in November, it had exceeded the 100 billion mark; and by the end of 1923, the German currency that could be exchanged for one dollar had reached 4.2 trillion marks. In his book From Bismarck to Hitler, Hafner vividly described: "As a result, even the printing press was not enough. By 1923, the mere attempt to print a sufficient amount of banknotes had become a real problem. In this way, private printing presses had to be used to help print money. In addition, a traffic problem arises: whole train after whole freight train must be transported in order to transport the freshly printed banknotes in a timely manner." Faced with such an unprecedented evaporation of monetary wealth, or more accurately, looting, the aforementioned Zweig wrote bitterly: "Nothing has trained the vast German middle class to accept Hitler as much as inflation between 1919 and 1923."
In the final chapter, the author elevates the analytical perspective from domestic to global governance, arguing that an "international" economic plan through some kind of supranational sovereign institution may cause even greater difficulties and dangers than a planned economy at the domestic level. On the contrary, an international institution that effectively limits the rights of States in infringing on individual rights is the best guarantee of peace. The rule of law at the international level must guarantee that States do not exercise tyranny over individuals, as well as that new supranational sovereign institutions do not exercise tyranny over nation-States.
In the course of writing this book, Hayek's old academic rival, Lord Keynes, is dragging his sick body back and forth between the Atlantic with the "Keynes Plan" of the post-war international order's system of governance concocted by him, engaged in extremely painful negotiations with the American White team who "want to gouge out the eyeballs of the British Empire." As we all know, the old Keynes lost to White, who had been quiet until now, and four months after the book was published, the Bretton Woods system was officially established. It is said that the Americans gave a special respect to Keynes, who failed in the negotiations, and regarding the meeting place, Cairnste wrote a letter hoping not to place it in Washington, so as not to further sting the nerves of the British Empire, so that the summer resort in the mountains of Washington, New Hampshire, came to the center of the post-war world stage.
Although Keynes read Hayek's new book with great interest on his way to the Bretton Woods Conference and soon wrote Hayek a warm and praising reply, in Hayek's view, whether it was the Keynesian or White program, whether it was the World Bank or the International Monetary Fund, or the United Nations founded the following year, he had reservations. Unfortunately, two years after writing that letter, Keynes, who had been bleeding and suffering from a heart attack for the British Empire, died at home of a sudden heart attack at the age of 63. He never had a chance to reflect further on Hayek's views, nor did he see the Bretton Woods system eventually collapse in the face of the Triffin conundrum. After that, Hayek also studied economics less and less, and after leaving the United Kingdom four years later to teach at the University of Chicago, the scope of his research was almost completely far away from economics.
In the concluding part of the book, the author once again emphasizes that our more important task is to remove the obstacles that human stupidity has imposed on our way forward, to liberate the creativity of individuals, not to design more institutions to "guide" or "guide" them, to create conditions conducive to progress, rather than to "plan progress."
Well, the main content of this book is introduced here, and I will talk about some superficial thinking caused or formed by reading this book for your reference.
In the process of reading this book, I have flashed all kinds of scene fragments in my mind. For example, the long list of Schindler outside the Nazi German concentration camps; Benjamin and Zweig, who chose to commit suicide in order to retain the good European impression in their hearts; The Soviet economist Kondratiev, known for his Chembo cycle, was sentenced to death during the Great Purge of the Soviet Union in 1938 and died at the age of 46, while Leontief, who was 14 years younger than him, moved to the United States in 1930 just before the start of the Great Purge, and later developed not only the input-output analysis method. It has made a significant contribution to the economic development of mankind and was awarded the Nobel Prize in Economics as early as 1973.
Looking back at history further, since the age of great navigation, European countries have begun to colonize the world with the blessing of strong ships and cannons. Portugal, Spain, the Netherlands, and later Britain, France, Germany, Italy, and other countries, with the aim of seizing the markets of gold and silver, raw materials, labor, and commodities, with guns as a means and germs as a supplement, brought endless suffering and disaster to the invaded and colonized countries. Even the free trade advertised by classical liberals is nothing more than "free trade" under the coercion of guns. In the process of passive involvement in the first round of globalization, the invaded and colonized countries have suffered far more typical and far-reaching influence than the dividends of globalization that they have enjoyed.
But even so, when we more calmly compare and analyze the countries and regions that have suffered the fate of invasion, we can still find that the different systems of the invaders, the legacy left to the invaded areas, and the long-term impact formed by them have very distinct characteristics.
The major economies outside Europe, the United States, Canada, Australia, India, Singapore, and Hong Kong, China, have historically been either colonies of the British Empire or have been deeply affected by it; Argentina and Brazil, which are also extremely rich in natural resources, and Mexico, which are geographically similar to the United States and Canada (slightly farther away from Western European countries), have also achieved remarkable economic achievements, but since the 1980s, they have almost become synonymous with the Latin American debt crisis, especially Argentina. It is also a typical example of the middle-income trap, and in these countries, the colonizer of Brazil is Portugal, and the colonizer of the other two countries is Spain. South Africa, which was once equally economically distinctive, was colonized by the Netherlands. Another major economy, Japan, was first knocked on by the American fleet, but the biggest influence on it belonged to the Bismarck-era German Empire.
Compared with these colonists in those years, although Britain has long ceased to be the glory of the world hegemon and the empire where the sun never sets, it is still at the forefront of the world in terms of its economic aggregates, international influence, finance, education, scientific research, and tourism. Germany, for its part, with its strong economic strength, especially its advanced manufacturing sector and leadership in the European Union, has long since reversed the negative image of a defeated country. Portugal, Spain and Italy, by contrast, have become the "Bungy Five" of Europe.
There are many reasons behind the tragedies of the 1930s and 1940s, as well as the different fates of colonial powers and colonized countries and regions. But one of the more striking points is Hayek's repeated assertion in this book of the trade-off between a free competitive market system and a system of rule of law that puts power in a cage.
Finally, I would like to share the following sentences in the book with you, hoping to inspire you.
The shift in perceptions, and the power of human consciousness, has shaped the world today.
If in the long run we are the creators of our own destiny; then, in the short term, we are prisoners of the ideas we have created.
In social evolution, nothing is inevitable, and what makes it inevitable, is thought. What brings thought to life is the interaction between individuals with different knowledge and different insights.
