Experience has taught us that even if government has good intentions, we should be as mindful of the threat it poses to freedom. Human beings, who are born free, are naturally vigilant against ill-intentioned rulers encroaching on their freedom. The greatest danger to freedom lurks in the covert invasion of fanatics, who have good intentions but lack brains. —L. Brandeis
One
For a century or so, it was mainly socialist ideals that inspired efforts for social reform—at some stages, even in countries like the United States that never had any major socialist parties. During this century, a large number of ideological leaders were attracted to socialism, and it was increasingly widely regarded as an inevitable and ultimate goal of social development. This momentum peaked after the end of World War II, when Britain was engaged in socialist experimentation. This seems to mark the climax of socialist development. Future historians may see the period from the French Revolution of 1848 to around 1948 as the century of European socialism.
During this period, socialism had a fairly precise meaning and a clear program. The common goal of all socialist movements is the nationalization of the "means of production, distribution and exchange", so that all economic activity can be subject to a comprehensive state plan aimed at some social justice. The main difference between the various currents of socialism is the different political methods by which they want to build a new society. The difference between Marxism and Fabian is that the former favors revolution and the latter favors gradualism. But their vision of the new society they want to build is the same. Socialism implies public ownership of the means of production and "use for the purpose of efficiency rather than profit".
One of the great changes that took place in the last century was the collapse of socialism in the strict sense of the word as a means of achieving social justice. Not only did it lose its intellectual appeal, but it was clearly abandoned by the population, so much so that socialist parties were everywhere seeking new programmes that they could expect to actively support their followers. They have not abandoned their ultimate goal, the ideal of social justice, but they no longer believe in the methods by which they hoped to achieve this ideal, for which the name "socialism" was coined. There is no doubt that any existing socialist party will adopt this name when drawing up a new program. But, in some old sense, socialism has died in the Western world.
There is some surprise to be given to such a universal assertion, but it is confirmed by a large body of pessimistic and disappointed literature from the socialist forces in various countries and the various discussions within the Systopoly Socialist parties. If one observes these developments only in individual countries, the decline of socialism seems to him nothing more than a temporary setback, a reaction to political defeat. But the international character and similarity of national developments tells us almost indisputably: things are not so simple. If 50 years ago dogmatic socialism seemed to be the greatest threat to individual freedom, today it is redundant to make arguments against it. Most of the arguments that were once used to refute socialism in the strict sense of the word are now arguments within the socialist movement in favour of a revised program.
Two
There are a number of reasons for this change. For the once most influential currents of socialism, the example provided by the "greatest social experiment" of our time is decisive: in the Western world, the Russian case stifled Marxism. For a long time, however, only a relatively small number of intellectuals realized that what was happening in Russia was the inevitable result of its systematic application of the traditional socialist program. However, even within socialist circles, the question is now asked, "Since you want 100% socialism, what else can you blame against the USSR"? This is a valid argument. But, on the whole, the country's course has only discredited Marxist socialism. General disillusionment with the fundamental methods of socialism comes from more immediate experience.
Perhaps three main factors contributed to this disappointment: first, there was a growing recognition that socialist mode of organization of production was not more but less productive than the private enterprise system; Second, it is also clearer that this way of organization does not seem to bring about the greater justice one envisioned, but rather implies a new, arbitrary, and more difficult to escape hierarchy than ever before; Third, it is recognized that this way of organization seems to imply the emergence of a new despotism rather than the realization of the greater freedoms promised.
The first disillusioners are trade unions, which feel greatly weakened when they deal with the state, not with private entrepreneurs. However, individuals soon discovered that confronting state authority everywhere did not improve their position in a competitive society. This process of knowledge occurs precisely at a time when the standard of living of the working class (especially manual workers) is generally rising, and it undermines the concept of an independent proletariat and, consequently, the class consciousness of the working people. In this way, the situation in most European countries is similar to that of the United States, which has been preventing the emergence of an organized socialist movement. Moreover, in countries that have suffered from totalitarian rule, there is a strongly individualistic reaction among younger generations. A deep distrust of all collective action and skepticism of all authority breeds among them.
But perhaps the most important factor that frustrated socialist intellectuals was their growing fear that socialism might mean the destruction of individual freedom. When an opponent asserted that socialism and individual freedom were incompatible, socialist intellectuals angrily rejected it, but later they were impressed by the fact that they themselves made the same assertion in a forceful, literary way.
Recently, a British Labour Party intellectual leader described the situation very frankly. In his pamphlet entitled Socialism and the New Absolutism, Mr. Crossman explains how "more and more distressed people have begun to doubt what they once saw as the obvious benefits of central planning and the expansion of state ownership", and he further explained that "it has been found that the 'socialism' of the Labour government implies the creation of a huge bureaucratic organization", that is, a "vast centralized state bureaucracy that poses a serious potential threat to democracy". This discovery created a situation in which "the main task of socialists now is to convince the people that their right to liberty is threatened by this new feudalism." ”
Three
But in the West, even if few representatives remain of the typical approach to collectivist socialism, its ultimate goal has hardly lost any appeal. Although socialists no longer have a clear plan for how to achieve their goals, they still want to manipulate the economy so that the distribution of income conforms to their vision of social justice. But the most important result of the socialist era was the destruction of traditional limits on state power. Insofar as socialism seeks to completely restructure society with new principles, it treats the principles on which the current system is based as purely obstacles. But now, since it no longer has its own independent principle, it can only propose new goals to pursue, but cannot clearly state the means to achieve them. As a result, we are embarking on new tasks dictated by the desires of modern humanity without principle to an unprecedented degree.
Importantly, although socialism has generally been abandoned as a deliberate goal, there is absolutely no guarantee that we will not build it again, even if it is not intentional. If innovators pursue what seems to be the most efficient way to achieve their particular ends, rather than what needs to be done to maintain an effective market mechanism, they are likely to move toward exerting more and more centralized control over economic decision-making (and perhaps privately reserving private property even in name) until we establish a system of central planning that few people would like to see today. Moreover, many old-style socialists have found that we have drifted so far in the direction of a redistributive state that it is much easier to continue in this direction than to strive to nationalize the already somewhat discredited means of production. They seem to have recognized that greater government control over industries that remain nominally private can make it easier to redistribute income, which would have been the real goal of a more visible private property confiscation policy.
Socialist leaders who have so frankly abandoned the more pronounced forms of totalitarianism of "hot" socialism are criticized for their shift to a "cold" socialization that may be as effective as the former—a criticism that conservatives sometimes consider unfair and blindly biased. But unless we succeed in distinguishing between new pursuits that can be achieved in a free society and which new pursuits that can only be achieved by totalitarian collectivist methods, it will be dangerous.
Four
Unlike socialism, the concept of the welfare state has no precise meaning. The term is sometimes used to refer to any State that in one way or another "cares" about issues other than the maintenance of law and order. However, even if some ideologues demanded that government activities should be limited to the maintenance of law and order, they could not justify this position through the principle of freedom. Only coercive government measures need to be severely restricted. As we have seen (see Chapter 15), the scope of non-coercive government measures is undeniable, and there is a clear need to finance these non-coercive government measures through taxation.
In fact, no government in modern society limits itself to what is occasionally described as "individualistic minimal government," and no "orthodox" classical economist favors limiting government activity to that extent. All modern governments provide relief to the poor, unfortunate and incapacitated, and worry about health and the spread of knowledge. With wealth growing in general, there is no reason why we should not increase these purely service activities. There are common needs in society that can be met only through collective activity, and the satisfaction of common needs in this way does not restrict the freedom of individuals. It is almost needless to say that as we become more prosperous, society will gradually raise the level of subsistence security that has always been provided to those who cannot stand on their own, which can be provided outside the market; Governments can also play an enabling or even leading role in those efforts, which can well be beneficial without causing any harm. There is little reason why governments should not be allowed to play some role in areas such as social insurance or education, or even take the initiative or provide temporary subsidies for pilot development projects. Here, the problem lies more in the method of government activity than in its purpose.
The purpose of restrained and well-intentioned government activities is often cited as an illustration of how unconscionable any opposition to such a welfare state is. But once abandoned, the serious position that the government should not worry about such matters at all – a position that is legitimate but has little to do with freedom, and freedom defenders usually find that the welfare state program contains many other things that are presented as equally justified and justifiable. For example, if they admit that they have no objection to the anti-counterfeit food law, this is taken as an indication that they will not oppose any national measure aimed at achieving a desirable goal.
Thus, those who seek to limit the functions of government from the point of view of objectives rather than from the point of view of method repeatedly find themselves in a position where they must oppose governmental measures that merely appear to have desirable results, or have to admit that they do not have the general rules by which they can oppose government measures that are effective for a particular purpose but which would generally undermine a free society. As long as we see the state only as a coercive machine, it seems logical to assume that the state should not be involved in matters unrelated to the maintenance of law and order; Nevertheless, we must recognize that the State can provide services as a service that contributes to desirable objectives that may not otherwise be achieved, without causing any harm. Many of the government's new welfare activities pose a threat to liberty because, although they appear to be purely service activities, they in fact imply that the government is exercising a coercive power and is based on the government's demand for exclusive power in certain specific areas.
Five
The current situation has significantly changed and aggravated the task of the Freedom Defenders. As long as the danger comes from straightforward collectivist socialism, it is possible to argue that the tenets of socialists are fundamentally wrong, that socialism cannot achieve what socialists want to achieve, and that it will have other consequences that they do not like. For the welfare state, we cannot argue with it in a similar way, because the term does not identify an exact system. We can understand it as a mixture of factors so diverse and even contradictory that while some of them can make a free society more attractive, others are incompatible with, or at least pose a potential threat to its existence.
As we shall see, certain welfare state objectives are achievable without compromising individual freedom, and that for this one does not necessarily need to adopt those methods that seem to be taken for granted and therefore most popular; There are other welfare state goals that are also achievable to some extent, but at a much greater cost than they think or are willing to bear, or they can only be achieved slowly and gradually as wealth grows; And finally, there are other welfare state goals that socialists are most cherished but unattainable in a society that wants to preserve individual freedom.
We can work together to provide public facilities, and it may be in the interest of all members of society, such as parks and museums, theatres and sports facilities, although there are strong reasons why it is better for local authorities than national authorities to provide them. There are also important security issues, avoiding the same risks that all people encounter, and where governments can often either reduce these risks or help people prevent them.
But here we must draw an important line between the two security concepts:
One is limited security, which in a free society is achievable if everyone is to enjoy it, and therefore it is not a privilege; The other is absolute security, which is out of reach in a free society if everyone is to enjoy it.
The first is to protect people from severe deprivation of material necessities, and to guarantee everyone a given minimum level of subsistence needs; The second type of security is the guarantee of a given standard of living, which is determined by comparing the standard of living of a person or group with others or other groups. The difference is that the former guarantees an equal minimum level of income for all, while the latter guarantees a specific level of income that a person is considered to be entitled to. Closely related to the latter is the third main welfare state objective, which is to use government power to guarantee a fairer or more equitable distribution of goods. Insofar as it means that the coercive power of government must be used to guarantee certain things to a particular part of the population, it requires discriminatory and unfair distinctions between different people, which is incompatible with a free society. This is the kind of welfare state that pursues "social justice" and is "first and foremost an income redistributor," which necessarily has its roots in socialism and its coercive, essentially arbitrary approach.
Six
Although the welfare state can achieve some of its goals only by means that are detrimental to freedom, it may be able to pursue all its goals in such ways. The main danger today is that once it is recognized that a governmental objective is legitimate, it is assumed that it is also justified to use governmental means contrary to the principle of freedom. The unfortunate truth will be that, in most areas, the most efficient, safest and quickest way to achieve a given goal seems to be to devote all available resources to this already visible solution. Eager and impatient innovators, resentful of a certain evil, seem to be able to eliminate it only by the quickest and most direct means. An all-encompassing and mandatory plan of action is essential if the time is to immediately relieve all those suffering from unemployment, sickness or inadequate old-age security.
But if we are impatient to solve these problems immediately and give the government exclusive and monopolistic powers, then we will find ourselves lacking vision. If we are allowed to choose only the quickest path to a solution that is now available, exclude any alternative experimentation, and if we take what seems to be the best way to satisfy a need as the only starting point for all future developments, then we may reach our immediate goal relatively quickly, but at the same time we may prevent ourselves from discovering other, more effective alternatives. Those who are most eager to make the most of the knowledge and power we have are often the most damaging to future knowledge growth because of the methods they employ. The impatient and manageable incentive often leads innovators to favor controlled unidirectional development, especially in the area of social insurance, which has become a typical feature of the welfare state and is likely to be a major obstacle to improving future development.
If the Government does not merely want to facilitate a certain standard of living for individuals, but to ensure that it is available to all, it can only do so by depriving individuals of any choice in this regard. In this way, the welfare state becomes a domestic state—a state in which a paternalistic power controls most of society's income and distributes it to individuals in the form and amount it deems necessary or deserved.
In many areas, one can make a compelling case for a service to be undertaken solely by the State, based on considerations of efficiency and economy; But if States do so, the result is usually that not only are the benefits illusory, but also that the nature of the services becomes completely different from those otherwise provided by competing institutions.
If the Government, instead of managing the limited resources under its control in order to provide a service, uses its coercive power to guarantee people something that experts think they will need, if people are thus no longer able to choose among some of the most important matters of life, such as health, employment, housing and old-age care, but must accept the decisions made for them by a designated authority on the basis of its assessment of their needs, if certain services become the exclusive domain of the State, and if the industry as a whole - Whether it's medicine, education, or insurance—existing as a single bureaucratic hierarchy—then deciding what people deserve is no longer competitive experimentation and consumer choice, but only the decision of the authorities.
The same reasons that led eager innovators to generally expect such services to be provided in the form of government monopolies led him to believe that the relevant authorities should be given broad discretion over individuals. But if his goal was originally to provide certain services according to a rule to improve opportunities for all, then this can be achieved by basic commercial means. But then we can never be sure that the outcome for all is exactly what we want. If everyone should be affected in some way, it will only work if there is an authority that has the power to discriminate and discretion various people and to act in an individualized, paternalistic manner.
It is purely unrealistic to believe that democratic oversight of certain citizens' liberties can effectively safeguard the liberties of citizens if the needs of this bureaucracy are the only concern of this bureaucratic machine. Insofar as the preservation of individual liberty is at stake, the division of labour between a legislator who says only this or that should be done and an administrative apparatus entrusted with exclusive powers to carry out these directives is the most dangerous institutional arrangement that may arise. All experience, "whether American or British, they show sufficiently clearly" that "the eagerness of the executive to achieve their immediate objectives has led them to take a wrong view of their functions and to believe that constitutional limits and constitutionally guaranteed individual rights must give way to the administration's fanatical efforts to achieve what they regard as the primary objective of government." ”
It is almost no exaggeration to say that the greatest threat to freedom today comes from those who are most indispensable and powerful in modern government: capable and expert administrators who are merely concerned with what they see as public goods. While theorists may still talk about democratic oversight of these activities, all those with direct experience in the matter agree (as one British writer recently put it): "If ministers supervise ... It has become a fantasy, and parliamentary oversight is and has always been a pure myth. It is inevitable that this mass welfare administration becomes an arbitrary and unsupervised administrative apparatus, before which the individual is helpless, and which increasingly takes on the mystique of sovereign authorities, i.e. Hoheitsverwaltung (sovereign administration) or Herrschaftstaat (ruling state), terms so alien to the Anglo-Saxons that "hegemonic" must be coined (hegemonic) is such a strange term to convey its meaning.
Seven
The following chapters are not intended to articulate a complete economic policy programme suitable for a free society. We will focus primarily on relatively new goals whose place has not yet been established in a free society, and our positions on such goals will still oscillate between extremes, and we urgently need here principles that can help us distinguish between good and evil. If we want to avoid the disreputable end of many more measured and legitimate goals, which too high aspirations can easily bring to all the activities of the welfare state, we should choose mainly those issues that are of particular importance.
Many aspects of government activity are essential to the preservation of a free society, but we cannot analyze them in detail here. First, we must shelve the whole set of questions raised by international relations, not only because any attempt to seriously explore them would be too much to desize the book, but also because the philosophical foundations required to adequately address them go beyond the scope of this book. Satisfactory solutions to these problems are probably not found, provided that we have to accept as the ultimate unit of international order the historically given entity that is well known as sovereign States. And, if a choice is given, to which groups should we delegate power from different governments? The question is also too difficult to answer concisely. At the international level, there still seems to be a complete lack of an ethical basis for the rule of law, and if we had to transfer some new governmental authority to supranational institutions today, we would probably lose all the benefits that the rule of law can bring to a country within its borders.
I will just say so much: it seems to me that only expedient solutions to the problems of international relations can be found, provided that we also have to learn how to effectively limit the powers of various Governments and how to divide them among the various levels of government authorities. It is also important to note that modern developments in State policy have made international issues much more difficult than they were in the nineteenth century. I would like to add here my observation that until individual freedom is guaranteed more firmly and reliably than it is now, the danger of creating a world nation for future civilization may be greater than waging a war.
The question of the centralization of government, as opposed to decentralization, is almost as important as the question of international relations. Despite its traditional relevance to most of the issues we will discuss, we will not be able to observe it systematically. Those who advocate increased government power are always characterized by favors of maximum concentration of power, while those who focus primarily on individual liberty generally favor decentralization. In cases where private initiative cannot be relied upon to provide certain services and therefore require some collective measures, local authority measures generally provide suboptimal solutions, for some strong reasons: they have many of the advantages of private enterprise and carry fewer risks associated with government coercion.
Competition between local authorities, or between larger administrative units in an area where freedom of movement exists, provides to a large extent an opportunity to experiment with alternative approaches that will ensure most of the advantages of free development. Even though most people may never seriously consider changing places of residence, there are usually enough people, especially among young and more enterprising people, to make it imperative for local authorities to provide equally good services at the same reasonable cost as their competitors. Often an authoritarian planner, he supported the centralization trend for the sake of unity, government efficiency, and ease of administration, and from it won strong support from the poorer majority of regions that wanted to share the resources of the wealthier regions.
Eight
There are also a few economic policy issues, which we can only touch upon here. No one would deny that economic stability and avoiding a major depression depended in part on government measures. We must consider this issue under the themes of employment and monetary policy. But systematic analysis leads us to highly technical and controversial questions of economic theory, on which I should take a position that is the result of my specialized research in this field, mostly unrelated to the principles discussed in this book.
Similarly, we have to consider the subsidy of particular efforts by the taxes levied in the context of residential construction, agriculture and education, which raises some questions of a general nature. We cannot simply dismiss these issues by arguing that government subsidies should never be issued, since in some areas of undisputed government activity, such as defence, government subsidies are often the least dangerous way to promote necessary development, and government outright coverage of these matters is usually given higher priority. Perhaps the only general criterion that can be established for subsidies is that subsidies must not be justified in terms of the interests of the direct beneficiary (whether he refers to the provider of subsidized services or its consumers), but only in terms of the general interest that all citizens may enjoy, which is the general benefit in the true sense of the word. Subsidies are a sound policy tool when they are used not as a means of income redistribution, but as a means of using the market to supply services that cannot be exclusively enjoyed by those who pay.
Perhaps the most striking deficiency in the following analysis is the omission of any systematic discussion of firm monopolies. The topic had been eliminated after much deliberation, mainly because it did not seem to have the importance normally assigned to it. For liberals, antitrust policy is often the main goal of their reform efforts. I believe I myself have used the tactical argument that we cannot expect to curb the coercive power of unions unless we also attack corporate monopolies. However, I am convinced that it is not honest enough to draw parallels with existing monopolies in the field of labour and in the sphere of enterprise activity. This is not to say that I agree with the position of authors who believe that corporate monopolies are useful and desirable from some point of view.
As I did 15 years ago, I still feel that it might be a good thing if monopolists were treated as scapegoats for economic policy; And I admit that U.S. legislation has succeeded in creating a climate that is not conducive to monopoly. Such action is best as long as the application of general rules, such as non-discriminatory rules, can curb monopoly power. However, the steps that we can effectively implement in this area must take the form of progressive improvements to our corporate, patent and tax laws, which few words can tell. However, I am increasingly skeptical that certain governments' disposal measures for particular monopolies are really beneficial, and I am really uneasy about the arbitrariness of the entire policy aimed at limiting the size of individual enterprises.
A policy that creates a status quo in which large companies are afraid to compete by cutting prices for fear of triggering antitrust action against them, as some American companies do, is absurd. Current policies do not recognize that what is harmful is not such monopolies or the size of firms, but only barriers to entry into an industrial or commercial sector and other harmful monopolistic behaviour. Of course, monopoly is not enough, but only in the equal sense that shortage is not enough; This means that both are inevitable.
It is an unpleasant fact that in life certain competencies (and certain strengths and traditions of a particular organization) cannot be copied, just as is the shortage of certain items. Without facing up to this fact, it makes no sense to try to create the assumption that competition "seems" to be efficient. The law cannot effectively prohibit the status quo, only the mode of conduct. All we can hope for is that once the opportunity for competition reappears, anyone can take advantage of it without being blocked. If a monopoly is based on artificial barriers to market entry, there are good reasons to eliminate it. We also have a strong case to ban price discrimination, as long as we can apply general rules to do so. But the government's record in this area is so bad that it would be surprising if anyone would expect the government's discretion to do anything good, rather than add obstacles.
All countries have experienced that discretion over monopolies is quickly used to distinguish between "favorable" and "unprofitable" monopolies, and authorities are more concerned with protecting what it perceives as advantageous and less concerned with avoiding unfavorable monopolies. I doubt that there are "advantageous" monopolies that are really worth protecting. However, there will always be some kind of monopoly, and their transitional and temporary nature is often transformed into a permanent nature by the government's concern.
But the situation will be made worse if we have little hope for any particular action by the government against corporate monopolies, if the government consciously contributes to the development of monopolies and fails to perform a basic governmental function, namely, to prevent coercive acts by granting immunity to general rules of law, as it has long done in the field of labor.
Unfortunately, after a democracy has gone through a phase in which measures in favour of a particular group have become commonplace, the arguments against privilege have become arguments against groups that have recently received special attention from the public because they are considered to need and deserve special help. But there is no doubt that, in recent times, the fundamental principles of the rule of law have not been undermined as pervasively as in the case of trade unions, and the consequences have been so severe. Therefore, union policy will be the first issue we will consider.
Reprinted from the "Classic Excerpt" public account, this article source: The Road to Serfdom / Hayek, F.A., Wang Mingyi, et al. Translation.—Revised Edition.—Beijing: China Social Sciences Press, 1997.8 (2015.9 reprint) (Western Modern Thought Series; 3) The Road to Serfdom. ISBN 978-7-5004-2136-8。 Some of the content has been compiled by the editor, and the comments are omitted.