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From The Road to Serfdom wiki


"Although Hayek believed that government intervention in markets would lead to a loss of freedom, he recognized a limited role for government to perform tasks of which free markets were not capable:


The successful use of competition as the principle of social organization precludes certain types of coercive interference with economic life, but it admits of others which sometimes may very considerably assist its work and even requires certain kinds of government action.[29]


While Hayek is opposed to regulations that restrict the freedom to enter a trade, or to buy and sell at any price, or to control quantities, he acknowledges the utility of regulations that restrict legal methods of production, so long as these are applied equally to everyone and not used as an indirect way of controlling prices or quantities, and without forgetting the cost of such restrictions:


To prohibit the use of certain poisonous substances, or to require special precautions in their use, to limit working hours or to require certain sanitary arrangements, is fully compatible with the preservation of competition. The only question here is whether in the particular instance the advantages gained are greater than the social costs they impose.[30]


He notes that there are certain areas, such as the environment, where activities that cause damage to third parties (known to economists as "negative externalities") cannot effectively be regulated solely by the marketplace:


Nor can certain harmful effects of deforestation, of some methods of farming, or of the smoke and noise of factories, be confined to the owner of the property in question, or to those willing to submit to the damage for an agreed compensation.[31]


The government also has a role in preventing fraud:


Even the most essential prerequisite of its [the market's] proper functioning, the prevention of fraud and deception (including exploitation of ignorance), provides a great and by no means fully accomplished object of legislative activity.[32]


The government also has a role in creating a safety net:


There is no reason why, in a society which has reached the general level of wealth ours has, the first kind of security should not be guaranteed to all without endangering general freedom; that is: some minimum of food, shelter and clothing, sufficient to preserve health. Nor is there any reason why the state should not help to organize a comprehensive system of social insurance in providing for those common hazards of life against which few can make adequate provision.[33][34]

He concludes: "In no system that could be rationally defended would the state just do nothing."["


Got to thinking about this after reading a post with a bit of Reagan bio that mentioned the importance of the book on his political evolution.


Was also thinking that the case that Piketty makes the case that most of us on also on a road to serfdom if our current economic system is extrapolated forward.


But never the twain shall meet.

6 Replies
Honored Advisor

Re: From The Road to Serfdom wiki

Veteran Advisor

Does this excerpt fit a poster on here?

"And because we have taught entire generations of Americans that becoming wealthy is one of the primary goals in life, it is creating a tremendous amount of envy, jealousy, frustration and anger among those that have not been able to become wealthy.

In recent years, the level of bitterness and resentment...."


I was going to do a post about liberalism as a form of mental illness, but haven't taken the time. Coveting what those that work harder and are more thifty have is certainly one form.


Re: Does this excerpt fit a poster on here?

BA is such a liberal.


Re: From The Road to Serfdom wiki

Good to see you're reading hayek, move on to "the constitution of liberty".    


I agree that the government could theoretically provide some good,  and is likely necessary as an independent arbiter,  but given the current corrupt state of the us government its like saying Stalin did some good.




Re: From The Road to Serfdom wiki

Read Road for a class in college, along with Keynes' General Theory.

Was just refreshing my recollections that seemed to think that Hayek was somewhat more liberal on many things than the GOP mainstream of the pesent.


Re: From The Road to Serfdom wiki

no that is not at all true, the Republicans have pretty well accepted the welfare/ government control state. part d, et al.  hayek wanted to prove state socialism destroys what it seeks to create (hum  Hegelian, is that the point?), but did oppose welfare programs except when the point was to be redistributive or they were coercive.  sort of came down to in theory its ok but in practice it goes astray.