COSMOS + TAXIS | Volume 8 Issue 1 2020
Abstract: F. A. Hayek’s Road to Serfdom argued central planning in lieu of market economies inevitably resulted in a new ‘serfdom.” A similar dynamic arises within the capitalist variant of a market economy, where all values are subordinated to profit and price signals have become price commands, creating a “systemic collectivism.” Organizations adapting to this environment seek to buffer them- selves from uncertainty by changing rules and increasing control over resources, including human beings. As a con- sequence, a new serfdom is arising. The cause arises from the central tension within all free societies. The organizations people create, Hayek’s taxis, have interests at odds with the spontaneous orders, cosmos, that arise within such societies. If they possess the power, organizations will seek to control them.
“Economic control is not merely control of a sec- tor of human life which can be separated from the rest; it is the control of the means for all our ends. And whoever has sole control of the means must also determine which ends are to be served, which values are to be rated higher and which lower, in short, what men should believe and strive for.”
F. A. Hayek, The Road to Serfdom
Hayek’s comment was focused on individuals and political parties who advocated replacing the market process with central economic planning. But his reasoning goes well beyond this. The Road to Serfdom offers a much deeper analysis of the foundations for serfdom in the modern world than his usual fans imagined.
When it appeared in 1944, F. A. Hayek’s Road to Serfdom attracted well-deserved attention. His basic message was simple: substituting deliberate planning to replace the market process not only would not improve our material well- being, it would lay the groundwork for an oppressive state where the worst among us would end up in charge, and political and personal freedom would be suppressed. This outcome would happen no matter how well-intentioned those who initially sought to replace markets with central planning might be. In a variant of an invisible hand explanation, Hayek argued central planning and a free society were antithetical to one another, independently of anyone’s intentions.
In making his case, Hayek distinguished between what he would later call spontaneous orders and organizations created to pursue specific purposes. A market system established procedural rules common to all but silent as to the specifics of what anyone might pursue within their framework. These rules facilitated voluntary agreement among status equals. The resulting price system created a distributed network of information sending signals as to where resources might be most effectively deployed compared to alternatives. Broad systemic information was simplified into prices able to assist decisions ultimately based on lo- cal and irreducibly individual knowledge.
As an alternative to the market, central planning subordinated local information to directives originating from the top of a hierarchy. It inevitably concentrated control at the top, divorced from most citizens, and from any local or tacit knowledge they possessed. The necessity of subordinating the economy to direction from the top would inevitably favor the ruthless, as he explained in a chapter titled “Why the Worst Get on Top” (1944, pp. 134-52).
Hayek contrasted these two ways of conceiving society as individualist and collectivist, the first based on individuals’ freedom to use their knowledge in ways of their own choosing, the second subjecting them to centralized direction in service to a large group. Collectivist ideologies valued individuals in terms of their ability to serve the whole, but a whole defined in different and competing ways. Hayek analyzed collectivism from two perspectives, ideological and systemic.
Hayek distinguished three basic collectivist ideologies: nationalism, racialism, and classism (1944, p. 140). When he wrote, Nazi Germany and Communist Russia were the two dominant collectivist societies. The Nazis believed people were of value to the degree that they served Aryan supremacy. The Communists valued people in terms of their service to the proletariat. Nationalist collectivism long outlived the other two. While often equated with the Nazis, with whom the Italian Fascists were allied, nationalist collectivism served other values, and remains important in many countries.
Hayek argued every collectivist system “has two central features . . . the need for a commonly accepted system of ends of the group and the all-overriding desire to give to the group the maximum of power to achieve these ends . . .” (1944, p. 146). Collectivist political systems sought to implement collectivist ideologies, and to do so they needed to create and maintain a strong state able to dominate society as a whole. To- talitarianism, a term coined by collectivists themselves, described unchecked organizational power, or what Hayek later called taxis. In Benito Mussolini’s words, totalitarianism meant “all within the state, none out- side the state, none against the state” (Editors, 2019). One set of values dominated all others, and a society’s strongest organizations existed to enforce them.
While modern collectivisms were justified in terms of an ideology, the ideology itself was interpreted by the ruling organization and, in practice, by those who controlled it. Serving the Aryan race meant serv- ing the Nazi Party, which served Hitler. Serving the proletariat meant serving the Communist Party which, at its totalitarian height, meant serving Stalin. Mussolini never achieved such control over what serving the nation meant, but came close. In short, collectivism is an ideology and its expression is an organizational system able to dominate all others.
There is one more dimension to this feature. During WWII collectivist states were under the control of single men, Hitler, Mussolini, and Stalin. The first two had largely created the parties that came to power, installing them as supreme rulers. Stalin had not, but used his position as party secretary to gain control of the organization and execute all potential rivals. Totalitarianism was associated with one-man autocracies.
Nazism and Italian Fascism were defeated during the war, and only the Soviet Union survived, accompanied by the rise of new Communist powers, most importantly China, which was also dominated by a single person, Mao Tse-tung. However, as both the Soviet Union and China persisted, an important change in totalitarianism’s nature developed.
Organizations are tools, but they are not just tools. While created to pursue a goal, over time they tend to redefine that goal in terms beneficial to the organization itself. In totalitarian organizations the initial goal is one of conflict against powerful enemies. Such framing of a goal reinforces the rise of charismatic leaders, of Hitlers and Maos and Lenins and Stalins and Mussolinis.
Success alters the dynamic. Subsequent Russian and Chinese Communist leaders arose out of service to and identification with a successful organization. Conflict within as well as without was de-emphasized. In established Communist nations, serving the proletariat was never a major goal of the Communist Party, serving the Party was. Redefining of their goals in self-serving ways is a feature of all large organizations, but most lack the power to take this redefinition very far (diZerega 2015). Totalitarian parties have the power.
By distinguishing between the charismatic leaders who had risen to power during the time Hayek wrote, and the organizations they established to enforce their rule, we can deepen Hayek’s analysis. There is the ideology and the organization created to enforce it, both of which Hayek discussed. But once created, the organization is in many ways an independent entity redefining the ideology to serve its interests. Ultimately, universal subordination is not to the ideology, or even to the leader, but to the organization implementing the ideology and shaping its leadership largely on its own terms.
By emphasizing the independent power of organizations as distinct from why they were organized, we can understand the rise of a new kind of collectivism, and the serfdom it is bringing with it.