By Jay Jamison
I’m reading one of those books everyone quotes but nobody reads. Friedrich Hayek was an Austrian economist who left his homeland in 1931 to teach at the London School of Economics. In the middle of World War II, he published in England, “The Road to Serfdom.” I have come across so many references to this little book that I finally decided to actually read it. In fact, this year marks the 75th anniversary of its publication. Commentators have compared this book with another book everyone quotes and no one reads — Alexis de Tocqueville’s classic, “Democracy in America.”
In 1989, the Berlin Wall came down and in 1991, the Soviet Union — which had been viewed by many elite academics as something akin to an immovable force of nature — collapsed. To many, this heralded the end of the socialist dream. Yet here we are, 28 years after the demise of the USSR, with a slate of national candidates promoting socialism of one kind or another. This was foretold by Hayek, who worried in his book that after the hoped for victory over the Nazis in World War II, the government of England would retain the war footing system of national economic planning when peace was finally achieved. His prediction proved prescient because that is exactly what happened. Here in America, we have had some similar national programs, each advertised as the war on this or that — the war on poverty, the war on drugs, and other policies modeled on national emergencies like the World War.
Oddly enough, after 9/11, the George W. Bush administration did not ask Congress to transform America to a war economy, when such a policy would have been completely justified, even in the eyes of libertarians like Hayek.
Today, employers are begging for qualified workers, inflation is in check and minorities — who for decades had been hardest hit economically — are now experiencing historically low levels of unemployment. Yet in spite of all of this, we currently have national candidates openly selling socialism. Free college education, free healthcare, and other promised subsidized programs are on the giveaway menu. These among other promised freebies are merely lures used by politicians to entice votes from unsuspecting constituents.
As a matter of fact, the only thing that is truly free is a gift from someone who has title to whatever he or she is giving away. All other transfers come at a cost. Politicians who promise free stuff are not giving away something to which they are entitled. They are merely robbing Peter to pay Paul.
The reason there are now gas lines in oil rich Venezuela is because the gasoline sold there is so heavily subsidized by the government that the price of the final product is below the cost of production. Remove the profit motive and you get shortages. The socialist motto should be: “Everything’s free, but unavailable.” Nobel Laureate Milton Friedman, who wrote the introduction to the 1994 edition of “The Road to Serfdom,” is often quoted as saying, “What would happen if socialism came to the Sahara Desert? First nothing, then we would have a shortage of sand.” Hayek’s book is partly a cautionary tale about the lures of a planned economy, which give rise to the shortages currently experienced in Venezuela and other places embracing the socialist experiment. Seventy-five years after its first publication, Hayek’s warning still rings true.