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Tuesday, January 31, 2012

Can planning free us from care?

Can planning free us from care? 


Most planners who have seriously considered the practical aspects 
of their task have little doubt that a directed economy must be run 
on dictatorial lines, that the complex system of interrelated activi- 
ties must be directed by staffs of experts, with ultimate power in 
the hands of a commander-in-chief whose actions must not be 
fettered by democratic procedure. The consolation our planners 
offer us is that this authoritarian direction will apply ‘only’ to eco- 
nomic matters. This assurance is usually accompanied by the sug- 
gestion that, by giving up freedom in the less important aspects of 
our lives, we shall obtain freedom in the pursuit of higher values. 
On this ground people who abhor the idea of a political dictator- 
ship often clamour for a dictator in the economic field. 
The arguments used appeal to our best instincts. If planning 
really did free us from less important cares and so made it easier to 
render our existence one of plain living and high thinking, who 
would wish to belittle such an ideal? 
Unfortunately, purely economic ends cannot be separated 
from the other ends of life. What is misleadingly called the ‘eco- 
nomic motive’ means merely the desire for general opportunity. If 
we strive for money, it is because money offers us the widest choice 
in enjoying the fruits of our efforts– once earned, we are free to 
spend the money as we wish. 
Because it is through the limitation of our money incomes that 
we feel the restrictions which our relative poverty still imposes on 
us, many have come to hate money as the symbol of these restric- 
tions. Actually, money is one of the greatest instruments of free- 
dom ever invented by man. It is money which in existing society 
opens an astounding range of choice to the poor man– a range 
greater than that which not many generations ago was open to the 
We shall better understand the significance of the service of 
money if we consider what it would really mean if, as so many 
socialists characteristically propose, the ‘pecuniary motive’ were 
largely displaced by ‘non-economic incentives’. If all rewards, in- 
stead of being offered in money, were offered in the form of public 
distinctions, or privileges, positions of power over other men, bet- 
ter housing or food, opportunities for travel or education, this 
would merely mean that the recipient would no longer be allowed 
to choose, and that whoever fixed the reward would determine not 
only its size but the way in which it should be enjoyed. 
The so-called economic freedom which the planners promise 
us means precisely that we are to be relieved of the necessity of 
solving our own economic problems and that the bitter choices 
which this often involves are to be made for us. Since under mod- 
ern conditions we are for almost everything dependent on means 
which our fellow men provide, economic planning would involve 
direction of almost the whole of our life. There is hardly an aspect 
of it, from our primary needs to our relations with our family and 
friends, from the nature of our work to the use of our leisure, over 
which the planner would not exercise his ‘conscious control’. 
Our freedom of choice in a competitive society rests on the fact 
that, if one person refuses to satisfy our wishes, we can turn to 
another. But if we face a monopolist we are at his mercy. And an 
authority directing the whole economic system would be the most 
powerful monopolist imaginable. 
It wouldhavecompletepowertodecidewhat wearetobe 
andcould, if itwished, discriminatebetweenpersonstoanyde- 
The will of the authority would shape and ‘guide’ our daily 
lives even more in our position as producers. For most of us the 
time we spend at our work is a large part of our whole lives, and 
our job usually determines the place where and the people among 
whom we live. Hence some freedom in choosing our work is prob- 
ably even more important for our happiness than freedom to 
spend our income during our hours of leisure. 
Even in the best of worlds this freedom will be limited. Few 
people ever have an abundance of choice of occupation. But what 
matters is that we have some choice, that we are not absolutely 
tied to a job which has been chosen for us, and that if one position 
becomes intolerable, or if we set our heart on another, there is 
always a way for the able, at some sacrifice, to achieve his goal. 
Nothing makes conditions more unbearable than the knowledge 
that no effort of ours can change them. It may be bad to be just a 
cog in a machine but it is infinitely worse if we can no longer leave 
it, if we are tied to our place and to the superiors who have been 
chosen for us. 
In our present world there is much that could be done to 
improve our opportunities of choice. But ‘planning’ would surely 
go in the opposite direction. Planning must control the entry into 
the different trades and occupations, or the terms of remun- 
eration, or both. In almost all known instances of planning, the 
establishment of such controls and restrictions was among the 
first measures taken. 
In a competitive society most things can be had at a price. It is 
often a cruelly high price. We must sacrifice one thing to attain 
another. The alternative, however, is not freedom of choice, but 
orders and prohibitions which must be obeyed. 
That people should wish to be relieved of the bitter choice 
which hard facts often impose on them is not surprising. But few 
want to be relieved through having the choice made for them by 
others. People just wish that the choice should not be necessary at 
all. And they are only too ready to believe that the choice is not 
really necessary, that it is imposed upon them merely by the 
particular economic system under which we live. What they resent 
is, in truth, that there is an economic problem. 
The wishful delusion that there is really no longer an economic 
problem has been furthered by the claim that a planned economy 
would produce a substantially larger output than the competitive 
system. This claim, however, is being progressively abandoned by 
most students of the problem. Even a good many economists with 
socialist views are now content to hope that a planned society will 
equal the efficiency of a competitive system. They advocate plan- 
ning because it will enable us to secure a more equitable distribu- 
tion of wealth. And it is indisputable that, if we want consciously 
to decide who is to have what, we must plan the whole economic 
But the question remains whether the price we should have to 
pay for the realization of somebody’s ideal of justice is not bound 
to be more discontent and more oppression than was ever caused 
by the much abused free play of economic forces. 
For when a government undertakes to distribute the wealth, 
by what principles will it or ought it to be guided? Is there a defi- 
nite answer to the innumerable questions of relative merits that 
will arise? 
Only one general principle, one simple rule, would provide 
such an answer: absolute equality of all individuals. If this were the 
goal, it would at least give the vague idea of distributive justice 
clear meaning. But people in general do not regard mechanical 
equality of this kind as desirable, and socialism promises not com- 
plete equality but ‘greater equality’. 
This formula answers practically no questions. It does not free 
us from the necessity of deciding in every particular instance be- 
tween the merits of particular individuals or groups, and it gives 
no help in that decision. All it tells us in effect is to take from the 
rich as much as we can. When it comes to the distribution of the 
spoils the problem is the same as if the formula of ‘greater equality’ 
had never been conceived. 
It is often said that political freedom is meaningless without 
economic freedom. This is true enough, but in a sense almost op- 
posite from that in which the phrase is used by our planners. The 
economic freedom which is the prerequisite of any other freedom 
cannot be the freedom from economic care which the socialists 
promise us and which can be obtained only by relieving us of the 
power of choice. It must be that freedom of economic activity 
which, together with the right of choice, carries also the risk and 
responsibility of that right. 

The Road to Serfdom 
The condensed version of The Road to Serfdom 
by F. A. Hayek as it appeared in the April 1945 
edition of Reader’s Digest 

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