Planning vs. the Rule of Law
FRIEDRICH A. HAYEK
Nothing distinguishes more clearly a free country from a country
under arbitrary government than the observance in the former of
the great principles known as the Rule of Law. Stripped of
technicalities this means that government in all its actions is bound by
rules fixed and announced beforehand– rules that make it
possible to foresee with fair certainty how the authority will use its
coercive powers in given circumstances and to plan one’s individual
affairs on the basis of this knowledge. Thus, within the known
rules of the game, the individual is free to pursue his personal
ends, certain that the powers of government will not be used
deliberately to frustrate his efforts.
Socialist economic planning necessarily involves the very
opposite of this. The planning authority cannot tie itself down in
advance to general rules which prevent arbitrariness.
When the government has to decide how many pigs are to be
raised or how many buses are to run, which coal-mines are to
operate, or at what prices shoes are to be sold, these decisions cannot
be settled for long periods in advance. They depend inevitably on
the circumstances of the moment, and in making such decisions it
will always be necessary to balance, one against the other, the
interests of various persons and groups.
In the end somebody’s views will have to decide whose interests
are more important, and these views must become part of the
law of the land. Hence the familiar fact that the more the state
‘plans’, the more difficult planning becomes for the individual.
The difference between the two kinds of rule is important. It is
the same as that between providing signposts and commanding
people which road to take.
Moreover, under central planning the government cannot be
impartial. The state ceases to be a piece of utilitarian machinery
intended to help individuals in the fullest development of their
individual personality and becomes an institution which deliberately
discriminates between particular needs of different people, and
allows one man to do what another must be prevented from doing.
It must lay down by a legal rule how well off particular people shall
be and what different people are to be allowed to have.
The Rule of Law, the absence of legal privileges of particular
people designated by authority, is what safeguards that equality
before the law which is the opposite of arbitrary government. It is
significant that socialists (and Nazis) have always protested
against ‘merely’ formal justice, that they have objected to law
which had no views on how well off particular people ought to be,
that they have demanded a ‘socialization of the law’ and attacked
the independence of judges.
In a planned society the law must legalize what to all intents
and purposes remains arbitrary action. If the law says that such a
board or authority may do what it pleases, anything that board or
authority does is legal– but its actions are certainly not subject to
the Rule of Law. By giving the government unlimited powers the
most arbitrary rule can be made legal; and in this way a democracy
may set up the most complete despotism imaginable.
The Rule of Law was consciously evolved only during the lib-
eral age and is one of its greatest achievements. It is the legal
embodiment of freedom. As Immanuel Kant put it, ‘Man is free if he
needs obey no person but solely the laws.’
The Road to Serfdom
FRIEDRICH A. HAYEK
The condensed version of The Road to Serfdom
by F. A. Hayek as it appeared in the April 1945
edition of Reader’s Digest