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Monday, January 30, 2012

Planning vs. the Rule of Law

Planning vs. the Rule of Law 


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 
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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