By F. A.
Hayek.
I never had much exposure to politics at home. My parents were value-conservative, believing in hard work, tolerance, making money, and a good life. We had no business in telling others how they should behave. If you wanted something, you had to work for it. My brother and me worked for our pocket money, in the garden, writing computer programs for calculation of rental costs, or helping in sorting paperwork for my fathers practice. Some of his clients my father respected were immigrants, decent folk who worked hard. My father never told you whom he would vote for. He said that the vote is secret would stick by that. We did not discuss political developments other that mum complained when the government raised the taxes again, taking away from the gains of our work.
In high school most of the other kids were socialists, with a smattering of Marxists and anarchists thrown in. If you were conservative you stood out like a sore thumb. I could not relate to their ideas and kept out of political discussions.
I am politically uneducated. And a man who has read only one book is dangerous. Still this book, my first political book, impressed me deeply. It makes the case for individual freedom and equality before the law, and that without economic freedom other freedom can not be had. It makes the case that collectivism, putting the common good ahead of individual freedom leads straight to the evil of a society of slaves, of national socialism, of terror and serfdom.
The socialists want a society where equality is not only equality before the law, but equality of material goods; where it is taken from the rich and given to the needy; where man stops looking only after his own advantage and we have a brotherhood of men: a noble goal. It appeals to teenagers, because it is so unselfish. The liberal touting "if every man cares of himself, all are taken care of" sounds like an egotist prick in comparison. He seems to push for the winner-take-all society, without charity, without compassion, without pity. And regarding property rights, the Indian Chiefs asking how you can own anything, the air, the land, which was there before you, seem so much wiser than the greedy capitalists.
Socialism also is asking less of you. Liberal individualism means you struggle for survival all your life, competing all the time, no security, no rest. You let up -- you lose, someone else will get your piece of the pie. Who wants that? Socialism promises to organize the whole community, and everybody will be taken care of. If you are weak or can't keep pushing hard, don't worry: you will be provided for. "From each according to his ability to each according to his need." The tough guy is not going to plow over you any more now. He is going to support you instead, work for your benefit. Doesn't this sound much better? It sure sounds appealing to me. A good life without having to work for it, without pressure? Yes, please.
So what is wrong with this picture?
Firstly, if the community is more than the individual, then the individual has to give up his freedom. It is not any more the wealthy man's own decision to give. He has to and if he does not want to, the community will force him to. And there, just like that, freedom goes right out of the window. But "the community" as such can not manage, cannot execute. It has to appoint bureaucrats, men in power. And who will control those? Where the ends of the community justify to suppress individuals as a means, it is a slippery slope down to abandoning free speech and twisting the truth, to torture and people disappearing.
Even without those atrocities, by controlling material goods and regulating who may do what, you control every aspect of people's everyday life and murder their freedom. Free markets do not automatically mean political freedom. But in politically unfree countries like China or Singapore, which embrace free markets, their inhabitants scarcely notice: they can go to the supermarket and buy whatever they want, they build lives and houses, they work for themselves and prosper. That they can not speak out against the ruling party has little effect on their life.
Without freedom of choice, of occupation, of property, political freedom doesn't matter. One just needs to look at Russia or China during communism, needs to compare the former east and west Germany, to understand how severely central planning and regulation of trade limits personal freedom.
These countries are also good examples to show that a free market, a voluntary exchange of goods, money and services, is infinitely better at creating wealth and progress than central allocation and planning. Any kind of trade limitation, tariff, tax, or artificial restriction generating monopolies reduces this. Each time that people can not spend their money on those goods that they want and that fulfill their needs at the lowest price, their wealth and freedom to use it for other things shrinks.
I live in a western democracy, Germany, supposedly a free country. I have the right to elect my government every four years. The influence is very indirect. I can not pick and chose a combination of values from a menu and vote for them. I have to take programs of values proposed by the few eligible parties, like them or not. And I have no say on what those politicians do, once I have elected them. They represent me only in the vaguest, most distant form, which is natural as they represent the everyone that elected them, who on average is unlike me.
The freedom to do as I like with the money I spend appears to me so much larger. I can spend it on whatever I want. I can exactly chose where it goes. Even if I waste it on stocks that then crash, it still is my free decision, and only I am to blame for the disheartening outcome. The outcomes are not distantly related to where I voted to spend my money, they are directly related.
Meanwhile, more than half of the value I generate goes as taxes to the government, which then spends the money. Most of it in ways that I do not support. The government strong-arms me out of this money and then distributes it, inefficiently and wastefully, and not last on feeding a large and useless bureaucracy. If the government would take all I earn, I were entirely unfree. I would have to live in whatever flat I am assigned, in whatever city, eat whatever food is rationed out to me, all through benevolent central planning and programs. No doubt it would be miserable, no matter how well meaning and competently done. I still remember the ugly, gray single type of telephone set we had for decades in Germany when the phone was owned by the state. Once it became a free market, hundreds of different phone sets bloomed, in all colors, full of functions, and cheap!
Some things, like a legal system and police to enforce it have to be maintained by the state, and need funding. But apart from that, I would feel more free if taxes and government were as small as possible. We are already more than half-way unfree. Each time the taxes mount, the part of our income that gives us choice gets smaller.
Hayek warned of society becoming unfree due to central planning. By its very nature, the higher the taxes are, the more needs to be centrally doled out by the government. Taxes, as much as political absolutism or dictatorship, mean serfdom.
Secondly, coming back to why collectivism fails: if you can not keep the spoils of your hard work and struggle, your motivation to work hard and struggle goes away. Then who is going to create the wealth that is to be distributed? And if you get subsistence for free, without having to work for it, why would you be thrifty about spending it and live economically?
...we were promised abundance for all,
By robbing selected Peter to pay for collective Paul;
But, though we had plenty of money, there was nothing our money could buy,
And the Gods of the Copybook Headings said: "If you don't work you die."
--Kipling, The Gods of the Copybook Headings
When I was in India I met a MP of the communist party of Tamil Nadu. His first question when he heard I was from former West Germany was "But, in East Germany, everybody was equal, no?". "Yes, " I said, "everybody was equally poor.". It seems to me, that the very fact that collectivists are so concerned with what the next guy has compared to you, shows that making people materially equal must fail. Being able to do better than your neighbor is just such a strong motivator that to take it away will condemn people to general listlessness. And it is no wonder either: success gives you better access to partners, gives your offspring better chances, gives you a more enjoyable live: not the least perk of it being your neighbors' envy.
Collectivism and taxes make you not only worse of by taking away your freedom, and forcing you to eat parts of the pie you don't like. They also make the pie smaller.
Freedom for me is when nobody can tell you what you do. (As long as you do not try to take you neighbor's freedom away, kill or otherwise hurt him). Equality is when everybody is treated the same before the law. The same rules apply to all.
That humans are born free and equal are fundamental ideas which we have grown up with. There are other ideas possible, like in old India, where you were not equal, you were born into a caste and station of life. Works too. But not our idea of what is right.
