Hayek, The Road to Serfdom - 21st session

Tuesday, December 1, 2020, 21st session

The Road to Serfdom Reading Discussion, 21st Online Meeting: Mori, Kangyoung Lee

Chapter 7. The Myth of Plenty

p. 153 Those who fell into the vain belief that economic problems would no longer exist came to hear irresponsible promises of “potential abundance” and came to think as though their hopeful beliefs had been validated.

p. 154 They no longer support central planning because of its supposedly superior productivity; rather, they support it because they believe it will secure a fairer and more equal distribution of wealth.

Mori provided some background explanation: in the 1920s and 1930s, there were expectations for the centrally planned economic system because the Soviet Union and Germany appeared to produce excellent(?) economic results, but by the 1940s, when this book was written, it had already been proven that such expectations were futile.

Resources are limited. They are never infinite. This is an unchanging fact. Because of this, the problem of scarcity always arises. And those who fall behind in competition often become angry. (Not everyone does, of course.) This too is an unchanging fact that arises because resources are scarce. In other words, I think it is a proposition we must accept. This is never a problem of capitalism.

The best way to alleviate this, at least somewhat, is the efficient use of resources through free competition. If more goods are produced with the same resources, the problem of scarcity is eased. Even if we look back only on the changes of the past decade or so, we can clearly see that we are enjoying this in our daily lives. A representative example is Daiso: “Daiso has it all.”

Even so, many people become angry simply because resources are not distributed properly. And they cast their vote for what claims to make that distribution more just. But does that really solve the problem of resource distribution? I doubt it. Rather, I worry that through the inefficient distribution of resources, output may actually decline further. If I have less and others also have less, does that make the problem disappear?

Human beings are lazy. We are lazy by nature. There may occasionally be exceptions, but most people are like that. Various methods have been tried to make these naturally lazy human beings produce through labor.

1. The command of God, 2. The command of the king, 3. The command of money, 4. The command of altruism

I wonder if socialists are firmly convinced of number 4.

I am sharing a video I saw on Facebook today because it expressed this point in such an entertaining and effective way.

https://www.facebook.com/100001642438276/videos/3785922314805812/

Chapter 7. The Unprecedented Extension of Totalitarian Control

p. 156 Through the division of labor, which progressed continuously during the age of liberty, almost all of our activities have now become part of a social process. This development has now become irreversible, because the enormously increased population can maintain its present standard of living, or anything like it, only thanks to the progress of this extended social division of labor.

Reading this, I was struck by the thought that even if we barely manage to stop this current shift toward totalitarianism and a liberal world emerges, the next time another shift toward totalitarianism occurs, central control could be exercised far more efficiently than it is now.

If anything, 80 years ago there was no computerization, so central control had many limits. But even now, with the spread of smartphones and the centralization of all kinds of financial and personal data, it is only natural that central control has become far more sophisticated and meticulous than in the past. The passage above notes that it had already become more elaborate than before because of the division of labor.

When I think about what the next totalitarianized world would look like, with AI added into the machinery of control, it is horrifying even to imagine.

p. 157 We often hear it said that political freedom is a sham without economic freedom.

True economic freedom simply means the freedom of our economic activity, with the right to choose and with the risks and responsibilities that inevitably accompany that right.

If I were to explain “liberalism” in a single sentence, I always remember something Mori once said: each individual is the “king” of his or her own life. Planning one’s life for oneself, carrying it out, failing and succeeding, and taking full responsibility for one’s own life—and allowing people to do so—that, I imagine, is what “liberalism” ultimately seeks. And for that, the protection of private property, penalties for infringing on others’ freedom, the existence of the state, the rule of law worthy of the name, and so on all follow one after another like sweet potatoes connected on a vine.

The claim that the state will solve economic problems and thereby give us freedom is, I think, only a sweet temptation. It cannot solve them, and even if it claims to do so, all that exists for that purpose is extensive control. I think we are experiencing this firsthand even now, just by looking around us today: countless regulations, soaring taxes, and so on.

I found myself wondering what those who fail to recognize this are thinking, and who exactly the people are that exploit them. Then, looking toward the back of the book, I was pleased to see titles of Hayek’s writings that seem to contain his thoughts on precisely those questions.

Today, Mori and I had a short conversation along these lines.

If you would like to join the online reading group every Tuesday evening, you are invited to the open chat room at the link below.

https://open.kakao.com/o/gX3OIqtb

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Original title: 하이에크 <노예의 길>-21차

Author: Jayujuui Ipmun Dokseotoronmoim

Date: 2020-12-01

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=reading01&pn=7&idx=23278