7 ms·

The Road from Serfdom - an interview with F.A. Hayek

52 points by limist 16y ago

roel_v 16y ago
Ironic how he singles out Spain as a country that was in a position to make itself into a shining beacon of fiscal responsibility, to be emulated by the rest of the world.
- stretchwithme 16y ago
  Here's what he said about Spain: "Spain, which has to choose a new constitution. It might be prepared to adopt a sensible one. I don't think its really likely in Spain, but it's an example. And they may prove so successful that after all it is seen that there are better ways of organizing government than we have." It seems to me he is only referring to Spain's potential new constitution, that they might adopt a sensible one.
sitmaster 16y ago
Wow look at how clearly he answers the questions. Half his answers begin with a "Yes" or a "No." Can you imagine someone thinking and speaking this clearly these days?
- matwood 16y ago
  Yeah, whether or not you agree with Hayek, he is obviously a smart guy who has no problem articulating where he stands on an issue. I wonder if it's a generational difference. My grand parents for example have no problem telling you what they think and their reasoning on why.
- zacharyvoase 16y ago
  I like to think of it as having the courage of one’s convictions. It’s one of the most admirable qualities a person can have.
nfnaaron 16y ago
"... socialism was bound to fail as an economic system because only free markets--powered by individuals wheeling and dealing in their own interest--could generate the information necessary to intelligently coordinate social behavior. In other words, freedom is a necessary input into a prosperous economy."
- Gormo 16y ago
  I think in hindsight we can broaden this argument: human beings do not have the capacity to understand most dynamic complex systems sufficiently to engineer any particular macro-level outcome, and should instead focus on optimizing specific micro-level components to produce the desired micro-level results. Considering the increasingly common failures of risk-aggregation systems in a number of contexts (not just economic: look at the cascade of failure that triggered the 2003 East Coast Blackout), we should be increasingly conscious of this as technological improvements allow us to act unilaterally at increasingly large scales.
- jbooth 16y ago
  Blanket assertions about socialism and capitalism are fundamentally silly. Nobody thinks it would be efficient to privatize the federal highway system and turn everything into a toll road. I've been biking recently, but I used to take the subway. That's socialist. Taking a cab would be capitalist. Did I care? Not really. Normal market goods are almost always better served by private markets. They may need to be regulated if the create significant externalities or pose risk to the economy at large. The metric should be common sense, not -isms. When picking a software platform, I pick the one best suited to the job at hand. I'd like to see some of these so-called big policy thinkers apply the same principle.
  - nfnaaron 16y ago
    I was really most interested in the last sentence, which needed the text before it for context. Certainly systems tending toward economic freedom are more efficient at serving actual wants and needs. On the other hand I do like efficient travel on tax-paid highways, and detest driving around Chicago (assuming they still have toll roads?).
CWuestefeld 16y ago
The rules of the game that the gold standard requires [say] that if you have an unfavorable balance of trade, you contract your currency. That's what no government can do--they'd rather go off the gold standard. In fact, I'm convinced that if we restored the gold standard now, within six months the first country would be off it and, within three years. it would completely disappear. I wonder to what degree we can use this to explain the PIIGS problems in Europe. Of course, they don't have a gold standard. But for a given nation in the Euro, the value of the currency is fixed: they have no means of manipulating it to take pressure off their fiscal problems.
- muerdeme 16y ago
  I don't have a link handy on my phone, but The Economist discusses this issue in an article this week about Europe's existential crisis with the currency system. I think one of Italy's ministers mentions joining the EU specifically to force the parliament to quit running budget deficits, so tying their own hands was probably part of the deal for everyone to some extent.
  - Perceval 16y ago
    I think this is the story you're referring to: http://www.economist.com/world/europe/displayStory.cfm?story_id=16060063 http://www.economist.com/world/europe/displayStory.cfm?story...
- arvinjoar 16y ago
  What Hayek said is that the bubbles popped pretty early on (which is a good thing) because they could not be maintained and continued by the institutions that existed back then. That the bubbles popped is a good thing. A gold standard keeps the inflation stable, because gold can't be printed. Hayek goes on to say that a gold standard would not work because governments have an incentive to "cheat" and blow up giant bubbles, which cannot be done successfully with a gold standard. I think that currency should not be issued by governments at all, the absence of government issued money would mean competing currencies, and in a situation where gold competes with other currencies, gold often wins the confidence of the people.
ytilibitapmoc 16y ago
This quote, "Reason: Is Britain irrevocably on the road to serfdom? Hayek: No, not irrevocably. That's one of the misunderstandings. The Road to Selfdom was meant to be a warning: "Unless you mend your ways, you ll go to the devil." And you can always mend your ways. Reason: What policy measures are currently possible to reverse the trend in Britain? Hayek: So long as you give one body of organized interests, namely the trade unions, specific powers to use force to get a larger share of the market, then the market will not function. And this is supported by the public because of the historic belief that in past the trade unions have done so much to raise the standard of living of the poor that you must be kind to them. So long as this view is prevalent, I don't believe there is any hope. But you can induce change. We must now put our hope in a change of attitude. I'm afraid many of my British friends still believe, as Keynes believed, that the existing moral convictions of the English would protect them against such a fate. This is non- sense. The character of a people is as much made by the institutions as the institutions are made by the character of the people. The present British institutions contribute everything to change the British character. You cannot rely on an inherent "British character" saving the British people from their fate. But you must create institutions in which the old kinds of attitudes will be revived which are rapidly disappearing under the present system.", on the (historically) current effect of unions is priceless.
delackner 16y ago
Sorry for the long quote, but I have tried to reduce its length as much as possible while retaining meaning: "" [...] the idea that things ought to be designed in a 'just' manner means, in effect, that we must abandon the market and turn to a planned economy in which somebody decides how much each ought to have, and that means, of course, that we can only have it at the price of the complete abolition of personal liberty. "" This seems to me to be a false dichotomy. If the state sets artificial prices on some goods, say basic foodstuffs, this does not automatically lead to the complete destruction of market forces, it simply produces an artificial input in the market, leading to an equilibrium that likely to be different from the natural equilibrium. As an aside, I was really thrilled by his description of meeting Alexander Solzhenitsyn.

52 points by limist 16y ago

Ironic how he singles out Spain as a country that was in a position to make itself into a shining beacon of fiscal responsibility, to be emulated by the rest of the world.

stretchwithme 16y ago
Here's what he said about Spain: "Spain, which has to choose a new constitution. It might be prepared to adopt a sensible one. I don't think its really likely in Spain, but it's an example. And they may prove so successful that after all it is seen that there are better ways of organizing government than we have." It seems to me he is only referring to Spain's potential new constitution, that they might adopt a sensible one.

sitmaster 16y ago

Wow look at how clearly he answers the questions. Half his answers begin with a "Yes" or a "No." Can you imagine someone thinking and speaking this clearly these days?

matwood 16y ago
Yeah, whether or not you agree with Hayek, he is obviously a smart guy who has no problem articulating where he stands on an issue. I wonder if it's a generational difference. My grand parents for example have no problem telling you what they think and their reasoning on why.
zacharyvoase 16y ago
I like to think of it as having the courage of one’s convictions. It’s one of the most admirable qualities a person can have.

nfnaaron 16y ago

"... socialism was bound to fail as an economic system because only free markets--powered by individuals wheeling and dealing in their own interest--could generate the information necessary to intelligently coordinate social behavior. In other words, freedom is a necessary input into a prosperous economy."

Gormo 16y ago
I think in hindsight we can broaden this argument: human beings do not have the capacity to understand most dynamic complex systems sufficiently to engineer any particular macro-level outcome, and should instead focus on optimizing specific micro-level components to produce the desired micro-level results. Considering the increasingly common failures of risk-aggregation systems in a number of contexts (not just economic: look at the cascade of failure that triggered the 2003 East Coast Blackout), we should be increasingly conscious of this as technological improvements allow us to act unilaterally at increasingly large scales.
jbooth 16y ago
Blanket assertions about socialism and capitalism are fundamentally silly. Nobody thinks it would be efficient to privatize the federal highway system and turn everything into a toll road. I've been biking recently, but I used to take the subway. That's socialist. Taking a cab would be capitalist. Did I care? Not really. Normal market goods are almost always better served by private markets. They may need to be regulated if the create significant externalities or pose risk to the economy at large. The metric should be common sense, not -isms. When picking a software platform, I pick the one best suited to the job at hand. I'd like to see some of these so-called big policy thinkers apply the same principle.
- nfnaaron 16y ago
  I was really most interested in the last sentence, which needed the text before it for context. Certainly systems tending toward economic freedom are more efficient at serving actual wants and needs. On the other hand I do like efficient travel on tax-paid highways, and detest driving around Chicago (assuming they still have toll roads?).

CWuestefeld 16y ago

The rules of the game that the gold standard requires [say] that if you have an unfavorable balance of trade, you contract your currency. That's what no government can do--they'd rather go off the gold standard. In fact, I'm convinced that if we restored the gold standard now, within six months the first country would be off it and, within three years. it would completely disappear. I wonder to what degree we can use this to explain the PIIGS problems in Europe. Of course, they don't have a gold standard. But for a given nation in the Euro, the value of the currency is fixed: they have no means of manipulating it to take pressure off their fiscal problems.

muerdeme 16y ago
I don't have a link handy on my phone, but The Economist discusses this issue in an article this week about Europe's existential crisis with the currency system. I think one of Italy's ministers mentions joining the EU specifically to force the parliament to quit running budget deficits, so tying their own hands was probably part of the deal for everyone to some extent.
- Perceval 16y ago
  I think this is the story you're referring to: http://www.economist.com/world/europe/displayStory.cfm?story_id=16060063 http://www.economist.com/world/europe/displayStory.cfm?story...
arvinjoar 16y ago
What Hayek said is that the bubbles popped pretty early on (which is a good thing) because they could not be maintained and continued by the institutions that existed back then. That the bubbles popped is a good thing. A gold standard keeps the inflation stable, because gold can't be printed. Hayek goes on to say that a gold standard would not work because governments have an incentive to "cheat" and blow up giant bubbles, which cannot be done successfully with a gold standard. I think that currency should not be issued by governments at all, the absence of government issued money would mean competing currencies, and in a situation where gold competes with other currencies, gold often wins the confidence of the people.

ytilibitapmoc 16y ago

This quote, "Reason: Is Britain irrevocably on the road to serfdom? Hayek: No, not irrevocably. That's one of the misunderstandings. The Road to Selfdom was meant to be a warning: "Unless you mend your ways, you ll go to the devil." And you can always mend your ways. Reason: What policy measures are currently possible to reverse the trend in Britain? Hayek: So long as you give one body of organized interests, namely the trade unions, specific powers to use force to get a larger share of the market, then the market will not function. And this is supported by the public because of the historic belief that in past the trade unions have done so much to raise the standard of living of the poor that you must be kind to them. So long as this view is prevalent, I don't believe there is any hope. But you can induce change. We must now put our hope in a change of attitude. I'm afraid many of my British friends still believe, as Keynes believed, that the existing moral convictions of the English would protect them against such a fate. This is non- sense. The character of a people is as much made by the institutions as the institutions are made by the character of the people. The present British institutions contribute everything to change the British character. You cannot rely on an inherent "British character" saving the British people from their fate. But you must create institutions in which the old kinds of attitudes will be revived which are rapidly disappearing under the present system.", on the (historically) current effect of unions is priceless.

delackner 16y ago

Sorry for the long quote, but I have tried to reduce its length as much as possible while retaining meaning: "" [...] the idea that things ought to be designed in a 'just' manner means, in effect, that we must abandon the market and turn to a planned economy in which somebody decides how much each ought to have, and that means, of course, that we can only have it at the price of the complete abolition of personal liberty. "" This seems to me to be a false dichotomy. If the state sets artificial prices on some goods, say basic foodstuffs, this does not automatically lead to the complete destruction of market forces, it simply produces an artificial input in the market, leading to an equilibrium that likely to be different from the natural equilibrium. As an aside, I was really thrilled by his description of meeting Alexander Solzhenitsyn.