On this blog, I’ve sometimes defended Hayek against unfair attacks (see here, here and here). And I’ve recently read that Brad DeLong has repeated the falsehood that Hayek understood himself to be arguing that “regulatory intervention was in the long run incompatible with a free society,” in The Road to Serfdom. I don’t usually fool with replies to posts that are so quick and unfair but DeLong repeats a misconception that irks me, so I thought I’d say something quick about it (quick for me, anyway).
DeLong adduces an old quote from the 1956 Preface to RTS that refers to the effects of the 1945-1951 Attlee Government to support his claim:
[S]ix years of socialist government in England have not produced anything resembling a totalitarian state. But those who argue that this has disproved the thesis of The Road to Serfdom have really missed one of its main points: that the most important change which extensive government control produces is a psychological change, an alteration in the character of the people. This is necessarily a slow affair, a process which extends not over a few years but perhaps over one or two generations…. [E]ven a strong tradition of political liberty is no safeguard if the danger is precisely that new institutions and policies will gradually undermine and destroy that spirit…. [T]he change undergone by the character of the British people, not merely under its Labour government but in the course of the much longer period during which it has been enjoying the blessings of a paternalistic welfare state, can hardly be mistaken. These changes are not easily demonstrated but are clearly felt if one lives in the country….
For DeLong, that’s that. Hayek saw himself as arguing that “regulatory intervention” leads to serfdom. So when Ramesh Ponnuru commented that Hayek was largely concerned in RTS to argue that “central planning was incompatible with a free society” and not “‘regulatory intervention’ per se,” DeLong decided to lay the smack down on Ponnuru with this quote.
Those familiar with Hayek will note the smack down fail.
Let’s begin with the obvious. The phrase “regulatory intervention” is capacious. It can refer to small or modest regulatory environments comparable to the economic regulations imposed by the US federal government in 1910, or to more intensive regulatory environments like the US in 1970, or according to Hayek, a very intense regulatory environment like the post-war Labour government in the UK which nationalized numerous industries, including coal, healthcare, civil aviation, railways, cable, wireless and steel. According to Wikipedia, by 1951, the British government owned and operated 20% of the entire British economy.
So if “regulatory intervention” can refer to US regulation in 1910 and UK regulation in 1950, Ponnuru cannot be so easily refuted. Hayek was concerned largely with planning but did not resist regulation as such in RTS, nor did he later interpret himself as such. That should be obvious from the text of RTS which defends all kinds of regulatory practices. Further, Hayek’s work as a whole backs up this view, especially in The Constitution of Liberty where Hayek outlines a regulatory framework for a free society at great length. It would be truly bizarre for Hayek to claim something in the preface about the book that was flatly inconsistent with what he wrote before and after it.
As I’ve argued in the past, Hayek endorsed a robust welfare state, but one where regulations were simple, general, consistent and predictable. What he was most concerned about was the “welfare state of administration” which requires constant, unpredictable state tinkering. Hayek did think certain extensive patterns of regulation would lead down the road to serfdom, but by no means all of them.