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Wednesday, March 28, 2012

The New Road to Serfdom: A Letter of Warning to America

F. A. Hayek’s most famous book, The Road to Serfdom, was written as a warning—to “socialists of all parties”—that socialism, the intellectually fashionable trend of his day, would lead to the loss of both liberty and prosperity. He was right, but the nature of the threat has changed from the time of his writing in 1944. Politicians today are not so enamored of government takeovers of business and industry as when the theories of Marx and Lenin were still ringing in their ears. Now they are more infatuated with socioeconomic control through regulations, bailouts, endless government “services,” and, especially in Europe, supranational planning.

That is the witches’ brew that Daniel Hannan warns us against in this book. Hannan is the British member of the European Parliament who became famous for a remarkable dressing-down he gave to then-Prime Minister Gordon Brown after a speech in which Brown tried to paint a pretty picture of Europe’s future. Hannan replied that the future was bleak, due to the embrace by politicians of unsustainable collectivistic policies. In this book Hannan explains why Americans must avoid the road that Europe is on and return to the original “British liberties” that our revolution sought to preserve.

“The United States is Europeanizing its health system, its day care, its welfare rules, its approach to global warming, its foreign policy, its federal structure, its unemployment rate,” Hannan writes. Unless we change course abruptly, we will bitterly regret it. The severe financial problems that have beset much of Europe since the book’s publication strongly amplify Hannan’s message. In truth the United States is already far along in the “Europeanizing” process, but not yet at the point of no return, he suggests.

Health care is Exhibit A in his case. Although the State has been invading this crucial field in America, in most of Europe it is a near monopoly by government. “Britain,” he writes of his native country, “is pretty much the last place in the industrialized world where you’d want to be diagnosed with cancer, stroke, or heart disease.”

In the nineteenth century, British doctors and scientists were leaders in medical research and treatment, and the health of the populace improved dramatically. Today, however, the nation is stuck with the National Health Service (NHS), a state-controlled system that demolishes the incentives for quality care—when patients can get any care at all. Distressing stories about the suffering of neglected, misdiagnosed, or maltreated patients abound in Britain, but any criticism of the NHS is met with ferocious counterattacks from its personnel and political defenders, who claim that criticism is an “insult” to the dedicated workers and an affront to the nation’s “caring values.” Even though the NHS produces miserable results, reform is proving to be impossible. That is why Hannan advises us to stop the politicization of our health care system before it’s too late.

Hannan also counsels against abandoning federalism. He observes that the most free and vibrant country in Europe is Switzerland, which is still a federation of largely autonomous cantons. Federalism protects against the manifold evils that result from unchecked power in the central government, and Hannan shows his grasp of Public Choice theory in explaining that the problem of factionalism becomes more and more acute as a nation becomes more politically centralized. Again America has already begun down the road that Hannan cautions against—our commitment to federalism has been steadily eroding ever since the New Deal—but we will suffer increasingly severe consequences if we continue moving toward omnipotent central government. Hannan argues that the European trend toward supranational government is especially to be avoided. Whereas Americans still can vote out of office politicians who displease them, in Europe many critical social and economic decisions are now made by the bureaucrats of the European Union, who are accountable to no one.

Most of The New Road to Serfdom is solid, but libertarian readers will find some of Hannan’s advice discordant. In particular he favors an America that “projects global military power” as opposed to the weakling foreign policy of Europe’s major nations. Like most conservatives Hannan sees imaginary benefits in a policy of acting as the world’s policeman and is oblivious to its heavy costs, including its nasty habit of creating the very antagonisms that then seem to demand our further military presence to quell. It’s a vicious circle, but Hannan dismisses the idea that a militaristic foreign policy causes trouble rather than solves it.

Nevertheless it is valuable to have a book by a European intellectual that runs counter to the widespread notion that America can solve its socioeconomic problems through increasing the power of the State. Trying that will only make them worse.

  • George Leef is the former book review editor of The Freeman. He is director of research at the John W. Pope Center for Higher Education Policy.