Road to Serfdom, The - Hayek, F. A. & Caldwell, Bruce [5]
A very special situation arose in England, already in 1939, that people were seriously believing that National Socialism was a capitalist reaction against socialism. It’s difficult to believe now, but the main exponent whom I came across was Lord Beveridge. He was actually convinced that these National Socialists and capitalists were reacting against socialism. So I wrote a memorandum for Beveridge on this subject, then turned it into a journal article. . . .13
In his reminiscence Hayek got the date wrong: given his reference in his memorandum to the Berlin student demonstration, and given that it carries the date “Spring 1933,” he probably wrote it in May or early June of that year. The memo, titled “Nazi-Socialism,” is reproduced for the first time in the appendix of this volume.14 In it, Hayek rebuts the standard account with the claim that National Socialism is a “genuine socialist movement.”15 In support of this interpretation he notes its antagonism to liberalism, its restrictive economic policy, the socialist background of some of its leaders, and its antirationalism. The success of the Nazis was not, he asserted, due to a reactionary desire on the part of the Germans to return to the prewar order, but rather represented a culmination of antiliberal tendencies that had grown since Bismarck’s time. In short, socialism and Naziism both grew out of the antiliberal soil that the German Historical School economists had tended. He added the chilling warning that many other countries were following, though at a distance, the same process of development. Finally, Hayek contended that “the inherent logic of collectivism makes it impossible to confine it to a limited sphere” and hinted at how collective action must lead to coercion, but he did not develop this key idea in any detail.16
As Hayek noted in his reminiscence, he ultimately turned his 1933 memo into a magazine article, published in April 1938, titled “Freedom and the Economic System.” The following year he came out with an expanded version in the form of a public policy pamphlet.17 If one compares the two articles one can trace an accretion of ideas that would later appear in The Road to Serfdom. In the 1938 version, though he continued to stress the links between fascism and socialism, Hayek began to expand on what he saw as the fatal flaw of socialist planning—namely, that it “presupposes a much more complete agreement on the relative importance of the different ends than actually exists, and that, in consequence, in order to be able to plan, the planning authority must impose upon the people that detailed code of values which is lacking.”18 He followed with a much fuller exposition of why even democratic planning, if it were to be successfully carried out, eventually requires the authorities to use a variety of means, from propaganda to coercion, to implement the plan.
In the 1939 version still more ideas were added. Hayek there drew a contrast between central planning and the planning of a general system of rules that occurs under liberalism; he noted how the price system is a mechanism for coordinating knowledge; and he made several observations concerning economic policy under a liberal regime.19 All of these ideas would be incorporated into The Road to Serfdom.
On the one hand, Hayek had developed some of his new arguments in the course of fighting a battle against socialism during the middle years of the decade. On the other hand, some of the