A book review and summary with comments.

(Added to this website on 11/15/11.)

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Names and words change meaning from time to time.   This happens partly because media people, kids, and society in general cause them to change.   However, "progressives" (communists) use this phenomenon to create changes in language so that they can confuse and alter situations to their advantage.   The word "liberal" comes from the word "liberty" and once meant those in favor of the free-market system, the right to private property, personal liberty, and government regulation only to promote competition.   Liberals then were in favor of progressing only to better promote the foregoing.   The socialist/communist/fascists decided to infiltrate liberal groups and to call themselves "liberals".   During this process, the name "liberal" came to mean something entirely different.

In his book The Road to Serfdom (1944), Friedrich A. Hayek tells us that socialism leads to communism, and communism leads to fascism.   In socialist societies, the means of production and distribution in some industries are controlled by the government.   Under communism, all of the means of production and distribution are controlled by the government.   Under fascism, almost everything is controlled by the government.

Freedom under the free-market system means freedom from coercion, and from arbitrary power of other men.   According to the Left, freedom now means freedom from necessity, and from the compulsion of circumstances which inevitably lead to a range of choices for all of us.   To the Left, freedom means power or wealth by means of redistributing wealth.   Actually, this means a common level of security for all and less freedom of choice.   Again we have a word that has changed meaning so that, when conversing, people are often talking about different concepts without realizing their error.

Local control of elements in society is epitomized by the free-market system in which the individual is the one who exercises control over his own destiny insofar as possible. Central control (one size fits all) is epitomized by a communist/fascist government which dictates how one is to live his life.   Most societies are in between somewhere and are far from being ideal.   When socialism is mixed with the free-market system we the is a mix of dictatorial government and true economic freedom, of bureacracy and reality.   The lowest of bureaucrats has dictatorial power and exercises far more control over the individual than the most wealthy of employers.   Yet the bureaucrat has a lower IQ and and often a lower moral standard.   The only reality for the bureaucrat is his forms and his paperwork view of the world.   He is seldom exposed to real life, and he certainly should not be dictating to those who experience real life.

In a fascist society, the laws are made by the government to force the individual to serve the state.   In a truly free society, the laws are made by representatives of the people to keep the people free and the government under the control of the people.   In his book, Hayek fails to understand the difference between a democracy and democratic republic.   A democracy is the worst example of dictatorship.   It is mob rule.   A lynch mob is an example of democracy in action.   Rule by majority is dictatorship by the majority.   In New Jersey, when I was there, the majority voted to have the transients (military) and the dairy farmers pay most of the taxes.   The same thinking takes place in California when it can be legislated or voted for by the people.   Most likely, the same is true in other states.   In the Constitution, there is a bill of rights that protects us part of the time from mob rule, and the founding fathers expected us to elect mentally and morally superior people to represent us.   They also expected the Supreme Court to be composed of mentally and morally superior people who would uphold the Constitution.   However, when the people elect the wrong representatives, the representatives (the President and the Senators) put morally corrupt judges on the Supreme Court.   This can change for the better when more of the people begin to wake up.

In a society with a centralized government dictating to the people, there must be planning for a successful economy to exist.   There is no automatic correction for economic error like we have in a free-market economy.   Instead, the government must first recognize a problem, then decide how to fix it, and finally to implement their plan.   By the time all this can happen, the government committee has usually found the wrong solution and the problem has escalated.   There are many facets to the economy which cannot all be addressed at one time, so the committee is always growing further and further behind.   There is a saying that I have found to be essentially true: the IQ of a committee is the inverse of the number of its members multiplied by 100. If there is a committee of one, its IQ is 100.   If there is committee of four, its IQ is 25.   If the committee is made of self-serving congressmen, its IQ is ridiculously low and so is its moral level.   A committee in a communist country is a disaster.

When a government wishes to control the people, it begins to use coercion to do so.   This leads to a police state such as that in Nazi Germany or in the Soviet Union.   When the economy is centrally planned, there must be laws which force the people to move in a certain direction (no choices), and the laws must be enforced by coercion.   Absolute power corrupts and leads to bad laws with no recourse.   Those who are in the largest group with a common interest become the ones in charge.   Once they are in charge, they make sure that they remain in charge.   Putin in Russia today is an example of this.   Obama in the U.S. is another example when he keeps our southern border open to get more votes from the Hispanics, and when he give our tax dollars to ACORN so that they can influence the voting.   The corruption of absolute power means that those in power know that the end justifies the means, and they will stop at nothing to attain their ends.

Collectivism (dedication of one's life to the state) leads to laws that prevent any criticism of the government.   This leads to suppression of the truth and a foundation of lies.   Indoctrination becomes the norm in education and freedom for the planners of society to do as they wish without any consequences.   The majority must be deprived of independent thought.   Those who continue to think independently must be silenced.   Thus, collectivism begins by supposedly using reason, and ends by extinguishing reason.  

Facism is the other side of the coin from a pure democracy.   In a pure democracy we have a dictatorship of the majority (mob rule).   In a facist state we have a dictatorship of a minority.

Money gives us freedom of choice.   When we are paid for our services we can choose to spend our money as we wish.   In a socialist society, one may be rewarded for his services with honors, privileges, positions of power, housing, food, etc. - but he cannot choose what he wants from the great variety he would have had he been given money for his work.   In a competitive society, we must often give up something if we want something else, but we still have the right to choose what to give up and what to gain.   In a socialist society, we do not have such choices.   Instead, we have orders and prohibitions which must be obeyed.

There are two kinds of security.   There is the certainty of a given minimum of sustenance (like food stamps) for all and a certain standard of living, and the certainty of the relative position which one person or group enjoys as compared with that of others.   We are wealthy enough today to dispense with laws that provide social insurance to the extreme that individual freedoms are compromised.   Too much planning for security can lead to failure to evolve in a forward manner.   In fact, too much security has an insidious effect upon individual liberty.

Hayek has has ten insights at the end of his book.

1.   Recessions are bound to happen.
My comments: They are not as frequent, as long, or as severe as those created by interference by the Federal Reserve or the government.

2.   Central planning and excessive regulation do not work.

3.   Some regulation is necessary.
This regulation must promote competition rather than suppress it.

4.   A stimulus will only stimulate the deficit.

5.   The economy is too complex for precise forecasting.

6.   Remember the rule of unintended consequences.
Putting toothpaste back into the tube is difficult to do correctly.

7.   You won't believe how much you will learn in Econ 101.
Or in The Creature from Jekyll Island

8.   Leave social justice out of it.
My comment: when the have-nots take power, they become the haves.   This leads to another revolution with new have-nots becoming the haves.   The revolutions continue forever with each eliminating the most intelligent.   Consequently, humankind moves farther and farther backward rather than evolving into a better being.

9.   Nothing beats the free market.
My comment: The free market has come down from prehistoric times, has been the key to forward progress, and is the key to future forward progress.

10.   As a rule of thumb, government cures are not only worse than the disease, but lead to further disease.
My comment: The Obama administration, Harry Reid, Nancy Pelosi, and the Federal Reserve have meddled in ways designed to ruin us - and to some extent they are doing so.   Yet, the people voted for them.   When a government is elected by ignorant people, their representatives are likely to be ignorant and corrupt - and the people will get precisely what they asked for.

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