The Road More Traveled: Why Statism Persists, and the Importance of Fighting Back

3 05 2012

I wrote this essay for an Intercollegiate Studies Institute essay contest. I did not win, but putting it all together was a useful exercise. I have reproduced it here:

Since F. A. Hayek penned The Road to Serfdom, the world has witnessed a series of seemingly unequivocal affirmations of his central thesis: that central planning leads to economic decline, moral decay, and inexorably, the rise of a liberty-destroying total state. While Hayek lived to see the implosion of the Soviet Union – perhaps the most tangible sovereign manifestation of the statist impulse – he could have only imagined the incalculable benefits free trade and new technologies have brought to billions of individuals across the globe in the two decades that followed.

Yet every triumph of classical liberalism[1] has been tempered by setbacks, and these setbacks only seem to be mounting as the 21st century progresses. States have spent far beyond their means, virtually guaranteeing that future generations will be held in debt-driven subservience. Personal dependence has become a virtue to be rewarded by a munificent, ever-growing welfare state. Regulations choke innovation while benefiting those willing to engage in political entrepreneurship and rent seeking.

Certainly, Hayek would not be pleased. He might also be a bit perplexed. For centuries, Hayek and other liberal intellectuals have diagnosed the cause of our most enduring troubles and prescribed a simple solution: increased personal and economic freedom. This solution has worked wonders to the extent that it has been attempted, but relapses are nevertheless frequent – and frustrating.

The liberal’s persistent frustration is explained by an error of perception, not understanding. The road to statism and the road to liberty are not the two possible trajectories that a given society might follow. Rather, statism is a threat that must be fended off constantly, even in societies that appear relatively free. As soon as one slackens in the Sisyphean task of defending liberty, the leviathan resumes its march. The road to serfdom is always and everywhere the path of least resistance.

Though it may be disheartening, that the loss of liberty is never more than a generation or two away explains the enduring relevance of liberal thought. The Road to Serfdom is as vital in America today as it was in 1944. The same can be said of the works of 16th century French protolibertarian Étienne de La Boétie, who lived and died centuries before America – let alone Hayek – existed.

Unlike the many strains of utopian collectivism, classical liberalism recognizes mankind’s limited capacity for fundamental change; rather than lamenting the fact that there can be no “New Liberal Man,” it incorporates its individualistic understanding of human nature into its worldview. Importantly, liberal thinkers acknowledge the central importance of self-interest as the motivation for man’s actions. At its best, self-interest reveals itself in the peaceful cooperation between Adam Smith’s butcher, brewer, and baker. In a different context, however, the same self-interest can transform men into cruel feudal lords – or Goldman Sachs executives.

It is not surprising that the liberal perspective helps makes sense of America’s present troubles, especially the matter of why a society is susceptible to the slide towards statism when it is at its most prosperous. Globetrotting libertarian scholar and activist Tom G. Palmer has astutely observed that poverty, not wealth, is mankind’s natural material state. The modern Western experience of abundance and freedom is not the historical, or even contemporary, norm: as billions of individuals in developing nations can attest, prosperity and the ability to enjoy one’s liberty are not birthrights.

Once individuals become accustomed to a certain level of prosperity, however, they can easily lose sight of the factors that made that prosperity possible. Throughout his work The Anticapitalistic Mentality, Ludwig von Mises notes that some enjoy the material benefits of the free market but misunderstand their causes; others feel guilty of their success or even resentful of the success of others.[2] Many are willing to surrender a portion of their wealth to the state – and compel others to do so through taxation – particularly when said wealth is devoted to a noble goal, such as poverty alleviation.

But noble goals cannot be achieved through compulsion. All instances of centrally planned intervention (from Stalinist industrial schemes to welfare programs to the central banks that underwrite modern sovereign spending) grow beyond their intended purposes or boundaries. Public choice theory explains how even well-intentioned government initiatives become institutional doomsday machines in short order. The same incentives that make the market system operate efficiently, it seems, do not simply vanish in the public sector. Rather, individuals and special interests respond to these incentives predictably, using the state’s monopoly on force for their own personal benefit.

While the co-option of government power may have been more explicit in Hayek’s era of total states, there is no shortage of cronyism in modern-day America. Twenty-first century political entrepreneurs abound, though their wise investments in public relations campaigns partially disguise their intentions. For example, Timothy P. Carney has documented General Electric’s bold partnership with big government – all supposedly done for the good of the “green” movement.[3]

The green movement has served as such an unimpeachable justification for intervention that, in a few short years, spawned countless costly boondoggles, from billion-dollar bets on electric luxury cars to alternative energy debacles like Solyndra. To their credit, banks and automakers at least developed a novel method of exploitation. By declaring themselves “too big to fail,” they deftly held an entire nation’s economy hostage and secured massive transfer payments as a ransom. In any case, the end result is the same: the redistribution of wealth from taxpayers to the pockets of special interests.

It would be troubling enough if statism merely destroyed material wealth; despite the claims of redistributionists, man’s ingenuity can create new wealth when it is permitted to do so.  But the dead hand of government both annihilates wealth and destroys an individual’s will to produce more. The growth of the welfare state is even more insidious; a welfare state redistributes wealth in such a manner that it maintains the illusion of prosperity while suffocating the creative impulse that is wealth’s root cause.

The moral implications of the creation of a society of coddled dependents will be left to individual interpretation, but it is clear that in practice, the tightly regulated welfare state has failed to achieve the progressive-utilitarian goal of “the greatest good for the greatest number.” PayPal co-founder Peter Theil, an outspoken libertarian entrepreneur, has called attention to the dangerously declining rate of innovation in America.[4] This has serious implications for the future of the welfare state: while the power of market capitalism fueled the initial explosion of interventionism, the concurrent strangulations of the ability to innovate and the initiative to do so has confounded the perpetual growth assumptions of central planners.

Further, massive and compounding economic intervention inevitably leads to parallel intervention into individuals’ private lives. It is impossible to separate economic and personal liberty. Once the state comes to be seen as a defender of the “public welfare” rather than a protector of individual rights, society has legitimized its ability to subordinate personal liberty to some illusory, ever-shifting “common good.” Smoking cessation, a healthy diet, and the use of seatbelts in automobiles may be beneficial to some individuals – but once individuals have become wards of the state, they quickly become compulsory for all.

There is a limit to the amount of degradation and deprivation individuals are willing to suffer at the hands of the state. When a society embraces the blessings of liberty and is willing to fight for their preservation, it advances the whole cause of mankind. Tea is thrown into harbors, walls are torn down, and subjects assert their rights as free citizens. Absent this liberal vision, however, revolutions quickly become counterproductive. Bodies mount by the guillotine; Arab Springs turn into harsh winters as puppet-rulers are replaced by totalitarian religious fanatics. The bloodshed only ends once a new gang of thugs has asserted authority.

There is some evidence that the Western world is beginning to realize that nations have written a series of checks that their central banks cannot cash, either literally or figuratively. Yet there is a real risk of further loss of liberty. As European politicians attempt to back away from unrealistic promises made in better economic times, their American counterparts are racing to widen the reach of government.

Now more than ever, it is imperative that liberals everywhere understand and articulate the ideas of La Boétie, Bastiat, Mises, Hayek, and others. One should not view these intellectuals as great figures who nevertheless failed to steer us off the road to serfdom and onto the path to freedom. Instead, we must respect the liberals of the past as individuals who knew that statism is just around the corner should men and women fail to act to prevent it. We owe much of our present prosperity to their powerful ideas; the only appropriate way to repay our debt of gratitude is to carry on in their worthy tradition.


[1] I will hereafter use “liberalism” in place of the more modern term “classical liberalism.”

[2] See especially Chapter I, Section 1.“The Resentment of Frustrated Ambition” and Chapter I, Section 8. “The Resentment of the ‘Cousins.’”

[3] Timothy P. Carney, “The Cultural Costs of Corporatism: How Government-Business Collusion Denigrates the Entrepreneur and Rewards the Sycophant.” In Back on the Road to Serfdom: The Resurgence of Statism, ed. Thomas E. Woods. (Wilmington, Delaware: ISI Books, 2010), 120-129.

[4] Nicole Perlroth, “PayPal Founders: Innovation is Dead,” Forbes, September 12, 2011, accessed March 28, 2012, http://www.forbes.com/sites/nicoleperlroth/2011/09/12/paypal-founders-innovation-is-dead.

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3 responses

7 05 2012
KathUsitalo

Well done.

21 05 2012
For the Cognoscenti

Reblogged this on and commented:
From Graham Kozak:
https://grahamkozak.wordpress.com

21 05 2012
Graham Kozak

Thanks!

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