
The Road from Serfdom - an interview with F.A. Hayek - limist
http://reason.com/archives/1992/07/01/the-road-from-serfdom/print
======
sitmaster
Wow look at how clearly he answers the questions. Half his answers begin with
a "Yes" or a "No." Can you imagine someone thinking and speaking this clearly
these days?

~~~
matwood
Yeah, whether or not you agree with Hayek, he is obviously a smart guy who has
no problem articulating where he stands on an issue. I wonder if it's a
generational difference. My grand parents for example have no problem telling
you what they think and their reasoning on why.

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nfnaaron
"... socialism was bound to fail as an economic system because only free
markets--powered by individuals wheeling and dealing in their own interest--
could generate the information necessary to intelligently coordinate social
behavior. In other words, freedom is a necessary input into a prosperous
economy."

~~~
jbooth
Blanket assertions about socialism and capitalism are fundamentally silly.

Nobody thinks it would be efficient to privatize the federal highway system
and turn everything into a toll road.

I've been biking recently, but I used to take the subway. That's socialist.
Taking a cab would be capitalist. Did I care? Not really.

Normal market goods are almost always better served by private markets. They
may need to be regulated if the create significant externalities or pose risk
to the economy at large.

The metric should be common sense, not -isms. When picking a software
platform, I pick the one best suited to the job at hand. I'd like to see some
of these so-called big policy thinkers apply the same principle.

~~~
Kadin
> Nobody thinks it would be efficient to privatize the federal highway system
> and turn everything into a toll road.

Not sure it's safe to say that. The usual arguments against making the
Interstate system toll-based are practical ones: it would be a pain to
operate, you'd have to have tens of thousands of tollbooths, you'd create
giant traffic jams, etc. (Anyone who's ever driven down the Jersey Turnpike,
pre-EZPass, can understand the horror that a lot of people think this would
necessarily entail.)

But from an economists' view it would probably be very efficient. Right now
there's not much of a direct linkage between road users -- those who cause
wear and tear to the roads -- and those who end up footing the bill. The net
effect of this is a huge government subsidy to over-the-road trucking. Trucks
get to drive on the roads for free and, due to their high axle loads, do the
most damage to the road. The public foots the bill for maintaining and
repairing that infrastructure. It's an externalized cost on the part of
trucking companies.

Using tolls (based on miles driven and axle weight, perhaps) would force
internalization of these costs into the goods being transported, which would
be more efficient from a classical economic perspective. You'd be making the
price of the widget in the store more accurately reflect the inputs it
requires to make it and bring it to market, which is generally regarded as a
Good Thing. It might also have the side-effect of making other transportation
methods (rail, ship, air) more competitive in certain edge cases.

Such a scheme might be impractical, difficult to implement, or prone to
siphoning for purposes other than road maintenance, but it's not inherently
less efficient.

[Edit for punctuation.]

~~~
stretchwithme
private control of property does cost something. you need locks and alarms to
manage access to real estate just as you need systems like FastTrak and
EasyPass.

But daily traffic jams also have a cost and building twice as much road as you
really need does too. A massive unmeasured cost.

------
CWuestefeld
_The rules of the game that the gold standard requires [say] that if you have
an unfavorable balance of trade, you contract your currency. That's what no
government can do--they'd rather go off the gold standard. In fact, I'm
convinced that if we restored the gold standard now, within six months the
first country would be off it and, within three years. it would completely
disappear._

I wonder to what degree we can use this to explain the PIIGS problems in
Europe. Of course, they don't have a gold standard. But for a given nation in
the Euro, the value of the currency is fixed: they have no means of
manipulating it to take pressure off their fiscal problems.

~~~
arvinjoar
What Hayek said is that the bubbles popped pretty early on (which is a good
thing) because they could not be maintained and continued by the institutions
that existed back then. That the bubbles popped is a good thing. A gold
standard keeps the inflation stable, because gold can't be printed. Hayek goes
on to say that a gold standard would not work because governments have an
incentive to "cheat" and blow up giant bubbles, which cannot be done
successfully with a gold standard.

I think that currency should not be issued by governments at all, the absence
of government issued money would mean competing currencies, and in a situation
where gold competes with other currencies, gold often wins the confidence of
the people.

~~~
evanrmurphy
That would be an interesting item to deregulate. I've always been fascinated
that the U.S. government doesn't mandate an official language [1] and just
incidentally uses English for most purposes (with Spanish becoming
increasingly relevant). As far as I can tell, it hasn't caused any major
problems for the country and may be a better way to handle the issue. Could
currency be the same way?

[1] Language being another item that governments tend to regulate.

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ytilibitapmoc
This quote,

" _Reason:_ Is Britain irrevocably on the road to serfdom?

 _Hayek:_ No, not irrevocably. That's one of the misunderstandings. The Road
to Selfdom was meant to be a warning: "Unless you mend your ways, you ll go to
the devil." And you can always mend your ways.

 _Reason:_ What policy measures are currently possible to reverse the trend in
Britain?

 _Hayek:_ So long as you give one body of organized interests, namely the
trade unions, specific powers to use force to get a larger share of the
market, then the market will not function. And this is supported by the public
because of the historic belief that in past the trade unions have done so much
to raise the standard of living of the poor that you must be kind to them. So
long as this view is prevalent, I don't believe there is any hope. But you can
induce change. We must now put our hope in a change of attitude.

I'm afraid many of my British friends still believe, as Keynes believed, that
the existing moral convictions of the English would protect them against such
a fate. This is non- sense. The character of a people is as much made by the
institutions as the institutions are made by the character of the people. The
present British institutions contribute everything to change the British
character. You cannot rely on an inherent "British character" saving the
British people from their fate. But you must create institutions in which the
old kinds of attitudes will be revived which are rapidly disappearing under
the present system.",

on the (historically) current effect of unions is priceless.

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delackner
Sorry for the long quote, but I have tried to reduce its length as much as
possible while retaining meaning:

"" [...] the idea that things ought to be designed in a 'just' manner means,
in effect, that we must abandon the market and turn to a planned economy in
which somebody decides how much each ought to have, and that means, of course,
that we can only have it at the price of the complete abolition of personal
liberty. ""

This seems to me to be a false dichotomy. If the state sets artificial prices
on some goods, say basic foodstuffs, this does not automatically lead to the
complete destruction of market forces, it simply produces an artificial input
in the market, leading to an equilibrium that likely to be different from the
natural equilibrium.

As an aside, I was really thrilled by his description of meeting Alexander
Solzhenitsyn.

------
roel_v
Ironic how he singles out Spain as a country that was in a position to make
itself into a shining beacon of fiscal responsibility, to be emulated by the
rest of the world.

~~~
stretchwithme
Here's what he said about Spain:

"Spain, which has to choose a new constitution. It might be prepared to adopt
a sensible one. I don't think its really likely in Spain, but it's an example.
And they may prove so successful that after all it is seen that there are
better ways of organizing government than we have."

It seems to me he is only referring to Spain's potential new constitution,
that they might adopt a sensible one.

