'The Road to Serfdom' by Friedrich Hayek, is a classic political polemic in favour of free markets and against socialism, or 'planning' as he calls it. If you anticipate my saying I am not a socialist because I read Hayek's book, you would be wrong, as I have only read it just this week, encouraged by the account of the economist's life in Sylvia Nasar's excellent book 'Grand Pursuit', which is reviewed elsewhere in this blog. In fact, I should have read Hayek 39 years ago, after Margaret Thatcher was elected as Prime Minister. At that time I was a civil servant in the then Department of Industry, a part of government Mrs Thatcher hoped could be abolished, once free market policies had replaced the post-war consensus of nationalised industries and use of subsidies to prop up other sectors of industry. She put in Sir Keith Joseph, one of her most trusted lieutenants, to run, or maybe run down, the industry department. I sat next to him on a flight back from Brussels once and found him a pleasant and interesting man, but in the department he was ideologically committed to purging it of 'planning' and promoting free market policies. Thus he sent round a reading list for his civil servants, which naturally included Hayek's book and works by other liberal economists such as Milton Friedman. OK, I've admitted I didn't read them, but then it was not really difficult to understand the way the wind was blowing: I had spent the previous four years negotiating bilateral deals to support the then nationalised industry, British Airways. The department had been sued by the maverick entrepreneur, Freddie Laker (who I also got to talk to), who was bent on breaking BA's monopoly of transatlantic routes, an outcome he eventually managed to achieve. Virgin Atlantic was still a gleam in Branson's eye. My big boss in this area, was certainly a supporter of nationalised industries and probably a 'planner'; he didn't last long in the new regime. BA was, of course, high on the list of industries the new government wanted to privatise (and even Mr Corbyn doesn't want to reverse that decision).
So, was I a socialist before 1979, did I convert with the new government? Not exactly. I inherited from my father, who was unemployed during the 1930s, a general support for what the Labour Party did under Clem Attlee after World War Two. But I saw this in terms of social policy: the NHS, education for all, the welfare state, national insurance, etc. I had no real feel of the implications for industrial policy until I saw them in action under Ministers such as Tony Benn and Peter Shore (at Department of Trade) and then I found them both confusing and unsettling. The message was that I, an untrained bureaucrat, should go out and tell the board of a private company that they should increase production in the UK (Benn) or increase exports (Shore) to meet some national planning target. This seemed like a radical departure from reality and common sense: I just couldn't get my head round it! I felt much more comfortable in a world where private companies were left to get on with their business and government intervention was targeted to promote public good through e.g. setting environmental and safety standards, preventing cartels, regulating worker's conditions, etc., or was aimed at helping with particular issues such as training skilled staff, insuring risky exports, funding blue-sky research or encouraging major investments. Implicitly I felt one should judge by what works, rather than on the basis of ideology.
Somewhere in my journey through life, however, books have influenced me to be opposed to socialism. In talking of socialism we should be clear what we mean: Hayek states this clearly: "socialism means the abolition of private enterprise, of private ownership of the means of production, and the creation of a system of planned economy....". His reference points were, of course, Soviet Russia and Fascist Germany. He was not suggesting that all forms of state intervention were to be tarred with this negative brush, for example, he also wrote: "where it is impossible to create the conditions necessary to make competition effective, we must resort to other methods of guiding economic activity". One might feel the water industry in the UK is a current case in point.
Economic and political freedom for individuals go hand in hand, Hayek felt; it would have been interesting to have him this century to comment on Deng Xiaoping's China where economic freedom was granted in a one-party state. But now we live in an age where arguably both freedoms are being rolled back in many parts of the world. It is therefore worthwhile going back and revisiting those books that shaped my attitudes, which were mostly written just after World War Two. George Orwell has to be to the fore: Animal Farm is a brilliant satire of 20th century dictatorship, and 1984 is also a powerful indictment. Arthur Koestler wrote several books about his life which are very relevant, plus the bleak novel Darkness at Noon. Another interesting life story is I Believed by Douglas Hyde; I have a 1952 edition of this book. The Open Society and its Enemies by Karl Popper sets the philosophical arguments out very clearly while The Origins of Totalitarian Democracy by J L Talmon paints a vivid historical background. These are the books that shaped my political attitudes in my impressionable student days and they are still on my shelves today. Now Hayek is there too!
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