Hayek Road To Serfdom Summary

Friedrich A. Hayek is often rejected because of the ideological aspect of his most known works (Gamble, 1996), especially The Road to Serfdom. Nevertheless, he provides strong arguments within debates on whether markets and businesses should be regulated or not, or the traditional political left and right. In fact, as of late, his thought has become useful to investigate, considering the occurrence of the 2008 financial crisis, its consequences, the slow recovery that most western nations have experienced, and seemingly growing global wealth inequalities. He represents the liberal side of the fundamental opposition within political economy, and presents challenging arguments that this author finds should be assessed, as they

Also, his arguments on rationality and government action seem to be the most convincing aspects of his thought (Shearmur, 1998; Caldwell in Gillespie, 2005; Caldwell; 2004), but are also the most impractical. Views on the disaggregation of information are a useful argument against the centralisation of coordination (Shearmur, 1992), but it is not easy to imagine that people would accept the idea that the best that can be done about the moral and economic problems of society is to palliate them (Shearmur, 1998). Also, it may be argued that sometimes, the state has more information to act that individuals through prices (Rees, 1963). Moreover, his prescription for certain types of government intervention has been criticised for being unclear and impractical - most famously by Keynes – since there is no clear indication of where to draw the line (Skidelsky, 2007; Kukathas; 1989, Cornish, 2013; Tomlinson, 1990), and some of his ideas may require the type of state control he argues against (Papaioannou,

Also, although he does recognise the imperfect nature of market coordination, Hayek downplays its extent, as his views of human rationality coupled with the extent of agency individuals can have in their private sphere show that certain aspects of his methodological individualism are impossible – the public and private sphere are indistinguishable. First, when considering the political causes of the 2008 financial crisis, Hayekian thought provides a fitting explanation: through the theory of the Trade Cycle, and Hayekian conceptualisation of spontaneous and made orders, the failure of 2008 was predictable as monetary policy and other legislation disrupted information flows, and represented an conscious, exogenous interference into a spontaneously coordinated order. Second, though overregulation explains the 2008 financial crisis, the subsequent prescription cannot necessarily be the reduction of political action on markets. There is no clear distinction between desirable and disruptive state action, as the nature of policy leading to the crisis shows, and some of the types of legislation Hayek prescribes are contradictory to his warnings. Third, in arguing in the direction of the imperfect nature of human