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The lessons that can be learned from F.A. Hayek’s The Road to Serfdom are so numerous it would be almost impossible to list them all. But after taking the time to dive into this classic piece of economic literature, I compiled a list of what I consider to be the most important lessons one can learn while strolling down The Road to Serfdom.
Is the digital hand the last frontier for the average person to do good business in marketspaces? The problem with the dead hand is that it imposes barriers that eliminate the incentive for many to consider selling on eBay, Esty, Poshmark, etc. A requirement for permits and upfront fees to start entrepreneurial activities will impose disincentives to conduct business in marketspaces. Why?
Many of the studies instrumental to the theories that behavioral economists cite to prove human irrationality are highly flawed in their reasoning. In many cases, they either extrapolate beyond what the original experiment can be said to prove, or, in some cases, have been shown to be the product of deliberate fraud.
When making policy about complex phenomena, politicians can only guess which experts to attend to, and which to ignore. There is no reason to assume that such guesses hit their marks more often than not or, indeed, that they tend to improve the relevant circumstances rather than make them worse. Policymakers do not have access to interdisciplinary experts about complex, multi-causal phenomena. Such experts do not exist.
Zuckerberg is certainly right about one thing: Apple is using its dominant position in the mobile phone market to unilaterally impose a major change to how user data is tracked and shared online, establishing an “opt in” regime – a dream of privacy activists.
Ultimately, the kinds of Silicon Valley companies to which these observations apply face a cultural problem. Consumer value and consumer service are not a sufficient part of their DNA. They were founded and developed to nurture technology. They found bolt-on monetization schemes that responded to mass reach. Culturally, the idea of consumer value has never been central to them.
Markets coordinate the division of labor and the division of knowledge. We cooperate to mutual advantage and deploy for our purposes expertise and skills we don’t have for purposes other people may not understand. Exchange collapses the incomprehensibly complex into simple bids and offers whereby people decide whether or not they want and are willing to pay for what is on offer at the requested price.
With time, the modernist emphasis on increasing knowledge—and the presumption that there is always more knowledge to come—triumphed over traditional emphases on capital, scale, commerce, and trade. But where did that knowledge come from? Whose “ingenuity” was it?
Within the institutions of entrepreneurship, one should be able to drop down their bucket where they are. Institutions of entrepreneurship should make room for new entrepreneurial participants via technological devices, i.e., smartphones, tablets, laptops. Higher levels of entrepreneurship are not the cause but the effect of technological advancements.
The unknown ideal, the ultimate solution to social domination, and its horrid extreme – slavery, is the self-evident morality of capitalism. It is the socioeconomic system that bans force from all voluntary, human interaction. Free markets are rooted in rational self-interest, its foundation is the morally derived principle of rights, and their axiomatic truth is in the primacy of existence.
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