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Road To Serfdom

A New Perspective Becomes a Refreshing Journey on The Road to Serfdom

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About fifteen years ago, I read the Road to Serfdom. My exact reasons for picking it up are unclear, except to say that it had a compelling title. I also knew the reputation of the book and its author, Friedrich Hayek, to be stellar. One day something inspired me to order it online, and I remember that it was a challenging read. Of course it was written by an economist about economics, but I also remember there wasn’t any complicated economic theory or math. Instead, the book was about life writ large. And this was long before I read Ludwig von Mises proud assertion: “Economics is life.”

In the years that followed, I never had the opportunity to discuss it with anyone I knew personally or professionally. Among friends and family, one may have heard of the Road to Serfdom, but certainly none had read it, let alone have a clue about its place in 20th century history. Among colleagues, it just never came up. The only economics anyone cared about in the financial services industry were the latest GDP forecasts, the Fed, and trade deficits. Of course, that was centered on the economic theories of John Maynard Keynes, never Hayek or the business cycle theory of the Austrian School of economics.

The Need for Classics Made Simple

About 8 or 10 years ago, I heard Rush Limbaugh mention the Road to Serfdom on his radio broadcast. He asked a caller “Are you telling me that you’ve actually read the Road to Serfdom? I’ve never met anyone who has read it!” The point is that Rush understood that the book is a classic, and that its ideas are the backbone of free and prosperous societies. He knew the book to be an essential source of knowledge, that this knowledge breeds confidence, and it’s the kind of knowledge that is essential to fight back against the dominant collectivist agenda of the American media/education complex.

So how can the Road to Serfdom be made more accessible? Maybe if its language were more understandable (it was written by an Austrian-Brit in 1943), more people will read it. And if its ideas could be made relevant to people with little interest in economics, they would be armed with this knowledge. And what about the millennial generation – entrepreneurially inclined, knowledge oriented, and technologically savvy; what if they had access to a broader platform of ideas for human flourishing?

This is precisely what Brittany Hunter has done with her new e-book: A New Perspective On The Road to Serfdom. In its foreword, she plainly states her mission, and the daunting challenge she has taken on – to promote the universal morality of individualism.

My political science department was dominated by contemporary liberals and far-leftists convinced that collectivism was the only answer to the problems facing our country. But in the  midst of this leftist agenda, I managed to find one professor who challenged this viewpoint. Reading passages from Hayek’s Constitution of Liberty, I was floored at how this point of view had never been presented in any of my previous courses. I believed it was extremely important to present a modern, millennial approach to a book with a timeless message.

Economic Freedom Breeds Political Freedom

The ideas I still remember from reading The Road to Serfdom are the link between economic and political freedom (Chapter 7), the evolution of 20th century European socialism (Chapter 12), and the pathology of those who seek to dominate others (Chapter 10). There were also a couple of ideas in Hayek’s book that contradicted what I believed, such as universal basic income (Chapter 9). Brittany addresses all of them with greater insight than I was able to muster at the time, and she does it for a younger and larger audience.

For example, universal basic income is a hot political topic that resonates with today’s democratic socialism crowd. Yet we see in Brittany’s e-book that this idea is not new, and we learn that Hayek’s treatment of it is not widely admired by today’s free market advocates. As she explains, “while economic security may be appealing to many and ease our minds, it does not  come without a cost, and, in most instances, it is a loss of not only our economic freedom but freedom in general.”

A New Perspective explains why free people who are busy focusing on family, careers, and health also need to be aware of economics. After all, we are constantly engaged in economics, much like we are constantly engaged in breathing.

Integrating New Perspectives

The most revealing experience for me as I read A New Perspective, was to realize the powerful impact Hayek continued to have on me, and my ability to frame ideas. For example, I had totally forgotten about Chapter 11 – Hayek’s warning’s about state-controlled education. At the time, it validated my decision to enroll our young children in a Montessori program, and over the years it subconsciously became my knowledge base about public education.

Another important aspect is the last chapter in A New Perspective titled Postface: Five Lessons Learned from the Road to Serfdom.

The greatest enemy of individualism has always been and will always be collectivism, which is why Hayek touches on this theme over and over again in his writing. True equality comes from the individual’s ability to live, work, and function without a constant fear of state oppression. This equal access to happiness and fulfillment is the truest form of equality in existence.

When a literary milestone is transformed into a feature film, it is always best to read the original before viewing the movie. It leads to a greater understanding and appreciation of the film version. However, in the case of A New Perspective, Brittany reverses the direction. Her e-book is the prologue to reading and fully appreciating the original achievement that is Friedrich Hayek’s the Road to Serfdom.

 

To Alleviate Poverty, Treat the Cause Not the Symptoms

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When we fall ill, our bodies give us symptoms to signal to our brains that trouble is afoot. A fever, for example, lets us know that our body is working in overdrive to fight off some sort of infection. While it may be causing us tremendous discomfort, we know that the fever itself is not the real problem, but rather a symptom of a greater problem that is about to manifest itself.

But if we are in search of lasting relief, we must first discover what is causing the fever in the first place. Sure, we can try to mask the discomfort by using aspirin or ibuprofen, but this relief is conditional and only lasts for so long. Unless the root causes are identified and treated, the symptoms will come back as soon as the medicine wears off.

When put in terms of our health, recognizing that symptoms are merely consequences of a bigger problem but not the actual disease seems obvious. But many fail to see how this principle translates into other realms in life. Poverty, for example, is a vicious cycle with many observable symptoms. Starvation, lack of clean drinking water, and insufficient housing are all symptoms of poverty, but they are not the cause.

And yet, no matter how well-intentioned many charities and organizations may be, a lot of them perpetuate this cycle by focusing only on treating the symptoms of poverty, completely ignoring the root causes.

Everyone is familiar with the saying, “Give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for a lifetime.” Yet, few of us actually make use of this wisdom.

The Problem with TOMS

One summer, I noticed that everyone on my college campus was wearing TOMS shoes.

It didn’t take long for a Google search to tell me everything I needed to know. On paper, TOMS appeared to be revolutionizing the way we approach charity by capitalizing on consumer incentives. First-World consumers love participating in a cause bigger than themselves, especially when almost nothing is required of them. And TOMS brilliantly found a way to use this to its advantage.

TOMS’s mission promises that for each pair of shoes you purchase, another pair will be sent to the developing world and given to a child in need. And for my fellow college students desperate for a cause to be passionate about, this was a golden opportunity.

But TOMS’s popularity wasn’t limited to college students. Bleeding-heart consumers were buying these shoes in droves. And they weren’t just buying one pair either. New colors and styles of TOMS were being invented to keep up with the increasing demand. American consumers, as it turns out, loved feeling as though they had personally helped alleviate poverty. And before you knew it, TOMS was being held up as a beacon of conscious capitalism.

There was just one problem: handouts cannot fix systemic poverty. And a pair of free shoes can change a person’s life no more than one free fish can. Sooner or later, you run out of fish or your shoes develop holes and need to be replaced. And by creating a dependence on these donations, you actually help perpetuate the very problem you are trying to solve.

Without self-sufficiency, no developing village can ever hope to break the cycle of poverty. And when a village that is fully capable of producing its own shoes instead relies on free American shoes, it reinforces the notion that these countries “need” First-World countries to swoop in and provide them with their basic needs. This is not a particularly empowering message.

And while it may feel good to know we have helped a child receive a free pair of shoes, this act alone does not help keep anyone out of poverty. It serves only to treat a symptom of poverty without acknowledging the cause.

What Can Be Done?

So what can be done to help impoverished villages in Africa? Encourage commerce and create jobs. Senegal, for example, is one of the worst places in the world to start a business. This is why the country earned the 124th slot on the Fraser Institute’s Economic Freedom Ranking. To give some perspective, America, which is extremely free when compared to other countries, is the 11th freest country out of 159 countries included in the ranking, putting Senegal towards the very bottom of the list.

This biggest problem in Senegal comes in the form of overregulation. Because it is so hard to enter the market as an entrepreneur, the country suffers from a lack of businesses. Where there are no businesses, there are no jobs. Where there are no jobs, there is no income. And where there is no income, there is poverty. But it doesn’t have to be. In fact, despite all the regulatory hurdles standing in her way, one woman is single-handedly showing Senegal how integral entrepreneurs are in building economic prosperity.

Magatte Wade was born in Meckhe, Senegal, and was shocked when she first traveled abroad as a child. Baffled by the economic prosperity enjoyed in foreign countries, Wade wanted to know why these economies were so different than Meckhe’s. It didn’t take her long to realize that job creation played a major role in determining the prosperity of a nation. Determined to bring jobs to her home village, Wade has had to navigate through a sea of government red tape in order to start and operate her business within the country.

Wade started Skin Is Skin, a high-end skin care line based in Austin, Texas, but produced in Meckhe, Senegal. And while a skin care line might not seem revolutionary on its face value, to the employees whose lives Wade has changed, Skin Is Skin has been the difference between poverty and prosperity.

Ibrahima N’Dour is Skin Is Skin’s production manager. Prior to working with Wade, N’Dour lived in a tiny one-bedroom home with his wife and five children. At night, they would squeeze three people into their one bed while the rest of the family slept on the floor. Now, he lives in a beautiful home where each of his children has beds and room to play. None of this would be possible without his job at Skin Is Skin.

Adji Maria is another employee of Wade’s who had never held a job before finding Skin Is Skin. Since Meckhe’s economy is entirely based around farming and fishing, roles historically held by men, many women were expected to work in their homes cooking and serving their families. But thanks to her job, Maria has gained skills that have allowed her to provide for her parents and family in a way that was never before thought possible. And Maria is not alone in this. Other employees featured in FEE’s new documentary about Skin Is Skin are positively glowing when they speak of the opportunities Wade has brought to their village. Mame Yakhara, another employee, spoke of the inspiration Wade has given her:

If it was not for Magatte, I would be just staying at home, like before, cooking, serving, while waiting for a husband…we have not seen anyone do what Magatte did, come and open a business in a place like this, to provide work to people like us who are inside our homes, sitting without a job. To get us out of our houses and provide us with this type of job… we do not get many opportunities like this.

Another employee, Mame Mareme Cisse commented, “This work has changed a lot in my life. Now I can provide everything I need for myself without having to ask anyone for it.” Not only is Magatte Wade bringing jobs to this village, she is also empowering the local women in a way they have never before known.

But the jobs created by Wade’s company are not limited strictly to the manufacturing of the actual skin care products. Each product purchased from Skin Is Skin comes in a handsewn leather bag made by a Senegalese company, CAWAAN. The family who runs the company has been making handmade leather goods for five generations. Over the years, as tariffs have increased to rates as high as 45 percent on imported materials, CAWAAN has also struggled to obtain the goods they need to offer quality consumer goods. Understanding these difficulties firsthand, Wade has continued to use CAWAAN, a relationship the company has cherished. In fact, the company has said that Wade’s commitment to their businesses has “encouraged us to work hard and optimize everything.”

Wade understands that in order to break the cycle of poverty, you must strike at the root of the problem: unemployment. And since jobs are scarce in her own village, as well as others in Africa, Wade has dedicated her being to creating jobs through her entrepreneurship, something that is clearly resonating with others. In fact, Wade is now working with the mayor of Meckhe in order to provide more opportunities for education and job training.

The path to economic prosperity will not be found in government regulations or seemingly charitable handouts, like TOMS. For individuals to be able to lift themselves out of poverty, they must have the freedom to be self-sufficient through their own entrepreneurial efforts. And Magatte Wade is a living example that entrepreneurship and job growth are the antidote to poverty.

The 3 Individual And Social Benefits Of Your Entrepreneurial Life.

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We are at the beginning of a new entrepreneurial era, and the benefits for each of us and all of us are magnificent. They’re also numerous and multifaceted, and potentially quite revolutionary. Here is a way to distill them into three meta-virtues.

Control

Entrepreneurs – especially those who follow the principles of Individual Economics – understand that they can’t predict or control the future. The future is defined by uncertainty – we don’t know what is going to happen, irrespective of our own actions. In fact, there is a type of uncertainty identified by Peter G Klein, the leading economist of entrepreneurship, called Absolute Uncertainty. That’s when we have a large set of input options – actions we could take – each of which would generate a large array of possible outcomes. Choosing the inputs and anticipating the outcomes are both uncertain.

Entrepreneurs are individuals who embrace this uncertainty. What exactly does that mean? First, they recognize it as an environmental condition. They know they will never have enough knowledge to resolve the uncertainty. Everything is a possibility, nothing’s a certainty, and most things don’t even have a probability score. Entrepreneurs develop heuristics – decision making short cuts using as much knowledge as possible, but not waiting for certainty. They take action. They think in bets– making as good a bet as possible. If things turn out differently than they prefer, they learn, they re-assess and try another action.

With this pattern of action – assessment – re-assessment – more action, self-reliant individual entrepreneurs can experience a sense of control. The decisions are theirs, the actions are theirs, their attitude to unpredictable events is stable and positive. They choose their own ends, and choose the means they utilize to achieve those ends. They are free to change those means, or to adjust the ends they strive for.

There is no sense of failure, or even possibility of failure. There is a process, an action sequence, a continuous streak of entrepreneurial initiative that generates new knowledge, which, in turn, stimulates new actions. Entrepreneurship is a lifestyle choice.

When we settle for a subsidiary position as an employee in a hierarchical structure, we abase ourselves. We submit to the whims and preferences and rules and assignments and orders of others. We work towards their imagined futures, not our own. When we position ourselves as a node of entrepreneurial service in a network of collaborators and consumers, sharing knowledge, ideas and mutually beneficial service offerings, we elevate ourselves and others. We manage our possibilities by our hard work, our responsiveness to market signals in the network, our ideas and our initiatives.

Opportunity

We are all striving for self-betterment. Entrepreneurship is often described in terms of seizing opportunities. In fact, opportunities do not “exist”. They can only be described in retrospect, when an observer can identify the results of a successful initiative. But the entrepreneur did not know that success would be the outcome. The entrepreneur imagined a possible future, worked hard to attain that future, and made a lot of adjustments along the way. Entrepreneurs create opportunities.

Indeed, creating opportunity is how entrepreneurs navigate uncertainty. The route to success is paved by the needs of others. Every person’s need is raw material and a source of energy for the entrepreneur. Every free market exchange occurs between a willing buyer and an eager entrepreneurial seller. It is because consumer needs always exist that entrepreneurs will always be able to create opportunity.

Fulfillment

When entrepreneurs look for possibilities, they are seeking ways to serve others. An expression of need or dissatisfaction with the current state of things by a consumer is a request to make things better. By offering to serve the consumer, to solve their problem and make their life better, the entrepreneur is creating a just and moral society of dynamic opportunity. The creative entrepreneurial society is directed towards betterment for all. In a society characterized by entrepreneurial order, there is no drive for redistribution, and no negotiation for a bigger slice of the pie among entrenched special interests or classes. There is only mutual betterment. The entrepreneur succeeds if the consumer feels better.

Entrepreneurship, therefore, is the most fulfilling life. It consists entirely of understanding what others want and need, and creating products and services to address those wants and needs. And then observing the results. Success? Then do more good. Not quite what the consumer wanted? Then readjust and try again for their approval. Move closer and closer towards the goal of perfect service for your fellow human beings.

Everyone of us has a hierarchy of needs. When we feel good about what we have attained at one level, we can move up to the next, and tackle something greater – a higher value. The entrepreneur can take the consumer on that journey to higher and higher values. It’s a collaborative climb to the top.

The New Mantra Of Entrepreneurship.

In the past, the life mantra communicated to us by parents and teachers has been something like this: “Get educated, then earn a salary by working for a company and climbing the corporate ladder over time.” The new mantra can be something different:  “Know yourself, establish your uniqueness, then create value by serving your chosen customers in better and better ways.” You will have control over your life, create opportunity and find fulfillment.

 

 

 

The Road To Individualism: The Current Trend Towards Authoritarianism Is Not Sustainable.

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Some commentators fear that the world is heading towards greater authoritarianism. They point to President-For-Life Xi in China, Vladimir Putin in Russia, President Recep Tayyip Erdogan in Turkey, and a few more emerging dictators. The same commentators often point to what they see as increasing authoritarianism and centralization in the USA.

But Robert Kaplan, employing his encyclopedic knowledge of the history of nation-state politics, points out that the increasing creation of wealth and opportunities for the middle classes, especially when supported by technology, results in demands for greater freedom and opportunity. Governments are too slow, sclerotic and resistant to respond. The people win by pursuing advantage via the economic way. Governments mired in the political way are forced to adapt or perish.

Mr. Kaplan provides a useful reminder to us to be optimistic and pursue our goals, in spite of authoritarian government. Here is his recent article in the Wall Street Journal.

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We have moved from a world of ideological struggles in the 20th century to a world of geopolitical struggles in the 21st—or so goes the conventional wisdom. But technology is moving so fast that this world of geopolitical struggles will likely transform into another stage of conflict. Eurasia itself will become unhinged, as the destabilizing autocracies in Moscow and Beijing themselves become unstable.

In December 1997, I published a cover story in the Atlantic called “Was Democracy Just a Moment?” It was a time of unbridled optimism among policy elites about the triumph of democracy across the world. Contrarily, I argued that such a triumph would be short-lived and that new forms of authoritarianism would arise. My argument was based on experience on the ground as a foreign correspondent in dozens of countries, where elections had been held without institutions and middle classes being built. Now my experience as a reader and a foreign correspondent reveals to me another lesson: The authoritarian trend that I predicted over 20 years ago may also not be sustainable.

The explosions of middle-class wealth and technological advancement, often occurring under authoritarian or quasi-authoritarian systems, are putting pressure on governments to be more alert to the needs of their citizens. Russia and China most acutely represent this trend. They now face what I call the Samuel Huntington trap.

Huntington, who died in 2008, was arguably America’s most clairvoyant political scientist. The Harvard scholar has in recent years been famous for his clash of civilizations thesis, propounded in 1993, which the recent struggle between the West and militant Islam vindicated. But Huntington published his greatest work, “Political Order in Changing Societies,” in 1968. One of its central themes: The creation of large middle classes can actually be politically destabilizing if governmental institutions do not simultaneously become more efficient and responsive.

Russian President Vladimir Putin may be intimidating the West with his military buildup and aggression. But he rules rather than governs. Russia does not have institutions so much as a camarilla of oligarchs around the leader. Russia’s citizens, with severe ups and downs, have seen their economic lives move in the direction of normality since Boris Yeltsin’s chaotic reign in the 1990s. But as life, particularly physical security, has improved, Russia has seen little institutional development. As Mr. Putin ages, Russia’s stability cannot be taken for granted. A low-calorie version of the former Yugoslavia may be in the making at the fringes of its empire. Russia would be lucky to have America’s problems.

China was until recently developing into an enlightened authoritarian system. The collegial-style rule of technocrats encouraged the establishment of lasting institutions, with term limits for the leader himself buttressing everything. But the effective coronation of President Xi Jinping as president for life overturns this dynamic. One-man rule means a cult of personality, decimating the collegial system upon which institution-building has rested. This occurs at a time when China’s middle class is expanding, even as the Chinese state is starting to use technology, such as facial recognition and search engine monitoring, to pry into the online and offline behavior of its citizens.

Chinese society is entering a phase in which people, on the whole getting richer, are demanding more from their government. This is the basis of Huntington’s argument in “Political Order in Changing Societies.” Political turmoil never stops as societies develop; politics merely ascends to new and more sophisticated stages of instability. This is why history is so tumultuous.

American elites, fearful of dictatorship in Russia and China, are assuming that the world has reached a fixed state. It hasn’t. The thought controls the Chinese regime is attempting to place on its own people will work for now. But the ultimate result will be more psychosis, repression and anxiety on the individual level. From this new social explosions will ultimately emanate.

Technology is unhinging all sorts of societies. Look at the U.S. A world without instant polling and internet-fed polarization would yield a calmer political climate. A world of smoke-filled rooms rather than primaries would have produced a more conventional Republican presidential candidate in 2016. But America’s newfound political instability—with all of its dangers—is of a self-correcting sort. The U.S. holds elections at the local, state and national levels that allow citizens and their elites to respond and adapt to ever-changing circumstances.

Russia and China are in different situations. Russia is a rickety house that at some point may crumble. China is sturdier; nevertheless, it could slowly become a compressed pack of social dynamite with less of an outlet for its internal frustrations. It is theoretically possible for Mr. Xi, as president for life, to institute a program of dramatic economic reforms. But doing so would unleash the need and yearning for more personal freedoms, the kind that the regime is moving with its technological thought control to try to eliminate.

As Russia and China strengthen militarily, even as they maintain and intensify internal repression, they will continue to clash with the West in the near term. But as in the early days of the Cold War, policy makers have to look beyond the present to the difficulty our adversaries will have sustaining their systems over time. And if their systems come undone in the next decade or the one after, Eurasia—of which Russia and China are the geographic organizing principles—will face extreme instability. The U.S. must gird itself for this struggle, though with a certain degree of optimism. Democracy is the better long-distance runner.

Mr. Kaplan, a senior fellow at the Center for a New American Security and a senior adviser at Eurasia Group, is author of “The Return of Marco Polo’s World: War, Strategy, and American Interests in the Twenty-First Century,” just out from Random House.

Mr. Kaplan’s article appeared in the March 24, 2018, print edition of the Wall Street Journal, under the headline How Russia and China Could Come Unhinged.

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