The Road to Serfdom is the 1944 book by Austria-born British economist and philosopher August von Hayek (1899-1992). It offers an attack on socialism as a political and economic system of central planning, while defending liberalism and free-market.
Hayek started working on The Road to Serfdom when he was in Britain and was actively involved in the Economic Calculation debate. This debate tookmplace against the background of the Great Depression (1929-1939), when economists sought to outline their arguments of the proper role of the state in the economy.
The debate saw two camps of economists formed. On one side there were the free-market economists, such as Hayek, his economics mentor from Austria Ludwig Von Mises (1881-1973), and British economist Lionel Robbins (1898 - 1984). They argued against any intervention of the government in the economy, thus supporting the laissez-faire approach which had influenced most governments since the 18th century. The others advocated a greater role for the state in the economic affairs of the nation. The most prominent proponent of this view was John Maynard Keynes (1883-1946). Both camps thought the solution to the problem is liberal democracy, but had different views on what that was. While for Keynesians liberal democracy could be achieved if the state took on a greater burden of economic management, Hayek thought that liberal democracy could be brought by a market free of any such intervention from the state.
Hayek wrote The Road to Serfdom in the midst of World War II, when the British coalition government of national unity, although led by the Conservative party's Winston Churchill, had been forced to operate in a centralized economy to sustain the war effort. The book was published in Britain in March 1944 and several months later in the United States, getting wide popularity and recognition.
In the book Hayek argued that any boost to state intervention and planning to solve problems like unemployment would not safeguard liberal democracy, but would ultimately ruin it. That would happen because the lack of a functioning price mechanism and a free-market would see governments intervene at all levels of the economy. As a result, the freedom of the individuals to make choices about their economic actions and social life would in the end be completely destroyed. It is this process of losing freedom that Hayek calls the road to serfdom.
Hayek explained how the socialist system turned the government into a monopoly, while ruining competition. The state, Hayek argued, wants to fulfill its plans and policies regardless of the means to be used. Thus those people with the fewest moral scruples are likely to gain the highest position in the hierarchy of control. The bureaucracy of the planned society lures people who are likely to enjoy the use and abuse of power over others.
In attacking socialism, Hayek was also critical of the totalitarian regimes of Nazi Germany and the Soviet Union. He slammed any system that purported the organization of society along some rational, centrally governed and planned lines. Thus Hayek issued a stark warning to all economists and political theorists in the Western world who supported the ideas of collectivism and socialism, arguing that these ideas were not in their essence different from the "progressive," socialist and collectivist ideas of the era before World War I began in 1914.
He challenged his contemporaries by claiming that Nazism was not a perverted outburst of capitalism. Instead, Hayek said, the Nazi movement had developed out of the same collectivist ideas, which many intellectuals in England and the United States had promoted in their own countries.
Since its original publication, The Road to Serfdom has been translated into more than 16 languages. Reading The Road to Serfdom led Antony Fisher (1915-1988) to establish the Institute of Economic Affairs in London. The ideas outlined in Hayek's book have had a great influence on economics, providing insights into areas like public choice analysis, evolutionary and behavioral economics.