Extending central economic planning tends to erode political liberty, because a plan requires the state to override individual choices.
Hayek argued it in The Road to Serfdom (1944), written in wartime Britain as a warning that the planning then popular on both left and right pointed towards the regimes Britain was fighting. He later said he had argued that the road was dangerous, not that it was inevitable.
In practice
- A government fixes the prices of essential goods, meets the shortages with rationing, and then with rules about who may buy.
- A company that schedules every employee centrally ends up policing the details of their breaks.
- Possible explanations
- One explanation is that a plan needs agreement on ends that a free society does not have, so disagreement must be overridden. Another is that control of the economy gives the state leverage over every other part of life.
- In its favour
- Lawson and Clark found in 2010 that very few countries combine high political freedom with low economic freedom, as the thesis predicts, and the command economies of the twentieth century were authoritarian.
- Against it
- Several democracies with large public sectors and substantial planning after 1945 remained free, which critics such as Samuelson cited against it. Much depends on whether planning means state ownership or welfare provision.
- Standing
- Contested as a prediction, particularly for mixed economies. Compare why the worst get on top.
- Further reading
- Wikipedia
- Subject
- Law & Politics
- Essay
- Competing accounts of how power works