Sachs Misunderstands Hayek
16 October 2006
Editor, Scientific American
To the Editor:
Jeffrey Sachs writes that the late "Friedrich Von Hayek was Wrong" ("Welfare States, beyond Ideology," November 2006). This Nobel laureate's error allegedly was to argue that the welfare state paves - as the title of Hayek's 1944 book expressed it - "the road to serfdom."
Sachs misreads Hayek. Although he was no fan of the welfare state, Hayek never argued that it leads to tyranny. In The Road to Serfdom, Hayek distinguished between government efforts to ensure "limited security" and government efforts to achieve "absolute security." Hayek warned only against efforts to achieve the latter, which he described as "the security of a given standard of life, or of the relative position which one person or group enjoys compared with others." Hayek was correct that such "security" is achievable only by tyranny.
But as for limited security, Hayek wrote that "There is no reason why in a society which has reached the general level of wealth which ours has attained the first kind of security [that is, limited security] should not be guaranteed to all without endangering general freedom…. Nor is there any reason why the state should not assist the individuals in providing for those common hazards of life against which, because of their uncertainty, few individuals can make adequate provision."*
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
* F.A. Hayek, The Road to Serfdom (University of Chicago Press, 1944), pp. 133-134.
Editor, Scientific American
To the Editor:
Jeffrey Sachs writes that the late "Friedrich Von Hayek was Wrong" ("Welfare States, beyond Ideology," November 2006). This Nobel laureate's error allegedly was to argue that the welfare state paves - as the title of Hayek's 1944 book expressed it - "the road to serfdom."
Sachs misreads Hayek. Although he was no fan of the welfare state, Hayek never argued that it leads to tyranny. In The Road to Serfdom, Hayek distinguished between government efforts to ensure "limited security" and government efforts to achieve "absolute security." Hayek warned only against efforts to achieve the latter, which he described as "the security of a given standard of life, or of the relative position which one person or group enjoys compared with others." Hayek was correct that such "security" is achievable only by tyranny.
But as for limited security, Hayek wrote that "There is no reason why in a society which has reached the general level of wealth which ours has attained the first kind of security [that is, limited security] should not be guaranteed to all without endangering general freedom…. Nor is there any reason why the state should not assist the individuals in providing for those common hazards of life against which, because of their uncertainty, few individuals can make adequate provision."*
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
* F.A. Hayek, The Road to Serfdom (University of Chicago Press, 1944), pp. 133-134.
Posted by Don Boudreaux on
Sunday June 3, 2007 at 4:07pm