Chapter Seven: Economic Control and Totalitarianism

Hayek points out in this chapter that anyone who has given economic planning serious thought recognizes that this must be a top-down, command-oriented situation because of the interrelated complexities.

(Personal insight: This difference between espousing the free market and central planning to solve economic problems is similar to the difference between espousing Darwinian and Intelligent Design/Creationism methods for solving evolution problems.)

What the planners also believe, according to Hayek, is that base economic life can be separated from the higher interests of life. Another way of saying this sunny side belief is that economic planning is a good thing because it automatically solves social justice problems for the community and thus it lets community members think about other, higher things, in life. This is the attraction of central planning.

This distinction is important in this chapter, but I'm not sure this distinction between economic things and higher things is as much a part of 2010's thinking as it was 1930's thinking. I think the surprise of just how much good stuff humans could produce using the new industrial techniques was still dazzling the intellectuals of the 1930's. Today intellectuals, and most people, just take this cornucopia for granted.

Nonetheless, Hayek warns that you can't separate economic control from control of other aspects of human living -- you can't have freedom if you don't have economic control. He points out how much of a freedom-creater the concept of money is, and, how the freedom created is even more for poor people than it is for rich people because even without the concept of money rich people can do a lot of things.

And, he points out, if you give a planner power over production, you have de facto given him or her power over consumption as well. The contemporary example of that happening in the US is health care. This is an environment where central planning ideas are alive, well, and thriving. There are few people today who advocate more competition as a way of solving the nation's health care problems. (But for the record, I'm one who does. I feel that invoking "patient pays" as a governing philosophy would produce a golden age in US health care.)

Hayek points out that planning not only controls choices in an individual's consumption, it also controls choices in their employment -- if the planners are controlling production, they are controlling jobs.

Finally, he points out that what people really want is freedom from making hard economic choices -- the freedom to not have to decide between the devil and the deep blue sea -- and this is what some central planner advocates say they are offering. It sounds attractive. Sadly, the reality is not that the hard economic choice is avoided, but that it is given to a planner to make instead of the individual... not quite the same thing.