Celebrating his Dec. 3, 2006, victory in Venezuela’s election, President Hugo Chavez proclaimed: "Long live the socialist revolution! Destiny has been written." Chavez is correct. Venezuela’s destiny is clear. The many nations that have negated individual rights in favor of collective socialism bear witness to Venezuela’s chosen path: It is the road to serfdom.
"The Road to Serfdom" is the title Nobel Memorial Prize-winning economist F.A. Hayek gave to his 1944 study of individual liberty and government authority. This book was not just an academic exercise to Hayek. Teaching at the London School of Economics and living in fear of Nazi aggression, Hayek wanted to better understand how Adolph Hitler’s Nazi Germany came into being and how to keep tyranny from rising again. What Hayek found, in essence, is that the evil of Nazi Germany was not an accident: A country that negates the rights of individuals will, inevitably, progress from freedom to tyranny.
The notion that a tyrannical government can negate the rights of individual people was, of course, not new. The American Revolution was to some extent fought on this very principle. Many Christian theologians had also explored this theme, with its emphasis on the fallen nature of humanity and the danger this poses in positions of power.
Hayek, however, took the matter one step further by seeing that government is incapable of taking into account the needs of people better than people themselves, not only because government is comprised of people capable of error, but by the very nature of the situation. Hayek observed that no government planner can understand, let alone dictate, the wants and needs of individuals in an economy. It is, simply, impossible. This impossibility, according to Hayek, has real, inevitable consequences for government and citizens.
One of the first consequences of collective socialism is the demise of democracy. As a government struggles with its inability to sustain a working marketplace, its leaders come to see elections as part of the problem. Politicians conclude that if they could just jettison the fear of losing an election, they could finally get the economy in order. Centralization of power is thus inevitable. This makes Chavez’s recent call for a commission to propose changes to Venezuela’s Constitution especially dangerous.
A second consequence of the inherent weakness of central planning is that it requires a growing bureaucracy as government struggles to achieve the unachievable. Put another way, in an attempt to manage individuals in a free market, the bureaucracy will try to cover its failings by demanding an even larger role. It is as if the government says, "Just give me one more employee or regulation, and we can make this system work." Of course, the government never will sort out the growing economic chaos, because it is impossible to do so.
A third consequence of choosing socialism is that an ever-growing bureaucracy, combined with the centralization of power and diminishing authority of elections, prompts — as Hayek put it — "the worst" to get to the top. The system bred by socialism calls out for the megalomaniacs of society to step into power in an attempt to control the chaos that is always under the surface. According to Hayek:
"Just as the democratic statesman who sets out to plan economic life will soon be confronted with the alternative of either assuming dictatorial powers or abandoning his plans, so the totalitarian dictator would soon have to choose between disregard of ordinary morals and failure. It is for this reason that the unscrupulous and uninhibited are likely to be more successful in a society tending toward totalitarianism. Who does not see this has not yet grasped the full width of the gulf which separates totalitarianism from a liberal regime, the utter difference between the whole moral atmosphere under collectivism and the essentially individualist Western civilization."
Hitler, Stalin and countless other personalities since the dawn of civilization give credence to Hayek’s observation.
The end result of seriously experimenting with forms of socialism, according to Hayek, ultimately will be a reduction of the people to serfdom at the hands of tyrannical government. This economic principle is a fundamental reason to be skeptical of government solutions, whether in Lansing or Washington, D.C., and to care about economic policies. Economic systems have consequences.
If Hayek is right, which he is, Venezuela is playing with fire. No matter how charming Chavez may be or may become as he basks in Venezuela’s oil wealth, we should not be tempted to follow him down that road.
Thomas W. Washburne is director of labor policy for the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited.