Part 1, Part 2, and Part 3

Chapter 3: Individualism and Collectivism

The title of this chapter is in my own opinion quite a misnomer. In fact, Hayek spends as little time as possible truly outlining what he considers to be “collectivism” or “individualism” beyond a rudimentary appraisal in the first few pages. Most of the chapter is spent detailing the tendency towards a ‘planned-economy’ in the West, the reasoning behind it, and why this is bad. Regardless we will go about debunking Hayek’s claims as they appear with special attention given to certain structural arguments which give base to subsequent claims.

On the first page Hayek starts by noting confusion over what precisely socialism entails. He claims that not only does it socialism imply a sense of justice and equality, but also the means by which to arrive at such a society.

“In this sense, socialism means the abolition of private enterprise, of private ownership of the means of production, and the creation of a system of “planned economy” in which the entrepreneur working for profit is replaced by a central planning body.” [1]

At the conceptual level, Hayek is absolutely correct. Socialism does require the abolition of private entrepreneurship as well as the establishment of some “common plan” of production (a la Marx). The extent by which we consider the central body to be a direct replacement of the directing market forces or a scientific advancement in the way the whole ‘system functions’ is still debated. However, it certainly cannot be ignored that in the history of socialism centrally planned bodies have played a strategic role in building up to socialism in the rational allocation of resources.

Hayek then returns to his previous tirade of claiming socialist have been arm-twisting liberals into accepting socialism, “by far the most important species of collectivism” [2]. Social justice, he argues, or at least the “current ideas of social justice”, requires a conscious distributive program that the free market cannot sustain. Therefore, socialists argue strongly in favor of the use of a central plan [3]. However, he continues to drive home the fact that the liberal conception of “planning” within an economy is very different than the socialist.

“’Planning’ owes its popularity largely to the fact that everybody desires, of course, that we should handle our common problems as rationally as possible and that, in doing so, we should use as much foresight as we can command. In this sense everyone who is not a complete fatalist is a planner…But it is not in this sense that our enthusiasts for a planned society now employ this term…According to modern planners, and for their purposes, it is not sufficient to design the most rational permanent framework within which various activities would be conducted by different persons according to their individual plans. This liberal plan, according to them, is no plan.” [4]

He uses the above premise to bridge into a discussion of whether a ‘central plan’ or “liberal plan” is more preferable.

“The question is whether for this purpose it is better that the holder of coercive power should confine himself in general to creating conditions under which the knowledge and initiative of individuals are given best scope so that they can plan more successfully; or whether a rational utilization of our resources requires central direction and organization of all our activities according to some consciously constructed ‘blueprint’.” [5]

Let’s start with a few points.

1. Capitalism is an anarchy of production. Not in the proverbial or preferable sense of a relatively ‘horizontal’ system of some equitable nature. The allocation of resources is arguably done ‘irrationally’ according to the maxim of “production for use”. Moreover, capitalist production and distribution is hardly able to account for its own internal contradictions which are in a constant flux causing the crises we so regularly experience. The argument in favor of “planning the economy”, from socialists at least, is not so much from a conceptual fetishism of “reason” and “rationality” but a more historic understanding of how capitalism actually functions. Socialism requires the concrete advancement of productive forces in a direction to enhance overall scientific-technical knowledge of our own productive capacities. To put it briefly, socialism needs ‘planning’ because the anarchic nature of the market makes prolonged and effective development of the productive forces towards communism impossible.

2. Capitalism has paved the way to socialist planning. Lenin once noted the necessity of developing certain capitalist methods as to progress in our own understanding of directing economic activity. Was he correct? Arguably Wal-Mart has done more to advance our own understanding of real-time consumer data, streamlining distribution, logistics, and technical discrepancies than any Soviet planner. The fact of the matter is that under monopoly capitalism (imperialism) much of the world economy is already collectively planned by a small network of massive corporations. The fantasy world of millions of mom-and-pop shops competing for those beloved customers is long past us. Only a handful of transnational firms maintain the concrete economic gravity which keeps capital circulating and the whole system in check. The world economy is already planned the question is planned for who?

3. Planning is not just for the obvious purposes. Developing the productive forces, while being very important, is not the only component of socialism nor is it arguably the most important. Transforming the relations of production, the ways in which people relate to each other in the course of production, takes primacy in the construction of socialism (in our understanding, at least). Planning the economy allows us to transform these relations by eliminating certain elements of bourgeois society from the course of the labor process. For example, through planning the economy, labor no longer becomes a commodity to be bought and sold (rather, the time-selling of labor-power to the capitalist by the worker). Unemployment, homelessness, and hunger are no longer weapons to be used against the working class. The oppressed and exploited are able to concretely seize upon their own economic conditions and draft up a plan which empowers them and their own class position. This is the sort of subtleties to planning which Hayek completely glosses over and arguably even some technocratic proponents of planning to some extent or another.

4. The “creating conditions under which the knowledge and initiative of individuals are given best scope so that they can plan more successfully” is simply an advanced euphemism for refining the existing capitalist legal structure; formalizing the relations of production, relations of exploitation, so that they might become more ‘efficient’ and ‘seamless’ in their progression. All this talk about the ‘initiative of individuals’ might as well be rhetoric from the holy gospel of the Free Market. In modern capitalism, even in early competitive capitalism, this “initiative of the individual” is negligible. Capitalists themselves are only stand-in functionaries, “conductors”, to the train of capital circulation; they are a necessity, but they themselves are certainly not and neither is their initiative. What Hayek is concretely referencing here is the formalization of the social division of labor, the legal establishment of capitalist superiority and the supremacy of their relations of production, to an even greater extent than is already experienced.

All of this “planning” talk and the question of ‘individuality’ rather rhetorically posed by Hayek at the beginning of the chapter only becomes more empty as the book drags on. What sort of plan can even be posed by that of the proletariat; members of the exploited class and not the exploiter class? What sort of plan gives the oppressed and exploited the same ‘individual initiative’ and social significance that is afforded to the bourgeoisie? Only a “plan” which involves the complete abolition of capitalism, imperialism, and every other system of oppression which keeps the people in one chain or another.

The idea that a worker could empower herself through an “individual plan”, the liberal sort that Hayek makes mention of, is absolutely laughable. What is she to plan? Today I will get exploited, when I am done being exploited I will reproduce my bodily capacities, then I will go tomorrow and get exploited etc. etc. Only the most detached and academic nonsense could possibly conjure a situation where the great mass of people are empowered by such empty “individual plans”. These plans are actually component parts of the collective myth of “success”. Something so rare that every time it occurs the ruling class must hoist such an example up high for the whole social formation to witness and then place it safely into a museum display for generations to pass-by (in the words of Althusser). What is this individual plan, this hope of “success”, to the homeless man outside the Chanel store? How about the children growing up in New York’s public housing? What is it to those single mothers grinding out an existence deep in Compton?

Such an individual plan only makes sense if you are in fact the “individual” in question; a holder of capital, an exploiter, someone who wields the economic mechanisms of our society as a weapon against the working class. Only then does the plan that Hayek and others speak of have any relevance.

Ultimately, Hayek ends this chapter with one final appeal to the ‘decent sentiments’ of his readers.

“The idea of complete centralization of economic activity still appalls most people, not only because of the stupendous difficulty of the task, but even more because of the horror inspired by the idea of everything being directed from a single center.” [6]

Perhaps unknown to Hayek, everything is directed from a “single center”: the amorphous composition of this fluttering phenomenon we call capital from which all things relate and to a great extent are determined. More troubling is how not only does all economic activity stem from the ‘center’ but also moves towards a central ‘goal’. This goal being the acquisition of a profit, the reproduction of the circuit of capital, wherein the cycle starts again and the endless drive to accumulate is extended. Therefore Hayek’s appeal to the individuality of his readers against this boogeyman of a ‘planned-economy’ retains its own despicable irony. Nothing could be more damaging to the individual and her expression than the burgeoning march of capital and history has constantly demonstrated this.

The question of socialism then is not one of ‘individualism or collectivism’, or myself and the ‘others’, but really a fundamental question of the social self. Should we, as workers but more importantly as people, command our own production or not? Should we satisfy our own needs and desires or not? Do we want to be oppressed or self-determined? This might seem to be a massive simplification of the socialist demand but quite honestly this is the kernel at play: do we affirm ourselves or not?

Socialism is not the negation of individuality to the credit of collectivity but instead the realization of individuality through the affirmation of ourselves.

Chapter 4: The “Inevitability” of Planning

Hayek starts the chapter with a very critical indictment of the Marxist method. As shown in earlier chapters, Hayek promotes a sort of idealism at the loss of a materialist conception of history. Meaning that he decidedly believes ideas are the driving force of history rather than material practices which is what Marxists highlight in opposition to his sort of idealism.

He specifically notes how the trend towards the concentration of capital (monopoly capitalism) is not an inherent process of capitalism but rather a sort of ‘self-fulfilling prophecy’ to the credit of (nominally) socialist ideas.

“The tendency towards monopoly and planning is not the result of any ‘objective facts’ beyond our control but the product of opinions fostered and propagated for half a century until they have come to dominate all our policy.” [7]

A tempting possibility for the liberal to ponder but simply not true for a number of reasons. First, experience generally precedes theory. When we encounter a phenomena we seek to describe and recognize the phenomena with a whole sort of significations. However, what is important to note is that the phenomena did exist at least phenomenologically (bear with me) to the point at which it was discerned. There is some deep philosophical discussion to be had as to the construction of certain ‘events’ (e.g. the concentration of capital) however we can remain fairly historically certain these did not occur simply because of the “opinions” of some nominal progressive policy makers. We can even explain this phenomena and provide cross-cultural examples using the Marxist method.

To explain why capital concentrates (“tendency towards monopoly”) quite briefly we should note the process is inherent to the accumulation of capital itself. Production is driven by the socially necessary labor time. Capitalists who are able to enhance the productivity of their labor process therefore lower the necessary labor time in the production of a commodity (usually through expanding productive means e.g. equipment, machines, etc.) and therefore are able to acquire more of the market. These larger capitalists then acquire the assets of smaller capitalists and again expand their own production. Eventually, smaller capitalists are forced into retreat from these monopolized markets and “crowd into spheres of production which Modern Industry has only sporadically or incompletely got hold of” which is where we find most ‘small businesses’ today [8].

Therefore, history has shown the concentration of capital to be an objectively certain process of capitalism and to our analysis quite ‘inevitable’ and independent of any idealist notions of change.

Hayek, to his credit, does not simply ignore this knowledge nor give up his original assertion. In fact, he takes our materialist conception of history and the concentration of capital to bat in the following pages.

“The alleged technological cause of the growth of monopoly is the superiority of the large firm over the small…The most comprehensive study of the facts…arrives at the conclusion that the view according to which the greater efficiency of large scale production is the cause of the disappearance of competition ‘finds scant support in any evidence that is now at hand’” [9]

Hayek then cites a prominent economic report at his time detailing how the concentration of capital was due to “collusive agreement and promoted by public policies” [10].

There is a bit of truth to be found in Hayek’s assertion so it’s important to take our time analyzing the selected material.

First, the study he utilizes was, even at the time, ill-equipped for any real comprehensive and comparative analysis of firms. The Temporary National Economic Committee which he cites only analyzed the relative success of “large-firms” to “small-firms” in select markets. Ignoring the fact of course that even Marx admitted there were certain markets wherein small capitalists could take refuge. These markets are where the “competition rages” where the consumer base is more important than the disciplined productivity of a “large-firm”. However, the analysis given is almost laughably one-sided. Where is the analysis of small capitalists in the steel industry, or the oil industry, or the textile industry? That is where the large productive capacity of monopoly capitalists comes to full fruition as they sweep smaller competition through sheer force. More modern economic analysis has shown, perhaps intuitively so, that larger-firms are always better equipped in competition with smaller capitalists. The reason is even more expanded than that initially provided by Marx with the socially necessary labor time being commanded by larger capitalists. In addition to their ability to discipline productivity, monopoly capitalists can negotiate preferable finance deals, acquire more specialized labor-power, and invest more capital into labor-power reproduction. All of which gives them a substantial edge over small capitalists, no mater how driven, innovative, or enterprising they are. Big money beats small money in big fields.

On an off point, Hayek also argues that if concentration were inevitable we should have seen it occur faster in the older industrial nations such as England but instead it occurred most noticeably in the United States. However, this makes perfect sense from the analysis provided by Marxists. The concentration of capital is hardly mechanical but certainly determined more by the rate and liquidity of accumulation than the duration of development. The tremendous amount of foreign investment from Europe into fresh markets within the US allowed for the remarkable expansion of industrial capitalists as they gobbled up stakes. Smaller capitalists in the US unable to secure that bountiful investment faded very quickly and left the most lucrative markets to a handful of ultra-wealthy massive firms which only grew quicker. The situation in England was starkly different with no real spatial ‘room-for-growth’ and only trickling foreign investment; industrial capital had a very uphill climb which explains why the concentration took so much longer to advance (although now its certainly apparent the process wasn’t fatally hindered). A more modern example would be the explosion of monopoly firms within India which only very recently began industrializing. India, like all other growing industrial powers today, has the whole world market of foreign investment and liquidity to quickly develop capitalism and all the processes therein.

Second, the presence of “collusive agreements” between big capitalists and the state is hardly any surprise to a Marxist. After all, the bourgeois state is the bourgeois state it is there to serve the bourgoeisie. None of which casts doubt on the truth-value of the Marxist method. If anything, our understanding of history and society is only reaffirmed by the presence of such collusion. Some might then ask is the concentration of capital a consequence of internal contradictions within accumulation or the simple subservience of the state to the bourgeoisie? For our purposes with debunking Hayek here, it really makes no difference. Both processes are arguably equally intrinsic to capitalism therefore it makes no difference how it occurs, concentration of capital is imminent.

However, for point of technical clarification we should note that this concentration is likely reinforced by both processes but principally through the internal contradictions in accumulation. Even without the collusion between big capitalists and their state actors, monopolies would spring up in markets for the reasons already given. Yet, the bourgeois state in capitalism has always acted to develop and protect capitalism without any real exception to be noted (even in the case of “picking losers” the action extends the social whole). It should be expected that the superstructure would act back upon the base to help resolve those contradictions which might impede overall development.

Hayek goes onto make several claims to the superiority of competitive markets and the price system as opposed to a planned-economy. However, we should not spend too much time on these claims in specific as much more accomplished experts in these fields have disproved so much of Hayek’s assertions.

For example, Paul Cockshott (PhD) and Allin Cottrell (PhD) in their published report Economic Planning, Computers and Labor Values thoroughly demonstrated how an entire economy could be planned more effectively than anything existing today using real-time data feeds and labor-values in place of standard pricing [11].

Although Hayek does make several correct claims with regard to certain policy makers suggesting a more “centralized” approach to developing capitalism (for example, with the chartering of corporations in the United States). However, this does not build his argument on behalf of his idealism nor to the credit of any ‘free market system’. Rather, what he is highlighting is a conscious example of what was mentioned earlier with regard to the superstructure intervening in the progression of the base. What certain policy makers realized is that to effectively develop capitalism and extend their own tentacles they have to overcome (or at least attempt to overcome) the contradictions which riddle the ‘normal development of capitalism’.

This ‘conscious development’ of capitalism of course retains all of the exploitation and oppression endemic to the system but in a very pragmatic and remarkably “human” sense. Take for example the development of capitalism within China over the past 30 years. No doubt, the Chinese mainland has developed their productive capacity in a way rarely seen in history but has done so with a more clear ‘sense of direction’. The Communist Party of China continually remarks that the development of “market mechanism” will enhance the living standards of their massive population even as they are submerged deeper into the workings of exploitation and circulation. How is this possible?

To use a metaphor, it’s easier to paddle when everyone is on board. And that is exactly how modern capitalist-imperialism has developed to later stages, by reinforcing the idea that “everyone is on board”. Public-private joint ventures, public development with private investment, private ecological initiatives, big capitalists supporting the maintenance of smaller capitalists (think GE “community investment”) etc. These are all conscious efforts by the ‘thoughtful’ (read: conscious capital) elements of the capitalist class to maintain their own domination and advancement, even if this means nominal concessions.

None of which builds upon Hayek’s argumentation. More than socialism, Hayek misunderstands the reality of capitalism. All of his quaint rhetoric is nothing more than a rosy fairy tale not even the capitalist class is willing to entertain. By observing the actual development of capitalism we have discovered that the ability to change form while deepening substance is the only chance capitalism has at prolonging its own existence.

Public policy makers who advocate centralized development are not socialists. Not even in the soft usage of the term. They are fundamentally the most profound capital advocates in existence. More so than the charlatan spinsters such as Hayek and other free market prophets. Arguably, FDR did more for capitalism than Adam Smith ever could.

Chapter 5: Planning and Democracy

The point of this chapter is to prove that ‘planning’ could never fully satisfy the desires of every individual ‘under the plan’ and is therefore insufficient in the realm of social governance. In classic Hayek fashion, he makes a collection of assertions to supplement this point although none of them are particularly convincing. Regardless we will go about destroying every relevant assertion as it makes its appearance through the text.

He begins with rhetoric very similar sounding to that of previous chapters (already addressed).

“The common features of all collectivist systems may be described, in a phrase ever dear to socialists of all schools, as the deliberate organization of the labors of society for a definite social goal.” [12] 100

Such as the production of commodities or the realization of a profit. Though, one would be hard pressed to find Hayek admitting that capitalism could be anything but a form of “collectivism” in and of itself. In addition, we should make very clear that usage of terms such as “collectivism” is hardly founded in anything meaningful. The usage of terms should be revealing to the reader, not concealing, and with such vague terminology employed one can only imagine that Hayek has no intention of “revealing” anything at all.

“The various kinds of collectivism…differ from liberalism and individualism in wanting to organize the whole of society and all its resources for this unitary end and in refusing to recognize the autonomous spheres in which the ends of the individuals are supreme. In short, they are totalitarian in the true sense of this new word which we have adopted to describe the unexpected but nevertheless inseparable manifestations of what in theory we call collectivism” [13] 100

Let’s make a few points, given as this is a rather central theme to the entire text.

1. As stated innumerable times Hayek makes an arbitrary distinction between the variants of society he calls “collectivism” and whatever sort of society he would consider capitalism. At the end of the day, all societies since the beginning of civilization have at least one thing in common: they are class societies. So common is this knowledge that when referring to “society” we are already referring to something which is divided, stratified, and wholly separate from the “individual” and to itself. Feudalism was a class society dominated by the feudal class: the monarch, landed aristocracy, their vassals, the clergy, etc. Capitalism is a class society dominated by the bourgeoisie: the industrial capitalists, bankers, investers, businessman, their professionals, etc. Socialism is still a class society however it is moving towards classlessness, or what we refer to as Communism. Ultimately, the point to be made is that Hayek’s division is arbitrary and with a material conception of history in mind, seems ridiculous.

2. What are these “autonomous spheres in which the ends of the individuals are supreme”? Once again we find Hayek taking vague refuge in the promise of some not-yet-articulated humanism e.g. the banal conception of “individuality” as-being-without. Apparently, one can only be an “individual” when one is in some mythical social existence where everyone else does not matter. Furthermore, Hayek provides no concrete reasoning as to why one could not be in these “autonomous zones” while living in a socialist society; keep in mind, we define socialism only as what it fundamentally is (a society on its way to classlessness).

3. Hayek’s usage of ‘totalitarian’ is also problematic. What makes something totalitarian? Better yet, what makes socialism totalitarian? The idea of a planned-economy? Forgetting that the capitalist economy is already planned by a handful of corporations on behalf of the rich. The combined determination of society? Forgetting that capitalism is collectively determined, by the ruling class, the owning class, for their own purposes. The wrongly held belief that “hard work” will not be rewarded? Because the hard work of single mothers, sweatshop workers, and child slaves is surely rewarded in an equitable society such as capitalism. Often times it’s difficult to even fathom the full regime of control exerted by capitalism onto the unaware individual. Everything we do surrounds this all-powerful piece of paper which represents everything material and representable. Our lives hang in the balance of some numbers dancing across a screen. All of which only examines one narrow dynamic of oppression in relation to capitalism; the full totality of which, including those webs of oppression not entirely capitalist but integrated (such as patriarchy), are hardly something we could ever measure. Yet, Hayek will go about claiming it is the liberation from capitalism which is the true totalitarianism. What nonsense.

Hayek then argues that a planned-economy (at this point the reader should substitute this phrase with ‘socialism’) is incompatible with human civilization because it “presupposes, in short, the existence of a complete ethical code in which all the different human values are allotted their due place” [14]. 101

Once again, Hayek demonstrates a very shallow understanding of human society as a whole. First, morality, like culture, is constructed/created/conjured forth from the host of material practices which sustain a society. While human society is best seen as an “organic whole” (to account for the sheer intricacy and interrelation) Marx draws a divergence between the base and superstructure, or the material practices which fundamentally sustain the society (e.g. production) and the social practices built around that (e.g. culture). This helps us account for the cross-cultural similarities (but also differences) at points such as morality, values, etc. Importantly, we must understand that the certain cultural understandings an individual possesses are not some inescapable extension of her person (however material oppression can still be built, quite easily, around culture as well) but constructions which can be augmented and quite often are.

Therefore, we should not worry about balancing ‘essential’ human values from one person to another to find the perfect formula for everyone. Values, like morality, are socially conditioned and constructed and any socialist society would go about like societies before it transforming these values accordingly.

However, this is not some cultish advertisement for social engineering. In fairness, the engineering is already being done. Perhaps not in the way sci-fi fans would imagine, however, the totality of human thought and behavior is constantly being conditioned, molded, and reproduced by the cultural outputs which surround us. Every television show, magazine, video game, song, and book is providing some sort of social narrative; something more powerful and constructive than any futuristic or sadistic mind-control nonsense. Even the way in which we speak is riddled with implicated signifiers which exude a mode of ‘normalcy’ which defines how we understand everything around us.

To put it quite simply, Hayek’s “different human values” are essentially humanistic nonsense.

This does not mean socialism would require the same ‘regimes of control’ or that individuals would not be free to explore “different human values” (if we understand that they are indeed exploring and not emboddied). However, this exploration and configuration would be entirely different in that the base of exploitation and material oppression (the capitalist relations of production, patriarchy, national oppression, etc.) would be eliminated. Therefore, the human values realized thereafter capitalism might actually be considered human values in the full sense that they would no longer be based on a system of exploitation but the subjective life-affirmation of that individual.

Ultimately, no “complete moral code” is required for the planning of an economy, success of socialism, or abolition of capitalism.

Hayek continues ranting about the lack of any such “complete moral code” and extends upon the defeated arguments listed above until finally arriving at the question of democracy with regard to economic planning.

Here he makes himself a home and begins a very long and terribly boring explanation as to why democracy and central economic planning are incompatible. His essential thesis through the pages is:

1. People do not really know what they want.
2. Their representatives cannot accurately represent them.
3. There can be no full agreement ergo someone is giving up something.
4. There is no real efficient way of dividing these democratic tasks to accomplish the planning.
5. This ‘planning democracy’ gives way to ‘economic dictators’.

Allow us to go about debunking these vital points for the sake of brevity and a concise explanation for the reader.

1. Hayek consistently makes usage of this idea of “limitless wants” as an impeding factor in the effective planning of an economy, let alone the democratic method of planning. However, he forgets (or simply ignores) that wants are not intrinsic but given. There was no “limitless want” for computers before Microsoft or happy meals before McDonald’s. A democratically planned-economy would not be entirely concerned with these unrealized ‘wants’ which are surely a social construction. The presentation of ‘new wants’ could come about organically through the free innovation of anyone interested and later integrated, perhaps. The main concern of any democratic planning body would be to satisfy the ‘needs’ of everyone concerned. Such a task is far more feasible, predictable, and as mentioned earlier (refer to P. Cockshott’s work) possible with current technology. Ultimately, if Wal-Mart and McDonald’s can safely plan the demand of most consumers one would hope that the collective intellectual, technological, and material resources of humanity could plan and provide for their own physical needs.

2.This is more nonsense speculation on behalf of Hayek. He makes references to failed reformist socialists in Western Europe but misses the point of their failure. Working within the bourgeois forms of representation will certainly offer nothing substantial to the oppressed and exploited. It is for this reason that “representatives” and their bodies of “representation” will be of an entirely new type that satisfies the organic desire of the masses. It is certainly arguable that even past experiences in socialism (such as the USSR and PRC) overcame this obstacle through radical forms of democracy which gave all power to the people.

3. Once again, more baseless assertions and speculation. When most of the useless ‘smoke and mirrors’ of capitalism is done away with, commodity production is eliminated, and the masses are liberated its unlikely individuals will be distraught over realizing their needs like some sort of Amazon shopping cart. The productive capacity will be transformed to the point where everyone’s needs will be accounted for certainly with room for satisfying those life-affirming cultural desires.

4. Bourgeois parliament or congress will have little in common with bodies of real proletarian power. As previous socialist experiments have shown us, these bodies are insufficient in their ability to both represent the real demands of the people and efficiently deliver those demands. It would be entirely fruitless to speculate how tasks might be divided in these democratic bodies however we work with the simple knowledge that the liberated creativity of the masses will carry humanity through these stages of socialism. What we should really be wary of is, is those who doubt the potential of the masses. Such doubt and skepticism of the people usually breeds the right-opportunism which eventually tanks real bodies of proletarian power.

5. It is doubtful that any “economic dictator” under socialism could be worse than your average CEO today. In socialism, labor-power ceases to be a commodity that is simply bought and sold between bidders (capitalists). The organized and collective power of the workers stands a much better chance of mitigating any possible abuse on behalf of some technical planning bureaucrat or authoritarian elected leader. Furthermore, real socialism incorporates the shared administration of the planned-economy by every willing individual which actively works to combat any possible avenues of economic autocracy. Although nothing is given “for sure”, we work with the combined experience of previous failed experiments and all that we understand better now; ultimately, we must trust the possibility of our own liberation over the certainty of our present oppression.

In the end, Hayek is simply casting doubt on the possibility of a ‘successful liberation’ by criticizing proletarian or progressive democracy. He is not, however, questioning the actual predicament which is the exploitation and class struggle within capitalism. The idea is not to have some perfect working blueprint of democracy within socialism. One could argue that the Jacobins among other bourgeois radicals had little understanding of how a bourgeois democracy ‘would actually work’ (as if we could run computer models of liberation or something of the sort) when their respective monarchies came to an end. The question is not whether democracy in socialism “can work” the point is that it must work because what exists now is neither democratic nor acceptable. When the masses come to power they will develop the necessary apparatuses for the maintenance of their own dominance, similar to all significant social revolutions of the past. Speculating upon technical specifics at this point demonstrates nothing but cynicism on behalf of those who doubt the people.

Do we trust the future of liberation? If not we can always settle for our certain and definite oppression within the status quo.


[1] F. A. Hayek. 1944. The Road to Serfdom. p. 83
[2] Ibid. p. 84
[3] Ibid. p. 85
[4] Ibid.
[5] Ibid.
[6] Ibid. p. 89
[7] Ibid. p. 91
[8] Marx, Karl. 1867. Capital. Volume 1; Chapter 25: The General Law of Capitalist Accumulation note: Marx makes special usage of the word “crowd” to describe the way in which small capital is confined. It’s even more remarkable given how accurate this description has maintained even as we now see most small businesses left nothing but petty shops and loyal contracting.
[9] Hayek. 1944. p. 92
[10] Ibid. p. 92
[11] note: This is only one publication on the subject, there have been other equally compelling pieces by the same authors. Including the 1993 publication by the duo entitled Calculation, Complexity and Planning: The Socialist Calculation Debate Once Again. If the reader is still curious as to how such an economy might be planned she should investigate the works of Dr. Cockshott and Cottrell further.
[12] Hayek. 1944. p. 100
[13] Ibid. p. 100
[14] Ibid. p. 101

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