Friedrich A. Hayek's “The Road to Serfdom” is the clearest rationales for why limited and independence government is necessary for the prosperity and development. Written at the end of World War II, Hayek was concerned about the rise of dictatorial governments and he had a personal experience in the vagaries of totalitarianism. In reality, most of our issues are human problems and these governments tend to make them more difficult rather than solve them.
Hayek was worried that people would support their concept that government involvement in all parts of life was the signal of the future. Hayek’s whole book is an argument against such concepts and an effort, mostly proven, that active government development of peoples lifestyles and economies is a bad idea that may lead straightly to the empty mindless pit of communism and fascism. People should be cautious when supporting a role for central government in economies and in other areas where they impact upon public freedom. He states that there is no active and positive task for governments in economies. This is made simple by Hayek when he states that the "state planning of economies" must be avoided.
States taking a positive role in planning of production, progressive taxation of companies, expropriation of industries, and the planning for development of cities with minimal private input are all things that he prohibited because they could be the thin wedge of a future dictatorship and could lead to ineffective economies of scale. In short if carried to an extreme as in Mao's China and Soviet Union, they lead to Serfdom.
In “Road to Serfdom“, Hayek shows that a system of free markets helps the survival of a free people. People within that system might use that independence for good or bad things, but the system itself leaves all people free. Under Socialism, the dictatorial ends are contained within the means. The whole system itself demands that people should not be free and independent. Hayek was not just making this whole material up in the abstract; he knew exactly what he was writing about totally based on the terrible and awful reality of planned economies.
In this book Hayek summarizes the rationales why capitalism will always be more efficient and successful than socialism. He rationally explains the beauty of socialism to the majority of Europe's present literati and other scholars; and why, without impugning the sincerity of their values and anxiety for humanity, their trust and hopes in the capability of socialism to create a brighter and better world for the people's of the earth is premature.
In short, Hayek demonstrates the natural contradiction between a command economy and freedom, and the inevitable descent of socialism into dictatorship. The accuracy of his forecasts of the long-term results of communism were strange, and a strong warning against attempting this system yet again.
"The Road to Serfdom" is a perfect book about history, economics, socialism, fascism, capitalism, and the Holocaust. Most significantly, the book also talks about how the Holocaust came to happen. The Holocaust did not just come about quickly. Instead, it was the outcome of years of government control and planning and. The Holocaust was the final outcome of the real world implementation of the ideas of socialism. Under socialism, property rights do not exist at all. And in the absence of property rights of people, no other rights can exist.
Hayek was a man ahead of his time, even at a time when the brightest and the best of the United States leaned heavily on solutions of socialist origin for complex national and global problems and issues. Hayek emphasized that these solutions and cures are not appropriate and are valid for only short period.
It is especially enjoyable to read this remarkable book after the fall of the Soviet Union and the collapse of socialism proved by history. When Hayek wrote this book in 1944, the economic part of the political atmosphere was steeped in Keynesian thought, and Hayek’s writing was almost ignored. After fifty-eight years, there is now little confusion about who was right.