Mike Krieger On Our Road To Serfdom

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The Road To Serfdom, By Mike Krieger of KAM LP

 

As is true with respect to other great evils, the measures by which war might be made altogether impossible for the future may well be worse than even war itself.
- F.A. Hayek in The Road to Serfdom

Those who preach a “New Order” which is no more than a projection of the tendencies of the last forty years, and who can think of nothing better than to imitate Hitler.  It is, indeed, those who cry loudest for the New Order who are most completely under the sway of the ideas which have created this war and most of the evils from which we suffer.

- F.A. Hayek in The Road to Serfdom

I recently finished reading F.A. Hayek’s classic work The Road to Serfdom and quite frankly I was completely blown away.  Its author is one of the greats in Austrian economic thought and he won the Nobel Prize in Economics in 1974.  The Road to Serfdom was first published in Britain in 1944 and in the United States the following year.  I found the book to hold such significant lessons about the dangers of concentrated political and economic organization that I was compelled to write down many of my favorite quotes and passages in the email below.  Where I have found the need to comment I have added “my two cents.”  I suggest everyone on this list buy this book and read it if you have not already and to reread it if you had in the past.  It’s almost scary how he seems to be describing many of the exact same things that are happening today.  I guess that is because as much as things change, human nature never really does.  So we create the same disasters over and over. 

I am about to head out on the road (not to serfdom hope!) and before I do I want to issue a rallying cry to everyone that craves freedom both politically and economically.  We must all at once stop identifying ourselves as Democrats and Republicans.  The elites use these definitions as part of a divide and conquer strategy.  In any event, Bush and Obama seem pretty similar to me anyway.  Two thugs.  We must get back to our roots and what made this country great.  The enemy is not someone from a different political party or a “capitalist” or a “socialist.”  The enemy is collectivist thought imposed on humanity from the top down.  Top down collectivist thought has taken on many forms whether it is Communism or Fascism but in the end what happens is a small ruling elite run the lives of 99% of the population.  Those that resist are killed or imprisoned.  I certainly do not think I have all the answers.  What I do know is that freedom loving people the world over must shed their prior false political identities and together agree on certain key principles.  There is a battle going on between a small highly organized group that wants a collectivist top down structure of world government and they are rushing to put these plans into action.  This is not conspiracy theory it’s very obvious if you open your eyes.  Get your money into real assets and get prepared so that you are not destitute when it comes time to stand up and rebuild.  We can make this world a better place but it’s not going to be easy.  I will be in touch.    

The Road to Serfdom:  Favorite Passages and Quotes

What in the future will probably appear the most significant and far-reaching effect of this success is the new sense of power over their own fate, the belief in the unbounded possibilities if improving their own lot, which the success already achieved created among men.  With the success grew ambition – and man had every right to be ambitious.  What had been an inspiring promise seemed no longer enough, the rate of progress far too slow; and the principles which had made this progress possible in the past came to be regarded more as obstacles to speedier progress, impatiently to be brushed away, than as the conditions for the preservation and development of what had already been achieved.
- Chapter One “The Abandoned Road”

My Two Cents: Basically as mankind advanced and become more free and standards of living advanced, a trend toward idealist and impossible to achieve utopian concepts became increasingly prevalent and the attempts to implement these have actually cause immense suffering and in the process many forgot the actual methods by which the prior progress had actually been achieved.  I think this is a great parallel to the modern United States where we have forgotten the roots of that which made this country great.  An attempts to rediscover those roots is burgeoning with the current Constitutional movement, which I fully endorse.

The complete collapse of the belief in the attainability of freedom and equality through Marxism has forced Russia to travel the same road toward a totalitarian, purely negative, non-economic society of unfreedom and inequality which Germany has been following.  Not that communism and fascism are essentially the same.  Fascism is the stage reached after communism has proven an illusion, and it has proved as much an illusion in Stalinist Russia as in pre-Hitler Germany.
- Quote by Peter Drucker used by Hayek in Chapter Two “The Great Utopia”

Many people, on the other hand, who value the ultimate ends of socialism no less than the socialists refuse to support socialism because of the dangers to other values they see in the methods proposed by the socialists. 
- Chapter Three “Individualism and Collectivism”

Or, to express it differently, planning and competition can be combined only by planning for competition but not by planning against competition.
- Chapter Three “Individualism and Collectivism”

My Two Cents: Planning an entire economy doesn’t work!  Look at the mess China is in.  Believe me, they have a major mess on their hands and if they don’t either appreciate the yuan or back their currency by gold soon I expect a total collapse there.

It should be noted that, moreover, that monopoly is frequently the product of factors other than the lower costs of greater size.  It is attained through collusive agreement and promoted by public policies.
- Chapter Four “The ‘Inevitability’ of Planning”

My Two Cents: Can you say the modern U.S. corrupt and rigged economy.

While there is nothing in modern technological developments which forces us toward comprehensive economic planning, there is a great deal in them which makes infinitely more dangerous the power a planning authority would possess. 
- Chapter Four “The ‘Inevitability’ of Planning”

My Two Cents: And this was written in Hayek’s time.  We must be more vigilant than ever to protect against an authoritarian government since the technology available to them to enforce tyranny is beyond nightmarish.  Why anyone has any trust in the Federal government of virtually any nation to do the right thing is beyond me.
From the saintly and single-minded idealist to the fanatic is often but a step.
- Chapter Four “The ‘Inevitability’ of Planning”

That in a planned system we cannot confine collective action to the tasks on which we can agree but are forced to produce agreement on everything in order that any action can be taken at all, is one of the features which contributes more than most to determining the character of a planned system…It is important clearly to see the causes of this admitted ineffectiveness of parliaments when it comes to a detailed administration of the economic affairs of a nation.  The fault is neither with the individual representatives nor with the parliamentary institutions as such but with the contradictions inherent in the task with which they are charged.
- Chapter Five “Planning and Democracy”

Yet agreement that planning is necessary, together with the inability of democratic assemblies to produce a plan, will evoke stronger and stronger demands that the government or some single individual should be given power to act on their own responsibility…Hitler did not have to destroy democracy; he merely took advantage of the decay of democracy and at the critical moment obtained the support of many to whom, though they detested Hitler, he seemed the only man strong enough to get things done.
- Chapter Five “Planning and Democracy”

My Two Cents: As if dealing with the current inept and corrupt administration is not bad enough.  What we get in the backlash to this administration could be worse.  We must all agree on the Constitution so that we do not put in a demagogue after Obama or in a “crisis” that makes us afraid.

It may well be true that our generation talks and thinks too much of democracy and too little of the values which it serves…Democracy is essentially a means, a utilitarian device for safeguarding internal peace and individual freedom…and it is at least conceivable that under the government of a very homogenous and doctrinaire majority democratic government might be as oppressive as the worst dictatorship…The fashionable concentration on democracy as the main value threatened is not without danger.  It is largely responsible for the misleading and unfounded belief that, so long as the ultimate power is the will of the majority, the power cannot be arbitrary.  The false assurance which many people derive from this belief is an important cause of the general unawareness of the dangers which we face…Democratic control may prevent power from becoming arbitrary, but it does not do so by its mere existence.  If democracy resolves on a task which necessarily involves the use of power which cannot be guided by fixed rules, it must become arbitrary power.
- Chapter Five “Planning and Democracy”

My Two Cents: So prescient.  Don’t fall for the propaganda that because we are in a “democracy” all is ok.  Just look at how the Congress rams through extremely unpopular bills and refuses to pass a real Audit the Fed bill when 80% of the population wants it.  America was founded as a REPUBLIC.  There is a difference.  Look it up.

The more the state plans, the more difficult planning becomes for the individual.
- Chapter Six “Planning and the Rule of Law”

It is the Rule of Law, in the sense of the rule of formal law, the absence of legal privileges of particular people designated by authority, which safeguards that equality before the law which is the opposite of arbitrary government…To produce the same result for different people, it is necessary to treat them differently.
- Chapter Six “Planning and the Rule of Law”

My Two Cents:  There is no rule of law in America.  Obama basically suspended it during the financial crisis.  Remember, rights and the rule of law are always removed by autocratic leadership in a crisis.  Think 9/11 and the financial crisis. 

It may well be that Hitler has obtained his unlimited powers in a strictly constitutional manner and that whatever he does is therefore legal in the juridical sense.  But who would suggest for that reason that the Rule of Law still prevails in Germany?
- Chapter Six “Planning and the Rule of Law”

Nothing would at first seem to affect private life less than a state control of the dealings in foreign exchange, and most people will regard its introduction with complete indifference.  Yet the experience of most Continental countries has taught thoughtful people to regard this step as the decisive advance on the path to totalitarianism and the suppression of individual liberty.
- Chapter Seven “Economic Control and Totalitarianism”

My Two Cents: This is HUGELY important.  Once the FX controls really kick in you will know deep trouble lies ahead.  I expect this within 1-2 years at the latest.

The reader may take it that whoever talks about potential plenty is either dishonest or does not know what he is talking about.
- Chapter Seven “Economic Control and Totalitarianism”

My Two Cents: Potential plenty is a myth used by collectivists since the beginning to market their ideas to a naive public.  It is still used today.  It’s a sham.

To believe that the power which is thus conferred on the state is merely transferred to it from others is erroneous.  It is a power which is newly created and which in a competitive society nobody possesses. 
- Chapter Eight “Who, Whom?”

My Two Cents: Decentralized power is always inherently less dangerous than centralized power.  Nothing is more dangerous than a “global centralized power.”  This is the direction the elite and oligarchs are attempting to take us in to create a neo-feudalism with them and their progeny as the aristocracy.

It is not rational conviction but the acceptance of a creed which is required to justify a particular plan.  And, indeed, socialists everywhere were the first to recognize that the task they had set themselves required the general acceptance of a common Weltanschauung, of a definite set of values.
- Chapter Eight “Who, Whom?”

There is a great deal of truth in the often heard statement that fascism and National Socialism are a sort of middle-class socialism –only that in Italy and Germany the supporters of these new movements were economically hardly a middle class any longer.  It was to a large extent a revolt of a new underprivileged class against the labor aristocracy which the industrial labor movement had created…They were quite ready to take over the methods of the older socialism but intended to employ them in the service of a different class. 
- Chapter Eight “Who, Whom?”

In a society used to freedom it is unlikely that many people would be ready deliberately to purchase security at this price.  But the policies which are now followed everywhere, which hand out the privilege of security, now to this group and now to that, are nevertheless rapidly creating conditions in which the striving for security tends to become stronger than the love of freedom.  The reason for this is that with every grant of complete security to one group the insecurity of the rest necessarily increases.  If you guarantee to some a fixed part of a variable cake, the share left to the rest is bound to fluctuate proportionately more than the size of the whole.  And the essential element of security which the competitive system offers, the great variety of opportunities, is more and more reduced. 
- Chapter Nine “Security and Freedom”

My Two Cents: This is the real reason the welfare state is so dangerous.  It ultimately collapses and then in the chaos and vacuum that follows freedom is often sacrificed.  We must never allow this in the United States.

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 for 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.
- Chapter Ten “Why the Worst Get on Top”

My Two Cents:  Look at how we reward failure.  The Treasury Secretary couldn’t pay his taxes.  What a clown he is and what a clown Obama is for keeping this clown around.

He will be able to obtain the support of all the docile and gullible, who have no strong convictions if their own but are prepared to accept a ready-made system of values if it is only drummed into their ears sufficiently loudly and frequently.  It will be those whose vague and imperfectly formed ideas are easily swayed and whose passions and emotions are readily aroused who will thus swell the ranks of the totalitarian party.
- Chapter Ten “Why the Worst Get on Top”

My Two Cents: We must all work as hard as possible to inform the largest number of people as possible ahead of the collapse so that some when we rebuild the demagogues do not come out on top in the battle of ideas.

Collectivism on a world scale seems to be unthinkable –except in the service of a small ruling elite.
- Chapter Ten “Why the Worst Get on Top”

My Two Cents: G20, Bilderberg Group.  Any secretive group of elites must be examined much more closely by the populace.  Time to grow up.    

To split or decentralize power is necessarily to reduce the absolute amount of power, and the competitive system is the only system designed to minimize by decentralization the power exercised by man over man.
- Chapter Ten “Why the Worst Get on Top”

The principle that the end justifies the means is in individualist ethics regarded as the denial of all morals.  In collectivist ethics it becomes necessarily the supreme rule; there is literally nothing which the consistent collectivist must not be prepared to do if it serves “the good of the whole” because to him the “good of the whole” is to him the only criterion of what ought to be done…There is always in the eyes of the collectivist a greater goal which these acts serve and which to him justifies them because the pursuit of the common end of society can know no limits in any rights or values of any individual.
- Chapter Ten “Why the Worst Get on Top”

The moral consequences of totalitarian propaganda which we must now consider are, however, of an even more profound kind.  They are destructive of all moral because they undermine one of the foundations of all morals; the sense of and respect for truth.
- Chapter Eleven “The End of Truth”

My Two Cents: If you haven’t noticed the mainstream media is full of lies and trite stories.  The government is the most consistent liar I have ever encountered.

It is not difficult to deprive the great majority of independent thought.  But the minority who will retain an inclination to criticize must also be silenced.  We have already seen why coercion cannot be confined to the acceptance of the ethical code underlying the plan according to which all social activity is directed.  Since many parts of this code will never be explicitly stated, since many part of the guiding scale of values will exist only implicitly by the plan, the plan itself in every detail, in fact every act of the government, must become sacrosanct and exempt from criticism. 
- Chapter Eleven “The End of Truth”

In particular, they all (totalitarian systems) seem to have in common an intense dislike of the more abstract forms of thought –a dislike characteristically also shown by many of the collectivists among out scientists.
- Chapter Eleven “The End of Truth”

In any society freedom of thought will probably be of direct significance only for a small minority.  But this does not mean that anyone is competent, or ought to have power, to select those to whom this freedom is to be reserved…The tragedy of collectivist thought is that, while it starts out to make reason supreme, it ends by destroying reason because it misconceives the process on which the growth of reason depends. 
- Chapter Eleven “The End of Truth”

Still less was the cause (of the rise of National Socialism in Germany), as so many people wish to believe, a capitalist reaction against the advance of socialism.  On the contrary, the support which brought these ideas to power came precisely form the socialist camp.  It was certainly not through the bourgeoisie, but rather through the absence of a strong bourgeoisie, that they were helped to power.
- Chapter Eleven “The Socialist Roots of Nazism”

My Two Cents: There is nothing more dangerous than a society where a vibrant middle class is destroyed.  This is happening in America right now and is far and away the most concerning thing I see.  Obama’s polices, intentionally or unintentionally are consolidating power and wealth into a small elite of government officials and corporate oligarchs that want to run your life.

“Conservative Socialism” (and, in other circles, “Religious Socialism”) was the slogan under which a large number of writers prepared the atmosphere in which “National Socialism” succeeded. 
- Chapter Eleven “The Socialist Roots of Nazism”

My Two Cents: George W’s “Compassionate Conservatism” comes to mind.  There was nothing compassionate or conservative about it.  That administration ran America like a bunch of thugs using the “war on terror” as a cover.  Unfortunately, Obama is doing the same thing.

In past ages intellectuals engaged in a disinterested search for universal truths; they searched for ideals that transcended the need of the state or society in which they lived.  In recent times, however, intellectuals have become more and more the handmaiden of political and national causes.  As a result of this betrayal of the intellectuals, extremist political passions had recently become more universal, coherent, continuous, and preponderant. 
- Quote by Julien Benda from her book La Trahison des Clercs used by Hayek in Chapter Twelve “The Totalitarians in our Midst”

My Two Cents: This is a total tragedy and has clearly accelerated in modern times.

The impetus of the movement toward totalitarianism comes mainly from the two great vested interests: organized capital and organized labor.  Probably the greatest menace of all is the fact that the policies these two most powerful groups point in the same direction.
- Chapter Twelve “The Totalitarians in our Midst”

My Two Cents: Obvious parallel to today. Look who has benefited the most under Obama.  The elite use a divide and conquer strategy to keep the serfs bickering on issues away from the big picture.  The truth of the matter is much of big business (especially the large banks) and big unions are so corrupt they are both the enemy of the middle class.  We must step out of the left-right paradigm and see who is really screwing us!

The movement is, of course, deliberately planned mainly by the capitalist organizers of monopolies, and they are thus one of the main sources of this danger.  Their responsibility is not altered by the fact that their aim is not a totalitarian system but rather a sort of corporative society in which the organized industries would appear as semi-independent and self-governing “estates…”But while the entrepreneurs may well see their expectations borne out during a transition stage, it will not be long before they will find, as their German colleagues did, that they are no longer masters but will in every respect have to be satisfied with whatever power and emoluments the government will concede them.
- Chapter Twelve “The Totalitarians in our Midst”

My Two Cents: The big banks and many of our corporate leaders (Warren Buffett in particular comes to mind.  He is such a good actor he should win an Oscar) sold us out to “team up” with a corrupt government in the aftermath of the financial crisis.  They think they will be “winners” with the government.  I have my doubts.  When this thing collapses and the administration needs a scapegoat they will go down and in an epic fashion.

But if the place of the opposition, in public discussion as well as in Parliament, should become lastingly the monopoly of a second reactionary party, there would, indeed, be no hope left.
- Chapter Twelve “The Totalitarians in our Midst”

My Two Cents: This is precisely what we have today with the Republican and Democratic fake choice system.  We are offered coke or pepsi.  We must stand up and say neither.  We want the Constitution. 

Though it is natural that, as the world around us becomes more complex, our resistance grows against the forces which, without our understanding them, constantly interfere with individual hopes and plans, it is just in these circumstances that it becomes less and less possible for anyone to fully understand these forces…But they are mistaken when they carry the comparison further to argue that we must learn to master the forces of society in the same manner in which we have learned to master the forces of nature,  This is not only the path to totalitarianism but the path to the destruction of our civilization and a certain way to block further progress.  Those who demand it show by their very demands that they have not yet comprehended the extent to which the mere preservation of what we have so far achieved depends on the coordination of individual efforts by impersonal forces.
- Chapter Thirteen “Material Conditions and Ideal Ends”

We must now return to the crucial point –that individual freedom cannot be reconciled with the supremacy of one single purpose to which the whole society must be entirely and permanently subordinated.  The only exception to the rule that a free society must not be subjugated to a single purpose is war and other temporary disasters when subordination of almost everything to the immediate and pressing need is the price at which we preserve our freedom in the long run.
- Chapter Thirteen “Material Conditions and Ideal Ends”

My Two Cents: His observation about war is extremely important.  Our leaders understand this.  This is why we have been sold a never-ending “war on terror.”  That way you can always be reminded we are at war so you have to give up this right and that right because someone went on a plane with a firecracker in his underwear.  If someone wants to blow something up they will find a way.  We can’t let fear take us over so much that the government can just poke and prod us like animals everywhere we go.  Freedom in the number one priority in my opinion. 

As the glib phase runs, it must be accomplished “at any price.”  It is, in fact, in this field (the reduction of unemployment) that the fascination of vague but popular phrases like “full employment” may well lead to extremely shortsighted measures, and where the categorical and irresponsible “it must be done at all cost” of the single-minded idealist is likely to do the greatest harm.
- Chapter Thirteen “Material Conditions and Ideal Ends”

My Two Cents: Amazing that he used these exact phrases that you now hear so often from the administration and its minions.  These phrases are not new and we must understand that as well as the dangers those that use them pose to us.

It should never be forgotten that the one decisive factor in the rise of totalitarianism on the Continent, which is yet absent in England and America, is the existence of a large recently dispossessed middle class.
- Chapter Thirteen “Material Conditions and Ideal Ends”

Outside the sphere of individual responsibility there is neither goodness nor badness, neither opportunity for moral merit nor the chance of proving one’s desires to what one thinks right…A movement whose main promise is the relief from responsibility cannot but be anti-moral in its effect, however lofty the ideals to which it owes its birth.
- Chapter Thirteen “Material Conditions and Ideal Ends”

My Two Cents: Morals only exists with the freedom to make such choices. If the government imposes morals and makes the whole of humanity acts in a way the rulers deem “moral” there are no morals and the concept is dead.

It is one of the most fatal illusions that, by substituting negotiations between states or organized groups for competition for markets or for raw materials, international friction would be reduced.  This would merely put a contest of force in the place of what can only metaphorically be called the “struggle” of competition and would transfer to powerful and armed states, subject to no superior law, the rivalries which between individuals had to be decided without recourse to force.
- Chapter Fourteen “The Prospects of International Order”

My Two Cents: Such an amazing quote.  This is precisely why we face a major war right now.  Too much power is concentrated at the top and when the elites of one nation sell out the elites of another nation which always happens at times like this, they start a war.  The elites don’t suffer the people do.  Let’s not let them do this to us.

But one has only to visualize the problems raised by economic planning of even an area such as western Europe to see that the moral bases for such an undertaking are completely lacking.
- Chapter Fourteen “The Prospects of International Order”

My Two Cents: Western Europe would have been difficult enough!  I can’t help but think of the Euro.  What an absurd concept it was.  Be aware that the elite would like to use this crisis to bring in a global currency managed by a global central bank.  You thought the euro was bad.  This is would be the end of all economic and individual freedom on a global scale.  SDRs are just another fiat scam joke.  We must never ever agree to it.

If most people are not willing to see the difficulty, this is mainly because, consciously or unconsciously, they assume that it will be they who will settle these questions for others, and because they are convinced of their own capacity to do this justly and equitably.
- Chapter Fourteen “The Prospects of International Order”

My Two Cents: The most dangerous people are those that think they “know best.”  This attitude is the DNA of dictators.

Planning on an international scale, even more than is true on a national scale, cannot be anything but a naked rule of force, an imposition by a small group on all the rest of that sort of standard and employment which the planners think suitable for the rest.
- Chapter Fourteen “The Prospects of International Order”

What these dangerous idealists do not see is that where the assumption of a moral responsibility involves that one’s moral views should by force be made to prevail over those dominant in other communities, the assumption of such responsibility may place one in a position in which it becomes impossible to act morally. 
- Chapter Fourteen “The Prospects of International Order”

My Two Cents:  This is the ultimate contradiction of the idealistic planners.  Their good intentions end up creating the highest of degrees of human suffering.

It is significant that the most passionate advocates of a centrally directed economic New Order for Europe should display, like their Fabian and German prototypes, the most complete disregard for of the individuality and of the rights of small nations.
- Chapter Fourteen “The Prospects of International Order”

My Two Cents: Any leader that talks of a “New Order” must be seen as potentially very dangerous.  It was used by Hitler and others often back in Hayek’s days.

We shall all be gainers if we can create a world fit for small states to live in.
- Chapter Fourteen “The Prospects of International Order”

Neither an omnipotent superstate nor a loose association of “free nations” but a community of free men must be our goal.
- Chapter Fourteen “The Prospects of International Order”

Have a great long weekend,
Mike