Friedrich Hayek

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Gus Dizerega:

"In making his case, Hayek distinguished between what he would later call spontaneous orders and organizations created to pursue specific purposes. A market system established procedural rules common to all but silent as to the specifics of what anyone might pursue within their framework. These rules facilitated voluntary agreement among status equals. The resulting price system created a distributed network of information sending signals as to where resources might be most effectively deployed compared to alternatives. Broad systemic information was simplified into prices able to assist decisions ultimately based on local and irreducibly individual knowledge. As an alternative to the market, central planning subordinated local information to directives originating from the top of a hierarchy. It inevitably concentrated control at the top, divorced from most citizens, and from any local or tacit knowledge they possessed. The necessity of subordinating the economy to direction from the top would inevitably favor the ruthless, as he explained in a chapter titled “Why the Worst Get on Top” (1944, pp. 134-52).

Hayek contrasted these two ways of conceiving society as individualist and collectivist, the first based on individuals’ freedom to use their knowledge in ways of their own choosing, the second subjecting them to centralized direction in service to a large group. Collectivist ideologies valued individuals in terms of their ability to serve the whole, but a whole defined in different and competing ways. Hayek analyzed collectivism from two perspectives, ideological and systemic. Hayek distinguished three basic collectivist ideologies: nationalism, racialism, and classism (1944, p. 140). When he wrote, Nazi Germany and Communist Russia were the two dominant collectivist societies.

The Nazis believed people were of value to the degree that they served Aryan supremacy. The Communists valued people in terms of their service to the proletariat. Nationalist collectivism long outlived the other two. While often equated with the Nazis, with whom the Italian Fascists were allied, nationalist collectivism served other values, and remains important in many countries. Hayek argued every collectivist system “has two central features . . . the need for a commonly accepted system of ends of the group and the all-overriding desire to give to the group the maximum of power to achieve these ends . . .” (1944, p. 146). Collectivist political systems sought to implement collectivist ideologies, and to do so they needed to create and maintain a strong state able to dominate society as a whole. Totalitarianism, a term coined by collectivists themselves, described unchecked organizational power, or what Hayek later called taxis. In Benito Mussolini’s words, totalitarianism meant “all within the state, none outside the state, none against the state” (Editors, 2019). One set of values dominated all others, and a society’s strongest organizations existed to enforce them.

While modern collectivisms were justified in terms of an ideology, the ideology itself was interpreted by the ruling organization and, in practice, by those who controlled it. Serving the Aryan race meant serving the Nazi Party, which served Hitler. Serving the proletariat meant serving the Communist Party which, at its totalitarian height, meant serving Stalin. Mussolini never achieved such control over what serving the nation meant, but came close. In short, collectivism is an ideology and its expression is an organizational system able to dominate all others." (

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