ȃǿȃ Partʺʺ: Politics and Philosophyfor those who have been brought up in a different tradition. (Hayek
ȀȈȃȃ/ȀȈȄȅ, p.ȀȃȈ)Besides delving into psychology, Hayek goes further than Jöhr into the
history and interconnections of ideas. He makes more allusions to people,
events, and literature. He considers the allegedly inexorable decline of
competition and the supposed necessity of planning for that reason. He
describes the positive accomplishments of a price system. Anticipating
chapterȅof hisĻe Constitution of Liberty(ȀȈȅǿ), he presents the case
for allowing market incentives to guide the allocation of resources, effort,
and risk-bearing rather than trying to make the distribution of income
correspond somehow to judgments of moral merit.
Ļe Road to Serfdomforeshadows many of Hayek’s later writings and
could serve as an introduction and summary. Over his lifetime his work
shows continuity. In his writings, as I know them, he has had to reverse
himself on remarkably little. Ļis is not to say that he is stuck in a rut,
reciting earlier formulations—not at all. His thought has developed, but
largely through his deepening of earlier insights and extending them to
new fields. With regard to the degree of economic intervention he favors,
he has evolved if anything in a laissez-faire direction, as illustrated by
his proposals for taking even the monetary system out of the clutches of
government.
Ļe Road to Serfdomexplains the perverse consequences of government
measures to shelter individual sectors of the economy against the adverse
impact of change. Already inȀȈȃȃ, Hayek had begun to grasp some points
later elaborated by Mancur Olson in hisĻe Rise and Decline of Nations
(ȀȈȇȁ). Ļe longer a society enjoys peace and stability, the better organized
economic interest groups become and the more successful in lobbying
the government for special privilege and for protection against domes-
tic and foreign competition. Economies become sclerotic, with adverse
consequences for productivity, growth, and macroeconomic performance.
Olson was able to explain much recent economic history with this simple
insight.
Hayek had already explained how anticompetitive restrictions impose
all the more of the burden of change on occupations outside the favored
ones.
In consequence, instead of prices, wages, and individual incomes, it is
now employment and production which have become subject to violent
fluctuations.... Few catchwords have done so much harm as the ideal of