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Really? The Road to Serfdom?

Posted By Russ Roberts On November 8, 2012 @ 11:28 pm In Charity,Civil Society | Comments Disabled

In this recent post [1] I gave some post-election thoughts. I was trying to cheer up those of us who are alarmed at the road we appear to be heading down. One commenter, Jamie Newman wrote in response:

You guys have been forecasting the arrival of universal serfdom for about as long as the left has been predicting the collapse of capitalism. Is the Road to Serfdom gridlocked? Did someone forget to gas the car? Has our dashboard GPS unit failed? Or our we just moving really slowly, the better to take in the scenery?

I mean, come on. I’m guessing that that you, the readers of this blog are among the freest people in human history. You are free to go pretty much anywhere in the world you wish to go, free to buy pretty much anything that’s available for sale anywhere, free to think anything you want, say anything you want, read anything you want, watch anything you want on TV. And even after you’ve paid for all those dinners in nice restaurants, vacations in nice places, and homes in nice subdivisions, you still have enough left over to own shares of Apple or Google. You’re paying less in taxes than you have in decades. If you get really sick, or suffer a serious injury, you will receive top quality medical care than will not leave you penniless even though you might never be able to pay the full cost of your care yourself– thanks largely to the pre-eminently socialist institution known as “insurance.” And even if you’ve not made or saved lot of money in your lifetime, you will not be destitute in your old age, and you will not be allowed to die like a dog in the street. And so on.

Maybe I’ve missed something. But an itemized list liberties of which you have been deprived, or that you are at risk of losing, might help me get up to speed.

Now I was actually pretty calm about the road to serfdom in the post. I didn’t say we were well down the road or anything like that. Nor did I claim that the current trend inevitably means we’re going to lose our freedom. I claimed the opposite in fact: if we work hard to educate and inspire we can put the country on a different path.

But I want to interpret Jamie’s comment in a different way. He’s really asking what’s the big deal with the last four years or the four years to come. Is it really so bad? Why are those of us who claim to love liberty so concerned about the path of the country? Most of us have a good life here and that is another reason to be pretty cheerful. Things really are pretty good in the United States. They were good before Obama got elected and they’ll likely be good even after his next four years. So why are we so alarmed and anxious? Before I try to do that, I want to correct one factual error in Jamie’s description. Our taxes aren’t lower than they’ve been in decades. They’re higher. Income tax rates are lower for everybody, particularly low-income earners [2] (unless we go over the fiscal cliff and the Bush tax cuts expire.) But the amount the Federal government  spends is so much higher and the deficit is so much larger so to use current tax rates is misleading. We have an enormous tax burden in the future that we have pretended doesn’t exist.

But what about the general quality of life? It is pretty good and has been for some time. And it keeps getting better. Most of the time, anyway. So why are those of us who love liberty so upset with the state of the country? Shouldn’t we just chill out and enjoy the ride? What’s so bad about big government?

You’re right. Life is good for me. I am in a field that is in high demand, partly because of the depredations of government. Government’s coddling of the financial sector has boosted the demand for economists and that helps economists who don’t work in the financial sector, too. When I began as an assistant professor of economics, I made about $19,000. Today, a starting assistant professor evidently makes something in the $90,000–$100,000 range. That is well above the rate of inflation. I make more than that. So life is good.

But I worry it won’t be so good for my children. We’re becoming more like Europe. I don’t know if you’ve looked lately but Europe isn’t doing very well. The last time I looked, unemployment in Spain was 25%. Most Europeans still have a good life, but I don’t like the trajectory and I’d hate to look for work as a teenager. It’s not a very dynamic place. Yes you can read what you want and eat good food in good restaurants if you have a job. And because of the generosity of the welfare state, you can even enjoy those freedoms without a job. But I’m not sure it’s going to last very long.

So I’m worried about the US becoming a less dynamic place to work and live. I worry my kids will struggle to find ways to fully express their potential. But to be honest, I’m less worried about my kids and more worried about the kids of other people. My kids have lots of advantages. They read. They have decent DNA. They go to a demanding school where they learn something most days. Their parents know lots of people who can open doors for them.

A lot of kids don’t have those advantages. Their schools are awful. Their teachers are less than highly motivated. The teachers are protected from alternatives. And unfortunately, the teacher’s union is a very powerful part of the Democratic party. The NEA recently sent me an email about the great victories on election day:

Educators—74 percent of whom are women—played a key role in these victories. NEA members live in every state, in every Congressional district, and in every precinct, and one in every 78 voters is an NEA member. NEA was the first union to endorse President Obama for a second term, and nearly 500,000 NEA members signed up in some way to be involved in the Obama For America campaign.

The public school teachers are one protected group. They are not alone. Equally unhealthy is the protected status of the financial class. Republicans and Democrats are both friendly to the investment banks and their executives. Then there are the farmers. Public unions. The autoworkers. The green energy industry. All of these groups get special treatment, special favors, protection from competitors.  That divides us into those with special privileges and those without. It is very corrosive for democracy and for capitalism. And it makes us poorer. More energy goes into being in the protected class. Less energy is left over for productive activity serving others. Another way to say it–more energy put into zero-sum activity and less energy put into making everyone better off.

But you’re right. Life is pretty good for most of us. I mainly worry about keeping it that way–keeping the system of profit and loss that drives innovation and our standard of living. I care about that partially because it’s nice to have material comfort, but mostly because I think it allows us to flourish as human beings.

Finally, the rise of big government in the 1930′s in the United States that took a great leap upward in the 1960s and pretty much keeps going no matter who is in office has been very damaging to civil society–to the voluntary connections we make to help one another. I want collective action that is voluntary not coerced. I want people to have the incentive to come together and help others. Government takes my money and gives it to other people. Sometimes it’s good people. But sometimes it’s not. So it doesn’t just replicate what I would have done already. It distorts it. But more importantly it discourages the deeply human ways we help one another as friends and family. I don’t want to romanticize private charity or the way families work. They’re both deeply flawed and imperfect. But big government destroys those systems of interaction and help. Big government makes it cheaper to be on our own. It makes it cheaper to avoid helping others because the government is doing it already.

As I wrote in this post [3]:

Being against government help is not the same as being against any kind of help. Why is this so hard for people to understand? Is the misunderstanding deliberate and malicious or does it just reflect a lack of imagination?

But what about people without friends or family? If government got out of the way, there would be more organizations to help people without friends and family. And we’d be better better friends and better family members if government was less paternalistic.

So you’re right. I don’t think we’re close to serfdom. But we’re close to lots of things I don’t like, things that come from big government that I think are destructive of the human enterprise, things that come from the centralization of power, things that come from romanticizing the political process and romanticizing how much it represents us. It doesn’t represent me. It doesn’t serve me. It serves the powerful.

I want a smaller government. I want power to be more dispersed. I want an economy of real capitalism and not crony capitalism, where big investors can not just profit but also fail. And I want government to get out of the way and “let us discover the most valuable ways to serve one another [4]“–not just in commercial interactions but in how we relate to each other when we are poor, when we are old and when we are sick.

So yeah, I’m free to read what I want, eat what I want (more or less at least for now) and go where I want. And I have a good salary and lots of stuff. That’s not all I care about.

We’re not on the road to serfdom, at least right now. But wherever we’re headed isn’t where I’d like to go. It may be pleasant enough, materially, at least for people like me. But we can do better.

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URL to article: http://cafehayek.com/2012/11/really-the-road-to-serfdom.html

URLs in this post:

[1] this recent post: http://cafehayek.com/2012/11/some-post-election-cheer-and-encouragement.html

[2] Income tax rates are lower for everybody, particularly low-income earners: http://www.cbo.gov/sites/default/files/cbofiles/attachments/effective_rates_0.pdf

[3] this post: http://cafehayek.com/2012/08/romneys-speech.html

[4] let us discover the most valuable ways to serve one another: http://www.youtube.com/watch?v=GTQnarzmTOc

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