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… is from page 40 of Bruce Caldwell’s excellent Introduction to the 1997 collection of some of F.A. Hayek’s essays and papers (Bruce Caldwell, ed.), Socialism and War [2] (footnote deleted; the internal quotation is from Hayek’s April 1938 Contemporary Review essay, “Freedom and the Economic System”):
Under a system of free markets, each consumer makes his own choices. Under planning, at least some choices must be subject to the ‘general will’. In making these choices, the planners will inevitably impose a code of values on the rest of the populace. Whatever choices are finally made, some members of the society will be made better off and some worse off. Since planners are political appointees who wish to retain power, they will seek ways to justify the choices that they have made. Those who support their choices will be rewarded, and those who oppose them will be sanctioned: “Planning becomes necessarily a planning in favour of some and against others.” In this way authoritarian government tends inevitably to expand beyond the economic and into the political domain. Liberty ends up being sacrificed, even under forms of socialism that may have started out as democratic. Only if democracy is allied with the freedom of choice that inheres in a free market system will it have some hope of survival.