… is from page 217 of F.A. Hayek’s November 1941 Nature paper, “Planning, Science and Freedom,” as this paper is reprinted as chapter ten of the 1997 collection, splendidly edited by Bruce Caldwell, Socialism and War:
It must indeed be admitted that if we wanted to make the distribution of incomes between individuals and groups conform to any predetermined absolute standard, central planning would be the only way in which this could be achieved. It could be argued – and has been argued – that it would be worth putting up with less efficiency if thereby greater distributive justice could be obtained. But unfortunately the same factors which make it possible in such a system to control the distribution of income also make it necessary to impose an arbitrary hierarchical order comprising the status of every individual and the place of practically all values in human life. In short, as is now being more and more generally recognized, economic planning inevitably leads to, and is the cause of, the suppression of individual liberty and spiritual freedom which we know as the ‘totalitarian’ system.