… is from pages 110-111 of the 2007 Definitive Edition (Bruce Caldwell, ed.) of F.A. Hayek’s classic 1944 book, The Road to Serfdom; specifically, it’s from chapter 5, which is titled “Planning and Democracy”:
The fashionable concentration on democracy as the main value threatened [by government-directed resource allocation] is not without danger. It is largely responsible for the misleading and unfounded belief that, so long as the ultimate source of power is the will of the majority, the power cannot be arbitrary. The false assurance which many people derive from this belief is an important cause of the general unawareness of the dangers which we face.