Overview
In "The Road to Serfdom", Friedrich Hayek warns the reader that governments that gain too much power form a slippery slope towards socialism and how socialism always decays into totalitarianism. Using his personal experiences from living in Nazi Germany as well as examples of the Soviet Union, Hayek warns readers of the events that led up to total government control and specifically warns the United States and England about events taking place within their nations that are similar to the events that took place in Germany.
Empty Promises
First of all, socialist governments have the advantage of being able to promise great things without being held accountable if their plans fail. For example, if a socialist policy guarantees that all workers earn a minimum wage, it does not have to care if it prints money that causes the actual currency to be devalued. It does not matter if the minimum wage is $50 per hour if one cannot afford to live off of $50 per hour due to an increase in inflation. In addition, socialism also creates an environment that stifles competition, especially if companies are government-owned. This can also contribute to inflation and reduces the options that consumers have in the market which means that consumers are effectively worse off. While socialism wants to promise equality, financial stability, and safety, among other things, society actually ends up worse off than they were before the government intervention. This is due to the devaluing of currency, lower competition in the marketplace, and a loss of individual liberty.
Liberty
As stated previously, society is worse off if individuals lose their individual liberties. In particular, socialism likes to trample on people's right to criticize the government and to own private property. A nation that is unable to criticize its government is at the whim of whatever those in charge decide. For example, the Nazis could commit genocide and there was effectively nothing those that opposed it could do within the country. Even scarier, however, is how socialism can convince millions of people that unspeakable acts are okay or even necessary. Somehow, millions of people in Germany were convinced or pressured into joining the Nazi party and ignored or even facilitated the holocaust. In addition, socialism seems to have an aim of abolishing private property, which in my opinion, is one of the most important liberties that individuals have. Without private property, individuals have nothing to their name and are at the whim of government policy. In addition, private property is used to produce the goods that consumers want and need. The government cannot be trusted to run private businesses effectively or efficiently. The abolition of private property would effectively destroy any economy.
What can we learn from Germany?
Hayek claims that the Nazis came into power in Germany because of the extinction of liberalism in the country. Essentially, socialism paved the way for the rise of Hitler. In my opinion, nations leaning towards socialism should take a hard look at historical evidence that shows how corruptible and ineffective socialist governments are at helping people. While many may be uncomfortable with an unregulated free market, these markets actually provide consumers with better products and services than heavily regulated ones and are almost immune to centralized corruption. Centralized power in the form of government control, however, has ended in corruption every time it has been tried.
Friedrich, A. H. (2005). The road to serfdom. Institute of Economic Affairs.