from “The Road to Serfdom”

Friedrich Hayek

By F A Hayek

Those who are so ready to ride roughshod over the rights of small states are, of course, right in one thing: we cannot hope for order or lasting peace after this war if states, large or small, regain unfettered sovereignty in the economic sphere. But this does not mean that a new super-state must be given powers which we have not learnt to use intelligently even on a national scale, that an international authority ought to be given power to direct individual nations how to use their resources. It means merely that there must be a power which can restrain the different nations from action harmful to their neighbours, a set of rules which defines what a state may do, and an authority capable of enforcing these rules. The powers which such an authority would need are mainly of a negative kind: it must above an be able to say “no” to all sorts of restrictive measures.

Far from its being true that, as is now widely believed, we need an international economic authority while the states can at the same time retain their unrestricted political sovereignty, almost exactly the opposite is true. What we need and can hope to achieve is not more power in the hands of irresponsible international economic authorities, but, on the contrary, a superior political power which can hold the economic interests in check, and in the conflict between them can truly hold the scales, because it is itself not mixed up in the economic game. The need is for an international political authority which, without power to direct the different people what they must do, must be able to restrain them from action which will damage others. The powers which must devolve on an international authority are not the new powers assumed by the states in recent times, but that minimum of powers without which it is impossible to preserve peaceful relationships, i.e. essentially the powers of the ultra-liberal “laissez-faire” state. And even more than in the national sphere, it is essential that these powers of the international authority should be strictly circumscribed by the Rule of Law. The need for such a super-national authority becomes indeed greater as the individual states more and more become units of economic administration, the actors rather than merely the supervisors of the economic scene, and as therefore any friction is likely to arise not between individuals but between states as such.

The form of international government under which certain strictly defined powers are transferred to an international authority, while in all other respects the individual countries remain responsible for their internal affairs, is, of course, that of federation. We must not allow the numerous ill-considered and often extremely silly claims made on behalf of a federal organisation of the whole world during the height of the propaganda for “Federal Union” to obscure the fact that the principle of federation is the only form of association of different peoples which will create an international order without putting an undue strain on their legitimate desire for independence. (1) Federalism is, of course, nothing but the application to international affairs of democracy, the only method of peaceful change man has yet invented. But it is a democracy with definitely limited powers. Apart from the more impracticable ideal of fusing different countries into a single centralised state (the desirability of which is far from obvious) it is the only way in which the ideal of international law can be made a reality. We must not deceive ourselves that in calling in the past the rules of international behaviour international law we were doing more than expressing a pious wish. When we want to prevent people from killing each other we are not content to issue, a declaration that killing is undesirable, but we give an authority power to prevent it. In the same way there can be no international law without a power to enforce it. The obstacle to the creation of such an international power was very largely the idea that it need command all the practically unlimited powers which the modern state possesses. But with the division of power under the federal system this is by no means necessary.

This division of power would inevitably act at the same time also as a limitation of the power of the whole as well as of the individual state. Indeed many of the kinds of planning which are now fashionable would probably become altogether impossible. (2) But it would by no means constitute an obstacle to all planning. It is, in fact, one of the main advantages of federation that it can be so devised as to make most of the harmful planning difficult while leaving the way free for all desirable planning. It prevents, or can be made to prevent, most forms of restrictionism. And it confines international planning to the fields where true agreement can be reached not only between the “interests” immediately concerned, but among all those affected. The desirable forms of planning which can be effected locally and without the need of restrictive measures, are left free and in the hands of those best qualified to undertake it. It is even to be hoped that within a federation, where there will no longer exist the same reasons for making the individual states as strong as possible, the process of centralisation of the past may in some measure be reversed and some devolution of powers from the state to the local authorities become possible.

It is worth recalling that the idea of the world at last finding peace through the absorption of the separate states in large federated groups and ultimately perhaps in one single federation, far from being new, was indeed the ideal of almost all the liberal thinkers of the nineteenth century. From Tennyson, whose much quoted vision of the “battle of the air” is followed by a vision of the federation of the people which will follow their last great fight, right down to the end of the century the final achievement of a federal organisation remained the ever-recurring hope of a next great step in the advance of civilisation. Nineteenth-century liberals may not have been fully aware how essential a complement of their principles a federal organisation of the different states formed (3); but there were few among them who did not express their belief in it as an ultimate goal. (4) It was only with the approach of our twentieth century that before the triumphant rise of Realpolitik these hopes came to be regarded as unpracticable and utopian.

¤ ¤ ¤

We shall not rebuild civilisation on the large scale. It is no accident that on the whole there was more beauty and decency to be found in the life of the small peoples, and that among the large ones there was more happiness and content in proportion as they had avoided the deadly blight of centralisation. Least of all shall we preserve democracy or foster its growth if all the power and most of the important decisions rest with an organisation far too big for the common man to survey or comprehend. Nowhere has democracy ever worked well without a great measure of local self government, providing a school of political training for the people at large as much as for their future leaders. It is only where responsibility can be learnt and practised in affairs with which most people are familiar, where it is the awareness of one’s neighbour rather than some theoretical knowledge of the needs of other people which guides action, that the ordinary man can take a real part in public affairs because they concern the world he knows. Where the scope of the political measures becomes so large that the necessary knowledge is almost exclusively possessed by the bureaucracy, the creative impulses of the private person must flag. I believe that here the experience of the small countries like Holland and Switzerland contains much from which even the most fortunate larger countries like Great Britain can learn. We shall all be the gainers if we can create a world fit for small states to live in.

But the small can preserve their independence in the international as in the national sphere only within a true system of law which guarantees both that certain rules are invariably enforced and that the authority which has the power to enforce these cannot use it for any other purpose. While for its task of enforcing the common law the super national authority must be very powerful, its constitution must at the same time be so designed that it prevents the international as well as the national authorities from becoming tyrannical. We shall never prevent the abuse of power if we are not prepared to limit power in a way which occasionally may also prevent its use for desirable purposes. The great opportunity we shall have at the end of this war is that the great victorious powers, by themselves first submitting to a system of rules which they have the power to enforce, may at the same time acquire the moral right to impose the same rules upon others.

An international authority which effectively limits the powers of the state over the individual will be one of the best safeguards of peace. The international Rule of Law must become a safeguard as much against the tyranny of the state over the individual as against the tyranny of the new super state over the national communities. Neither an omnipotent super-state, nor a loose association of “free nations” but a community of nations of free men must be our goal. We have long pleaded that it had become impossible to behave in international affairs as we thought it desirable because others would not play the game. The coming settlement will be the opportunity to show that we have been sincere and that we are prepared to accept the same restrictions on our freedom of action which in the common interest we think it necessary to impose upon others.

Wisely used, the federal principle of organisation may indeed prove the best solution of some of the world’s most difficult problems. But its application is a task of extreme difficulty and we are not likely to succeed if in an over-ambitious attempt we strain it beyond its capacity. There will probably exist a strong tendency to make any new international organisation all-comprehensive and world-wide; and there will, of course, be an imperative need for some such comprehensive organisation, some new League of Nations. The great danger is that, if in the attempt to rely exclusively on this world organisation it is charged with all the tasks which it seems desirable to place in the hands of an international organisation, they will not in fact be adequately performed. It has always been my conviction that such ambitions were at the root of the weakness of the League of Nations: that in the (unsuccessful) attempt to make it world-wide it had to be made weak, and that a smaller and at the same time more powerful League might have been a better instrument to preserve peace. I believe that these considerations still hold and that a degree of co-operation could be achieved between, say, the British Empire and the nations of Western Europe and probably the United States which would not be possible on a world scale. The comparatively close association which a Federal Union represents will not at first be practicable beyond perhaps even as narrow a region as part of Western Europe, though it may be possible gradually to extend it.

It is true that with the formation of such regional federations the possibility of war between the different blocs still remains, and that to reduce this risk as much as possible we must rely on a larger and looser association. My point is that the need for some such other organisation should not form an obstacle to a closer association of those countries which are more similar in their civilisation, outlook, and standards. While we must aim at preventing future wars as much as possible, we must not believe that we can at one stroke create a permanent organisation which will make all war in any part of the world entirely impossible. We should not only not succeed in such an attempt, but we should thereby probably spoil our chances of achieving success in a more limited sphere. As is true with respect to other great evils, the measures by which war might be made altogether impossible for the future may well be worse than even war itself. If we can reduce the risk of friction likely to lead to war, this is probably all we can reasonably hope to achieve.

(1) It is a great pity that the flood of federalist publications which in recent years has descended upon us has deprived the few important and thoughtful works among them of the attention they deserved. One which in particular ought to be carefully consulted when the time comes for the framing of a new political structure of Europe is Dr W Ivor Jennings’s small book on A Federation for Western Europe (1940).

(2) See on this the author’s article on “Economic Conditions of Inter-State Federation” The New Commonwealth Quarterly, vol V, September 1939.

(3) See on this Professor Robbins’s already quoted book, pp. 240 57.

(4) As late as the closing years of the nineteenth century Henry Sidgwick thought it “not beyond the limits of a sober forecast to conjecture that some future integration may take place in the West European states: and if it should take place, it seems probable that the example of America will be followed, and that the new political aggregate will be formed on the basis of a federal polity” (The Development of European Polity, published posthumously in 1903, p 439).

The Road to Serfdom was first published in 1944, when F A Hayek was a professor at the London School of Economics.


Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top