"ROAD TO SERFDOM, THE" (F.A. HAYEK) & "THE AFFLUENT SOCIETY" (JOHN GALBRAITH).   Term Paper ID:19344 Click to get this paper

Essay Subject: Compares former's free market economics & latter's mixed-economy socialism.... More...

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Paper Abstract: Compares former's free market economics & latter's mixed-economy socialism. Paper Introduction: This study will compare and contrast two works on economic theory --- F.A. Hayek's The Road to Serfdom and John Kenneth Galbraith's The Affluent Society. The study will consider the common elements of mixed-economy socialism (as described in Galbraith's book) and free market economics (as advocated by Hayek); the disagreements of the two authors; ways in which their ideas are reflected in any modern economic or political structures; and this reader's view on the legitimacy of the two authors' approaches to the questions raised. The basic difference between the two books is that Galbraith argues for some measure of social planning which diverges from a strict free market economy, while Hayek argues from a more purely ideological viewpoint and sees any social planning as a surefire means of economic suicide for capitalism. Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. 26). Hayek's The Road to Serfdom and John Kenneth Galbraith's The AffluentSociety. If the world wereindeed composed of purely free market economies/democracies on the onehand, and socialistic/totalitarian government/societies on the other hand,then perhaps Hayek's argument would be more persuasive. For example, Hayek writes, "Our freedom of choice in a competitivesociety rests on the fact that, if one person refuses to satisfy ourwishes, we can turn to another. And an authority directing the whole economic system would be themost powerful monopolist conceivable" (Hayek, 1972, p. In fact, that is precisely the doctrine which prevails today in thecapitalist societies. For example, Hayek essentially argues that socialism in any form isakin to Hitlerism because it takes freedom away from the individual ---both the individual as capitalist and the individual as consumer --- andputs that freedom in the hands of the state. Hayek does not truly address the problems of socioeconomic andpolitical injustice in the capitalist society. To Galbraith, it is vital that such steps be taken, inthe name of the poor and in the name of peace. Hayek comes from a place of fear and desiresto put his reader in a similar position of fear in order to persuade thereader of the correctness and urgency of his argument. To Hayek, such argumentsare distractions from the central concern --- the maintenance of freemarket economics in all its purity. It would be misleading to refer to Galbraith's argument as anargument for "mixed-economy socialism." At the same time, he is clearlymore sympathetic to certain socialistic elements than is Hayek,particularly those elements which show concern for those who do not sharein the affluence of the free market economy. . Any inroads made by socialism --- nomatter how noble-appearing the problem or the cause --- are to Hayek thebeginning of what will eventually develop into certain doom and destructionfor the free market system of economics and for the democratic governmentwhich he sees as the natural accompaniment of that economic system. But if we face a monopolist we are at hismercy. But it is wellworth saving from its own adverse or destructive tendencies" (Galbraith,1984, p. Hayek, F.A. And there is the likelihood that . However, this argument ignores the success --- or atleast relative success---of the mixed economy societies of Europe. In his attack on socialism, however, he fails toforesee changes in the capitalist world which, ironically, have brought topass the very elements he feared would be created by socialism. Whatweakens Hayek's argument most is his utter refusal to consider even thepossibility that a mixed economy society can exist without immediatelybeginning the slide into totalitarianism. . . There are mixed-economysystems as recommended by Galbraith --- including Great Britain,Switzerland, Sweden, and others, and none of those nations shows theslightest sign of developing into the totalitarian states predicted byHayek. When Galbraith arguesthat "The second effect of affluence [Galbraith sees affluence as the realgoal of capitalism] is that out of great well-being come the resources forthe production of weapons of ever increasing danger, ever greater capacityfor devastation" (Galbraith, 1984, p. However, as the world has seen in the aftermath of World War II,affluence or capitalism is not a required element of a society orgovernment which seeks to develop a powerful military. However, taken as a whole, Galbraith's arguments are far more well-reasoned than those of Hayek. . This study will compare and contrast two works on economic theory ---F.A. Leading capitalists indeed argue, as in the UnitedStates in the Reagan-Bush era, that the government which is asked toperform socialistic activities, which is asked to enforce a welfare state-oriented economy, will be taxed into impotence, and all will suffer as aresult. iii).If there is any doubt that Hayek's terrible fear and hatred of socialismare rooted in his association of socialism with Hitlerism, Hayek makesclear that there should be no such doubt: "If we are to build a betterworld, we must have the courage to make a new start . The basic difference between the two books is that Galbraith arguesfor some measure of social planning which diverges from a strict freemarket economy, while Hayek argues from a more purely ideological viewpointand sees any social planning as a surefire means of economic suicide forcapitalism. (1984). (1972). That is, he is concerned with battling the propaganda ofsocialism with the propaganda of capitalism. He barely acknowledgestheir existence, and even then only to argue that any socialistic effortsto correct those injustices will create more problems than they could everbegin to solve. the danger that, withaffluence, we will settle into a comfortable disregard for those excludedfrom its benefits and its culture. References Galbraith, John Kenneth. Poor nations of everypolitical and economic stripe around the world have concentrated onbuilding up their military in the face of overwhelming poverty andinjustice at home. . In effect, the free marketsystem brings about many of the undesirable economic and political elementswhich Hayek predicted would be created by the socialist government. The road to serfdom. It is, indeed, those who cry loudest for the New Order whoare most completely under the sway of the ideas which have created this warand most of the evils from which we suffer . . two major effects of affluence that I would nowwish especially to emphasize. He accepts the fact that it is an imperfectworld, and that we are morally obliged to deal with the real problemscreated by affluence. The affluent society. Hayek wrote his book in the early spring of 1944, in the midst ofHitler's rampaging through Europe and,the general horror of World War II.As Hayek himself writes: " . This requires steps be taken which areoutside the purview of capitalism, steps which are borrowed from thesocialist approach. The demand for the newfreedom was thus only another name for the old demand for an equaldistribution of wealth" (Hayek, 1972, p. The breakdown ofthe non-affluent Soviet Union can be seen in part as a result of themilitary build-up of that nation since World War II. . Both Hayek and Galbraith focus in their arguments on the problem ofinequality in the capitalist system. Whereas Hayek is determined to rage against any form or sign ofsocialism whatsoever, Galbraith recognizes that something must be done todeal with the inequities and flaws of capitalism. The world is not black-and-white politicallyor socially or economically as the ideologue Hayek would have us believe. 3 -31). 262). There is no doubt that socialism has many problems, and this critiqueis not meant to be a defense of socialism by any means. This argument ignores the realworld and focuses instead on extreme examples, as is the tendency ofpropaganda for one side or the other. One is to resist the tendency of recent times, which is, as sooften before, to find social doctrine that limits or rejects the socialclaims of the poor. In that context, we read: "What the promise (of the socialists)really amounted to was that the great existing disparities in the range ofchoice of different people were to disappear. It is ironic that Hayek is the one who is mostadvocating a Utopian blueprint for government and economics, and Galbraithis the one who is most realistic and moral about the world and the peoplein that world. 26). At thesame time, the free market system fails to address many of the inequitieswhich exist in every society and which are exacerbated by growingmonopolies and corporate-government relations. He wishes to define the termsof the battle, and will not bend to consider seriously or in-depth theargument of the other side. .we will develop a doctrine to justify the neglect." As an example of thatdoctrine, Galbraith notes "the argument that stresses the inefficiency ofgovernment and sees its costs and taxes (those for defense apart) as athreat to liberty" (Galbraith, 1984, p. . In any case, Hayek fails to see that the freedom of choice in adeveloping capitalist society is increasingly diminished as the giant firmsswallow up the smaller firms and set prices in collusion, supported by thewealthy capitalists who run the government. . No truly effective argument can be made if the advocate of a positionoperates essentially either out of fear or of underestimation of theintelligence of the audience. This book gradually took shape as awarning to the socialist intelligentsia of England" (Hayek, 1972, p. . In other words,Hayek argues, the socialists offer freedom to the masses in the form ofpower and/or wealth, but in fact those socialists take away freedom andpower from individuals and gather it unto themselves in the name of thestate. He charges that the socialistdream (he would call it a nightmare), the "Great Utopia," is based on thepromise of power or wealth to those who do not have it, and that power orwealth is the equivalent of freedom (Hayek, 1972, p. The difference is that Hayek's argument isideological. 262). Hayek fails to foresee the monopolies which would come to dominatethe capitalist societies as the smaller companies were increasingly forcedout of business by the growing firms, particularly when those giant firmswere closely associated with the governments of the capitalist nations.Hayek failed to see that close association and the role that governmentwould play in such a capitalist society, as opposed to the role which hedescribes again and again for the government in a socialist society. New York:New American Library. Hayek spends much of his time berating the socialists whoseek such a perfect world, but he is in fact the one who should preserve atany cost the purity of a Utopian capitalism which exists only in his ownmind. However, aspainted by Hayek, socialism is, or would be if it were fully unleashed uponthe world, the source of all problems in the world, in economics, inpolitics, and so on. There is first . . He sees the battle as oneof propaganda, and he clearly means to battle socialist propaganda withpropaganda of his own: "While to many who have watched the transition fromsocialism to fascism at close quarters the connection between the twosystems has become increasingly obvious, in the democracies the majority ofpeople still believe that socialism and freedom can be combined" (Hayek,1972, pp. Galbraith, on the other hand, not only addresses such problemsdirectly and compassionately and reasonably, but also offers a message,albeit indirectly, to Hayek in his conclusion: "So I leave the reader withtwo pleas. It should be noted that the times in which the two books were writteninevitably had much to do with the nature of the books and the attitudes ofthe authors, although it should be also noted that neither author disclaimshis book today, some decades after writing. In fact, Hayek would love to return to the previous century, wherethe poor and the disadvantaged had no voice and no advocates in high placesand no organization and could not bother the capitalist in his palace.Hayek equates any socialist idea with Hitlerism, and in his eagerness todestroy socialism he fails to see that there are many problems with "pure"capitalism or unbridled free market economics. Galbaith, on the other hand, presents a reasoned argument that whilethe free market is certainly the desirable economic system for thoseseeking freedom, there are nevertheless problems with capitalism thatcapitalism alone cannot fix. Instead let us put elimination of poverty in theaffluent society strongly, even centrally, on the social and politicalagenda . . Galbraith, on the other hand, acknowledges both the problems inherentin an affluent capitalist society, as well as the dangers of socialisticapproaches to those problems. . Hayek might point to the Soviet Union and the countries of theSoviet bloc and argue that their fall makes clear that socialism is afailure and should never be applied in any form whatsoever by thecapitalist nations. 93). So Galbraith is simply incorrect when he argues thataffluent capitalist nations will alone build up their military forces. The argumentcertainly must have been more persuasive when made under the shadow ofHitlerism than it is today, in a world full of examples of the relativesuccess of mixed economies. The study will consider the common elements of mixed-economysocialism (as described in Galbraith's book) and free market economics (asadvocated by Hayek); the disagreements of the two authors; ways in whichtheir ideas are reflected in any modern economic or political structures;and this reader's view on the legitimacy of the two authors' approaches tothe questions raised. Hayek essentiallyfocuses on the dangers of any government interference in the economywhatsoever, and as a warning against such interference he holds up thehorrors of Fascism and Totalitarian Communism. It is not thosewho believe in inevitable tendencies who show this courage, not those whopreach a 'New Order' which is no more than a projection of the tendenciesof the last forty years, and who can think of nothing better than toimitate Hitler. In his warning about the negative impact of capitalism, Galbraithwrites, "There are . He is incorrect in oneregard, however, although in most instances, this reader would agree withhim far more than with the near-hysterical Hayek. The guiding principle thata policy of freedom for the individual is the only truly progressive policyremains as true today as it was in the nineteenth century" (Hayek, 1972, p.24 ). The affluent society is not without flaws. The fact is that there are no truly free market systems in anythingresembling the purity recommended by Hayek. However, after that point ofsimilarity, there is little agreement in the two books. 263). Chicago: University ofChicago Press.----------------------- 11 If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.

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