F.A. Hayek’s The Road to Serfdom is one of the more compelling and accessible books in the Austrian economic tradition. The bulk of the book makes the argument that central planning and interventionism inevitably lead to authoritarianism in the plain language that influenced the sale of over 350,000 copies.

Towards the end of the book, he deals with the undeniable authoritarians of his time and casts the national-socialist movement as one built on disgust with liberalism. Born in Vienna and educated at the University of Vienna, he draws on an intimate education in the German socialist tradition to illustrate its origins as fundamentally reactionary to laissez-faire, specifically to its mercantile British proponents. He includes in this lineage the Nazi Party, who were in power at the time he wrote the book.

The doctrines which had guided the ruling elements in Germany for the past generation were not opposed to the socialism in Marxism, but to the liberal elements contained in it, its internationalism and its democracy.

His first case study is Werner Sombart, who Friedrich Engels called the “first German university professor, to see in Marx’s writings, what Marx actually said.” Having done his dissertation on Marx, Sombart championed and built on the Marxist program until 1909.

He had done as much as any man to spread socialist ideas and anti-capitalist resentment of varying shades throughout Germany; and if German thought became penetrated with Marxian elements in a way that was true of no other country till the Russian revolution, this was in a large measure due to Sombart.

Sombart, like many Germans in the early 20th century, was compelled by a case for war between the British and Germany on the grounds that the British had lost any warlike instinct in the pursuit of individual happiness, which he saw as a disease contracted from a society built on commercialism. Laissez-faire was an unnatural anarchic order giving rise to parasites and dishonest merchants, while the German concept of the state was derived from a heroic natural aristocracy that would never fall to such depths.

The German state is the Volksgemeinschaft, or “People's Community,” where the individual has no rights, only duties. Hayek gives credit for the formation of this line of thinking to Johan Fichte, Ferdinand Lasalle, and Johann Karl Rodbertus, among other notable German socialists.

War is to Sombart the consummation of the heroic view of life, and the war against England is the war against the opposite ideal, the commercial ideal of individual freedom and of English comfort, which in his eyes finds its most contemptible expression in the safety-razors found in the English trenches.

He continues by studying another Marxist, Sociologist Johann Plenge, and his book detailing the conflict between the “Ideas of 1789” and the “Ideas of 1914.” In Plenge’s book, 1789 and 1914: The Symbolic Years in the History of the Political Mind, 1789’s ideal was freedom, and the modern ideas of 1914 support the ideal of organization. Plenge asserts, correctly according to Hayek, that organization is the true essence of socialism. Hayek asserts that all socialists until Marx shared this understanding and that Marx tried in vain to make a place for freedom in this modern German idea of grand organization.

Starting with the same liberal language as Marx, Plenge gradually abandoned usage of bourgeois liberal terms and moved into the shamelessly totalitarian realm that attracted so many Marxist leaders:

It is high time to recognise the fact that socialism must be power policy, because it is to be organisation. Socialism has to win power: it must never blindly destroy power.

Hayek then shows Social Democratic Party politician Paul Lensch apply a Marxist analysis to Otto Von Bismarck’s protectionism and planning in favor of certain industries:

The result of Bismarck’s decision of the year 1879 was that Germany took on the role of the revolutionary; that is to say, of a state whose position in relation to the rest of the world is that of a representative of a higher and more advanced economic system. Having realised this, we should perceive that in the present World Revolution Germany represents the revolutionary, and her greatest antagonist, England, the counter-revolutionary side.

This unity of the Prussian national identity and the revolutionary socialist project informs the thinking of figures important in the Nazi Party, like A. Moeller van den Bruck. Hayek quotes and paraphrases him from his Prussianism and Socialism:

“Old Prussian spirit and socialist conviction, which to-day hate each other with the hatred of brothers, are one and the same.” The representatives of Western civilisation in Germany, the German liberals, are “the invisible English army which after the battle of Jena, Napoleon left behind on German soil”

Hayek gives more support for this version of events before offering a warning to England; that the “conservative socialism” en vogue at the time was a German export, which for reasons he details throughout the book, will inevitably become totalitarian. Interestingly enough, this was written before the great crimes of the Holocaust were public knowledge and the Nazi regime had become as universally reviled as it soon was.

This was not a sensationalist attempt to prove his point. Hayek was rather calmly pointing out an example of the type of government one could expect in a society that has discarded liberalism for planning. The more extreme warnings Hayek gives in The Road to Serfdom just happened to be true in the case of 1940’s Germany.

Reprinted from the author's blog