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  • Friedrich Hayek (1899–1992)

Hayek's 'The Road to Serfdom': Central Planning and Totalitarianism

In his book 'The Road to Serfdom,' composed during World War II, Friedrich Hayek argued that central economic planning, even if pursued with noble aims, would unavoidably culminate in a totalitarian government. His argument was formulated in a period when central planning was actively used by diverse governments, such as the fascist states of Germany and Japan, the Soviet communist regime, as well as the governments of the UK and the US.

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Social Science

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Economy

Economics

CORE Econ

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Learn After

  • Source: 'The Road to Serfdom' (Hayek, 1994)

  • According to the central argument that comprehensive economic planning by a government inevitably leads to a totalitarian system, what is the primary mechanism that drives this transformation?

  • Analysis of a Green Economic Plan

  • Critique of the Inevitability of Totalitarianism from Central Planning

  • The Logic of Central Planning's Unintended Consequences

  • Based on the argument that comprehensive economic planning inevitably leads to a loss of individual freedom, arrange the following events into the logical sequence that describes this process.

  • An economist argues that any government's attempt to comprehensively plan an economy—by setting prices and production quotas for all major industries—will ultimately result in a totalitarian state. According to this line of reasoning, why is this outcome considered inevitable even if the government is democratically elected and its stated goals are to ensure social welfare and equality?

  • The central argument that comprehensive economic planning leads to totalitarianism posits that this danger is a risk exclusive to non-democratic, authoritarian regimes.

  • An economic theory posits that comprehensive government control over the economy inevitably leads to a loss of individual freedom and the rise of a totalitarian state. Match each action taken by a central planning authority with its most likely consequence according to this theory.

  • An economic theory posits that even when initiated with noble intentions, the comprehensive planning of an economy by the state necessitates increasing control over individual lives to ensure the plan's success. According to this theory, this escalating control inevitably leads to the establishment of a ____ regime.

  • The Universal Application of the Central Planning Argument