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Hayek and 𝙏𝙝𝙚 𝙍𝙤𝙖𝙙 𝙩𝙤 𝙎𝙚𝙧𝙛𝙙𝙤𝙢 | Bruce Caldwell — Transcript

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0:00tonight I'm here to talk about uh
0:02something uh different which was uh the
0:05road to surum so the road to surum was
0:08was published in
0:101944 so 2019 was it was its uh 75th
0:14anniversary of that
0:16publication and I think it's actually
0:18aged pretty well um uh so I'm going to
0:21tonight just introduce you to the book a
0:24little bit talk about the context in
0:27which it was created why did hyek decide
0:30yeah Hayek was a a technical Economist
0:32in the
0:331930s uh writing about monetary Theory
0:36uh theory of the business cycle uh and
0:39socialism and suddenly he does this
0:41popular book in
0:431944 and it ends up being much more
0:46popular than he than he ever could have
0:49envisaged when he when he decided to do
0:51it so I'll talk a little bit about how
0:53he came to write the book uh what he was
0:56responding to uh how it turned into uh
1:01basically a a an iconic document for the
1:06Cold War okay because it was published
1:09in 1944 the war was still going on but
1:12it really became a very important
1:13document uh for the post-war period and
1:16led him into a whole bunch of different
1:18uh uh uh areas that he would probably
1:21not have gone to into had he not written
1:24the book um and then uh at the end we'll
1:26have we'll have time for for a Q&A so
1:30um for those of you who don't know much
1:33about Hayek he was an Austrian Economist
1:35born in Vienna in
1:371899 uh went to the London School of
1:40economics in the early
1:431930s uh as soon as he arrived there he
1:45got into a a debate with John Maynard
1:48KES a a very at that time already a
1:52famous economist not as famous as he
1:54would become later in the 30s after
1:56publishing uh a book called the general
1:58theory uh but still a prominent
2:01Economist and they had they had some
2:03debates but soon after getting to
2:07London it's early 1930s so it's right in
2:10the middle of the Great
2:11Depression and he realized that a much
2:14more significant debate was taking place
2:17uh and that was the debate about
2:19socialism okay uh the the prospects for
2:22socialism so why would people be
2:24interested in that well first of all
2:26he's at the London School of Economics
2:28which was founded in
2:311895 by Fabian socialists okay Sydney
2:35and uh beatric Webb uh were among the
2:38founders and uh it was a school
2:40dedicated to studying economics topics
2:43the Socialists were quite confident in
2:46the truth of socialism so they would
2:49hire the best economists that they could
2:50find they didn't have to be people who
2:52were ideologically similar uh Lionel
2:54Robbins was one of the people that they
2:56hired and he was a a good liberal
2:58Economist just like hi was um Hayek gave
3:01some lectures in the early 1930s uh he
3:04wowed the people with the with his
3:06lectures uh and they invited him to be
3:08first a visiting professor and then uh
3:11uh a u a name chair after one year they
3:14gave him a a chair um so it wasn't
3:19excuse
3:22me it was a place where there was um
3:25active debate about the merits of
3:28socialism at the time indeed I looked
3:30back in some of the of the uh uh guides
3:34to the classes that were published back
3:35then and if you were a student in the
3:38summer of
3:391937 you could take High ex problems of
3:42a collectivist economy from 5 to 6 p.m.
3:46on Thursday nights and then walk into
3:49Evan durban's economic planning and
3:50theory and practice uh from uh uh 6 uh 6
3:55to 7 so you could get two hours one
3:58person saying why socialism can't work
4:00the other person's saying how to do it
4:02uh so it was really quite a vibrant
4:04place to to be uh engaged so people who
4:08know that background would think well
4:10Hayek wrote the road to serfdom because
4:12of this debate that's taking place in
4:15the 1930s at the LSC and that was
4:18partially true uh but really the debate
4:21that took place at the LSC was at a very
4:23high level uh these are people who are
4:25building the Socialists building models
4:27of how a socialist economy is supposed
4:29to work and Hayek is offering criticisms
4:32it wasn't really that that stimulated
4:34his interest in in publishing something
4:37uh uh like the road to serom um it was
4:41more the popular view that socialism was
4:45the way forward given the circumstances
4:48of the world at the time so remember
4:51it's the Great Depression it appeared
4:54that capitalism has simply failed okay
4:56it wasn't working anymore um on the
4:59other hand if you looked to Europe you
5:03saw these various
5:04experiments many of them looking pretty
5:07unsavory okay so you have fascism
5:09emerging in in the Iberian Peninsula in
5:12Italy and later in Germany and you have
5:15communism in the Soviet Union so you
5:18have totalitarian and authoritarian
5:20sorts of of setups that are on offer and
5:24capitalism looked like it failed so the
5:27British
5:28intelligencia and popular opinion in
5:31Britain in the
5:3230s favored socialism at that time it
5:36was viewed as the middle way capitalism
5:38had failed you don't want these
5:40authoritarian or totalitarian approaches
5:44this seems to be the reasonable way to
5:46go anyway that was the view of the
5:49intelligencia they also there was a
5:51popular view in place that fascism um
5:56was well think of of the the German
6:00variety okay it's national
6:03socialism okay that's what Nazism is
6:06national
6:07socialism but the view at the time uh
6:10among the intelligencia that Hayek ran
6:12into at LSC was that uh that fascism was
6:17really uh not
6:20socialism but somehow affiliated with
6:23capitalism uh the Marxist view was that
6:26um capitalism was doomed to fail
6:30uh it would fail uh most dramatically
6:33after business cycles of increasing
6:35intensity and duration so the Great
6:37Depression seemed to fit that bill so
6:40it's supposed to fail but according to
6:43this argument um the fascists came along
6:46and tried to preserve capitalism from
6:50the ultimate socialist Revolution that
6:51would occur and there were some some
6:54evidence some arguments that could be
6:56made along these lines uh Hitler when he
6:59came to
6:59power uh certainly had the backing of
7:02some uh some of the firms and cartels
7:06that were existing then in Germany and
7:09in addition uh he went very quickly
7:11against the Socialist and communist this
7:12is one of his I mean this is what he was
7:14famous for going after them so Hayek
7:17looked at this and said well this this
7:19does not look like a very good argument
7:20to me but he had heard it being uh U
7:24talked about by the director of the
7:26London School of Economics William
7:27beverage Lord beverage so he wrote a
7:30memo to beverage and by the way um I'm
7:32I'm the I'm the general editor of hak's
7:34collected works and there is a collected
7:36works version of the road to surum and
7:40it has the text of the road to surum but
7:42it also has uh documents that would be
7:45important in the in the creation of the
7:47road to surum so this beverage memo a
7:50memo that he wrote privately to Lord
7:52beverage is in the appendix and and he
7:55said there well I I disagree with this
7:57argument that that fascism is is a just
8:00another uh capitalist reaction the last
8:03dying gas of capitalism is what produced
8:06the fascist reaction and in the memo he
8:09he pointed out that national socialism
8:11was in fact a variety of socialism not a
8:14capitalist reaction to it um and in
8:17their antagonism uh to liberalism in
8:21their proposed interventions in the
8:23economy as well as the fact that certain
8:26of the Nazi leadership in fact had been
8:28socialists in their earlier days were
8:31all Arguments for why this is in fact
8:33something that was antithetical to
8:35liberalism now this is not an argument
8:38that is today viewed as at all
8:40controversial uh you Nazism is kind of
8:44the opposite of of of of liberalism of
8:46the sort that that hyek is is endorsing
8:49but at the time it was viewed as a
8:51really reactionary view I mean if your
8:54if your mindset is that socialism is
8:56this middle way that will lead us
8:58forward to a to a better Society the
9:00notion that it is in any way associated
9:02with fascism was something that was uh
9:05that would have been viewed with horror
9:07by the British intelligen now Hayek is
9:10just giving this memo to beverage he's
9:12not uh he's this is not a speech he's
9:16giving somewhere um but he could see the
9:18reaction uh that he got when he gave his
9:21inaugural lecture at the London School
9:23of economics in that lecture he was just
9:25mild mildly critical of socialism and
9:28said we're going to have be having some
9:30research in the future that will show
9:32some of the problems with a with the
9:34Socialist setup and he said the next day
9:36one of the students came in and said uh
9:38to him and he said this cheeky student
9:41came in and said well you've totally
9:43discredited yourself among all of the
9:45all the student body by coming out with
9:48a with with a statement that you that
9:50you had problems with socialism so it
9:52was it was a very I'm I'm telling you
9:55this in part just to give you a sense of
9:57how different the world was at this
10:00specific moment in time unfortunately it
10:02only got worse okay it only got worse as
10:05the 30s went along more and more people
10:08were saying planning is the way of the
10:10future uh we yeah the Anarchy of the
10:13marketplace needs to be replaced by by
10:16rational economic planning and it wasn't
10:19just um socialist economists there were
10:22a group of uh uh scientists natural
10:25scientists uh hyek refers to them as the
10:28men of science
10:29because they refer to themselves as the
10:31men of science we're doing real science
10:33here uh people and they were saying no
10:36that if you look at the Soviet Union
10:38their model at this time was the Soviet
10:40Union they said look like and they took
10:42trips there the Soviets had had uh
10:46brought various intellectuals over and
10:47said yeah we gave great support to
10:50science but this is the way of the
10:51future under under capitalism there's
10:54not enough money left over for for
10:56scientific research but if we were able
10:59ble to have that kind of support that
11:00the like the Soviets give would be able
11:03to solve these problems of the great uh
11:05depression would be able to have plenty
11:06of food shelter all the other things
11:09that are necessary for for a good life
11:12so this was the environment that he was
11:14he was working
11:16in so did he then write the road to
11:18surum no he's fredri kayak okay this is
11:23a person who is trained in this uh
11:26central European tradition so what is
11:29going to do he's going to write a TW
11:31volume work that he started work on okay
11:35it's called the abuse and decline of
11:37reason and the first volume would be an
11:39historical study of where things went
11:43wrong over the past 100 years and the
11:46second volume would be where he would
11:49talk about the implications for the 20th
11:52century and that volume would be some of
11:55the ideas that he had for the road to
11:57serf him that was his ultimate plan plan
11:59and and what he was trying to do with
12:00the historical part I'll just I'll give
12:02you a quick uh overview of that it he he
12:06his his argument was starting back
12:09around after the French Revolution in
12:12France you had a set of views that
12:15linked socialist
12:18ideas with
12:20science okay and that the idea that you
12:23could just like natural scientists had
12:26conquered the natural world so
12:29scientists emphasizing the science part
12:33would be able to plan a society just
12:35like an engineer is able to construct a
12:37bridge and if we link
12:40socialism and scientism which was his
12:43word for it together we'll be able to
12:46have a much better Society in the future
12:48this is the way forward and what Hayek
12:50did in the what he wanted to do in the
12:52historical bit was to say how these
12:55ideas spread from France to Germany to
12:58England to the United States in each
13:00country with very different sorts of
13:02people advocating them okay um in in
13:06Germany it was in fact a conservative uh
13:08imperialists the German historical
13:10school but if you get to the the United
13:13Kingdom to England you have uh Fabian
13:16socialists you have the progressives uh
13:19who were not socialists but they were in
13:21the United States the technocracy
13:23movement in the United States so various
13:26groups different from each other but all
13:28have this faith in that socialist ideas
13:32in general and uh and science uh can be
13:36used together uh to recreate a more just
13:40Society so he wanted to critique that in
13:44this big book but right at the beginning
13:47of the war he starts to realize that he
13:49needs to do something more popular he
13:52actually sends a a message to one of his
13:54friends from Vienna uh Fritz mckop where
13:57he says at the moment I'm mainly
13:59concerned with an enlarged and more
14:01popular exposition of the themes of my
14:03earlier work which of if I finish it
14:05might come out as a six pence penguin
14:08volume which would be like a paperback
14:09Volume so the change of the plans well
14:12he started to be worried not so much
14:15about the current
14:17situation um but about what would happen
14:21after the war he he wrote a a letter to
14:23Jacob Viner a professor at the
14:25University of Chicago that he knew well
14:27and he said I'm I'm fairly optimistic
14:30about the the prospects for the war but
14:32no means so about the peace or rather
14:37about the economic regime that will
14:39follow the war he was worried that the
14:43planning that necessarily takes
14:45place of the economy during a wartime
14:49economy would be extended
14:51on okay he was worried that that kind of
14:54central planning would be continued and
14:57there was a number of people who gave
14:59him pause about this so I mentioned
15:02before the men of science I'm going to
15:04read just a couple of of statements by
15:07people that were the lead writers in
15:09nature magazine so this is a a natural
15:11Science magazine it's like Scientific
15:13American for Britain um and uh they have
15:16a lead writer so they have an editorial
15:19it's published every couple of weeks
15:21immediately after Dunkirk okay which was
15:25a almost a complete disaster it ended up
15:28being
15:29uh that that lots of British soldiers
15:31were saved but it it didn't look that
15:33way immediately afterwards there was a
15:35lead article called scientific method in
15:38administration here's a line from it it
15:41has become a matter of life and death
15:44that the habits and customs of a la Fair
15:47Society should be abandoned and the
15:50economic and social implications of
15:52Modern Life be fully
15:57recognized

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This page contains the full transcript of Hayek and 𝙏𝙝𝙚 𝙍𝙤𝙖𝙙 𝙩𝙤 𝙎𝙚𝙧𝙛𝙙𝙤𝙢 | Bruce Caldwell by Hillsdale Digital, generated from the public captions YouTube serves with the video. The transcript has 2,568 words across 366 segments, with the original timestamps preserved so you can click any line to jump to that moment in the embedded player.

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