COVID-19 and the new Road to Serfdom
In 1944, Austro-British economist Friedrich August von Hayek published The Road To Serfdom, one of the most significant books of liberal thought of the 20th century. Hayek highlighted the state’s tendency to impinge on individual freedom, opening the way to totalitarianism and general enslavement. How do such ideas find their relevance in the context of the current health crisis and its implications?
The fight between liberals and statists in the 20th and 21st centuries: a brief look back at the 1945-2010 period
Far from being inspired by Hayek’s ideas, Western political leaders during the post-war economic boom favoured the precepts of Keynes, applying a curious mixture of capitalism and statism. This is hardly surprising: as the economist Pascal Salin has often said, the British economist offered political leaders the economic justification for their political actions, something which remains true to this day. An era marked by continuous growth and low unemployment, the post-war economic boom was nonetheless characterised by the steady growth of the state and the uninterrupted enlargement of its sphere of influence in our societies. In Great Britain, the alteration of the Tories and the Labour Party in government was accompanied by the same Keynesian way of conducting the country’s affairs, transforming Britain into one of the most state-run and bureaucratised European societies of its day.
Suddenly there arrived the oil crises of the 1970s and the ensuing stagflation, leading more and more people in Western countries to question Keynesian theories. The ‘conservative revolution’, to use the words of the essayist Guy Sorman, then sprang to life, whether in the United States with Ronald Reagan, in Great Britain with Margaret Thatcher, or in New Zealand with Roger Douglas.
In his inaugural address delivered on 20 January 1981, Reagan asserted the famous sentence: ‘Government is not the solution to our problem: government is the problem.’ Even in modern-day France, we remain amazed at the audacity of this statement – not uttered by any politician, but by the president of the world’s greatest superpower. Even our current right-wing politicians could never come anywhere near conceiving this idea for a moment, let alone expressing it publicly. What ideological gulf separates the ‘conservative revolutionaries’ of the 1980s from our extraordinarily timid political leaders who, for the past thirty years, have thrived on ideas about the possibility of a ‘Third Way’, about the need to ‘humanise’ liberal capitalism and to make it more ‘equitable’ – or solidaire, as the French say?
Reagan’s declaration makes us wonder who the real reactionaries are. Are they the disciples of Mises and Hayek, like Thatcher or Reagan, who took it upon themselves to free individuals from the stranglehold of the state, and to correct the harmful effects caused by more than 30 years of state control and collectivisation? Or are they the followers of old Keynesianism, which had shown in the 1970s not only its inability to solve our societies’ economic problems – but even its counter-productivity and harmfulness?
In November 1989, the Berlin Wall fell. Two years later, in December 1991, Soviet premier Mikhail Gorbachev announced the dissolution of the Soviet Union. In 1992, the intellectual Francis Fukuyama published a resounding work, The End of History, in which he noted that the model of democratic and liberal civilisation constituted the ultimate form of political, economic and social organisation towards which converged humanity. Marx seemed dead and gone, Keynes irreparably discredited.
Then, against all the odds, there started to develop an extraordinary campaign of disinformation. The campaign rehabilitated social collectivism, which all assumed had been refuted by the facts and swept away into the dustbin of history. This unthinkable ideological tour de force was masterfully analysed, dissected and assailed by Jean-François Revel’s La Grande Parade (2000). The ‘new enemies of open society’, to allude to the title of a book by the philosopher Alain Laurent - who himself drew on the title of the well-known magnum opus of the British epistemologist Sir Karl Popper - were working to undermine the fundamental principles of liberal civilisation.
Indeed, liberal civilisation was increasingly faced with a danger of a new kind: the ‘new PC’, as Laurent aptly stated – that is to say, no longer the dying Parti communiste, but political correctness.
Almost 20 years after the fall of the Berlin Wall came the 2008 financial crisis. Under the pretext of avoiding widespread bankruptcy and saving the economy, states around the world embarked on immense economic stimulus plans, widening public deficits like never before and causing an explosion in public debts. The global financial crisis thus led to another crisis: that of government debt.
Politicians on the Right as well as the Left – President Nicolas Sarkozy in France, President Barack Obama in the United States – adopted economic policies based upon Keynesian principles, conferring on the author of The General Theory of Employment, Interest and Money (1935) a renewed topicality. Obama, who is often said to have been a ‘progressive’, was drawing on the old tradition of Big Government, to which had belonged his predecessors Franklin D. Roosevelt and John F. Kennedy.
In the 1980s, Reagan had endeavoured to deregulate the economy, which had become – even in the United States! – evermore bureaucratised under the growing weight of the state. He was unanimously decried in Europe. On the other hand, in the 2010s, Obama tried to restore the primacy of the state over the individual. He was acclaimed by all on the Old Continent.
Freed economically from the yoke of the state under Reagan, individuals saw their freedoms diminish under Obama in favour of state power. Hence the emergence in 2008-10 of the Tea Party movement, a phenomenon that remains poorly understood by Europeans, particularly the French.
Is the COVID-19 crisis a triumph for statists and authoritarians?
In November 2019, a new coronavirus broke out in the city of Wuhan, Hubei Province, China. The World Health Organization declared the infectious disease a Public Health Emergency of International Concern on 30 January 2020, and a pandemic on 11 March 2020. With a few notable exceptions, countries have carried out lockdowns one after another, suspending society’s usual business and economic activity.
In some countries, the crisis has provided an opportunity to justify growing authoritarianism. On 30 March, the Hungarian Parliament, dominated President Viktor Orbán's Fidesz party, granted Orbán full powers for an unlimited time. In Thailand, Prime Minister Prayuth Chan-o-cha announced a state of emergency, imposing curfews and censoring ‘false’ information about COVID-19. The Filipino Congress granted President Rodrigo Duterte extraordinary powers and allocated $5.4 billion to respond to the crisis. Perhaps these authoritarian excesses of power are not so surprising when we remember that the latter president compared the constitution of his country to ‘a scrap of toilet paper’.
As the investigative journalist Selam Gebrekidan has rightly remarked, although the pandemic ‘may be a boon to governments with an autocratic bent […] robust democracies are also using the pandemic to expand their power’. In France, drawing on the measures taken in countries such as Italy, on 16 March 2020 President Emmanuel Macron decreed restrictions on travelling inside the country, forcing citizens to print a certificate when shopping, exercising or commuting when it is not possible to work from home. Fines of 135€ are levied on citizens failing to present the document to the authorities.
This situation is said to be temporary, but can we be absolutely sure that the abdication by citizens of a significant part of their rights and freedoms in the name of a health ideal, although praiseworthy, will have no consequences for the future? All the more so as governments, especially in France, are encouraged by a myriad of political professionals and so-called ‘experts’ to go even further along the path of maximum state control. On the economic front, the state is seeking to buy social peace by promising individuals and businesses a gigantic recovery plan of more than 100 billion euros.
Thus, in the face of the crisis, ‘souverainist’ adulators of the ‘republican’ state, such as Jean-Pierre Chevènement, are demanding a new ‘patriotic’ fervour, notably at the industrial level. Chevènement, formerly Minister of the Interior under Lionel Jospin and the Parti socialiste’s presidential candidate in 2002, called for the establishment of a ‘government of public safety’.
As for the political extremes, they are not to be outdone: beyond their apparent differences, both the Far Left and the Far Right share the same hatred for globalisation and the market, which they hold responsible for the sanitary crisis. ‘We are asking for a united, social and environmental relocation: otherwise, the Far Right will appropriate this topic,’ said Aurélie Trouvé, Co-President of ATTAC, a movement promoting the Tobin tax in France. Marine Le Pen, President of the far-right Rassemblement national, has argued that the crisis’ real culprit is the ‘globalised ultraliberal model’. ‘The model’, she goes on to say, is responsible for ‘the disappearance of borders, of nation states, of strategic states’ and for ‘the running of the world dominated by the invisible hand of the market.’
According to this reasoning, crises are more likely to be avoided if we establish as much state control as possible. Has Le Pen forgotten about the Chernobyl nuclear disaster in 1986, whose responsibility can scarcely be attributed to the market and globalisation?
In fact, it is because we still tend to believe in the alleged ‘benefits’ of collectivism and statism that we have not been sufficiently responsible in anticipating and managing the health crisis. In a society where the state acts quickly and efficiently, but only within the limits of its granted powers, the state – along with all of society’s actors – are naturally led to show greater responsibility in their choices, expectations and actions. It is in societies where statehood is strongest that irresponsibility is also strongest.
What consequences should we fear given the action taken by most states to seek to curb the COVID-19 crisis? The Economist of 28 March 2020 made the following apt comments:
"The scale of the response makes COVID-19 more like a war or the Depression. And here the record suggests that crises lead to a permanently bigger state with many more powers and responsibilities and the taxes to pay for them."
Or in the words of Peruvian politician and essayist Mario Vargas Llosa:
"Coronavirus delights all enemies of freedom!"
How the COVID-19 crisis has reminded us of the fight between liberals and statists
In the aftermath of Macron's election as President of the French Republic, Guy Sorman wrote that the old right-left split was disappearing, giving way to a new dividing line between supporters of ‘open society’, like Macron, and ‘closed society’, such as Le Pen.
In my opinion, Sorman was both right and wrong. He was right in the sense that the right-left split is and has always been a false divide. For decades, we have witnessed right-wing leaders instituting left-wing policies, as in the case of Jacques Chirac’s presidency. In the end, left-wing and right-wing political leaders share without distinction the same idolatry of the state. The true dividing line separates, as Popper argued, ‘open societies’, based on democratic and liberal capitalism, and ‘closed societies’, which are its negation.
But we now see retrospectively that Sorman was wrong in another sense. Government responses to the pandemic, be those governments liberal or authoritarian, and the debates which the crisis has evoked, have shown that the opposition between liberals on the one hand, and collectivists and statists on the other, remains the great economic, political and philosophical division that still persists in our time.
Contrary to what some commentators have claimed, it is not at all true that we would have converted to liberal capitalism after the fall of the Berlin Wall and the collapse of socialist and communist regimes. Those who assert this falsehood in France, a country where public spending accounts for 56% of GDP, also convey the lie that we would live in an ‘ultraliberal’ system. The system is perhaps ‘ultraliberal’ seen from their own statist perspectives, but if one looks objectively at the economic situation of the country, one realises that we live in a society which is not ‘ultraliberal’ at all, but on the contrary still dominated by the state.
The distinction between ‘liberals’ and ‘statists’ therefore regains its full relevance in the present circumstances. It had never really lost its topicality; moreover, recent events have brought it back into the spotlight.
Therefore, we must place the COVID-19 crisis, and the economic crisis which will ensue, in the context of this struggle between liberal capitalism on the one hand, and social collectivism and statism on the other. Let us not forget that the latter often tend to appear nowadays under the guise of the defence for ‘national sovereignty’, a battle cry which has become increasingly popular over the last few years.
We must also ponder the following question: in which civilisation do we yearn to live? Do we want to follow the demanding and challenging path of individual freedom and responsibility? Or do we want to continue to move forward, at our own risk, along this ‘new road to serfdom’?
Matthieu Creson is a teacher and researcher living in Paris, France. He is a graduate of literature, philosophy, art history and business.
The opinions expressed in the article are those of the author, and not necessarily of the Oxford Hayek Society. A version of this article originally appeared in Revue Politique. We are grateful to Matthieu for allowing us to republish this article from its original French.
Author’s note: This article used the French libéral in its original publication, which is conventionally translated into British English, in which this above article is written, as ‘liberal’ and American English as ‘conservative’. While ‘liberal’ and ‘liberalism’ may have been appropriated by the Left in the United States, this should not lead us to renounce using these terms. Hayek himself did not accept the term ‘conservative’: see his postscript to The Constitution of Liberty (1960), entitled: ‘Why I am not a Conservative’.