One of my favorite games to play when reading Friedrich von Hayek is to plug and play the terms “socialism” and “capitalism.” The Road to Serfdom presents many opportunities. Here are just a few of my favorite corrections:

It is not rational conviction but the acceptance of a creed which is required to justify a particular plan. And, indeed, socialists capitalists everywhere were the first to recognize that the task the had set themselves required the general acceptance of a common Weltanschauung, of a definite set of values. It was in these efforts to produce a mass movement supported by such a single world view that the socialists capitalists first created most of the instruments of indoctrination of which Nazis and Fascists have made such effective use (113).

The most effective way of making everybody serve the single system of ends toward which the social capitalist plan is directed is to make everybody believe in those ends. To make a totalitarian capitalist system function efficiently, it is not enough that everybody should be forced to work for the same ends. It is essential that the people should come to regard them as their own ends. Although the beliefs must be chosen for the people and imposed upon them, they must become their beliefs, a generally accepted creed which makes the individuals as far as possible act spontaneously in the way the planner capitalist wants. If the feeling of oppression in totalitarian capitalist countries is in general much less acute than most people in liberal totalitarian countries imagine, this is because the totalitarian capitalists governments succeed to a higher degree in making people think as they want them to (153).

The point here is to show that everything Hayek feared that would eventually come to pass under socialism has happened under capitalism, including vast amounts of Americans losing their homes, savings, working for meager wages, etc. It’s almost as if today’s business elites used Hayek’s critique of the “planned economy” as a blueprint for how to structure our current capitalist order.

Hayek, of course, doesn’t see it this way. Yes, Hayek says, monopolies or totalitarian orders arise under capitalism; but such facts only point to the failure of capitalism to live up to its superior ideal. In other words, there are no failures of capitalism, just failures to live up to the ideal. As Seth Ackerman & Mike Beggs point out, under neoliberalism, “we can fail the model, but the model can never fail.” The status quo is therefore beyond reproach.

Now, to be fair, Hayek rightly diagnosed some elements of our current predicament. There’s little hope for regulating abuses within the market system, as regulators will inevitably become co-opted by business interests (see Gar Alperovitz, around the six minute mark). The solution, then, is to out-compete centralization and monopoly power. Indeed, for Hayek, there are two and only two paths before us: competition or centralization. “There is no other possibility than either the order governed by impersonal discipline of the market or that directed by the will of a few individuals; and those who are out to destroy the first are wittingly or unwittingly helping to create the second” (199), thunders Hayek.

Despite the fun games one can play with Hayek, there are certain elements of his thought we should take seriously. Karl Polanyi understood this, I think, which is why he spent the better part of his career challenging Hayek. And today the stakes couldn’t be higher. As Robert Kuttner writes, “Polanyi viewed Mises and Hayek as modern counterparts of Adam Smith, David Ricardo, and the social Darwinist Herbert Spencer, punishers of the poor in the name of market incentives. “Inside and outside England,” he wrote in The Great Transformation, “from Macaulay to Mises, from Spencer to Sumner, there was not a militant [free-market] liberal who did not express his conviction that popular democracy was a danger to capitalism.”

The only other insight to add here is that Polanyi also grasped the anti-Christian animus behind Hayek and his ilk. As he writes in The Great Transformation, at the height of the industrial revolution,

huge masses of the laboring population resembled more the specters that might haunt a nightmare than human beings. But if the workers were physically dehumanized, the owning classes were morally degraded. The traditional unity of a Christian society was giving place to a denial of responsibility on the part of the well-to-do for the condition of their fellows… To the bewilderment of thinking minds, unheard-of wealth turned out to be inseparable from unheard-of poverty. Scholars proclaimed in unison that a science had been discovered which put the laws governing man’s world beyond any doubt. It was at the behest of these laws that compassion was removed from the hearts, and a stoic determination to renounce human solidarity in the name of the greatest happiness of the greatest number gained the dignity of a secular religion (106-107).