The Race to Serfdom

20 years ago, it was common to hear people say something like “I love Hayek, but The Road to Serfdom is a bit embarrassing. Clearly not every intervention leads inexorably to totalitarianism.” And people would nod sagely, reassured that we were opening the Overton window just enough to feel a little dangerous, but not wide enough to let in a draft. It’s cold outside, and the causal story felt a bit obsolete here at the End of History.

This week, serious proposals are being floated in the UK for Arday’s Law, that would force journalists to limit news coverage of individuals at the center of a scandal for the sake of their mental health. This follows Nathan Cofnas’ exposé of former Prof. Arday’s semi-literate scholarship and fantastical life claims, an escalation by Cambridge University (which refused to investigate) and Arday himself (who made legal threats to scholars and more fantastical claims of threats against him to journalists), and his eventual resignation from Cambridge and suicide. The law itself has barely a fig leaf of pretense over its intent to protect powerful interests from scrutiny, and is not at all an implausible extension of the UK’s media control regime.¹

Cofnas himself, as has been much commented upon, writes on racial differences, and was defenestrated from Cambridge some years earlier for it. Besides the outright denial of such differences, a common response is: even if there are racial differences, isn’t it a bit sordid to care about them? What’s the harm in pretending we’re all equal? After all, we can very easily look to 1944 to see the potential harms of exaggerating these differences.

To see the harms of pretending, we also look to 1944, with the publication of The Road to Serfdom. The last ten years, across the developed world, have seen this denial forming the kernel of a snowballing total state, along the very lines described in the book.

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Imagine a system like a thermostat. If the temperature rises above the set point, the AC turns on and lowers it. If the temperature falls below the set point, the heater turns on and raises it. This is negative feedback. Systems with negative feedback are stable, and have an equilibrium.

Social and political systems are sometimes conceived as negative feedback systems. A problem arises – say, local crime has increased – we don’t necessarily know how to fix it, but we can tell if we’re fixing it. So we try things, and eventually something works. As the problem recedes, we may ease off the solution. That’s just negative feedback in reverse. It doesn’t guarantee fixes, but it does guarantee the problem never spirals out of control.

But now imagine we swap the wires in the thermostat so the AC control goes to the heater, and vice versa. It’s a warm day, and the thermostat activates. But instead of the AC, it turns on the heater. The temperature rises. You start sweating. The thermostat frantically cranks up the heater. Your butter dish overflows onto the table. The paint starts peeling. The only limit is the physical capacity of the heater. If it were sufficiently powerful, nothing would stop it until the controls themselves melted.

You can imagine the same process in the opposite direction on a cool day. The thermostat tries to raise the temperature, but…

This is positive feedback. Systems with positive feedback are unstable; they do not have an equilibrium, and spiral out of control until they reach physical or otherwise outside-the-system limits.

The Road to Serfdom describes one such positive feedback loop.

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The Road to Serfdom made an argument, very plausible in the totalitarian moment in which it was published, about a specific policy dynamic: price controls lead to economic pathologies, that political leaders are tempted to respond to with more price controls, in an escalation terminating in a planned economy. This is no speculative account: it was, in large part, interwar Germany’s actual path to a planned economy. Nevertheless, sporadic price controls here and there across the developed world since then have not snowballed. Perhaps price controls are not always a positive feedback loop.

In fact, I think the story does generalize. The real causal story is not “any intervention leads inexorably to socialism,” which would indeed be an overstretch. Nor is it “price controls are self-feeding” – true in at least one important political context, but despite certain limited experiments, postwar politicians in developed countries have largely been wise enough to abandon price controls rather than double down (so far).

Instead, I would suggest the story: Bad mental models, especially ones that interpret causation backwards, are like the thermostat with the wires crossed. Negative feedback becomes positive feedback. You react to a problem with legislation that feeds it, and respond to the worsening situation by doubling down with more legislation. It’s a cognitive argument as much as a political economy argument.²

The price control story is easy to tell this way. You observe an affordability crisis, conclude that capitalism has failed, and implement, say, rent control. Landlords predictably sell their properties, and any remaining landlords are the most venal ones willing to extract as much value as ruthlessly as they can get away with. Landlord-tenant relations become adversarial and zero-sum. You conclude this is another failure of capitalism, and progressively tighten controls and regulations on rental properties until the government has, in practice if not in legal title, nationalized the housing sector.

Perhaps then you turn to grocery stores.

The important element here is that, if you are locked into incorrectly interpreting any pathology as a failure of capitalism, failures will be taken as a sign to go harder rather than to pull back. The heater ramps up. The only brake on the process is policymakers’ willingness to revise their causal model – fix the wiring – or, barring that, some other limit outside the system, like collapse. If the process plays out without collapsing, you end up with, in practice, a planned economy under the direction of a total state.

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Now consider the proposition: there are no intrinsic average differences between human groups. ‘Groups’ may be sexual, racial, class, sometimes even religious, or anything else, and ‘differences’ rules out anything deeper than the skin. Perhaps there are even no intrinsic differences between individuals, which of course entails the proposition about groups.

Furthermore, consider the herculean social and political effort over the last half century to make the denial of this claim, almost literally, morally unthinkable (note your own discomfort in entertaining it!).

Then confront this proposition with the observation that there exist yawning gaps between human groups, gaps that stubbornly defy time, political emancipation, economic integration, administrative preferences, and incomprehensibly vast flows of social spending.

You will be forced to conclude that there exists an inordinately powerful but scarcely observable malign influence oppressing and marginalizing those groups at the bottom, perpetrated by those at the top. You observe those at the top are mostly nice and have no conscious ill intent, but this cannot absolve them. So you demand they engage in deep soul-searching over their unwitting and unforgivable complicity, and take denial to be the strongest evidence of complicity. Colorblind individualism is not good enough so long as disparities persist, and maybe even malignant itself. You might coopt entire academic disciplines to search for increasingly baroque manifestations of this malign force. You might advocate punitive confiscations from one group to the other, on top of the already elephantine humanitarian confiscations, and institutionalize increasingly blatant preferences for favored groups. When these preferences fail to move the needle in the aggregate, you conclude that this malign force must be even stronger than you supposed. Maybe it’s inherent to the system. Maybe these disparities will never be remedied until capitalism itself is overthrown.³

This proposition entails others. If you are committed to there being no intrinsic differences, it would be cruel and counterproductive to ever assign responsibility to a marginalized group for observed differences in social pathologies like crime or terrorism. Perhaps it’s even cruel to assign responsibility to the individuals engaged in such. So instead you assign responsibility to “root causes” like poverty or stigma.

“Carceral” solutions obviously don’t address these root causes. So instead, you might shower high-crime areas with resources and social programs. You might use the courts to redirect as many offenders as possible away from prison. You could prohibit employers from inquiring about criminal history (because this might disproportionately affect a marginalized group). You might presume the guilt of the party from the dominant group in any fraught interaction, and even (where possible) excuse violence on the grounds that it was a reaction to stigma or deprivation. As crime rises, you take this to demonstrate the moral urgency of funneling more and more resources to the most blighted areas via social programs – funded, of course, by the productively employed. If you’re a radical, you conclude that the only solution big enough to make a dent is to abolish prisons or police entirely.

Even if you’re not a radical, you must never ever stigmatize a marginalized group. So you put up PSAs hectoring bad behavior, but are careful to never attribute it to a minority. You restrict guns, or knives, and maybe even harass the manufacturers. You prohibit late night gatherings. You put up Flock cameras on every street corner, monitor the comings and goings of every citizen by every mode of transportation. You section off airport gates behind an invasive gauntlet. You monitor the network traffic and bank transactions of everyone in the country, making anonymity either de facto or de jure impossible. If stigma causes crime, it’s very important that no one express stigmatizing thoughts. So you threaten every important online platform until they sign on to an enormous coordinated censorship regime (this essay is worth reading in full lest you think this is an exaggeration or that this couldn’t happen with the First Amendment). Maybe you even succeed in keeping a lid on crime – after all, you’re more practical than the radical – but life gets smaller and smaller for everyone.

The radical here is essentially just a description of the DSA platform, at the moment the most energetic political bloc in the US. And no wonder: they’re the main group in US politics with the courage to ask, what if the pieties we all mouth as polite fictions were actually true? And as long as average Joe, or President Joe, continues to believe these polite propositions, the radicals will have the moral and intellectual high ground. If we really believe them, overthrowing the system is a moral imperative.

The pragmatist, on the other hand, is just a description of mainstream Democratic Party policy. Even in the hands of regimes without a whiff of radicalism, the entire Western world has been barrelling toward a totalitarianism that the literati hardly register as such because it merely forces on others the strictures and affectations they have adopted for themselves.

For the opposition party’s part, to the extent it also pays lip service to these propositions, its opposition to any of these particulars will be lame and ineffectual. Recall in 2020 how cautiously mild pushback to the moment of radical dominance had to be phrased. “Yes, I acknowledge powerful but scarcely observable malign influences exist. But—”. Recall that much of the countrywide security apparatus was installed under a Republican administration, on similar grounds of avoiding stigmatizing the perpetrators’ group. Recall the common barb that “a Republican is just a Democrat from 20 years ago.” At no point are entitlements and transfers touched. It’s only very recently that we’ve begun to glimpse the political possibility of serious opposition, and that only in the US so far.

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Now consider the possibility that the original proposition is false.

What if the vast sums of social spending not only failed to make a dent in the problem, but fueled it? What if the creeping totalitarianism was for nothing? What if every restriction was a misdirection? What if it didn’t need to be this way? Thoughts almost unthinkable in polite company.

From both the radical and the pragmatist, the result is that antisocial behavior is rewarded with sympathy and social spending, and productive behavior is punished with taxes and restrictions. Naturally – law of supply – you get more of what you reward, and – law of demand – you get less of what you punish.

In short, if you act on a backwards causal model of reality, you will be forced to patch reality with more and more intrusive and extravagant legislation until you end up with either a total state, or total revolution. So long as the core proposition remains unquestionable, failure will never be recognized as such, and can only be met with stronger policy responses across more and more domains of life. Arday’s Law only makes sense as a desperate patch relatively late in this process. If you are a true believer, you are forced to conclude from the spectacular failure of a beneficiary of racial preferences that everybody plagiarizes, and that his fall from grace is evidence of having been singled out for nefarious reasons. Policy based on these assumptions – circling the wagons around fraud, and punishing whistleblowers – is obviously not compatible with the continued existence of a credible academic enterprise.

Leftism is not the yang to the right’s yin, as the broad-minded moderate flatters himself. Not even in its mild and polite forms. It is a causal error; a wire-crossed thermostat; a positive feedback loop; a civilizational death drive.

And to the extent there’s complicity to be reckoned with, it’s those who hold the eyes of others closed as they drive the developed world along a path of positive feedback.

Footnotes

1. It’s worth noting that Reporters Without Borders considers an environment like this to be “freer” than one in which the president sometimes expresses distaste for journalists, and meditating on why this might be the case.
2. Hayek’s work did not become strongly cognitively oriented for another decade following The Road to Serfdom, but from the vantage point of that later work, I believe this is a faithful reinterpretation.
3. It seems almost unsporting to point out the communist record on remedying these differences.