Friedrich Hayek on our “Dictatorship of the Proletariat”


February 10th, 2012
Santiago, Chile

One of the greatest thinkers of all time was Austrian economic Friedrich Hayek, and his work The Road to Serfdom is an absolute must-read.

Hayek’s writings are incredibly powerful in these times. In light of the countless recent examples of governments changing the rules whenever/wherever it suits them (from the Troika nonsense in Europe to the Fraudclosure settlement in the US), I’d like to share a few key passages with you today.

On the sanctity of the Rule of Law in a free society, Hayek says:

Nothing distinguishes more clearly conditions in a free country from those in a country under arbitrary government than the observance in the former of the great principles known as the Rule of Law.

“[U]nder the Rule of Law the government is prevented from stultifying individual efforts by ad hoc action. Within the known rules of the game the individual is free to pursue his personal ends and desires, certain that the powers of government will not be used to deliberately frustrate his efforts.

“The important question is whether the individual can foresee the action of the state [based on the government following its own rules] and make use of this knowledge as a datum in forming his own plans…”

On the nature of legislative or judicial favoritism, Hayek says:

It is the Rule of Law… the absence of legal privileges [or favoritism] of particular people designated by authority, which safeguards that equality before the law which is the opposite of arbitrary government.”

[A]ny policy aiming directly at a substantive ideal of distributive justice must lead to the destruction of the Rule of Law.

There is a “belief that, so long as all actions of the state are duly authorized by legislation, the Rule of Law will be preserved… [But just because] someone has full legal authority to act in the way he does gives no answer to the question whether the law gives him power to act arbitrarily.”

“It may well be that Hitler has obtained unlimited powers in a strictly constitutional manner and that whatever he does is therefore legal in the juridical sense. But who would suggest for that reason that the Rule of Law still prevails in Germany?”

“The Rule of Law thus implies limits to the scope of legislation: it restricts it to the kind of general rules known as formal law and excludes legislation either directly aimed at particular people or at enabling anybody to use the coercive power of the state for the purpose of such discrimination.

On the consequences of the decline in the Rule of Law in a free society, Hayek says:

By giving the government unlimited powers, the most arbitrary rule can be made legal; and in this way a democracy may set up the most complete despotism imaginable.

“It is important to point out once more in this connection that this process of the decline of the Rule of Law had been going on steadily in Germany for some time before Hitler came into power and that a policy well advanced toward totalitarian planning had already done a great deal of the work with Hitler completed.”

We unfortunately live in an era where the Rule of Law means nothing; where contracts are irrelevant and people can no longer make plans based on rules and agreements; where the government exists above the law; where the benefits of one group are quickly sacrificed for the benefit of another.

Writing during World War II during the fight against Nazi Germany, Hayek describes this system as a ‘dictatorship of the proletariat’. Any thinking, rational person should look around at the world today and see:

– Hundreds of thousands of mortgage contracts abrogated by the federal government;
– Suspension of gun rights by several local governments;
– The continued criminalization of protest and free assembly;
– Increased surveillance and police state tactics;
– Authorization of military force and detention against the citizens;
– Seizing and/or voiding pension systems into which workers have paid lifelong contributions;
– Rejection of long-standing senior debt positions in favor of labor unions;
– Executive and police agencies ruling by regulation and policy, not by legislative process;

It’s hard to argue that Hayek’s vision hasn’t come true.

About the author

Simon Black

About the author

James Hickman (aka Simon Black) is an international investor, entrepreneur, and founder of Sovereign Man. His free daily e-letter Notes from the Field is about using the experiences from his life and travels to help you achieve more freedom, make more money, keep more of it, and protect it all from bankrupt governments.

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