The late economist F.A.Hayek’s seminal book, “The Road to Serfdom,” published in 1944, is a key work for all libertarians. It repudiates public ownership of “the means of production.” It excoriates socialism and the state capitalism of fascist governments. It tells us that expansion of the public sector leads to loss of individual freedom and a return to a world akin to medieval serfdom.
It’s an important book, hailed by those who want minimal government, damned by those who believe government can solve problems.
The lack of freedom Hayek wrote about was real. While most of us think of medieval serfdom as binding peasants to tend the land of their local prince and master, it was much wider.
J.S.Bach, jailbird
Here’s an example. In 1717, Johann Sebastian Bach was thrown in jail. He had committed no crime. But his employer, Duke Wilhelm Ernst of Saxe-Weimar, did it anyway. Why? Because the uppity composer had tried to change jobs and move to a region ruled by another nobleman.
Nothing like that could happen today, right?
Well, not so fast.
Defining serfdom
Serfdom isn’t really about big government, socialism or the rule of princes and kings. It’s about the concentration of power and wealth in the hands of a few. The greater the concentration of power, whatever its organizational trappings, the more likely most people will live a powerless, serf-like existence.
So I’d say Hayek identified “a” road to serfdom, not “the” road to serfdom. The other road to serfdom – the one we’re experiencing today — is the incredible expansion and concentration of private power and wealth that we’ve seen in the last half-century. Think of it as way too much of a good thing.
Post industrial serfdom
Skeptics should consider that modern CEOs and the very, very wealthy have power, means and perks that most of the kings and princes of yore would envy.
What does modern serfdom look like?
Here are the main elements. Check to see if they apply to you, your friends or your kids.
Medical Serfdom. During World War II, corporations competing for scarce workers couldn’t compete with fixed wages. So they offered new-fangled benefits like pensions and medical insurance. Today, most workers live with the accidental consequence: Employer-provided health insurance is the norm.
Now millions of workers don’t dare leave their employer to start their own business because of health insurance uncertainty. They are, in effect, indentured to the provider of their health insurance.
This isn’t identical to medieval serfdom. But it is a major constraint on mobility.
The Affordable Healthcare Act reduced this serfdom because it excludes no one due to pre-existing conditions. But it has been under attack since passage. And while premiums are subsidized, they are still very high for middle-income workers.
This is not an abstraction. Over the years I’ve listened to many workers decide that they had to stay with their current employer for only one reason: health insurance.
Education Debt Serfdom. Wages, even among the college educated, haven’t kept up with the cost of education and the amount of debt students accumulate while in college. One result is that young workers start their working life burdened by significant debt. Payments on that debt mean that young borrowers have high “back-end” ratios from the get-go. This reduces their ability to borrow and buy a home.
The result? Access to homeownership is reduced. A study by the Urban Institute, for instance, found that millennials between age 25 and 34 had a homeownership rate of only 37 percent, 8 percentage points lower than Baby Boomers and Gen Xers.
Homeownership is the largest single source of net worth for the vast majority of Americans.
Consumer Debt Serfdom. Many would argue that the money we borrow to buy cars and homes is entirely voluntary. It is. But it’s usually the result of a rational and hopeful decision, such as paying more for a house in a good school district to provide the best education for our kids.
The net effect of all three factors is to create anxiety and fear about employment. Reader mail tells me that this fear has been pervasive for most of the last three decades.
To be sure, none of this is as horrible as the terrible punishments peasants and surfs suffered in the Middle Ages.
But the key idea missing from today’s lovers of private enterprise or, in the opposing camp, socialist largesse, is the notion of countervailing power.
The private sector isn’t to be trusted anymore than any government is.
That’s not a happy reality, but it’s closer to reality than blind belief in either government or private enterprise.
Related columns:
Scott Burns, “When the rich have it all,” 08/04/2019 https://scottburns.com/when-the-rich-have-it-all/
Scott Burns, “Is it time to eat the rich?” 08/17/2019 https://scottburns.com/is-it-time-to-eat-the-rich/
Scott Burns, “Eat the rich and take their money (continued),” 09/01/2019 https://scottburns.com/eat-the-rich-and-take-their-money-continued/
Sources and References:
Biographical information on J.S. Bach: https://www.baroquemusic.org/bachweimar.html
F.A. Hayek, “The Road to Serfdom” on Amazon :https://www.amazon.com/Road-Serfdom-Documents-Definitive-Collected/dp/0226320553/ref=sr_1_1?keywords=road+to+serfdom&qid=1570548795&s=books&sr=1-1
Jung Hyun Choi, Jun Zhu, Laurie Goodman, “The state of millennial homeownership,” 07/11/2018 https://www.urban.org/urban-wire/state-millennial-homeownership
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Photo: Scott Burns, Napoleon III apartment in the Louvre, Paris
(c) Scott Burns, 2019