PRESTOPUNDIT -- "An intense brain-buzz, guaranteed" (2blowhards)

Margaret Thatcher discusses Friedrich Hayek (from the newly opened online archive of the papers of Margaret Thatcher.):

I am a great admirer of Professor Hayek. Some of his books are absolutely supreme— "The Constitution of Liberty" and the three volumes on "Law, Legislation and Liberty" — and would be well read by almost every hon. Member .. source

The Second World War, even more than other wars, had given an enormous boost to government control. Indeed, oddly enough when you consider that it was fought against totalitarian states, the War provided in many people's minds convincing proof that a planned society and a planned economy worked best. The sixties and seventies in Britain were decades during which this illusion was gradually, painfully dispelled. Social and economic planning led to larger, cumulative failures, and these in turn produced disillusionment and despair - even among those who once thought that socialism could achieve heaven on earth.

As the results of all this multiplied, commentators spoke wearily of the so-called "British disease". By this they meant an affliction of restrictive practices, low productivity, trade union militancy, penal taxes, poor profits, low investment - in short economic decline. And hardly less corrosive was the mentality which underlay, and which was itself encouraged by that decline. To put it simply, there was a resigned acceptance that Britain was finished.

This discouraged some politicians on the Right, who felt that damage limitation was the only sensible strategy, that managing decline made best sense. But a number of us felt differently. We did not believe that Britain was down, let alone out. We felt that it was socialism that had failed the country, not the country that had failed socialism. And we were determined to prove it.

Let me emphasise again: my journey along this path was never a solitary one. Keith Joseph gave the best political analysis of what was wrong, and what had to change. But behind him lay the wisdom of people like Friedrich Hayek, bodies like the Institute for Economic Affairs, and a host of thinkers who had swum against the tide of collectivism which at one time threatened to sweep away our national foundations.

If I were to use one phrase to sum up what had to be done - and what indeed was done - it is that we had to "reverse the ratchet" ... source

Not surprisingly, therefore, the most powerful critique of socialist planning and the socialist state which I read at this time [as a student at Oxford] and which I have returned to so often since, F.A. Hayek's The Road to Serfdom, is dedicated famously "To the socialists of all parties".

I cannot claim that I fully grasped the implications of Hayek's little masterpiece at this time. It was only in the mid 1970s, when Hayek's works were right at the top of the reading list given me by Keith Joseph , that I really came to grips with the ideas he put forward. Only then did I consider his arguments from the point of view of the kind of state Conservatives find congenial - a limited government under a rule of law - rather than from the point of view of the kind of state we must avoid - a socialist state where bureaucrats rule by discretion. At this stage it was the (to my mind) unanswerable criticisms of socialism in The Road to Serfdom which had an impact. Hayek saw that Nazi-ism - national socialism - had its roots in nineteenth century German social planning. He showed that intervention by the state in one area of the economy or society gave rise to almost irresistible pressures to extend planning further into other sectors. He alerted us to the profound, indeed revolutionary, implications of state planning for Western civilisation as it had grown up over the centuries.

Nor did Hayek mince his words about the monopolistic tendencies of the planned society which professional groups and trade unions would inevitably seek to exploit. Each demand for security, whether of employment, income or social position, implied the exclusion from such benefits of those outside the particular privileged group - and would generate demands for countervailing privileges from the excluded groups. Eventually, in such a situation everyone will lose. Perhaps because he did not come from a British Conservative background and did not in fact ever consider himself a Conservative at all, Hayek had none of the inhibitions which characterised the agonised social conscience of the English upper classes when it came to speaking bluntly about such things.

Hayek was unusual and unpopular, but he was not quite alone in root and branch criticism of socialism. I also read at this time and later the polemical journalist Colm Brogan 's writings. Where Hayek deployed philosophy, Brogan relied on withering irony and devastating wit. source -- from Margaret Thatcher The Path to Power, pp. 50-51.

The kind of Conservatism which he and I — though coming from very different backgrounds — favoured would be best described as "liberal", in the old-fashioned sense. And I mean the liberalism of Mr Gladstone not of the latter day collectivists.

That is to say, we placed far greater confidence in individuals, families, businesses and neighbourhoods than in the State.

But the view which became an orthodoxy in the early part of this century — and a dogma by the middle of it — was that the story of human progress in the modern world was the story of increasing state power.

Progressive legislation and political movements were assumed to be the ones which extended the intervention of government.

It was in revolt against this trend and the policies it bred that Hayek wrote The Road to Serfdom, which had such a great effect upon me when I first read it — and a greater effect still, when Keith suggested that I go deeper into Hayek's other writings.

Hayek wrote:

"How sharp a break — with the whole evolution of Western civilisation the modern trend towards socialism means — becomes clear if we consider it not merely against the background of the nineteenth century, but in a longer historical perspective. We are rapidly abandoning not the views merely of Cobden and Bright, of Adam Smith and Hume, or even of Locke and Milton, but one of the salient characteristics of Western civilisation as it has grown from the foundations laid by Christianity and the Greeks and Romans. Not merely nineteenth- and eighteenth-century liberalism, but the basic individualism inherited by us from Erasmus and Montaigne, from Cicero and Tacitus, Pericles and Thucydides is progressively relinquished."

So, Ladies and Gentlemen, against that background, it is not surprising that the Left claimed all the arguments of principle, and that all that remained to the Right were the arguments of accountancy — essentially, when and how socialism could be afforded.

It was this fundamental weakness at the heart of Conservatism which ensured that even Conservative politicians regarded themselves as destined merely to manage a steady shift to some kind of Socialist state. This was what — under Keith's tuition — we came to call the "ratchet effect".

But all that was not just bad politics. It was false philosophy — and counterfeit history.

Let me remind you why this is so .. source