Hayek versus liberty

F.A. Hayek is often praised as an advocate of liberty. In reality, Hayek mixed liberal (free markets and individual liberty) and anti-liberal traditions and said we should make trade offs between them. In Chapter 4 of The Road to Serfdom, pp. 53-54 of the Routledge  Classics edition, Hayek wrote:

There is yet another theory which connects the growth of monopolies with technological progress, and which uses arguments almost opposite to those we have just considered; though not often clearly stated, it has also exercised considerable influence. It contends, not that modern technique destroys competition, but that, on the contrary, it will be impossible to make use of many of the new technological possibilities unless protection against competition is granted unless a monopoly is conferred. This type of argument is not necessarily fraudulent, as the critical reader will perhaps suspect: the obvious answer, that if a new technique for satisfying our wants is really better, it ought to be able to stand up against all competition, does not dispose of all instances to which this argument refers. No doubt in many cases it is used merely as a form of special pleading by interested parties. Even more often it is probably based on a confusion between technical excellence from a narrow engineering point of view and desirability from the point of view of society as a whole.
There remains, however, a group of instances where the argument has some force. It is, for example, at least conceivable that the British automobile industry might be able to supply a car cheaper and better than cars used to be in the United States if everyone in this country were made to use the same kind of car; or that the use of electricity for all purposes could be made cheaper than coal or gas if everybody could be made to use only electricity. In instances like these it is at least possible that we might all be better off, and should prefer the new situation if we had the choice-but that no individual ever gets the choice, because the alternative is that either we should all use the same cheap car (or all should use only electricity), or that we should have the choice between these things with each of them at a much higher price. I do not know whether this is true in either of the instances given. But it must be admitted that it is possible that by compulsory standardisation or the prohibition of variety beyond a certain degree, abundance might be increased in some fields more than sufficiently to compensate for the restriction of the choice of the consumer. It is even conceivable that a new invention may be made some day whose adoption would seem unquestionably beneficial, but which could be used only if many or all people were made to avail themselves of it at the same time.

Hayek is claiming that sometimes it might be a good idea to force people to use some particular items rather than allowing free choice. This is an anti-liberal position and it’s also wrong. Hayek claims that forcing people to use  some item X would be good for them. But if people are forced to use X then how would we know whether they prefer it to some other option? Since they are being forced to use X they can’t turn it down in favour of something else. So the policy of forcing people to use X would prevent that policy from being corrected if it was wrong.

How could this problem work out in practice? It might be the case that if you invested in machinery capable of making 1 million Lada cars each year, then the unit cost of making each Lada would be a lot cheaper than the cost of making lots of different kinds of cars. But Ladas might actually be bad for some applications so that if people are forced to buy them their lives are worse despite the cheaper price. For example, people with long legs might have difficulty fitting inside a Lada so that they find riding in a Lada very uncomfortable. But that doesn’t matter to the Lada maker cuz the tall person is forced to buy a Lada. In addition, there is no particular reason to think the Lada manufacturer would make 1 million Ladas each year at a low unit cost. He might increase the unit costs and make fewer Ladas cuz he has a captive market. And since he has a captive market the Lada manufacturer can make money without bothering to improve his cars or make them cheaper. Restricting consumer choice also makes it difficult for the Lada maker to know what improvements people want cuz they have to take whatever he makes. The Lada maker might even have difficulty maintaining the machinery he has for making cars. If people have to take whatever he produces, then they may not report faults as a result of manufacturing problems. He also can’t motivate his staff to the same extent as under freedom cuz they can’t lose customers to competitors. So the staff may not fix machines as efficiently as they would if their company was more sensitive to consumer preferences. The Lada manufacturer also can’t benefit from copying innovations made by his competitors cuz he has none.

Hayek sucks and you shouldn’t recommend him as an advocate of liberty.