Hayek2 - cis225 hayek2 February 2006 p.1 Does Socialism...

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cis225: hayek2 February 2006, p.1 Does Socialism Lead to Dictatorship? -- B Chapter 3: “Individualism and Collectivism” 1 What is socialism? 2 To some, it refers to certain ends : the goals of social justice, greater equality, and security 3 To others, it is the means by which these goals are to be pursued: 4 The abolition of private enterprise and of private ownership of the means of production, 5 the creation of a “planned economy” in which the entrepreneur working for profit is replaced by a central planning body. 6 The concept of “planning” is popular because everybody believes that we should handle our problems as rationally and with as much foresight as possible. 7 Hayek argues that designing a free-market economic system is an act of planning which is designed to achieved various desirable goals. 8 But this is not what the socialist planners meant: 9 To them, planning is the central direction of all economic activity according to a single plan, which describes how the resources should be used to serve particular ends. 10 To Hayek, the dispute over planning is this (pp.40-41): 11 “The question is whether for this purpose it is better that the holder of coercive power should confine himself in general to creating conditions under which the knowledge and initiative of individuals are given the best scope so that they can plan most successfully; or whether a rational utilization of our resources requires central direction and organization of all our activities according to some consciously constructed ‘blueprint’.” 12 Hayek notes that opposition to central economic planning does not mean a dogmatic laissez faire, or “hands off” role for government; see p.41. 13 Instead, it is an argument for using the forces of competition to co-ordinate human efforts, not as an argument for leaving things just as they are. 14 The argument regards competition as superior not only because it is the most efficient method known but because it is the only method by which our activities can be adjusted to each other without coercive intervention of authority. 15 Where it is impossible to create the conditions necessary to make competition effective, Hayek agrees that we must resort to other methods of guiding economic activity. 16 He also says (p.43) that the preservation of competition is compatible with an extensive system of social services -- so long as the organization of these services is not designed in such a way as to make competition ineffective over wide fields of the economy.
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cis225: hayek2 February 8, 2001, p.2 17 In sum: the task of government is to create conditions under which the beneficial workings of competition can take place, when it is possible to create these conditions. Chapter 4: “The ‘Inevitability’ of Planning”
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This note was uploaded on 04/09/2008 for the course ISS 225 taught by Professor Williams during the Spring '07 term at Michigan State University.

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Hayek2 - cis225 hayek2 February 2006 p.1 Does Socialism...

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