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To many Americans who believed in the existence and value of Western civilization, 1945 was a year of victory, and foreboding. Europe was liberated but prostrate; the price of Hitler's extirpation had been the rending of what men once called Christendom. In far-off Asia, the Rising Sun had set-but not before seeing the future in the atomic bomb. And after all the sacrifices of war, there stood across eastern and central Europe, ominously, enigmatically, the Colossus of the East. Like the Abbé Sieyès, who had lived through the French Revolution, historically minded Americans might simply have said to one another: We survived.
For those Americans who believed in the creed of old-fashioned, classical, nineteenth-century, liberal individualism, 1945 was especially lonely, unpromising, and bleak. Free markets, private property, limited government, self-reliance, laissez-faire-it had been a long time since principles like these had guided governments and persuaded peoples. The 1930s-what had they been? Uncongenial years of workers' utopias, New Orders, and marching feet abroad; Blue Eagles, the WPA, and increasing regulation of the economy at home. The war-the Popular Front war, the crusade for freedom-had been little comfort to many thoughtful adherents of the old liberal faith. President Roosevelt mayhave announced the demise of "Dr. New Deal" in favor of "Dr. Win-the-War," but to many of his foes the end of domestic reform could hardly be welcomed.
For what had war and victory brought? A domestic superstate, a partially controlled economy; millions of conscripts under arms, and widespread fears of reversion to depression once demobilization set in. Further success for a philosophy of "tax and tax, spend and spend, elect and elect." If, seeking solace or perspective, these apprehensive "individualists" turned to ravaged Europe for a portent of the future, they could only be further disheartened. In the summer of 1945, Americans were stunned to learn that Britain had voted Socialist. Britain-home of so much of the classical liberal tradition, of John Locke and Adam Smith, Herbert Spencer and John Stuart Mill. Britain-home of the dauntless Tory, Churchill, who had warned the voters about the dangers of socialism, only to be turned out into the cold. "We are the masters now," boasted a Labour Party M.P. In Parliament, August 1, 1945, exultant socialists sang the "Red Flag" for the first time since the Spanish Civil War.
Was the whole Western world going Left? Many old-time American liberals feared that it was. Their dejection was sharply reflected in an article written by the historian Mortimer Smith and published three days after the Yalta conference in the year of victory. The "central fact" of the last seventy-five years, he declared, had been the march of men to collectivism; this trend was certain to gain "terrific momentum" from the war.
Through the cacophonous chorus of the postwar planners runs one harmonious theme: the individual must surrender more and more of his rights to the state which will in return guarantee him what is euphemistically called security.
No matter what their ideology, said Smith, the leaders of the Grand Alliance agreed on one goal: "enhanced state power" after the war. The fact was inescapable that "old-fashioned liberalism ... is all but dead in our present world."
And yet. And yet. The situation, gloomy though it appeared to many whom we may designate libertarian conservatives, was not hopeless. History, in fact, is rarely without hope, for history is possibility. There is no such thing as a lost cause, said T. S. Eliot, for there is no such thing as a gained cause. In 1945 classical liberalism was neither dead nor dying. Even then, as Mortimer Smith acknowledged in his article, there were "faint twitchings and stirrings" in the land. In a world of overweening statism, entrenched bureaucracy, and seemingly triumphant philosophies of the Left, the old indigenous American tradition of "individualism" was about to enjoy an unexpected revival. It was to become one branch of the postwar conservative intellectual movement.
However old and indigenous this stream of thought may have been, much of the initial impetus for its renascence came not from America but from Europe. Indeed, it is doubtful that this resurgent libertarianism would ever have achieved the respectability and impact that it eventually did attain without the contributions of two émigré scholars from the nightmare world of the Thousand Year Reich. The roots of postwar American conservatism must first be sought in Europe, in the revulsion from dictatorship and war.
In the spring of 1944 a little book called The Road to Serfdom appeared in Britain and soon caused a great storm. Interestingly enough, it was not written by a native Englishman but by an Austrian economist named Friedrich A. Hayek, then teaching at the London School of Economics. Born in Vienna in 1899 and educated at its university, an economist and lecturer in Austria during the 1920s, Hayek had gone to the London School of Economics as a professor of economics in 1931. Watching from afar the deepening crisis in central Europe in the 1930s, Hayek became a British subject in 1938. As World War II enveloped Europe, he grew increasingly alarmed about the tendency toward governmental planning of the economy and the consequences of this trend for individual liberty. He decided to write a learned polemic, which he dedicated "to the Socialists of all parties."
The thesis of Hayek's work was simple: "Planning leads to dictatorship"; "the direction of economic activity" inevitably necessitates the "suppression of freedom." By "planning" Hayek did not mean any kind of preparation by individuals or governments for the future; he meant only "central direction of all economic activity according to a single plan," or "planning against competition." Such comprehensive controls, he argued, would necessarily be arbitrary, capricious, and ultimately destructive of liberty.
Economic control is not merely control of a sector of human life which can be separated from the rest; it is the control of the means for all our ends. And whoever has sole control of the means must also determine which ends are to be served, which values are to be rated higher and which lower-in short, what men should believe and strive for.
Collectivism, in short-all collectivism-was inherently totalitarian; "democratic socialism" was illusory and "unachievable." Pointing to Nazi Germany as the incarnation of his fears, Hayek argued that "the rise of fascism and nazism was not a reaction against the socialist trends of the preceding period but a necessary outcome of those tendencies." His book, in short, was no academic matter. The path to socialism which Britain was taking was the very path Germany had already chosen: the road to serfdom.
Against this specter Hayek opposed "the abandoned road" of individualism and classical liberalism. The "fundamental principle" of this creed was "that in the ordering of our affairs we should make as much use as possible of the spontaneous forces of society, and resort as little as possible to coercion...." This did not mean, Hayek insisted, that government should be inactive; he strenuously denied that his brand of liberalism was identical with laissez-faire. Instead, he proposed the concept of the Rule of Law: "government in all its actions is [to be] bound by rules fixed and announced beforehand...." Such a principle would often require vigorous government action designed to facilitate competition and the continued functioning of a free society. Under such a system, in fact, limitations of working hours, sanitary regulations, and even minimum wage laws and social insurance would be permitted. But always the design of such interventions must be the preservation of competition, private initiative, and private property, and the rules of the game would have to be applied equally. There was, he contended, a world of difference between his version of the liberal state and the centralized, capricious, privilege-granting, collectivist state-aggrandizing power and "planning against competition."
The response to Hayek's work in Great Britain was immediate. Intended "as a warning to the socialist intelligentsia of England," The Road to Serfdom incited many readers to vigorous reply. So important a challenge did it offer that two book-length refutations appeared-one by a prominent Labour Party M.P. At one point in 1945, Hayek even briefly became an election issue when Clement Atlee accused the Conservative Party of adopting the Austrian economist's allegedly reactionary principles.
The British reception of Hayek's book was mild and restrained, however, compared to its fate in the United States following publication on September 18, 1944. The book had not been expected to make much of an impact; in fact three publishing houses-at least one of them apparently motivated by political opposition to Hayek-rejected it. When the University of Chicago Press finally published the book, it printed only 2,000 copies. Clearly, as Hayek later recalled, this book was "not intended for popular consumption."
Hayek's expectation was wrong. Instantly his book was recognized, not just as a scholarly polemic but as a fervent tract for the times. Within a week a second printing of 5,000 copies was undertaken; a few months later the Reader's Digest eagerly condensed the book for its readers and arranged for the Book-of-the-Month Club to distribute more than a million reprints. Soon Hayek-who had thought of himself as something of a voice in the wilderness-was lecturing all over the United States. "Seldom," said one observer, "have an economist and a nonfiction book reached such popularity in so short a time."
Many book reviewers contributed to the growing controversy with excited and sometimes extravagant remarks. In a front-page article in the New York Times Book Review, the veteran journalist Henry Hazlitt proclaimed The Road to Serfdom "one of the most important books of our generation," comparable in "power and rigor of reasoning" to John Stuart Mill's On Liberty.
In Fortune, John Davenport judged the book "one of the great liberal statements of our times," an effective restatement of the faith in individualism, "the faith after all in Western Christian civilization." Mortimer Smith predicted that Hayek's work might become a "milestone in a critical age," like Thomas Paine's The Rights of Man. Meanwhile, the hostile New Republic editorialized that Hayek's work was having little scholarly impact and was simply being used by reactionary business interests. Stuart Chase asserted that the volume was fulfilling a "deep spiritual need in American men of affairs" for "the fundamentalist doctrine that those of us beyond fifty were brought up on." Writing early in 1946, Professor Charles Merriam, a wartime vice-chairman of the National Resources Planning Board, vehemently dismissed Hayek's book as "over-rated," "dismal," "cynical," and "one of the strange survivals of obscurantism in modern times." Even in academic circles the debate became tempestuous, so much so that the editor of the American Economic Review took the unusual step of publishing two reviews of the book. Needless to say, they disagreed.
No one was more startled-and admittedly embarrassed-by this uproar than the scholarly Professor Hayek himself. As he later observed, the emotions the book engendered amazed him. Why should a work aimed at experts and written by an Austrian émigré living in London stir the passions of Americans? Perhaps it was true, as the New Republic charged, that chambers of commerce, advertising interests, and other businesses were boosting demand for the book by bulk orders, thereby concealing its actual public appeal. But why should they have bothered? And if, as one critic alleged, Hayek had merely presented "an old nostrum attractively packaged," why should many liberals (new style) have become so angry and even dismayed? Why should one self-proclaimed "left-of-center" reviewer confess that the book had "shaken" him and proved to be "one of the most unsettling books to come along in many years"?
The reason for the Left's malaise was partially supplied by Hayek in his retrospective essay of 1956. In contrast with Britain, where the question of freedom versus planning had become a familiar issue by 1945, the United States remained at the stage of enthusiasm. For many American intellectuals, the ideal of a "new kind of rationally constructed society" still seemed novel, vibrant, and "largely unsoiled by practical experience." To criticize such heady beliefs was to attack something nearly sacred-even if it was, in Hayek's view, an illusion.
The Austrian economist's analysis suggests another reason for the Left's reaction to his book. It had not, after all, been such a long time since modern liberalism (statism to its detractors) had attained power in America. It had not been so terribly long-twelve years, in fact, in 1945-since professors, lawyers, and many others had turned to Washington, D.C. and to President Roosevelt for leadership and the New Deal. For many of these people, one suspects, the pleasures and gains of those days were not quite consolidated in 1945. Theirs was still an uncertain triumph, not yet ratified by time and consensus. Consequently, when a bold challenge like Hayek's appeared-and few denied his competence and polemical power-it could not be airily dismissed. It was a threat, and it had to be vigorously repulsed. In 1948 and 1949 some American liberals would react in a similar but even more intense way to another formative controversy of the postwar era, the Hiss-Chambers trial. In 1945 their uneasiness about the future was already evident.
Yet if, at war's end, many self-designated progressives, for all their power and prominence, may still have felt insecure, the Right did not know it. There a far different sentiment prevailed. Outnumbered and beleaguered, it could only rejoice when a compelling restatement of its case appeared. Stuart Chase might ridicule it as "the true faith we have lost"; John Davenport might hail it for the very same reason. But both sides agreed that an old tradition had acquired an articulate voice again. No doubt, as many critics eagerly observed, Hayek's defenders did not always realize just how critical of laissez-faire and business he was. Still, their impulse was correct; Hayek was on their side. And that was precisely part of his significance: he enabled those who felt routed to draw the lines and confidently take sides once more. At last they had a champion who made the enemy squirm. It is a measure of their rout and of the paucity of libertarian thought in America in this period that they were obliged to rely on an Austrian professor for leadership.
Hayek was not the only European intellectual who provided intellectual sustenance to the American Right in the mid-1940s. Less dramatic but equally noteworthy was the widening influence of another Austrian: Hayek's mentor, the indefatigable Ludwig von Mises. Born in Austria-Hungary in 1881, Mises studied law and economics at the University of Vienna, where he obtained his doctorate in 1906. To be a young economist at Vienna in those days was to live in an environment dominated by the great Methodenstreit (clash over methods) of the late nineteenth century. Carl Menger, an eminent "classical liberal" Austrian economist, had opened the "war" in 1883 with an attack on Gustav Schmoller and the German Historical School of economists. To Menger and his allies-soon known as the Austrian School-the Historical School's relativistic rejection of universal economic laws in the name of history was a dangerous repudiation of science and a justification for government intervention and socialism. After all, if there were no immutable economic laws, why shouldn't the government direct affairs as it wished? This dispute did not quickly subside. Instead, as Mises later observed, each camp produced its disciples. In the direct line of the Austrian succession, from Menger to Eugen von Böhm-Bawerk (another Austrian economist) and beyond, was Ludwig von Mises. By the 1920s he had become internationally known as an economic theorist and author of a trenchant critique of socialism. He was also, like Hayek, an unremitting opponent of Nazism (or National Socialism, as its classical liberal critics carefully noted). In 1934 he left the University of Vienna to become a refugee at the Graduate Institute of International Studies in Geneva. In 1940 the "patriarch of the modern Austrian school" emigrated to the United States.
Excerpted from The Conservative Intellectual Movement in America Since 1945 by George H. Nash Copyright © 2006 by George H. Nash. Excerpted by permission.
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