9 Security and Freedom

“the whole of society will have to become a single office and a single factory with equality of work and equality of pay.” Lenin (1917)

“In a country where the sole employer is the State, opposition means death by slow starvatin. The old principle: who does not work shall not eat, has been replaced by a new one: who does not obey shall not eat.” Trotsky (1937)

Economic security is represented as an indispensable condition of real liberty.  

There are two kinds of security: limited- security against severe privation and a minimum sustenance; and absolute- security of a given standard of life.

Hayek argues there is no reason why the state can’t provide some minimum safety net. The insidious kind of security is that designed to protect individuals against diminution of their income. But this kind of guarantee untethers efforts from rewards. A solid system should be built so that financial reward from occupations corresponds to their usefulness to other members of society. It is difficult when someone who has worked hard to gain skills finds that his skills are no longer needed because some new technology has supplanted his. It can even offend our sense of justice. But if we insure him against losing his income, that will come at the expense of someone else.  

The problem of adequate incentives isn’t just about incentivizing people to do their best. The important question is that if we want to leave people choice, if they are able to judge what they ought to do, they have to have some way of measuring the social importance of the occupations. If the price system is divorced from reality by arbitrary decisions of planners, it is hard for anyone to choose intelligently what areas they should go into. These ways of organizing can broadly be called commercial and military.  

The important point is that choice and risk rest with the individual, or he is relieved of both. In a military organization, the security of the individual is guaranteed, but it comes at the cost of restrictions on his liberty and the hierarchical order of military life. Of course, if some want to choose this, it should be their option. Proposals of this type have generally proven unacceptable, due to the fact that those who would surrender their liberty for security have always demanded that they give their freedom up, it should also be taken from those that don’t want to do so.  

Typically, when the protection of a standard of life is attempted, employment and production are subjected to the whims that were fluctuations previously seen in wages or prices. It is the worst exploitation of one class against another than we see when big producers are able to regulate out of competition the smaller producers.

The general trend is for more people to feel that liberty without economic security is not worth having. The paraphrase of Ben Franklin is- those that would give up liberty to purchase security deserve neither.