Hayek’s Road To Serfdom An Inspiration For Argentina’s Reforms

This month, advocates of free enterprise celebrate 80 years since F.A. Hayek (1899-1992) published The Road to Serfdom. It is also approximately 80 years since the ideology of Peronism took hold in Argentina and, as Hayek foresaw, led to the country’s decline. Of course it takes time for ideas to lead to policy reform, but it is worth noting that Javier Milei, Argentina’s new president, takes Hayek’s views seriously. Has the time arrived for the implementation of Hayekian views in Argentina? How did Hayek’s ideas come to be known in the country? Here is a short history of how he influenced me and others in Argentina.

Like many of the Argentine liberals of my generation (I was born in 1954), I learned of Hayek’s first writings through the publications of the Centro de Estudios Sobre la Libertad (CESL). Directed by Alberto Benegas Lynch (1909-1999), CESL took shape in the early 1950s. One of these early texts that I came across was Hayek’s essay “Individualism: True and False.”

I bought my first copy of The Road to Serfdom in 1975. Hayek signed my book on November 22, 1977, during his visit to Buenos Aires after an invitation from Benegas Lynch. I thought I would have another opportunity to meet Hayek in person in 1980, as he was to speak alongside Milton Friedman at the closing session of the Mont Pelerin Society (MPS) meeting in September of that year at Stanford’s Hoover Institution. Unfortunately, Hayek had to cancel at the last minute.

Hayek founded the MPS in 1947. At the time I entered, I was the youngest member ever to join the society. My road began after that 1980 MPS meeting. Leonard Read, one of the original members of the society and founder of the Foundation for Economic Freedom, and Manuel Ayau, founder of the Universidad Francisco Marroquin, nominated me for membership. When I married in 1985, we moved to California, where my wife had a house. At that time, the Mont Pelerin was a more select group than today, and it was routine to visit members of society when arriving in their city. Thus, I visited, among others, Milton Friedman, and Antony Fisher. They lived in the same building at 1750 Taylor Street in San Francisco.

Fisher entered the world of ideas through the abridged version of The Road to Serfdom. The April 1945 edition of Reader’s Digest, a very widely read publication at the time, included a condensed version of The Road to Serfdom, thus considerable widening the book’s reach. Hayek’s warning that the West, by adopting some of the ideas of National Socialism and socialism, was on the road to serfdom, resonated with Fisher, who had suffered firsthand the impact of totalitarian violence. When he was only two, a sniper killed Antony’s father, Captain George Kenneth Thompson Fisher, while he was on patrol in Gaza. With his father absent, Antony and his brother Basil had to fill the void with an entrepreneurial spirit. They learned to fly airplanes, and when the Nazi threat approached England, they joined the Royal Air Force. Tragically, in August 1940, Basil died when his plane was shot down during the famous Battle of Britain.

Antony, for his part, became a successful and profitable chicken farmer, but with time there grew in him a desire to do something to stop socialism. He went to see Hayek, then at the London School of Economics, to ask if he should use his growing business income to enter into politics. Fisher told me that Hayek said something along the lines of, “Politicians follow public opinion, and today public opinion only listens to those who defend economic interventionism. Better help spread good economic ideas.” Hayek never acknowledged that he was so direct, but the conversation is now part of the folklore of the classical liberal movement.

So, Fisher founded the Institute of Economic Affairs (IEA) and hired Ralph Harris (later Lord Harris) and Arthur Seldon to run the think tank. The IEA, through its scholarly work, helped change the course of Great Britain. The triumph of Margaret Thatcher, who recognized the influence of the IEA, created incentives to start think tanks in the United States, Canada, and many other countries. In 1981, Fisher created the Atlas Economic Research Foundation, a precursor (though very different) of today’s Atlas Network, to continue creating think tanks worldwide. I worked with him from 1985 until his death and continued his efforts to start and nurture think tanks. Historians can say with certainty that The Road to Serfdom led to the creation of hundreds of organizations dedicated to the promotion and defense of a free society.

Hayek’s MPS society has about twelve Argentine-born members. Almost all of them are, or have been, associated with Argentine think tanks. Two of them, Martín Krause and Eduardo Marty, were considered for government positions. Javier Milei has drawn from ideas of many of these members. For instance, he borrowed his definition of liberalism from Alberto Benegas Lynch, Jr., the son of CESL’s founder and a life member of MPS. Milei also quotes other MPS members, especially the late Murray Rothbard and Spanish economist Jesús Huerta de Soto, two significant figures in Austrian economics. In most recent speech to the Argentinian Congress earlier this month, Milei referenced Hayek’s Road to Serfdom.

Hayek returned to Argentina in 1981 to help launch the Spanish edition of New Studies in Philosophy, Politics, Economics, and the History of Ideas. This time, more than his father, Alberto Benegas Lynch, Jr. played the key role in Hayek’s visit. When Benegas Lynch, Jr. founded the Higher School of Education and Business Administration (ESEADE), Hayek agreed to be the president of its Advisory Council. ESEADE had a research center that I joined in 1979, as soon as I arrived from studying at Grove City College under Dr. Hans Sennholz, a disciple of Ludwig von Mises. The late Juan Carlos Cachanosky, a classmate of mine at the The Catholic University of Argentina, also joined ESEADE’s faculty and its research department. The Cachanosky family continues to be influential in Argentina’s economic debates. Juan Carlos’s son, Nicolás, a professor of economics at the University of Texas at El Paso, co-wrote a book with Emilio Ocampo called Dolarización: una solución para Argentina (Dollarization: A Solution for Argentina), which is a blueprint on how Milei can fulfill his promises to dollarize. Not everything is rosy, however; for instance, Juan Carlos’s brother, Roberto Cachanosky, a noted analyst of the Argentine economic scene, who had been a target of Javier Milei’s outbursts even before his presidential campaign, is a strong critic of Milei’s policies. His criticisms, though, concern methods and style more than goals.

Returning to Hayek’s visit to Argentina, Alberto Jr. was generous enough to invite a group of young economists, including Juan Carlos and me, to spend an afternoon at his house and then have dinner with the famous guest. That afternoon, we were able to ask Hayek many questions. Juan Carlos and I published our conversation in Mercado magazine; at that time, Mercado was Argentina’s equivalent of Forbes magazine. We also had the privilege of meeting Hayek and his children on other memorable occasions.

I finish by highlighting three warnings in The Road to Serfdom that are especially relevant in the first decades of the 21st century.

The danger of simplistic prescriptions. When intellectuals, think tanks or political parties promote reforms beyond laissez-faire, many libertarians rend their garments. They seem blind to personal and social problems that can’t be measured with prices. Although Hayek understood why many of us defend economic liberalism as a dogma, he wrote: “Probably nothing has done so much harm to the liberal cause as the wooden insistence of some liberals on certain rough rules of thumb, above all the principle of laissez-faire.” Hayek saw the importance of creating institutes of economics and social policy research to avoid simplistic reasoning. For him, “the attitude of the liberal towards society is like that of the gardener who tends a plant, and in order to create the conditions most favorable to its growth, he must know as much as possible about its structure and the way it functions.”

There is a legitimate role for communal action. Connected to the previous point is Hayek’s assertion that a policy of support for those most in need and action in times of disaster can be consistent with the basic principles of a free society. Hayek accepts that the state may “assist individuals in providing for those common hazards of life against which, because of their uncertainty, few individuals can make adequate provision.” Hayek adds, “there is no incompatibility in principle between the state providing greater security in this way [a comprehensive system of social security] and the preservation of individual freedom.”

The destruction of the concept of truth. Chapter 11 of The Road to Serfdom is called “The End of Truth.” Hayek warned, “Few traits of totalitarian regimes are at the same time so confusing to the superficial observer and yet so characteristic of the whole intellectual climate as the complete perversion of language, the change of meaning of the words by which the ideals of the new regimes are expressed.” Today, in addition to totalitarian regimes, we often see big businesses teaming up with big governments to change the meaning of words and promote “official” truth: from the origins of COVID-19 to gender, from family to life. These often also have the support of the World Economic Forum, the United Nations, and other prominent international agencies, even the military, who instruct us on what words to use. As Hayek further wrote about propaganda control, these policies “are destructive of all morals because they undermine one of the foundations of all morals, the sense of and the respect for truth.”

In 1947, a few years after writing The Road to Serfdom, Hayek founded the Mont Pelerin Society. He promoted and accepted the MPS statutes, stressing that one cause of the weakening of the ideas of freedom was “a vision of history that denies any absolute moral value.”

Every time we read a great book, we find new points of interest because of changes in our knowledge, conditions, and society, The Road to Serfdom is a good example. On this anniversary, I recommend studying Hayek’s works and the authors he cites. Lord Acton (1834-1902), the great Catholic historian, is the most mentioned, if I did not miscount. All of us who have profited from reading this book can play a role in preventing further progress on the path of bondage and choosing the path to freedom. In the case of Argentina, those inspired by Hayek have the unique chance of reverting 80 years of decline with the ideas planted 80 years ago in The Road to Serfdom.