Hayek’s Slippery Slope, the Stability of the Mixed Economy and the Dynamics of Rent-Seeking

André Azevedo Alves, John Meadowcroft

Research output: Contribution to journalArticlepeer-review

22 Citations (Scopus)
316 Downloads (Pure)

Abstract

F. A. Hayek’s The Road to Serfdom continues to provoke intense scholarly debate focused on the validity of Hayek’s central claim that a mixed economy is inherently unstable and economic intervention will inexorably lead to totalitarianism if pursued for a sustained period. This article presents empirical evidence that shows conclusively that it is the mixed economy that has proved remarkably stable, whereas laissez-faire and totalitarian regimes have proved inherently unstable. It is argued that this empirical outcome can be explained by the dynamics of rent-seeking and Hayek’s failure to anticipate that the state could control more than half of national income without requiring a totalitarian apparatus to control and direct production and consumption. The implications of the failure of Hayek’s argument for our conceptualization of freedom and power in the context of the modern democratic state and our understanding of the relationship between economic and political freedom are considered.
Original languageEnglish
Pages (from-to)843-861
Number of pages19
JournalPOLITICAL STUDIES
Volume62
Issue number4
DOIs
Publication statusPublished - Dec 2014

Keywords

  • Hayek
  • Road to Serfdom
  • Mixed economy
  • interventionism

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