Presentation and systemic diagram copyright © 1996, 1997, 1998
by Barry and Deborah Brownstein
The Road To Serfdom
by F.A. Hayek
Is There a Common Good?
• “The ''social goal" or "common purpose" for
which society is to be organized is usually
vaguely described as the "common good," the
"general welfare," or the "general interest."...The
welfare and the happiness of millions cannot be
measured on a single scale of less and more.”
What Is Substantive Law?
• Where the precise effects of government policy
on particular people are known , where the
government aims directly at such particular
effects , it cannot help knowing these effects,
and therefore it cannot be impartial. It must, of
necessity, take sides, impose its valuations upon
people and, instead of assisting them in the
advancement of their own ends, choose the ends
for them.
What Is Formal Law?


“It is the Rule of Law, in the sense of the rule of
formal law; the absence of legal privileges of
particular people designated by authority, which
safeguards the equality before the law which is the
opposite of arbitrary government.”
“The Rule of Law thus implies limits to the scope
of legislation: it restricts it to the kind of general
rules known as formal law and excludes legislation
either directly aimed at particular people or
enabling anybody to use the coercive power of the
state for the purpose of such discrimination.”
Hayek, The Road to Serfdom
Value i
systemic diagram copyright 1996 by Barry and Deborah Brownstein
Value 2
Value 1
Belief in
"Common
Interest"
Subjective
values of
individuals
No majority
agreement on
precise goals
(ends) of an
economic plan
Majority agree
on use of
government to
direct the
economy
Legislators attempt
agreement on
"substantive law"
for a plan
Electoral
mandates
for "common
interest"
Democratic
Legislative
Body
Undermines
"formal Rule"
of Law
Failure to
produce
agreement
Citizens
dissatisfied
with democratic
institutions
Citizens support
taking planning
"out of politics"
Delegate
"technical details"
Experts rely on
subjective values,
preferences
Undermines
individual freedom
to act on personal
values
Individuals
fail to act
(costs
spread out)
Experts use
"discretion"
Tends toward
despotism
Government
Agency
Experts write
"substantive"
rules
Conflicts among
agencies
Rules have
differential
effects on
people
"Comprehensive"
plan is
fragmented
groups
with concentrated
benefits lobby
Social
conflict
increases