Hayek's The Constitution of Liberty - Institute of Economic Affairs

10 SOCIALISM IN a NEW GUISE: SOCIAL
JUSTICE AND THE WELFARE STATE
(Chapter 17)
Part III of The Constitution of Liberty is devoted to policy.
Hayek’s aim, as he explains in his Introduction, ‘will not be
to provide a detailed program of policy but rather to state the
criteria by which particular measures must be judged if they are
to fit into a regime of freedom.’ This he will do by applying principles
of freedom ‘to some of today’s critical economic and social
issues’ (5). Hayek proceeds to develop chapters on ‘Labor Unions
and Employment,’ ‘Social Security,’ ‘Taxation and Redistribution,’
‘The Monetary Framework,’ Housing and Town Planning,’ ‘Agriculture
and Natural Resources,’ and ‘Education and Research.’
These seven chapters on specific areas of policy are introduced by
a chapter entitled ‘The Decline of Socialism and the Rise of the
Welfare State.’
Advent of the welfare state
Hayek begins by calling attention to a great change that has taken
place in the post-war period – one that makes it more difficult
to identify and combat freedom’s opponents. For a century up
to the 1940s, efforts at social reform were inspired primarily by
socialism. Reformers shared a conviction that society was moving
inevitably towards socialism as its necessary and final goal.
Their task, as they saw it, was to gain control of the economy by
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