The Road To Freedom?

in #opinion6 years ago

THE ROAD TO FREEDOM?

In 1944 the Austrian economist, Friedrich August Von Hayek, published ‘The Road To Serfdom’. The book set out to argue that the free market is the only viable way of bringing about freedom and prosperity. Actually, the book does not talk so much about the virtues of free markets but rather the downsides of the alternative which, at the time, was central planning. Hayek’s argument was that we can only handle the complexities of reality in a bottom-up fashion, with individuals looking after their own self-interests while guided by pricing signals. This, he reckoned, would result in the efficient allocation of resources arising from what would now be called emergent behaviour.

On the other hand, if we instead relied on a centralised authority to determine resource allocation, such an authority would inevitably find the complexity of modern economies too much to handle. The only way the authority could gain some measure of control would be to exercise more power over the people, restricting their freedom and making them live their lives according to some plan. Thus, a socialist economy would become more authoritarian over time. As the title of the book said, Hayek reckoned socialism to be the road to serfdom.

It’s fair to say that the book remains one of the classic texts of neo-liberalism. Margaret Thatcher described Hayek as one of the great intellects of the 20th century, and he was awarded the Nobel Prize in economics in 1974. Even now, some 64 years after its publication, it is still regarded as a definitive refutation of leftist politics and proof that only neo-liberalism can deliver prosperity. You could say that Hayek is as important a figure to the free market as Karl Marx is to communism.

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(Hayek. Image from Wikimedia commons)

But, I wonder, does Hayek’s argument really successfully demolish every alternative to neo-liberalism? Does the selfish pursuit of money and the conversion of everything to a commodity to be bought and sold on the market still stand as the only way we can achieve peace and prosperity? Or are its advocates wrong to say there is no alternative?

I would say there is an alternative. We are no longer restricted to the either-or choice of laissez-faire capitalism or authoritarian central planning. There might just be a third way.

It’s worth baring in mind the time in which Hayek wrote his book and how things have changed since then. At the heart of his argument is the belief that the world is really, really complex and, because of this, far too much information is generated for a centralised authority to handle without imposing real restrictions on individual liberty. Only market competition guided by pricing signals can manage such complexity. But, remember, he was writing in 1944. Communications back then was a good deal more primitive than is the case today. There was not one satellite in orbit. Now we have many hundreds, if not thousands, constantly monitoring all kinds of stuff such as weather patterns, urban sprawl, how crops are faring and so on and so on. This amounts to a network of sensors englobing our planet and allowing for realtime feedback about all kinds of important things. Such a perspective simply didn’t exist when ‘Road’ was published.

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(An image representing the satellites in orbit around the Earth. Image from ‘Futurism)

The advances we have made in our ability to transmit information is truly remarkable. The numbers are hard to grasp as they are pretty astronomical, but let’s give ourselves some standard of comparison and see if that helps. The author James Martin proposed the ‘Shakespeare’ as the standard of reference for our ability to transmit information. One Shakespeare is equivalent to 70 million bits, enough to encode everything the Bard wrote in his lifetime.

Using a laser beam, you can transmit 500 Shakespeares per second. Sounds impressive, but in fact fibre optics technology can do much better. By using a technique called Wavelength Division Multiplexing, the bandwidth of a fibre can be divided into many separate wavelengths. Think of it as encoding information on different colours of the spectrum. Some modern fibres are able to transmit 96 laser beams simultaneously, each beam carrying tens of billions of bits per second or 13,000 Shakespeares.

But we are still not done, because many such fibres can be packed into a single cable. Indeed, some companies make cables with more than 600 strands of optical fibre. That is sufficient to handle 14 million Shakespeares or a thousand trillion bits per second.

Think about that. We can now transmit data equivalent to 14 million times Shakespeare's lifetime’s output from one side of the planet to the other almost instantaneously. Of course, this is quantity of information and not necessarily quality (not everything we send over the Internet is of Shakespearean standards!) but the point is that we can now send an awful lot of information around the world whereas this was not possible in Hayek’s day.

It would do little good to transmit petabits of information if we did not also improve our ability to store and crunch that data. In 1944 computers barely existed. What computers did exist came in the form of room-sized electromechanical behemoths that consumed huge amounts of power and were so temperamental only specialised engineers could be trusted to go near them.

Ray Kurzweil once said, “if all the computers in 1960 had stopped functioning, few people would have noticed. A few thousand scientists would have seen a delay in getting printouts from their last submission of data on punch cards. Some businesses reports would have been held up. Nothing to worry about”. And this was in 1960, over a decade after Road was published.

Since then, Moore’s Law (related to the price-performance of computer circuitry) has increased the power of computers by billions of times. It has shrunk hardware from the room-sized calculators of old to swift, multi-tasking supercomputers that can easily slip into your pocket. The cost has been reduced from about 100 calculations per second per thousand dollars in 1960, to well over a billion cps by 2000. Such a reduction means we can treat computing as essentially free, as proven by the way people are constantly on their web-enabled devices without ever fretting about how much it is costing. Also, computers have become increasingly user-friendly over time, from devices that required considerable technical skill for even simple tasks to modern conveniences like Alexa that can be interacted with through ordinary conversation.

The result of all this technological progress is that we are now practically cyborgs from infancy, thanks to the near-constant access to enormously powerful and intuitive computational devices. We live as part of a vast, dense network of bio-digital beings, connected to one another regardless of distance and with ready access to all kinds of information and digital assistance.

What this has to do with Hayek’s argument was expressed in an opinion put forward by David Graeber: “One could easily make a case that the main reason the Soviet economy worked so badly was because they were never able to develop computer technology efficient enough to coordinate such large amounts of data automatically...now it would be easy”.

In part two, we will see how the Internet and other technological advances provide options that were not feasible when ‘Road’ was written.

REFERENCES

“The Road To Serfdom” by Hayek

‘Zeitgeist Movement Defined’

‘The Zero-Marginal Cost Society’ by Jeremy Rifkin

‘Age Of Spiritual Machines and ‘The Singularity Is near’ by Ray Kurzweil

‘The Meaning Of The 21st Century’ by James Martin.

“Bullshit Jobs: A Theory” by David Graeber

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