Labor Economics in a Planned Economy: F. A. Hayek and John Jewkes on the Impossibility of Democratic Socialism

Michael Makovi

MPRA Paper from University Library of Munich, Germany

Abstract: Milton Friedman (1962) is associated with the claim that political and economic freedom cannot be distinguished (cf. Lawson and Clark 2010), using the famous example that there can be no freedom of speech where the government owns the printing presses. Less well-known is F. A. Hayek's example, drawn from labor economics, used to illustrate the same principle. Hayek was joined in this by his less well-known colleague, John Jewkes. Hayek and Jewkes argued that without a freely operating price system, central economic planning cannot function without compulsory regimentation of labor. Similarly, no state may simultaneously fix “fair” wages and demand a given pattern of productive output and employment. It is impossible to both achieve income equality and accomplish an economic plan. Hayek's and Jewkes's examples help explain why democratic socialism is impossible, in the sense that it cannot accomplish what its advocates desire.

Keywords: Hayek; Road to Serfdom; democratic socialism; market socialism; economic democracy; totalitarianism; public choice; government failure; impossibility; corvee; corvée; serfdom; slavery; involuntary; coercive; compulsion; compulsory; labor; servitude (search for similar items in EconPapers)
JEL-codes: A12 B24 B25 B51 B53 D7 J0 J00 J20 J30 J47 P10 P20 P30 P50 (search for similar items in EconPapers)
Date: 2016-03-21
New Economics Papers: this item is included in nep-his and nep-hpe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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