It is here that Hayek develops what can be seen as his doctrine of freedom, this is more of political science then economics but it is integral in understanding his ultimate support of capitalism and the threat socialism and communism pose on liberty.
He identifies how it was the liberation of action and thought which had resulted in the improvement in our general living standards whether at the top or bottom of the social ladder.
“During the whole of this modern period of European history the general direction of social development was one of freeing the individual from the ties which had bound him to the customary or prescribed ways in the pursuit of his ordinary activities”
The example of science and its development alongside freedom is noted as a direct benefit of allowing individual thought, he notes the remarks of Auguste Comte “the perennial Western malady, the revolt of the individual against the species” but rather than Hayek noting this in a derogatory sense he uses it an example of freedom being the force which created Western civilization.
Hayek is often bundled in with far right wing economic policy, with taking a completely laissez-faire approach, but he to some extent is more of an opponent to socialism then a proponent of laissez-faire policy. This originates from his core ideology of libertarianism which he states can be a mobile creed that does not stay on set values when conditions of society change. The other supporters of the liberal cause had made laissez-faire a “hard and fast rule” in which there was a failure to recognise the need for developing institutions to support it. This is identified as the cause for the picking apart of the liberal argument and then the slow progress of policy, as it was (and still is) difficult to change the institutional framework of society.
He uses a delightful metaphor to summarise this:
“The attitude of the liberal towards society is like that of the gardener who tends a plant and in order to create the conditions most favourable to its growth must know as much as possible about its structure and the way it functions.”
Moving on from this he accounts for the rise of the argument for planning, “conscious direction”, and socialism. In that he looks at how society changed from the rough rules of the 18th century accompanied by new thought but slow progress in making gaps which were yet to be filled. Thus, there were those who argued that “it was no longer a question of adding to or improving the existing machinery [of society], but of completely scrapping and replacing it.” Consequently, leading to the removal of unseen forces that produce unforeseen results, and its place have a collective and conscious direction towards deliberately chosen goals.
He accounts for the spread of similar thought throughout Europe as a consequence of the import of German ideas, he notes that the ideas may have not been first conceived in Germany but were “developed to perfection”, and that during Germany’s materialist accumulation these ideas were spread and were encompassed in the government itself which had a large socialist party in the parliament. He then notes a distinction that German thinkers developed in that “Western” was west of the Rhine, and that the society become opponents of this “Western” ideology which was constituted in liberalism, democracy, capitalism, and individualism. As the German people conceived these things to be shallow ideals, or “the rationalisation of selfish interest” thus defining the nature of German society in the early 20th century.