Abstract

Hayek’s The Road to Serfdom has been interpreted as a general warning against state intervention in the economy. We review this argument in conjunction with Hayek’s later work and discern an institutional thesis about which forms of state intervention and economic institutions could threaten personal and political freedom. Economic institutions pose a threat if they allow for coercive interventions as described by Hayek in The Constitution of Liberty: by giving someone the power to force others to serve one’s will by the threat of inflicting harm, in the absence of general rules of conduct. According to the logic of the argument, welfare-state provisions are not coercive insofar as they do not allow the identification and discriminatory treatment of individuals. By contrast, we claim that a structure of coercion is likely to emerge from the command-and-control nature of protectionist institutions and immigration restrictions currently advocated by the Radical Right.