Pete Leeson point to a quite extraordinary article by Paul Samuelson on FA Hayek in this months JEBO (download it here). Much of it I found illegible, but once more I'm underwhelmed by how The Road to Serfdom is so easily dismissed:
Hayek's argument is that there are structural reasons why a lack of economic freedom can lead to a lack of political freedom. Hayek of course was European, and had in mind the totalitarianism of the time. But the absence of disctatorship in c21st Europe does no disprove his thesis. Why is it that the likes of Samuelson (who is, in his own words, "a centrist") and Joe Stiglitz simply ignore countries like Belarus, Turkmenistan and Uzbekistan? We have indices that attempt to measure economic (and indeed political) freedom. They are not perfect, but no aggregate measures are - if you discount them I suggest you dispense with GDP figures, and the CPI first. According to these indices Sweden is an economically free country. This may strike you as surprising, but try to remember that the US and Europe are not the only parts of the world. At the end of class the other day I was talking to a student about Venezuela. This is a country that over the last few decades has seen a dramtic decline in economic freedom (for example the state confiscation of private oil and gas companies) under the pretext of "for the people". Would *you* like to be a journalist there? A dissident? How "free and fair" are their elections for office?
I am not an expert and not claiming to be one. But if you want to test Hayek's thesis, I think Venezuala - and not Sweden - would be where to look.
To really prove Hayek wrong (which I think misunderstands the book since it's not about prediction) you need to list countries that have had a lack of economic freedom for a period of time and not seen a loss in political freedom. Lawson made convincing empirical claims that (i) Chile's drastic increase in economic freedom was soon followed by increases in political freedom; (ii) Israel's lack of political freedom in the 1970s/1980s didn't last, and relatively free-market policies have coincided with a steady increase in political freedom; (iii) Venezuela really began to lose economic freedom from 1990-1995 and since then political freedom has fallen (and is falling). This latter case - Venezuela - is the Road to Serfdom before our eyes. Recourse to countries like Sweden that rank high in terms of economic freedom can blind us to the genuine affronts to liberty.