Freiderick Hayek and Karl Polanyi

Paper Summary:

The paper explores the changing ideas in the period up to and throughout World War II. The paper examines the arguments presented by both Freiderick Hayek and Karl Polanyi and supports the thesis that Hayek's ideas are a better representation of real-world examples than Polanyi's arguments. The paper explains the free-market (capitalist) system as advocated by Hayek and claims that support for Hayek's beliefs comes from the many people waiting to enter the United States, even illegally, just to get a chance at the free-market system.

From the Paper:

"Hayek clearly felt that the central planning and distribution system would inevitably lead to a totalitarian state. The basis for his argument lies in the ideas that formed the early democracy of the western world. Hayek argues that a true democracy cannot exist unless there is total agreement among the populace. Tyranny is the result of a small group of people being able to agree among themselves on a particular issue. Because this small group can agree and the rest of the populous cannot agree, it then becomes possible for the small group to take control develop into a dictatorship. This was his view of the world as he interpreted the ability of the Nazi regime to rise into power."

Sample of Sources Used:

• Hayek, F.A. 1997 (1944).The Road to Serfdom. Chicago: University of Chicago Press.
• Polanyi, Karl. 1944. The Great Transformation. Boston: Beacon Hill.

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