F. A. Hayek: Review of Polanyi and Clark

F. A. Hayek’s joint book review, first published in Economica in May 1941 and reprinted with editorial notes in 1997, brings together Michael Polanyi’s The Contempt of Freedom: The Russian Experiment and After and Colin Clark’s A Critique of Russian Statistics. Its organizing connection is between the intellectual defence of liberty and the empirical assessment of Soviet economic performance. Polanyi exposes the assumptions behind enthusiasm for centralized planning; Clark supplies a more extensive statistical investigation of the Russian experiment. Hayek treats their contributions as mutually reinforcing, while acknowledging corrections to Polanyi’s evidence and subsequent improvements in Soviet production.

The review first maps Polanyi’s four essays, written between 1935 and 1940. The opening and closing essays examine J. D. Bernal’s proposals for the organization of science and Sidney and Beatrice Webb’s account of Soviet communism. A third investigates Soviet economic development; the previously unpublished second essay, on collectivist planning, develops the general problems raised by the others. Hayek places these writings against a background of progressive fascination with Russia and neglect of traditional liberties. His accusation of intellectual betrayal is his own sharpening of Polanyi’s more courteous treatment: the issue is how commitment to human welfare can lead intellectuals to endorse institutions destructive of freedom.

Scientific planning provides the review’s first substantive case:

The analysis of Professor Bernal's book in the essay on the "Rights and Duties of Science" is perhaps the most illuminating discussion yet attempted of the psychological propensities which so frequently turn the man of science into an ardent advocate of central planning, and of the inconsistencies which this attitude involves.

Hayek emphasizes that Polanyi accepts the benevolent motivation behind this position. The objection concerns neither scientific competence nor humanitarian purpose, but the inference that consciously directing research would secure its social benefits. As Hayek presents it, Polanyi’s criticism is that comprehensive organization would arrest scientific development, while Bernal fails to explain how an authority should direct discovery toward human welfare. The account of controlled science in Russia, drawing on Polanyi’s experience and the Webbs’ evidence, gives institutional substance to this objection. The review thus turns a dispute about intentions into a question about whether the proposed organization can sustain the activity it promises to improve.

The essay on collectivist planning extends this argument from scientific research to economic coordination. Hayek particularly values a scientist’s contribution to a debate from which economists, too, can learn. Polanyi defines planning through centralized control, making the expression “decentralized planning” contradictory in his usage. The decisive conceptual move is then to distinguish a comprehensive overview from knowledge adequate to particular decisions:

But: "as in the case of science, the comprehensive view is not an essential view but a superficial view and an ignorant view. From it not a single business proposition could be made which would not be rejected out of hand by any businessman of special experience as grossly unprofitable, and which hence—in nine cases out of ten—would not also be grossly wasteful from the point of view of society as a whole."

The passage links the limits of centralized knowledge to practical waste. Seeing an entire system does not confer the specialized experience needed to judge its constituent activities. Hayek presents Polanyi’s defence of freedom as simultaneously an argument about productive competence and creative inquiry: cultural direction threatens inspiration, while general economic planning subjects everyday life to comprehensive control. The analogy between science and business is central to this section, but the review reports its force rather than developing an independent theory of coordination.

The transition to Clark tests the Soviet experiment against reconstructed economic evidence. Hayek judges Polanyi’s statistical essay largely superseded, yet stresses that Clark’s broader materials and later information confirm its principal conclusions for the period through 1934. Corrections of detail do not overturn the earlier picture. Food consumption per head in 1934 remained below its 1913 level and, on the comparison reported here, 30 per cent below consumption among the worst-fed tenth of the British population. Workers’ housing also deteriorated sharply after 1928. Hayek nevertheless explicitly recognizes substantial improvement in some later results, preserving the distinction between evidence against early Soviet achievements and a claim of unchanging failure.

Clark’s undertaking is defined positively:

Mr. Clark’s Critique of Russian Statistics is not so much a direct critique of official Russian figures as an attempt to arrive, from whatever figures are available, at reliable information about the development of the national income of Russia and its distribution.

This distinction makes the book valuable beyond a dispute over official reporting. Hayek highlights population pressure, industrial absorption of population growth, restrictions on international migration, and railway congestion. These observations widen the assessment from aggregate output to demographic and infrastructural constraints. Clark’s contrast between Russian population growth and approaching Western depopulation also raises difficulties for expectations of an international socialist order.

The review closes with two tables rather than an extended verdict. Together they distinguish output per head from the changing numbers employed in agriculture and other production. The weighted output figure falls from 58.5 in 1913 to 51.0 in 1934, then rises to 72.3 in 1937; agricultural output per head remains below its prewar level, while non-agricultural output advances strongly by 1937. Employment figures supply the necessary context for judging those movements. Hayek’s concluding emphasis is therefore on disciplined comparison: enthusiasm for planning must answer both the institutional problem of directing specialized activity and the empirical question of what the Russian experiment actually delivered.