The Road to Serfdom against The Great Transformation: A Comparison with Reference to Unintended Consequences

The present paper attempt at comparing two opposite accounts, developed to explain the same phenomenon, the rise of fascism and socialism in Europe in the 1930s, namely, Karl Polanyi’s The Great Transformation, and Friedrich A. Hayek’s The Road of Serfdom, in reference to the notion of the “unintended consequences.” The idea of unintended consequences, postulates, as an answer to the problem of “order” that even though the actions of individual human beings are carried out on their intentions, they will have some consequences that were not intended by any of these individuals, is taken as a reference point because both Polanyi and Hayek use this idea as an important ingredient of their social theories. However, it is argued in the paper firstly that the idea of unintended consequences cannot fulfil its promise, namely to explain the social order, especially in Hayek’s case. In Hayek, it remains essentially a mere abstraction and reduces to a functional argument based on the “representative individual” whereas in Polanyi it was conceived in terms of interactions between individuals who belong to different sections of the society, and thus it is helpful in presenting the institutional strains and contradictions of capitalism on a more concrete level. But, secondly, it is argued that it is not the differences in the use of the idea of unintended consequences per se but the difference between the respective visions of these two thinkers, concerning human beings and freedom, which actually constitutes the essential, unbridgeable gap between their social theories.