“Few are ready to recognize that the rise of fascism and naziism was not a reaction against the socialist trends of the preceding period but a necessary outcome of those tendencies.”

Nazi fascism, far from being capitalist, was in fact a form of socialist collectivism. Believing otherwise has led Western intellectuals into a state of denial and a willingness to plunge into the dangerous experiment of central planning. Hayek saw, while living in Eastern Europe, the rise of collectivism and totalitarianism; moving to England, he recognized seeds of the same trends planted in new soil. Hayek wants to awaken the British to these dangers, lest they fall unthinkingly into traps laid by their pet theories about socialism.

“We are ready to accept almost any explanation of the present crisis of our civilization except one: that the present state of the world may be the result of genuine error on our own part and that the pursuit of some of our most cherished ideals has apparently produced results utterly different from those which we expected.”

The West, focused on its efforts to improve the lives of its people through collective effort, persist in denying that the same practices have been put to sinister use in totalitarian countries. Those states achieve their despotic control because of, not despite, socialism.

“For at least twenty-five years before the specter of totalitarianism became a real threat, we had progressively been moving away from the basic ideas on which Western civilization has been built. That this movement on which we have entered with such high hopes and ambitions should have brought us face to face with the totalitarian horror has come as a profound shock to this generation, which still refuses to connect the two facts.”

Liberal ideals about freedom had suffered erosion well before the great dictatorships arose. The liberal West, moving away from those ideals and toward socialism, had through inattention laid the groundwork for the totalitarian threat.