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HAYEK: If it carried its socialistic economic policy very much further! But I don't think this is very likely; Austria will not adopt a policy of socialization of industries. 1 think the Austrian way is much the same as the Swedish and the Norwegian. These do not rely so much on the direct control of industry but on the redistribution of income by taxation and similar means. That need not degenerate into a completely authoritarian system. The danger always exists because such a process can be run efficiently only within an authoritarian system.
REASON: Would you say that, in this connection, Ludwig von Mises' analysis to the effect that a mixed economy must degenerate into a fully planned economy is not entirely correct?
HAYEK: Mises was a little careless in the use of the term "must." What he meant to say is that if these aims are persistently pursued, it would necessarily have that consequence. If you argued with him he would not have denied that of course it is possible to avoid this if you do not consistently pursue the ends.
REASON: Do you think in general Professor von Mises' analysis of the impossibility of economic calculation under the principles of a planned economy has been borne out in practice?
HAYEK: Yes. Very definitely, yes.
REASON: Do such places as the communist countries rely very heavily on the free world's economies to rationally allocate their resources, to calculate prices, and so forth?
HAYEK: They rely on the free world very largely for technological knowledge. Because for their allocation they cannot, and they haven’t solved the problem in the least, and the actual waste of resources due to lack of rational calculation is enormous.
REASON: Between the conditions in Austria and Hungary there is an enormous difference in workmanship, the quality of housing, of roads, of manufacture. Budapest is an extremely dirty and neglected place, although it has the potential of being an incredibly beautiful city. From your knowledge, is this a function of politics, or is it more a function of general culture and the non-political aspects of the country?
HAYEK: I’m convinced it‘s entirely a function of the economic system and I’ve been confirmed on this. At a time when it was still easily possible to move from West Berlin into East Berlin, we would have the evidence of the difference between the two sides of the border, sometimes on the two sides of the same street.
REASON: Let me turn now to another issue–the organization that you’ve been involved with, and you were the founder of–the Mont Pelerin Society. Do you find it an effective organization for the purpose for which it was designed?
HAYEK: For the purpose that it was designed for, very much. But many people believe it was intended as a propaganda society, which it never was. It was intended to provide for its members an opportunity to clear their own minds on problems they haven’t themselves intensively studied. Each of us is a specialist and we want to be able to talk to specialists in the related subjects who are approaching the problems frorn the same general point of view. It has been a discussion society and not a propaganda society and as such I think it has been extraordinarily beneficial. Considering what I myself have learned in the discussions with my fellow members I must be most grateful for the opportunities it has given me.
REASON: In recent meetings, it has been observed that there has been a mixture of so–called purists and not-so-purists concerning a commitment to the principles of the free market. Would you agree with this observation?
HAYEK: Of course, it has shades of difference, and probably even extreme wings, and perhaps we have even made one or two mistakes in electing particular people. But on the whole, there is fair unanimity on the basic philosophy. Most disagreements are legitimate and occur on points where one can differ on what way exactly to draw the line.
REASON: Do you yourself believe the organization should get larger? That is, does it aim for large membership or is it pretty much a given number with a very restricted and limited membership?
HAYEK: That’s a very serious dilemma and I don‘t quite know what the answer is. It did owe its effectiveness mainly to the fact that it was small. It now mainly serves the interests of people from overseas countries who have little opportunity to discuss their problems with people of similar convictions. And there are so many people who would benefit from being admitted into the discussion that expansion is very difficult to resist. At the same time, the expansion of the society has made it a much less interesting place than it used to be when it was small.