It's safe to say that Hayek was not describing the United States in 1993. But individuals still have to make decisions, despite the turbulence of public policy. And those decisions, if made on a broad enough scale, serve to lock in the public policy of the day. Consider the health-care mess. It derives, at least in part, from the steeply progressive tax rates and roaring inflation of the 1970s.
Inflation is about as unsettling a policy as there is.
Combine it with bracket creep that gives the tax man a bigger chunk of every raise, and you turn wage-earning taxpayers into gerbils running on a wheel, struggling desperately to stay in the same place. In the '70s, both unions bargaining collectively and individuals bargaining independently tried to beat bracket creep by taking more and more of their compensation in non-taxable benefits, notably greatly expanded health coverage and retirement benefits. From 1970 to 1980, the proportion of total compensation made up by fringe benefits increased by more than 50 percent. And now, of course, we find big companies unable to keep their pension and retiree health-insurance promises. And we're stuck with a health-care system in which patients have no incentive to watch costs.