I was under the impression that this might be a vaguely economics book, while it's really political, although it seems that for the author economics is politics. The first thing I noticed while reading was the change in terminology. It was written in 1944, and the overal thesis is 'liberalism good, socialism bad', but modern phrasing would be 'capitalism good, collectivism bad'. It's odd how the meaning of 'liberal' could go through an almost 180 degree turn!
Anyway, the author does a pretty decent job - totalitarianism is bad, collectivism and central planning inevitably lead to totalitarianism, and left-wing collectivism is just as bad as right-wing. Individual liberty is really important, so you better give yourself democracy with a free-market economy, or you'll be sorry. Pretty prescient for the rest of the twentieth century, really.
As it was written before the war ended, he's pretty much the first person taking the gun to this barrel full of fish, so it's mostly reasonably fresh. Despite a great cynicism of the 'historical inevitability' of socialism, he seems to draw various conclusions that 'must' happen in the wake of a collectivist government without much in the way of evidence, and occasionally it does seem to wander a little closer to opinion than well-thought-out argument, but generally it's pretty solid.
What's also interesting is how the collectivist socialism of this book compared to the real-world evolution of socialism. Post-war, Britain got a Labour government and the NHS was introduced, a giant piece of socialism. Despite this, we didn't seem to get a totalitarian government, and indeed we eventually got a huge pile of deregulation. Seems to have turned out ok. Was a huge government-run system like the NHS a real danger in his eyes, or safely justifiable in a mostly market-driven capitalist environment?
If we're going to be comparing political philosophies from economists, I'm slightly embarassed to say I prefer Soros's approach! While individual liberty is vital, and democracy and competitive markets seem to be very effective mechanisms to ensure that, I think Soros's identification of an 'open' society, where truth, transparency and accountability are near paramount, provides an important extra layer missing from Hayek's analysis.