From his Literature and Totalitarianism:
... Modern literature is essentially an individual thing. It is either the truthful expression of what one man thinks and feels, or it is nothing.
As I say, we take this notion for granted, and yet as soon as one puts it into words one realizes how literature is menaced. For this is the age of the totalitarian state, which does not and probably cannot allow the individual any freedom whatever. When one mentions totalitarianism one thinks immediately of Germany, Russia, Italy, but I think one must face the risk that this phenomenon is going to be world-wide. It is obvious that the period of free capitalism is coming to an end and that one country after another is adopting a centralized economy that one can call Socialism or state capitalism according as one prefers. With that the economic liberty of the individual, and to a great extent his liberty to do what he likes, to choose his own work, to move to and fro across the surface of the earth, comes to an end. Now, till recently the implications of this were not foreseen. It was never fully realized that the disappearance of economic liberty would have any effect on intellectual liberty. Socialism was usually thought of as a sort of moralized liberalism. The state would take charge of your economic life and set you free from the fear of poverty, unemployment and so forth, but it would have no need to interfere with your private intellectual life. Art could flourish just as it had done in the liberal-capitalist age, only a little more so, because the artist would not any longer be under economic compulsions.
Now, on the existing evidence, one must admit that these ideas have been falsified.