Friedrich Hayek's fleeting foray into 1940s colonial development

Chris Grocott

doi:10.1080/09672567.2017.1334078

Abstract

Herein we examine recommendations made in 1944 by Friedrich Hayek for the Government of Gibraltar, regarding Gibraltar's future economic prospects. In keeping with Hayek's ideas in The Road to Serfdom, he proposed reducing state-led economic planning in Gibraltar alongside proposals to lift restrictions upon the operation of a free market in rents and labour. Hayek's proposals were rejected by both governments in Gibraltar and London because they were not compatible with the economic planning of colonial economies, inspired by Keynes, and provision of welfare systems in the empire inspired by Beveridge, both dominant ideas during the mid-1940s in government circles.

Highlights

Title: Friedrich Hayek’s Fleeting Foray into 1940s Colonial Development Abstract: we examine recommendations made in 1944 by Friedrich Hayek for the Government of Gibraltar, regarding Gibraltar’s future economic prospects
In 1944, just three months after the publication of The Road to Serfdom, Friedrich Hayek accepted a commission to undertake a series of reports on the economy of Gibraltar that were intended to form the basis of imperial and local government policy towards post-war reconstruction in the British colony
Hayek’s silence over his time in Gibraltar leaves unanswered the question as to how it was that Hayek came to write such a problematic report

Summary

Introduction

In 1944, just three months after the publication of The Road to Serfdom, Friedrich Hayek accepted a commission to undertake a series of reports on the economy of Gibraltar that were intended to form the basis of imperial and local government policy towards post-war reconstruction in the British colony. On 4 April 1945, Luke wrote to Sir Arthur Dawe, the permanent secretary at the Colonial Office, outlining that in the light of Kuczynski’s memorandum, ‘the proposal made by Professor Hayek for working out a sort of census on the basis of material collected in connection with the evacuation plan would be unnecessarily cumbrous and expensive...I think we have no alternative but to drop the idea’.17 This was a minor dispute by comparison to the disagreement over ‘Some Economic Problems of Gibraltar’, to which we turn. Having had, ‘a fairly full discussion about the substance of his supplementary on “Some Economic Problems of Gibraltar”’, Dawe and Stanley found that Hayek was not ‘in any way inclined to depart from his general view that he had set out in his report as being the only effective solution of the overcrowding problem’.53 With no room for compromise and serious doubts in the minds of both the Colonial Office and the Government of Gibraltar, the report was put by

The Road to Serfdom and the Gibraltar Reports

Findings

Conclusion