Compromising liberty: Friedrich Hayek's The road to serfdom in practice

Abstract

This paper examines a rare and unstudied piece of consultancy work undertaken in 1944 by Friedrich Hayek for the British Colonial Office and for the Government of Gibraltar. Hayek's subsequent reports suggested the reorganization of the state-regulated Gibraltar housing market in line with free market principles designed to relocate the colony's working-class population into neighbouring Spain. However, rather than freeing Gibraltarians from the evils of state planning, as identified in The road to serfdom (also 1944), this proposal would have delivered them into the dictatorship of General Franco. Not only was Franco's regime brutal, but it also practised autarkic economic policies virtually identical to those which Hayek maligned in The road to serfdom. In sum, Hayek's proposals would have benefited Gibraltar's landlords at the expense of the liberty of the majority of the civilian population.