Friedrich Hayek's fleeting foray into 1940s colonial development

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.

The Road to Serfdom after 75 Years

“…His policy recommendations, to gradually relax rent controls and set the government's wage rate to be consonant with the wage prevailing in the surrounding area, was sufficiently out of touch with the prior vision of the Colonial Office that his report never saw the light of day. For more on this episode see Grocott (2017). The report may be found in the Friedrich A. Hayek Papers (FAHP), 113.6 (this refers to box and folder number, respectively), Hoover Institution Archives, Stanford University.…”