I am in Munich today to do a presentation on Brexit at the European Institute COO-CFO Roundtable.
As I was leaving home this morning I brought along Hayek’s classic The Road to Serfdom. I realized it was at least two decades since I had read it (all) last time so I thought it could be interesting to read it again.
And since I am speaking about Brexit today I started with chapter 15 “The Prospects if International Order” and lo and behold I found this very interesting quote that seems highly relevant to the discussion of Brexit:
“The English people, for instance, perhaps even more than others, begin to realize what such schemes (LC: an international federation) mean only when it is presented to them that they might be a minority in the planning authority and that the main lines of the future economic development of Great Britain might be determined by a non-British majority. How many people in England would be prepared to submit to the decision of an international authority, however democratically constituted, which had power to decree that the development of the Spanish iron industry must have precedence over similar development in South Wales, that the optical industry had better be concentrated in Germany to the exclusion of Great Britain, or that only fully refined gasoline should be imported to Great Britain and all the industries connected with refining reserved for the producer countries?”
I think this pretty well captures the sentiment among the Brexit campaigners today, which is pretty incredible given Hayek wrote this in 1944. That said, that does not mean that Hayek would have favored Brexit. In fact in the same chapter Hayek makes the following statement:
It is worth recalling that the idea of the world at last finding peace through the absorption of the the separate states in large federated groups and ultimately perhaps in one single federation, far from being new, was indeed the ideal of almost all the liberal thinkers of the nineteenth century. From Tennyson, whose much-quoted vision of the “battle of the air” is followed by a vision of the federation of the people which will follow their last great fight, right down to the end of the century that final achievement of a federal organization remained the ever recurring hope of the next great step in the advance of civilization.
In fact in his 1938-article “The Economic Conditions of Inter-State Federalism” Hayekmakes an argument for Federalism (even arguing for some kind of monetary union !), which surely could give some ammunition for the “remain” campaign.
And this pretty well sums up the dilemma for the classical liberal in the discussion over Brexit. There are classical liberal arguments both in favour and in against Brexit.
PS Listen to Tyler Cowen talk about “The Economic Conditions of Inter-State Federalism” here.
PPS The example of a Hayekian “remainer” in my view is the Dalibor Rohac, who in his new book “Towards An Imperfect Union – A Conservative Case for the EU” makes a strong Hayekian case for the EU.
If you want to hear me speak about these topics or other related topics don’t hesitate to contact my speaker agency Specialist Speakers – e-mail: firstname.lastname@example.org or myself at lc@mamoadvisory.