Speech to The Heritage Foundation
at the 27th Annual Resource Bank Meeting
on Thursday, April 29th 2004.
Mr., Chairman,
Many of you here have already quizzed me re May 1st and the expansion of the EU from 15 to 25 members.
Let me get that out of the way first.
It will be a dreadful moment in history, a day on which 10 independent nations, 8 of which threw off the yoke of communism only 15 years ago, will hand over sovereignty to the French and Germans in Brussels.
They will join not a free market but rather a corrupt and corrupting customs union.
Their trade with the rest of the world will be seriously impacted.
Many tens of thousands of EU regulations will be imposed on them.
Free movement of labour within the 25 is not to be permitted.
A single binding and constraining currency is to be imposed on all of the new 10.
Already the Germans and Swedes are demanding that very low corporation taxes in the 10 are increased from the teens to the thirties to match those prevailing in most of the 15.
And the special relationships so many of the 10 have enjoyed with the USA will be put under huge pressure.
So Saturday May 1st will be a very sad day.
Mr Chairman, I have two gifts for all 620 of your guests. I could not carry them with me so if you fill in the form on the flyer at your seat and fax/mail it as directed then we will send you a copy of the iea edition of The Reader's Digest condensed version of The Road to Serfdom and a copy of my own Waging the War of Ideas.
Mr Chairman, 60 years ago today D Day was just weeks away; US forces were advancing in the Pacific; and Berlin was being bombed.
With the end of hostilities only just over the horizon serious people were asking "what will post war society look like?"
The dominant thinking can be summed up in six words: As in War So in Peace. In other words the government would run everything.
As I wrote recently in the Wall Street Journal Europe:
In war we had united. We had conformed to plans. We had been directed. We had enjoyed a sense of purpose and a sense of fraternity. Everyone accepted rationing and conscription and all the other coercive powers the state adopted and adapted to its own ends. There was barely any questioning or challenge. It seemed so simple. We could together build a harmonious society bubbling with prosperity. We had "planned" our way towards victory. It was obvious. Now we had to "plan" our way to affluence - and fairness. To think otherwise was to risk exclusion from polite society; to say otherwise was intellectual suicide.
Well Hayek attempted suicide!
He published The Road to Serfdom! It was his manifesto for a free society and his dire warning of the dangers of planning.
It was a sensation.
First it picked up some good reviews. It rapidly became known as the book nobody could get. Because of war time paper rationing print runs were small and as soon as a new edition came out it was immediately vacuumed up. Second Churchill plugged the book in his speeches in the 1945 General Election and this spurred yet more demand. Indeed Churchill set aside part of the paper ration of the Tory Party to print yet more copies such was his view of its importance.
Third, The Reader's Digest condensed version came out in April '45 at the front not the back of the magazine. And fourth, General Motors produced a cartoon version.
Hayek became a celebrity. He sailed to America expecting audiences of a few score but while at sea The Reader's Digest was published. His first meeting in New York City was attended by over 3,000 and broadcast live on the wireless.
It was during this trip to the USA in April '45 that Hayek discovered the importance of intellectuals or second hand dealers in ideas. This led to his famous essay The Intellectuals and Socialism published in 1949 but written earlier.
This trip to the USA and his recognition of the importance of intellectuals immediately predates his summer 1945 meeting with Antony Fisher, the man who founded the iea, the first of many such free-market institutes.
It was at this summer 1945 meeting that Fisher was counselled by Hayek NOT to enter politics but instead to set up an institute. On page 84 of Waging the War of Ideas I reconstruct their conversation as follows:
Fisher I share all your worries and concerns as expressed in The Road to Serfdom and I'm going to go into politics and put it all right.
Hayek No you're not! Society's course will be changed only by a change in ideas. First you must reach the intellectuals, the teachers and writers, with reasoned argument. It will be their influence on society which will prevail, and the politicians will follow.
Now The Road to Serfdom is no harangue - in fact Hayek's unfailing courtesy to his intellectual opponents always utterly disarmed them. George Orwell admitted that Hayek jolted him out of many of his ideas and Animal Farm is surely a sequel to The Road to Serfdom.
The Road to Serfdom makes Hayek our Patron Saint. He did for policy what Edison did for electricity, what Fleming did for medicine and what Berners-Lee (not Al Gore) did for communications.
But Hayek was neither a Conservative nor a Republican. Rather he told me he was a Whig as in a true rather than an occasional believer in free trade and the rule of law.
The Road to Serfdom is as important today as it was in 1944 and is highly relevant in Europe as Leviathan rises in Brussels and is soon to crush 10 more formerly independent nations.
Mr Chairman, however benevolent the purpose, the state in accruing ever more power crushes liberty and takes us on a path to serfdom.
A year after The Road to Serfdom was published Churchill was out and socialism was in. But the experience of the next six years of planning was so utterly grim the Conservatives came back in '51 to rule for 35 of the next 46 years. Indeed all three times the conservatives have kicked out the socialists ('51, '70 and '79) it has been on radical quasi-Hayekian platforms. Quite a lesson for Michael Howard.
Mr Chairman, Hayek's little text continues to ripple round the world. Just last week we sent a big box of it to China.
Today we celebrate its enduring truths.
Academic economists rarely write best sellers. Indeed Hayek said it ruined his reputation among his fellow professionals.
Well thank goodness for that, I say!
Why?
Because he turned to broader matters of political economy and gave us amazingly powerful texts such as Law, Legislation and Liberty and the magisterial The Constitution of Liberty which Mrs Thatcher was so famously to bang down on a table in Conservative Central Office in the late '70s and announce;
"This is what we believe in!"
Thank you.