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

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