Wartime Hayekianism

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Dear friends—dear friends of liberty, let’s not beat about the bush. These are exceptionally difficult times in so many ways for us. It reminds me of a sentence in F. Scott Fitzgerald’s The Great Gatsby,when he writes:

“The loneliest moment in someone’s life is when they are watching their whole world fall apart, and all they can do is stare blankly.”

I have to admit that I felt some a tinge of this sensation, when the lights started to go out all over Europe, when borders were closed, when businesses shut down and country after country entered lockdowns. I know many of you did too. This is a scary moment in time.

Also, I had just finished writing a new book script, called Open: The Story of Human Progress, due in September, about how we create progress historically but also how we destroy it. Unfortunately, the conclusion that I reached, and I finished it before this pandemic, was that many open societies and great civilizations historically were undermined in times of crises—great depressions, foreign invasions, natural disasters, and pandemics. So there was some scary timing!

We’ve seen this before. When the world is scary, people start thinking that they can’t allow their neighbors to have some freedom to go about their own business, and you start blaming the outside world because any foreigner, anyone who’s different, might be dangerous. You begin to yearn for a strongman to protect us and to take control.

And we want governments to assume new powers—control and surveillance rather than open societies. Wartime socialism rather than free markets. Self‐​sufficiency rather than international trade. We’ve seen this creep before, and we’re here again. And that’s dangerous because in fact, I think these are all great arguments to do the complete opposite.

Obviously we’ve learned something about international trade. It might be dangerous to rely on all your components from one single country, especially if it’s China. But the solution is not to concentrate supply chains even further geographically. One reason why we’ve been able to open up industries in Sweden is that Asia has started to open up again so that we can get some inputs and supplies from there. Had we concentrated everything in Europe…well, then if we have a local problem then everything falls apart. So it’s not an argument for concentration but for decentralization, diversity, flexibility, being able to rely on more markets rather than just one. You can understand why there are export bans on protective equipment because you want to supply your own people first, right? But you also learn that this creates shortages and higher prices for everybody, and that one of the problems in getting those supplies out there are these export bans. The first thing that happened when some European countries began to shut their borders was that they [disrupted] the daily flow of goods, services, and people. Suddenly a factory in the Czech Republic that used to supply us all with lots of protective equipment, all our hospitals—well, they couldn’t get their workforce into the factory in the morning, because lots of them traveled from Poland into the Czech Republic every morning. Suddenly the borders were shut down.

And obviously the problem with socialism in wartime is that no matter what time it is, it is still socialism and it still doesn’t work! Yes, we want a strongman to point us in the right direction—but what happens if he points us in the wrong direction?

Personally, I think this crisis is the strongest possible argument for our ideas. We have just seen a real‐​life pre‐​view of a de‐​globalised, closed world—it’s like some sort of nightmarish combination of Greta Thunberg and Matteo Salvini. We have no travel, no mobility, no trade, no offshoring, no capitalist exploitation…and you know what, this world is not at all as nice as it looked in the online ads!

We have shut down the world for just two months, and the result is already in: global depression, mass unemployment, poverty, and hunger. It is a preview of a horror movie, and I for one, I do not want to watch this movie, this horror movie, permanently.

On the other hand, we have also learned what works under such difficult circumstances. Politicians have often failed us, but I think that we’ve seen everywhere how individuals, organizations, and businesses are rapidly adapting to new circumstances, making heroic adjustments to their business models, production processes, and supply chains—to keep food on the shelves, to reroute necessary supplies, to keep production going, and to help those in need. And produce lots of things that we didn’t know that we needed just weeks ago: vodka distilleries and perfume companies suddenly produce disinfectants and hand sanitizer, hygiene businesses switch to producing medical gloves and face masks. In fact, the number of European companies producing face masks has increased in just a few weeks from 12 to 500. They stepped up to the challenge, and to the change.

No economy czar and no central planner could have ever planned for anything like this because it was all dependent on local knowledge. The fact that individuals and businesses knew what capacity they had, what they could do, the labor force that was at hand, and more specifically what they could stop doing without creating devastating shortages in other places. We do not need wartime socialism. We need wartime Hayekianism! And I think as Brad alluded to, we’ve seen here in Sweden, the one country that did not shut down borders and businesses and restaurants and did not enforce social distancing with stay‐​at‐​home orders, we’ve seen that when people learn that lives are at stake, they adapt voluntarily. They reduce their mobility to almost the same extent as countries with very much harsher restrictions. They did this without any kinds of policemen on the streets asking them what they’re doing here. The only difference is that this allowed some openness for local knowledge and individual needs. So if you really have to do something, you’re able to do it. Which I think has served Sweden well.

I think all of this, this wartime Hayekianism, this wartime spontaneous development and adaption to new circumstances in the shadow of the wartime authoritarianism of many governments, should be a lesson and an inspiration in our work ahead. That all these regulations, these permits and license requirements, and bans—they are roadblocks on the way to change, adapting, and restructuring that we always need, but need now more than ever. They are ways of stopping people from using their local knowledge and their local talent and a way to replace it with the limited knowledge of a few people on the top. And that’s not just wrong—it is dangerous.

And let me just tell you over the past few days and weeks, I’ve seen what you all are doing to fight this, in your communities and in your countries. And I’m impressed by that, and I’m hopeful. Because if you can continue doing that, and if we continue to compare notes and learn from each other, the accomplishments that you are doing and we can learn from this here locally we might just get out of this stronger, as a liberty movement and as societies.

Because again, these are difficult times. But in the words of the great philosophers Coldplay: “Nobody said it was easy!” It’s when it’s most difficult that our ideas are needed the most.

And that’s also what turned Hayek and von Mises and Ayn Rand and Milton Friedman into legends—not just that they were brilliant thinkers, but also that it wasn’t smooth sailing. That they faced an uphill battle. Some steep odds. And they went straight at it and they persisted.

So I’d like to conclude these brief remarks by thanking you, extending all my gratitude to you for all the amazing work that you are doing. Thank you for not just standing by watching our whole world fall apart, and just stare at it blankly.

Because—to borrow another literary inspiration—the world is a fine place and it’s worth the fighting for. So let me raise a metaphorical glass and say thank you for the work you’re doing for freedom. And good luck!

Johan Norberg

This was the closing keynote speech for the 2020 Europe Liberty Forum Online of the Atlas Network.