The quoted material are the final paragraph of the final chapter of The Road to Serfdom before Hayek's brief conclusion. It helps explain why, for example, in his account of neoliberalism in The Birth of Biopolitics, Foucault spends so much time on the history of European federalism with special attention to Kant (recall here; here).
That certain kinds of regional federations can reduce the risk of war among member states and even between federations is a Kantian idea familiar from Perpetual Peace--a book Hayek quotes in (the later) The Constitution of Liberty (but surely familiar from the many allusions and references to it in Mises work). The Kantianism, with its emphasis on gradual growth of commercial republics, is even more explicit in the sentences preceding this final paragraph quoted above:
I believe that these considerations still hold and that a degree of co-operation could be achieved between, say, the British Empire and the nations of Western Europe and probably the United States which would not be possible on a world scale. The comparatively close association which a Federal Union represents will not at first be practicable beyond perhaps even as narrow a region as part of Western Europe, though it may be possible gradually to extend it. (p. 243)
I do not mean to suggest the sources are exclusively Kantian. Lurking in these comments are also the Smithian ideal of a transatlantic federation articulated in the Wealth of Nations, and an ideal revived in the context of (and now I quote Hayek again) "the propaganda for the "Federal Union"" (p. 239) which produced "the flood of federalist publications which in recent years has descended on us" (p. 239 n 1). For an overview of what Hayek may have in mind (and a lot more), I warmly recommend (recall; and here) The Emergence of Globalism: Visions of World Order in Britain and The United States by Or Rosenboim. (I return to this below.)
The Kantianism is not superficial in The Road to Serfdom. There is a huge emphasis on the significance of a Rechtstaat (see, especially, chapter 6) and its Kantian provenance recognized (see p. 85). And, in fact, politically, Hayek defends in The Road to Serfdom what Kant would have called a 'commercial republic.' It is no surprise, then, that in the Birth of Biopolitics, Foucault traces a lineage from Kant to the ordoliberals and Hayek. (The only awkwardness is that Foucault, while not blind to the Scottish sources on Kant, also treats Kant, not unreasonably, as inspired by Rousseau, whereas Hayek has a tendency to treat Rousseau as the source of bad/French rationalism.)
There is also a hint of Mill in these passages because Hayek seems to be presupposing a kind of civilization evolution or development ("more similar in their civilisation, outlook, and standards.") He clearly thinks it would be bad to have a federation that included the Soviet Union, and perhaps much of the former Austrian-Hungarian empire (not all of it foreseeably in the Soviet sphere in 1944). The question is to what degree this also includes Mill's ideas about civilizational superiority.
Now, because of the inclusion of the "British Empire" it is natural to read Hayek here in light of the his then recent, and recently much discussed, Hayek (1939) "The Economic Conditions of Interstate Federalism." In that essay, Hayek explicitly wishes to keep out socialist countries from the more Atlantic oriented federation. In addition (recall), I have argued that in it (the 1939 essay), Hayek's remarks are naturally read as endorsing continued colonial rule by the federation. So, it is natural to read The Road to Serfdom as echoing this position. And through the founding of the EU, many projects of European federation explicitly or tacitly assumed continued European rule over its colonies (and market access to its dominions).
But there is clear evidence that on the question of colonialism and even (although more ambigiously) racial hierarchy, Hayek's views did evolve non-trivially. This becomes clear in light of two (successive) footnotes earlier in the chapter. I quote and discuss them separately. Both notes are meant to support and illustrate an argument against global planning lead by (an enlightened) Great Britain. There is no doubt that Hayek's main target is global planning (and other forms of 'collectivism'). The first note reads as follows:
The experience in the colonial sphere, of this country as much as of any other, has amply shown that even the mild forms of planning which we know as colonial development involve, whether we wish it or not, the imposition of certain values and ideals on those whom we try to assist. It is, indeed, this experience which has made even the most internationally minded of colonial experts so very sceptical of the practicability of an "international" administration of colonies. (pp. 229-230)
Hayek acknowledges at least two important claims: first, even if a good faith effort is made to assist and develop colonized economies, this is experienced as an "imposition of certain values and ideals on" the colonized by the colonized. Of course, in practice there also was wholescale plunder and unequal privileges. Mises, is (recall) much more outspokenly critical of colonialism. Mises is, not unlike Smith, a fierce critic of the violent extension of liberal society. And Mises has no fondness at all for the idea for the civilizational mission of European colonialism and imperial projects. I mention Mises' (1927) Liberalism 124-125, with its really outspoken critique of colonialism because Mises ends up defending (alas) some kind of role for the league of nations to secure property rights in former colonies (by way of a mandate system).
And, so second, it looks like Hayek now accepts the sceptical position of the practicability of an "international" administration of colonies of the sort that Mises might have favored in a qualified way. So, Hayek goes beyond the position of Mises. And that's not strange because Hayek is a critic of the League of Nations and its expansive ambitions; that is, in fact, the main message of the second to final page of the chapter (p. 243) In 1944 Hayek clearly rejects something like a mandate/trust system. And so, this note both explicitly rejects the settler, colonial enterprise and the trust/mandate enterprise. (I don't mean to suggest that Hayek advocates removal of settlers from places like Australia, New Zealand, Canada, etc.)
The placing of the note also suggests that Hayek thought that colonialism is as bad as what Nazi-Germany tried to impose with their "highly immoral" Grossraumwirtschaft on their European sphere of influence (229). And since that is in line of the main argument of the book, Hayek's note actually hints at an implication of the argument that is not a mere aside. If anything, while Hayek's rhetoric is certainly very cautious about the future of the British empire, I think it's pretty clear he now thinks it's immoral and probably doomed.
In fact, the second note is attached to a claim to an argument that is intended to attack the idea that "idealistic and unselfish" (230) planning by the British on a global scale is a desirable possibility. This note reads as follows:
If anyone should still fail to see the difficulties, or cherish the belief that with a little good will they can all be overcome, it will help if he tries to follow the implications of central direction of economic activity applied on a world scale. Can there be much doubt that this would mean a more or less conscious endeavour to secure the dominance of the white man, and would rightly be so regarded by all other races? Till I find a sane person who seriously believes that the European races will voluntarily submit to their standard of life and rate of progress being determined by a World Parliament, I cannot regard such plans as anything but absurd. But this does unfortunately not preclude that particular measures, which could be justified only if the principle of world direction were a feasible ideal, are seriously advocated. (p. 230)
Hayek clearly recognizes that most attempts to impose an Enlightened plan on others are in bad faith (primarily designed to secure advantages to European industry), and will certainly be regarded as such by the colonized world.
I don't mean to ignore the fact that Hayek casts his argument here in racial terms such that the majority principle (and non-Europeans will outnumber Europeans), which might well disadvantage Europeans, is rejected on a global scale not just from obvious self-interest, but also from a kind of racial consciousness. I think Hayek's intention here is to call attention to such racial and racist consciousness among European populations not to advocate for it (although I completely grant that others may reject this.)
And so while one may well suspect that Hayek's rejection of a world state with planning powers has racist motives or is at least shaped by awareness of the significance of racist views, the actual position in the footnote, and the previous one, is inimical to colonialism and imperialism that goes well beyond his earlier view.
And, if anything, this understates Hayek's position. The broader context of the chapter is a defense of the viability and significance of "small countries" (his favorite examples are Holland and Switzerland). He is explicit that "we shall all be the gainers if we can create a world fit for small states to live in." (242) These two notes suggest that he is at peace with the possibility of a decolonized world of small states.
I do not mean to suggest that Hayek wishes to promote a decolonialization without constraints. For, he foresees a global order shaped by the rule of law as the Western states understand it. In Globalists: The End of Empire and the Birth of Neoliberalism, Quinn Slobodian has shown how Hayek and Mises, and the ordoliberals, embraced the idea of a global legal order to defend markets (recall here; here). That's clearly right. But I think this understates how the market order is itself a bulwark to preserve the rechtstaat (and human rights) for these neoliberals. Either way, and in in fact, lurking in this material is the ideal of a pax Americana, for Hayek writes "the great opportunity we shall have at the end of this war is that the great victorious powers, by themselves first submitting to a system of rules which they have the power to enforce, may at the same time acquire the moral right to impose the same rules upon others." (242, emphasis added)
Hayek does not spell out if this moral right then implies, say, Hume's position who (I think) clearly advocates the violent extension of the rule of law (as a civilizational enterprise), or if this moral right should be understood more as a duty that cannot be denied once the victors of the war are called upon by their present imperial subjects to secure the fruits of law's empire into their independent future. Either way, Hayek's turn away from colonial empire is not a turn away from civilizational, that is, law-governed, supremacy.
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