Could a federalist Europe have prevented the economic protectionism of the twentieth century?
In 1939, F.A. Hayek envisioned a post-war European community built on free trade and limited government. This video examines his prescient essay on interstate federalism, exploring how he predicted the evolution of common policies long before the European Union existed.
Published just before the outbreak of World War II, Hayek's 1939 essay, 'The Economic Conditions of Interstate Federalism,' analyzed the requirements for lasting peace and prosperity in Europe. He argued that to succeed, a federation of states would need to abandon regional protectionism, which he believed would naturally lead to a unified foreign policy, followed by a common economic and monetary framework.
Hayek emphasized that free trade would be the central pillar of such a union. However, he warned against a modern, insidious form of protectionism: the rise of administrative regulations on commerce. His analysis reflects his commitment to 19th-century liberalism, advocating for limited government intervention as the essential condition for a functioning, peaceful international order.
