ABSTRACT
In this and the following chapter, I will examine what Hayek referred to as his ‘intellectual emergency equipment’: the ‘Model Constitution’ and his plan for the ‘Denationalisation of Money’. He arrived at these radical schemes because he had lost faith in the ability of the political system to limit its legislative and monetary excesses. ‘Development towards a totalitarian state is made inevitable’ Hayek (1982a, p. xx). wrote, ‘by certain deeply entrenched defects of construction of the generally accepted type of “democratic” government’ and Britain was now at ‘an impasse from which political leaders will offer to extricate us by desperate means’ of the type Schmitt had outlined forty years previously. Although the urgency with which he called for the implementation of his equipment varied in response to broader political developments, it is clear that they were not merely an intellectual diversion. He regarded both pieces as concrete proposals, the adoption of which was eminently necessary to save Britain, and elsewhere, from ‘the nightmare of increasingly totalitarian powers’. The situation had become desperate, the moment when ‘the breakdown of the existing institutions becomes unmistakable’ was at hand. In 1977, he stated clearly that ‘my proposal is not, as I would wish merely a sort of standby arrangement of which I could say we must work it out intellectually to have it ready when the present system completely collapses’ (Hayek, 1999i) because the point of collapse was imminent. 1 Such was his disillusionment with the existing political system that even when political allies came to power in Britain and the United States, Hayek (1982a, p. xx) remained convinced they would not be able to resist the pressure to adopt ‘unlimited’ methods. He thus continued to regard his equipment as offering ‘a possible escape from the fate which threatens us.’ Hayek’s emergency equipment is not, therefore, a belated aberration in his body of work. Instead, it provides us with a concrete description of the institutions and form of government appropriate to Hayekian political economy: it demands our attention.
