Today, 30 November, is the birthday of Winston Churchill, one of the greatest statesmen of the twentieth century. He was born at Blenheim Palace in 1874, the year in which Iceland celebrated her thousand years: The first settler, Ingolf Arnarson, came from Norway in 874. Probably not too many people know however that in Churchill’s illustrious career there is a slight Icelandic connection. In the spring of 1940, British forces had occupied Iceland, and in August 1941, Churchill paid a visit to the country, on his way home from a meeting with President Franklin D. Roosevelt in Newfoundland. The British Prime Minister was warmly welcomed by the Icelanders who were discreetly relieved that their sparsely populated European outpost was occupied by Great Britain and not by Nazi Germany or Soviet Russia. According to an Icelandic newspaper (Morgunbladid 20 August 1941), it was in Iceland that Churchill, for the first time in public, used his fingers to make his famous salute with the V sign for Victory.
From the balcony of Parliament House in Reykjavik Churchill addressed a crowd that had gathered outside. He said: ‘I am glad to have an opportunity to visit the nation which for so long has loved democracy and freedom. We, and later the Americans, have undertaken to keep war away from this country. But you will all realize that if we had not come others would. We will do all in our power to make sure that our presence here shall cause as little trouble as possible in the lives of the Icelanders. But at the moment your country is an important base for the protection of the rights of the nations. When the present struggle is over, we, and the Americans, will ensure that Iceland shall receive absolute freedom. We come to you as one cultured nation to another, and it is our aim that your culture in the past may be joined to your progress in the future as a free people. I have pleasure in wishing you happiness and good luck in time to come.’
Churchill was referring to the fact that a month earlier, in July 1941, the government of Iceland, on the initiative of the United Kingdom, had signed a pact with the United States that American forces would defend the country during the war, replacing the British forces. This was a significant move by President Roosevelt towards American participation in the Second World War. During his visit to Reykjavik, Churchill went sight-seeing, looking at hot springs and later writing in his memoirs: ‘I thought immediately that they should also be used to heat Reykjavik, and tried to further this plan even during the war.’ There was some amusement in Iceland over this remark, because an Icelandic politician, Jon Thorlaksson, a civil engineer by training, and the first Leader of the centre-right Independence Party, had already in 1926 presented a well-thought out plan to use the ample supplies of hot water in Iceland to heat Reykjavik. He had started implementing this plan when he became Mayor of Reykjavik in 1933, before passing away prematurely in 1935. (In 1992, I published Thorlaksson’s biography.) But of course great minds think alike.
Besides the Icelandic connection, I have a tiny personal connection to Churchill because I did my doctoral dissertation on Anglo-Austrian economist and philosopher Friedrich Hayek. Churchill had been greatly impressed by Hayek’s Road to Serfdom, published in 1944. This was a warning that central economic planning, then championed by most socialists, would require a police state if it was to be consistently implemented. In a party broadcast before the 1945 elections Churchill said: ‘No socialist government conducting the entire life and industry of the country could afford to allow free, sharp, or violently-worded expressions of public discontent.’ Churchill added: ‘They would have to fall back on some form of Gestapo, no doubt very humanely directed in the first instance.’ British socialists immediately seized on his words, and in his next party broadcast Labour Leader Clement Attlee commented that Churchill’s ‘Gestapo speech’ was a ‘second-hand version of the academic views of an Austrian professor, Friedrich August von Hayek’. Attlee ignored the fact that Hayek had been a British subject since 1938, calling him by a full name he had abandoned himself, to make it sound as German as possible. However, in 1945 the British electorate was hardly ready for any suggestion of an association between the Labour Party and the Gestapo. The mild-mannered and unassuming Attlee seemed an unlikely Hitler. The Conservatives lost the elections by a wide margin. The ‘Gestapo speech’ probably had not helped. Some time later Hayek, at a social event, met Churchill who said to him: ‘You are completely right; but it will never happen in Britain!’
I think that both Hayek and Churchill were right. In Central and Eastern Europe central economic planning was implemented with the disastrous consequences for liberty of which Hayek had warned, but after the war socialists in the West turned to other measures, such as regulation of industries, the introduction of welfare provisions by the state and redistribution of income through taxes. They did not go too far however down that road. In a paper on Hayek and Keynes, economist Robert Skidelsky, the author of a massive biography of Keynes, writes: ‘By the 1970s there was some evidence of the slippery slope … and then there was Thatcher. Hayek’s warning played a critical part in her determination to “roll back the state”.’
(Gissurarson’s column in The Conservative 30 November 2020.)