Friedrich August von Hayek, How We Can Do It

Hayek’s How We Can Do It is a short, strongly approving review of Geoffrey Crowther’s Ways and Means of War, originally published in The Spectator on September 6, 1940, and republished in the supplied 1997 version. Its subject is the economic conduct of war after the collapse of France: the limits of blockade, Britain’s capacity to redirect resources, and the public understanding needed to sustain that effort. Hayek follows Crowther’s movement from the belligerents’ relative economic strength to British domestic policy, before making his own argument for candid taxation and informed leadership. His central judgment is that effective economic exposition can make the sacrifices required for victory intelligible without disguising their severity.

The review first praises Crowther’s combination of accessible analysis and carefully selected figures. The book’s encouragement rests on confronting adverse circumstances, not minimizing them. Germany’s expanded access to some materials does not remove its vulnerability elsewhere:

While Germany is now more or less adequately supplied with steel, coal, and timber, she suffers from a greater or lesser shortage of most of the other essential raw materials, and has only just enough food, provided harvests are not seriously deficient.

Hayek endorses a qualified account of blockade: it cannot be expected to produce German collapse, but it can constrain the scale of Germany’s economic effort. The distinction matters because it replaces an expectation of automatic victory through deprivation with a realistic assessment of the enemy’s limits. Crowther’s account is encouraging precisely because it identifies those limits while acknowledging the changed strategic position.

The review then turns to the choices governing Britain’s own mobilization. Hayek singles out Crowther’s explanation of scarcity as a problem of competing uses, rather than simply an inventory of unavailable goods:

Particularly interesting to the general reader will be the explanation how wide is the range of possibilities within which we can choose, how we can really get nearly every thing we want, but not all things at the same time, and how the various shortages are, or ought to be, the result of deliberate decision.

The qualification “or ought to be” gives this passage its critical force. Shortages should reflect deliberate priorities: resources committed to war cannot simultaneously satisfy every private demand. Hayek values the book for showing both the range of available choices and how far Britain remains from the mobilization required. More private needs must go unsatisfied. His reservations are brief but substantive: Crowther may rely too heavily on rationing, and his postwar expectations may be too optimistic. These doubts qualify rather than overturn Hayek’s broad agreement.

The sharpest disagreement concerns how reductions in private consumption should be secured. Hayek admires Crowther’s explanation of the relationship between financial mechanisms and real resources, but challenges the suggestion that painful adjustment must occur through a mechanism operating without open public recognition. He argues instead that people who understood the need for taxation and the alternative of inflation would prefer an explicit, honest burden. The issue is therefore not merely technical efficiency but confidence in citizens’ capacity to accept explained sacrifices.

The trouble is that in the economic sphere—at least so far as the concerns of the people as a whole are affected—we still lack the intelligent and inspiring leadership which we now have in the political sphere.

This diagnosis makes economic knowledge a condition of leadership. Crowther’s book supplies an understanding that Hayek considers insufficiently widespread, especially among those directing the national effort. The review’s relevance lies in its connection between resource allocation, public candour, and wartime resolve. Hayek praises a work that goes beyond assurances of victory to explain its material requirements; his closing recommendation gives particular urgency to its readership among the country’s busiest decision-makers.