Habsburg legacy: Hayek was born in Vienna in 1899, into an imperial regime that shaped his thinking about freedom and government.
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John Gray: The Friedrich Hayek I knew, and what he got right - and wrong

Hayek’s most striking intellectual trait was one uncommon in academic life – independence of mind, which enabled him to swim against some of the most powerful currents of the age.

In the 1980s, when F A Hayek was one of the intellectual icons of the New Right, some of the more doctrinaire members of that complicated and fractious movement used to say that for him a minimal government was one that provided three things: national defence, law and order, and a state opera. It was an observation made only partly in jest. The Austrian-born economist and philosopher may have been the thinker who, more than anyone else, articulated the free-market ideology that came to power along with Margaret Thatcher; but his view of politics was formed not in Britain, his adopted country, but in the Habsburg empire, where the ­Vienna Court Opera was a department of government whose existence no one would dream of questioning.

Born in that city in 1899, Hayek came from an upper-middle-class background – his father was a medical doctor with a passion for botany who always wanted to be a professor, while his mother came from a wealthy land-owning family. The Hayeks enjoyed the prosperity of the closing decades of what the Austrian author Stefan Zweig described as “ the age of security”: the long period of stability provided by the 68-year reign of its last-but-one emperor, Franz Joseph. Hayek witnessed the collapse of an imperial regime that for generations had been more civilised and more liberal than most of the nation states that replaced it in interwar Europe. It was this Habsburg realm, as he experienced it in its final years, which shaped Hayek’s thinking about freedom and government.

My interest in Hayek, which began in the early 1970s, was as much to do with intellectual life in the Vienna of his youth as with the condition of British politics at the time. One of the first questions I asked after we had met through one of the right-wing think tanks that were proliferating around the end of that decade was whether he had known Karl Kraus, the incomparable Viennese satirist, who in 1909 had written, with some prescience: “Progress celebrates victories over nature. Progress makes purses out of human skin.” Hayek replied that he had not talked with Kraus, though he remembered seeing him crossing the road to enter a coffee house some time during the First World War. Hayek had little in common with Kraus. Cool and reserved, he had nothing of Kraus’s wit. Although he was academic in his manner, Hayek’s most striking intellectual trait was one that is uncommon in academic life – independence of mind, which enabled him to swim against some of the most powerful currents of the age.

I was also keen to learn something of Hayek’s connection with Wittgenstein, a relative of his about whom he had written a biographical fragment, “Remembering My Cousin, Ludwig Wittgenstein”, published in Encounter in 1977. Hayek met Wittgenstein by chance, on a railway station in August 1918, when they were both in the uniform of the Austro-Hungarian army. Travelling on together, they talked throughout the journey – a conversation Hayek told me had influenced him deeply, though not because of any philosophical exchange that he could remember. The two would never become close and their paths crossed only occasionally; but there seems to have been a meeting of minds between the two artillery ensigns on their way back to war. At the time both were ardent socialists who attributed the disaster that had befallen Europe to the malign impact of capitalism.

At the start of the 20th century, Vienna was one of the world’s great cosmopolitan cities. Though not without grievous bigotry – in 1897, after repeated attempts by the emperor to block the appointment, the city elected a virulently anti-Semitic mayor – the population was not divided, as much of central Europe soon would be, into violently hostile groups. The antique structures of the Habsburg state supported a society that was remarkably modern, not only in its embrace of technology (railways and trams, electric lighting and public sanitation) but also in enabling people with widely ­differing cultures to coexist and work productively with one another. The destruction of this order after the Great War by the forces of nationalism – which the US president Woodrow Wilson inflamed by insisting that Europe could be rebuilt only on the basis of popular self-determination – framed a dilemma with which Hayek struggled for the rest of his long life (he died in 1992).

How could liberal values be renewed in a time of political tribalism? It was a question Hayek could not answer. Instead, he came up with a mix of evolutionist pseudo-science and rationalistic designs for an ideal liberal regime. Having abandoned his youthful socialism under the influence of the doctrinaire market economist Ludwig von Mises (1881-1973), Hayek came to believe that a process of social evolution would impel humankind in the direction of the values he favoured. His legacy to liberal thinking has been a type of scientism – the mistaken attempt to apply the methods of the natural sciences when examining the human world. It’s an ironical outcome, given that he was a forceful critic of scientism in economics. In his speech on receiving the Nobel Prize in 1974, Hayek described the efforts of economists to mimic the methods of the natural sciences as having produced a “pretence of knowledge”.

***

One of the oddities of Hayek’s career is that while his professional standing was secured through his work as an economist, he had by the mid-1940s given up economics as his central intellectual activity. A major reason for Hayek’s shift into social philosophy was that he believed – correctly – that he had lost the debate with John Maynard Keynes about the causes of the Great Depression. There can be no doubt that his encounter with Keynes was the most important event in his intellectual life. Yet he had little insight into Keynes either as a thinker or a human being. He told me that during their acquaintance he never realised that Keynes had been homosexual – a surprising admission, as it was hardly something Keynes concealed within his circle of friends. The two men had quite different kinds of minds – Keynes’s swift and mobile, with an almost clairvoyant power of entering into the thinking of others; Hayek’s slowly probing, inwardly turned and self-enclosed. They were nonetheless on cordial terms.

Keynes found Hayek rooms in King’s College when the London School of Economics (where Hayek became a professor of economics in 1931) moved to Cambridge for the duration of the Second World War, and for a time the pair shared fire-watching duties on the roof of the college when it was feared that Cambridge might be bombed. With characteristic generosity, Keynes – while firmly rejecting its claim that government management of the economy is bound to lead to totalitarianism – heaped praise on Hayek’s anti-socialist tract The Road to Serfdom when it appeared in 1944.

The differences between the two thinkers were as much in their underlying philosophies as in their economic theories. Both were sharply aware of the limits of human knowledge. But whereas Hayek invoked these limits to argue for non-intervention in the economy, Keynes recognised that bold action by governments is sometimes the only way in which the economy can be lifted out of depression – as when Roosevelt (to whom Keynes had written an open letter in 1933) successfully adopted some aspects of Keynesian thinking in the New Deal.

Hayek was most original when he ­argued that the market is a means of discovering and transmitting information that is dispersed throughout society. It was this insight into the knowledge-creating function of markets that enabled him to formulate a decisive argument against central economic planning.

Generations of socialists have maintained that the failings of the Soviet economy were because of historical causes extraneous to the planning system: a lack of democracy rooted in tsarist traditions of despotism, the underdevelopment of the Russian economy when the Soviet system came into being, and Stalin’s deformation of Lenin’s supposedly more benign inheritance.

As Hayek perceived, none of these factors can account for the universal failings of planned economies, which have followed a similar pattern in countries as different as  Czechoslovakia and Mongolia, East Germany and Cuba. The fundamental reason for the failures of central economic planning is that economic knowledge cannot be centralised. More than the love of power or the inevitability of corruption, it is the limitations of human knowledge that make socialist planning an impossible dream. Here Hayek’s argument was unanswerable.

The trouble is that it also applies to unfettered market capitalism. No doubt markets transmit information in the way that Hayek claimed. But what reason is there to believe that – unlike any other social institution – they have a built-in capacity to correct their mistakes? History hardly supports the supposition. Moods of irrational exuberance and panic can, and often do, swamp the price-discovery functions of markets.

When considering how to overcome the Great Depression, Hayek opposed Keynes-style fiscal stimulus for the same reason he opposed monetary expansion of the sort later advocated by his friend the American economist Milton Friedman (1912-2006). In attempting to generate recovery by macroeconomic engineering, both monetarism and Keynesianism required a knowledge of the economy that no one could possess. Unlike monetarism – with which it has sometimes been confused – the Austrian school of economics that Hayek promoted insists that the quantity of money cannot be measured precisely, and that expanding the money supply cannot reflate the economy in a sustainable way.

For Hayek, the causes of the Depression lay in earlier central bank policies of cheap money, which resulted in large-scale misallocation of capital. Because no central authority could grasp the shifting pattern of relative scarcities and prices, only the market could determine the right allocation. Accordingly, believing that misguided investments had to be liquidated, Hayek argued in the 1930s for policies that were more contractionary than those that were actually pursued. The task of government was to get out of the way and let the process of adjustment run its course.

If they had been adopted while the crash was under way, Hayek’s prescriptions would have made the Depression even worse than it proved to be – a fact he later admitted. But he never accepted Keynes’s core insight that large-scale economic discoordination could be the result of the workings of the market itself. For him it was always government intervention that accounted for market disequilibrium. More sceptical as well as more radical in his turn of mind, Keynes questioned the self-regulating powers of the market. His work on the theory of probability disclosed insuperable gaps in our knowledge of the future; all investment was a gamble, and markets could not be relied on to allocate capital rightly. There were booms and busts long before the emergence of modern central banking. Left to its own devices, the free market can easily end up in a dead end like that of the 1930s.

***

Keynes’s own experience told against Hayek’s theories. As one of the 20th century’s most successful speculative investors, playing the markets on behalf of his college from a phone at his bedside before he got up for the day, he understood – in a way that the inveterately professorial Hayek did not – the ineradicable uncertainty of economic life. As a member of the British delegation at the Paris Peace Conference in 1919, Keynes had been horrified at the punitive conditions imposed by the Allies, which he forecast would destroy the German economy and lead to an upheaval that would “submerge civilisation itself”. Keynes had an acute sense of the risks posed to social stability by misguided economic policies. In contrast, Hayek consistently ignored these hazards.

Hayek’s blind spot with regard to politics was clear in the early 1980s when the first Thatcher government, in an attempt to reduce inflation and bring the public finances closer to a balanced budget, was raising interest rates and cutting public spending. As he had done during the 1930s, Hayek attacked these policies as not being severe enough. It would be better, he told me in a conversation we had around this time, if Thatcher imposed a more drastic contraction on the economy so that the wage-setting power of the trade unions could be broken. He appeared unfazed by unemployment, which was already higher (more than three million people) than at any time since the 1930s, and would rise much further if his recommendations were accepted.

Fortunately Hayek never had any influence on Thatcher’s policies. (Her chief economic adviser in these years was Alan Walters, a Friedman-style monetarist.) Equally, and perhaps also happily, Thatcher had no understanding of Hayek’s ideas. If it was true that she carried about with her for a time a copy of Hayek’s magnum opus, The Constitution of Liberty (1960), she cannot have read its postscript, “Why I am not a Conservative”, in which Hayek explains that he rejects conservatism because it lacks a vision of human progress. A case can be made that Thatcher was no conservative, either – at least if being conservative includes an aversion to policies that impose deep changes on inherited social institutions. But this is a view that goes only so far. Unlike Hayek, Thatcher understood and accepted the political limits of market economics.

Though he witnessed at first hand the collapse of liberal civilisation in interwar Europe, Hayek had little sense of the fragility of freedom. He observed how the Habsburg regime was destroyed, first by war and economic ruin and then by nationalism, but his response was to look for what he called in his book Individualism and Economic Order (1949) “a permanent legal framework”, which could serve as a guarantor of liberty in the economy and society. Here Hayek disregarded the principal lesson of the interwar years, which is that a liberal regime cannot be secured by legal diktat.

Geopolitical conflict and war, economic upheavals and new social movements have repeatedly damaged or destroyed liberal regimes. No ideal constitution can overcome the permanent threats to liberal values.

Yet throughout his writings Hayek invoked the mirage of a legal order in which vital freedoms are protected by being insulated from the political process. Something like this protection was provided by the Austro-Hungarian empire during the reign of the emperor Franz Joseph, and it is almost as if Hayek were trying to reconstitute the Habsburg realm in a new form that would last for ever. He was always sympathetic to the attempt to build a European federal union – a fact that only confirms his blindness to political realities.

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Hayek’s attempt to fashion a regime in which the freedoms he cherished would be invulnerable to political challenge led him to some curious proposals. In The Political Order of a Free People (1979), the third volume of his last major work, Law, Legislation and Liberty, he outlined a scheme for a bicameral legislature in which the upper chamber is composed only of people elected at the age of 45 for a 15-year term by an electorate also consisting only of 45-year-olds. When they reached 60, members of the upper house would be retired and given a lifelong sinecure.

Hayek liked to ridicule the idea that institutions could be designed on the basis of abstract models – a view he criticised as embodying a philosophy of “constructivist rationalism”. Yet his scheme for an ultra-liberal constitution was a prototypical version of the philosophy he had attacked.

It may have been a half-conscious awareness of the limitations of this rationalistic philosophy that fuelled his evolutionary speculations. Underpinning his defence of the free market was a belief in what he called “spontaneous order in society” – the idea that, if only human beings were not subject to oppressive governments, they would evolve in ways that allowed them to live together in peace and freedom. This was not a view held by Hayek’s friend and LSE colleague Karl Popper, who gently demolished it when I talked with him, or by the conservative philosopher Michael Oakeshott, also a colleague at the LSE, who dismissed it – accurately – as “rubbish”. A type of unplanned order may well emerge in society but there is no reason why it should respect liberal values. There is nothing particularly liberal about the Mafia.

The fallacy that a process of social evo­lution is at work that will promote the spread of some version of liberal values goes back a long way. Propagated by Herbert Spencer, the prophet of laissez-faire who first coined the expression “survival of the fittest”, it was widespread in the late 19th century. There are many similarities between Hayek’s and Spencer’s theories, not least the idea that capitalism will prevail over other economic systems because it is more productive and can support a larger human population. Hayek assured me that he had never read Spencer, and I’m sure this was the case. Very similar ideas had been popular in fin-de-siècle Vienna. Hayek was doing no more than reviving a recurrent modern delusion – the belief that history obeys evolutionary laws, which somehow underpin a process of progressive social development.

The spread of capitalism over the past decades is a result of human decisions, not the workings of some imagined evolutionary process. Communism collapsed in the former USSR not because it was less productive than capitalism (though this was certainly the case) but because the Soviet state became embroiled in an Afghan war it could not win, while losing control of parts of eastern Europe and the Baltic states. Another important factor was the unintended impact of Mikhail Gorbachev’s reform policies, which, rather than strengthening the regime as he intended, exposed how little popular legitimacy it possessed.

A variety of capitalism came to China through the policies of Deng Xiaoping, who pulled down the curtain on the Maoist era. None of these developments resulted from the operation of evolutionary laws, and we are now seeing a reassertion of state power in both Russia and China.

Hayek’s belief that vital freedoms can be enshrined in law and thereby taken out of politics is ultimately delusive. But it is not an aberration peculiar to the brand of right-wing liberalism that he professed. An anti-political liberalism is the ruling illusion of the current generation of progressive thinkers. Philosophers such as John Rawls and Ronald Dworkin had views of justice very different from Hayek’s. Whereas Hayek rejected any redistribution of income beyond that required by a minimum level of subsistence, Rawls and Dworkin demanded different versions of egalitarianism. What all these thinkers had in common was the idea that reasonable people will converge on a shared conception of what justice requires. In this view, politics isn’t a rough-and-tumble in which rival interests and ideals contend with one another unceasingly, but a collective process of deliberation that leads to a common set of values. Some such vision seems to have possessed Ed Miliband, until he discovered that his ideal of equality was not widely held and the parliamentary road to predistribution was closed.

***

Hayek may still have lessons to teach us. The policies he recommended during the Great Depression may have been badly flawed but his insight that prosperity cannot be restored by unending expansion of debt may have some value at a time when the limits of “Keynesian” quantitative easing are becoming clear. It is in any case far from obvious that Keynes would have supported a continuation of QE once a disastrous collapse had been averted. “Keynesianism” is a confection of Keynes’s more mechanical disciples, not an indication of how this mercurially brilliant mind would have responded to our present dilemmas. Again, Hayek’s claim that nothing can be done to mitigate the impact of free markets on social cohesion was dangerously misguided. But he was right to point out that capitalism cannot be remodelled to fit some conception of an ideally fair distribution of resources. Whether any kind of social democracy can be reconciled with the anarchic energies of global markets is an open question.

Hayek may have shown the unreality of left-liberal visions of egalitarian capitalism, but it was Keynes who understood fully the vanity of liberal rationalism. In “My Early Beliefs” (1938), a talk later published as a memoir, Keynes mocked the philosophy held by himself and his friends before the First World War: “We were not aware that civilisation was a thin and precarious crust . . . only maintained by rules and conventions skilfully put across and guilefully preserved.”

Hayek watched the interwar collapse with horror, as Keynes did, and shared many of Keynes’s liberal values. What he failed to understand is that these values cannot be renewed by applying any formula or doctrine, or by trying to construct an ideal liberal regime in which freedom is insulated from the contingencies of politics.

John Gray’s latest book is “The Soul of the Marionette: a Short Inquiry into Human Freedom” (Allen Lane)

John Gray is the New Statesman’s lead book reviewer. His latest book is The Soul of the Marionette: A Short Enquiry into Human Freedom.

This article first appeared in the 30 July 2015 issue of the New Statesman, Summer Double

Stuart Ramson for Lumos
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“It’s probably the thing of which I am most proud”: J K Rowling in conversation with Eddie Redmayne

The Harry Potter creator talks to the star of Fantastic Beasts and Where to Find Them about her work with the Lumos charity and the urgent need to end the institutionalisation of children.

EDDIE REDMAYNE: Good evening, good evening ladies and gentlemen.

I am so excited that you are excited! Welcome to Carnegie Hall and – thank you! – Welcome to a very what I hope is a very special evening. More than 25 years ago, an author put pen to paper and created one of the most extraordinary stories that the world has ever seen. Her astounding imagination continues to thrill us, it captivates us, it enthrals us, it moves us, and it leaves us wanting more. And tonight ladies and gentlemen. . . there will be more.

But ten years ago, an unimaginable image and an unthinkable story propelled her down a very different path – where the lives of millions of voiceless children would need saving. The author is J K Rowling, and the path is Lumos.

Tonight, we will cast a light on eight million hidden children around the world who desperately need our help. 

FILM – NARRATED BY J K ROWLING: A child’s life is so much more than the sum of its parts ‐ and the love a family brings holds everything together. From the very beginning, a child thrives on individual care and attention. A baby quickly forges a bond with loving parents – and because of this bond the brain develops with remarkable speed and complexity. Within a safe, secure and stimulating environment a child gets the most out of life; in play, education and friendship their personalities develop freely within safe bounds. But this picture of childhood can be a fragile one. Conflict and disaster can destroy the foundations of family life. When countries suffer the effects of extreme poverty, the bond which holds families together can easily be broken apart. In these circumstances, families can feel they have no choice but to place their child into a so-called orphanage, especially if the child is disabled and needs care the family cannot afford. Community support alternatives may not even exist. That orphanages do exist locally may convince desperate parents that there is no alternative. But once a child enters an orphanage, a very different picture of childhood can emerge. A child must now compete for the unique attention they crave. A lack of individual care harms babies and affects their infant brains at a critical stage. Any schooling they receive is no compensation for the parental love they are denied, and children can become cut off from the world. Ill-prepared for life outside they have very poor life chances, and they are much more likely to fall victim to abuse and crime once they leave an orphanage. And we know there are at least 8 million of these children worldwide. But there is hope ‐ and it lies at the very heart of the problem. 80 per cent of children in orphanages are not in fact orphans but have parents or extended families who could care for them, given some support. And by better channelling of existing donations, we can support these vulnerable children at home. By directing funds away from so-called orphanages we can transform systems of care; we can establish community‐based services and prevent these places from ever taking root. Community‐based services are a better investment for donors: they are more cost efficient than residential care and reward children and communities in the long run. Placing children into orphanages is a choice and not a necessity; it is preventable and reversible. And by giving communities options in how they support families, we can change the lives of millions of children and give them strong beginnings ‐ and the futures they deserve.

ER: So now to hear more about Lumos and its life-changing work, please welcome to the stage its founder. Ladies and gentlemen, the extraordinary J K Rowling.

JKR: Thank you, thank you very much.

ER: So here we are!

JKR: Here we are!

ER: This is a big deal. We’re playing Carnegie Hall!

JKR: We are, yes. It’s actually my second time!

ER: Really? Alright, so in a short while we get to show these people our little movie.

JKR: Yeah, which is exciting and a little bit terrifying.

ER: And we will get onto talking about that in a little bit. But first, the reason we’re all here. So we’ve just seen this film – this is clearly a massive humanitarian issue, and a gigantic undertaking. I wondered: why this issue? Why is it so close to your heart?

JKR: Well, I think Eddie said it really well in his introduction – truth is that I saw a newspaper story about a very small boy, he was seven years old and he was effectively being kept in a cage. And I was pregnant at the time and I saw this image in the newspaper, and it was such a shocking image of this child – holding onto wire and screaming – that I went to turn the page. I went to turn the page because it was painful to look at, and I felt very ashamed. As I went to the page, I thought: No, no, you have to read the story, and if it’s as bad as it looks, you gotta do something about it. So I read the story, and it was even worse than it looked.

So to cut a very long story short, I pulled out the news story – which was all about an institution in the Czech Republic where very young children were being kept in appalling conditions. I went home the next day, Monday, [and] I started to write letters to anyone I could think of – MPs, and MEPs, and the president of the Czech Republic. I wrote to everyone I could think of, and that led me to connecting with experts in this field, and the creation of Lumos.

ER: And so there are eight million children living in orphanages worldwide –

JKR: That we know that we know of! See, I think what’s staggering with. . . what was amazing to me when I first began finding out about this these issues, you think how could eight million children be going through this and we don’t know? But a very small amount of thought shows you they are – as you just said – so voiceless. They are literally hidden from sight. So in fact eight million may be a conservative estimate – there may be more children who have been taken from families that we don’t know about, because record-keeping tends to be poor, which is one of the problems.

ER: And they are institutions that we are saying are harmful to children – I suppose, I imagine, not everyone agrees?

JKR: Absolutely so it is completely understandable that we – and by ‘we’ I mean wealthy Westerners – we may have an idea that institutions are kind. Kind in that otherwise perhaps the child will be on the street, or the child is alone. That’s completely understandable. We tend to have that image in our minds from movies, like Annie, that orphanages can be kind of fun! Actually, that’s not true – even the well-run ones are proven, as we saw in that short film, to do often irreparable harm. You will know, because he has – you have a baby now, who is five months old?

ER: Yup.

JKR: And you will know, as I know as all of us who have anything to do with small children know: that they are hard-wired to demand love. They just come out looking for it, because that’s what they need for brain development. And as was shown in this movie, we know that children who are raised in institutions suffer developmental delays, they tend to be physically stunted, they normally have psychological trauma… it is just not what nature intended for children to be herded together, and not given individual love and care.

ER: And are there sort of studies and statistics which support [this]?

JKR: Absolutely, so I’m not just saying this – plucking this out of the air to tell you. We have 80 years of research now that shows very, very clearly – all the research agrees – that this is very harmful. And in fact Lumos works with scientists in the field who can show you brain scans, showing the difference between a child that’s come from an institution and a child has been raised in a family.

As the movie showed, one large recent study shows that children who come out of institutions were six times more likely to have been abused;

10 times more likely to enter prostitution; 40 times more likely to have a criminal record.

And they were 500 times more likely to kill themselves. So you see we do have this enormous bank of research telling us that we are allowing or even inadvertently causing children to be harmed.

ER: For me, one of the complicated things get my head round – and, I suppose, for people in developed countries like the US or the UK in which institutionalisation is a thing of the past – one of the things we struggle with is there’s this sort of disconnect in terms of how we view orphanages.

JKR: I completely agree. I think a small amount of thought shows us if you imagine what would happen – God forbid – were a terrible natural disaster to hit New York tonight, everyone I think would immediately think “Well, the important thing is I keep my loved ones close to me, we stay together and we get the support we need to rebuild our business, find ourselves a home”… When we put ourselves and our families in that in that mentally in that position we understand. However, what’s happening across the developed world is disaster hits and families are immediately pulled apart: “we’ll take those children from you.” Now, imagine that, in the wake of the disaster, people come to you and say: “that child will get fed only if you give me that child.” And we keep propping up the system, and it’s causing a huge amount of damage.

ER: And so is that why families are being torn apart? Why do parents give them up?

JKR: Right, exactly – for many people, that’s the key question. So when I tell people [that] 80 per cent of these children have parents, then an understandable reaction is “what loving parent could give up their child to one of these places?” But we know that there are three main drivers into institutions. The biggest one, the overwhelming one, is poverty.

So parents who make themselves literally be starving are told “if you want to feed that child, we will take it to the institution – the child will get food in the institution.” So they literally believe “that’s how my child will be fed and survive – I’ll have to give the child.” The other one is disability. We find in the developed world, and certainly this was the case in Eastern Europe, where we’re doing a lot of work, children with disabilities were not integrated. And so parents again were told “if you want medical assistance for a disabled child, or if you want that child educated they have to go into the institution.”

And then the third driver is natural disaster, and this is where a very nasty aspect of institutionalisation comes in. It is often the case in the developed world, the so-called orphanages are run as businesses, and that effectively children are trafficked for profit because we Westerners are generous and we can we give a lot of money to these orphanages. And unfortunately there are very unscrupulous people, who in the wake of disasters use it as an opportunity to get children and corral children as a magnet for foreign money, rather than putting the money into systems of care that would keep families together. So since 2010, there has been a 700 per cent increase in children in institutions in Haiti. 

ER: So, for me. . . what’s the solution? How does one go about it?

JKR: Obviously this is this is a massive issue, a massive issue. And, as you would imagine, the solution is complex but – I bring you hope! This is an entirely solvable issue. This is entirely solvable, and we know how to do it. Doesn’t mean it’s easy – but we know how to do it. So it’s a two-part problem: first of all we have these children, some of them living in truly appalling conditions, whom we need to rescue.

The other part of the issue is we need to stop children going into those institutions in the first place, ever again. Lumos’ ambition – and we believe it’s achievable – is that by 2050 we will have ended institutionalisation globally. Now, that’s going to be a huge amount of work, clearly, but a lot of us are really up for that. So, first thing is we need to put into place different systems of care, and some very good news is institutions are very, very, expensive to run. And if we just redirected the funds that are being pumped into institutions, that alone would enable better systems of care to be set up.

But you also need a lot of expertise, and what we do with Lumos is, we work with people in country who are already trying to change these systems. So that’s the point I always really like to get across, we are not moving into countries and saying: “let us show you how it’s done.” We are walking into countries because in all of these countries there are experts, who know the system’s wrong, but they don’t have the money and they don’t have the clout, and they aren’t connected with the kind of people who can help them change systems. We can go in and help them do, that so that’s what we do. We go in and we try and affect the change.

We also do things like – I mean, we’ve provided urgent medical assistance to children we’ve found in very, very bad situations and so on. So it’s multi-layered, and then the other thing we do is advocacy, so we work with places like the UN and the EU to change policy, to stop this being the default position when disasters happen.

ER: I think I read that every year, particularly in this country [the US], millions of dollars are being given to orphanages.

JKR: That’s right. I have these notes because I want to get the figures right – because normally I just make it up out of my head, like people say “how many house elves are in the Hogwarts kitchen?” and I just [gestures]. But this is really important – I’m not saying house elves aren’t important, they clearly have been massive in my life, they mean a lot to a lot of people. . .

But I want to get this right because this is this important. So, this is an incredible figure: this is how much Americans give to charity annually – how awesome are Americans? – The answer is $375bn. So I mean that is phenomenal, that’s phenomenal and just warms ones heart to think about the generosity. Now, that money was given with the absolute best possible intentions. There’s not one person here tonight, I know, of any age, that does not want to help a child in trouble. It’s a human instinct that we all have.

We know that that money drove a lot of children into orphanages who probably didn’t need to be – well, no child needs to be in an orphanage. But we know that it created a drive-in. And, so what I would like, even if you never give us another penny – I’m so grateful for what you have given us tonight, we will always be able to use money very effectively because these children have very complex needs.

But even if you never give us another penny, if you just walk out of here tonight and explain to people that donating to orphanages or volunteering and orphanages is sometimes propping up some very corrupt people making a lot of money, and if you give your money to community-based services you can actually help ten times as many children. Just checking my notes – ten times as many children.

ER: You mentioned Haiti – that is somewhere that is obviously in our minds of the moment.

JKR: It is, hugely in our minds. In my mind a lot at the moment because, we know and I have more figures here – these are new figures to me, because obviously there’s recently been an absolute catastrophe there. So we now know that there are 30,000 children institutionalised, and the same statistic I keep quoting still applies: the overwhelming majority of those children have at least one parent, and these are families whose livelihoods have been swept away, these are families who were so desperate that they thought that was the only way they were going to keep that child alive. Which is an absolutely heart-breaking thing to me and I know it will be to you also.

There is a lot of corruption in Haiti, and we know that there are people who are called child finders – not childminders – these child finders are out there persuading parents to give up their children to orphanages, and making lots of promises to them about what they can do for that child in terms of protection and care. And those children are not receiving protection and care – rather the reverse.

We know that a lot of child trafficking is going on, and we also know that for each child in an orphanage in Haiti, currently each child is attracting six thousand dollars’ worth of foreign aid, and that’s why it is becoming a business. So people with the best possible intentions are giving money, and I think they might be horrified to see what’s going on. So what I’m saying to you is, for God’s sake don’t stop giving money, but give it right. Give it to NGOs that are working to give people back livelihoods and to support communities, not to institutions.

ER: And Hurricane Matthew has exacerbated that…

JKR: Hurricane Matthew was, as we all know, an absolute nightmare: half a million people lost their livelihoods, we have 900 dead, and it will – unless we intervene in the correct way – continue to prop up this very damaging system. And I will say this because I would like you all to know, that I put my money where my mouth is: I gave a million pounds last week to Haiti to support community-based services. And I’m not saying it for that reason – I kind of cringe slightly as I even say that – because I’m not saying it for that reason. I’m saying that I’m not asking anyone to give where I’m not already giving, but Haiti is a particular catastrophe and I wanted to give extra funds to Haiti right now through Lumos, because Lumos is on the ground right now affecting this kind of change, and really looking out for those children in those institutions.

ER: And recently Bonnie Wright and Evanna Lynch – so Ginny Weasley and Luna Lovegood from the Potter films – who we love! And I think Bonnie is here this evening – but they are two incredibly dedicated Lumos ambassadors, who visited Haiti, and they not only saw the horrific conditions but also they saw the solution that you’ve been talking about Jo and we actually have some footage from the trip here:

FILM – NARRATED BY BONNIE WRIGHT AND EVANNA LYNCH: “Hi, my name is Bonnie Wright and I’m an actress and director. You may know may know me as Ginny Weasley from the Harry Potter films. But today I am here in Haiti with Evanna Lynch, who you may know as Luna Lovegood. We decided to come to Haiti because we’re concerned about the 30 thousand children living here in orphanages instead of at home with their families. 80 percent of these children have families who would care for them but cannot. I was incredibly shocked and upset to find the conditions at the first orphanage we visited. I’ve heard so much about the work that Lumos was doing and from some of the workers here about what these institutions were like, but I think out of this first visit just highlighted how incredibly important Lumos’ work is here in Haiti. The most important thing that I took away from today is that children really need to grow up in families.”

“Without family and without love, children can’t be children. The most important thing as a child is to be with your family, and you have to do everything you can to keep that family unit in place.”

ER: Those are pretty profoundly powerful images.

JKR: They are, they are but you know… we’re obviously doing a lot of work in Latin America now, it’s an area that does have a problem with institutionalisation. But we are very hopeful at Lumos that we could reach a tipping point in five years or so, where we can we can change policy. We are very hopeful that by 2035 – if we can get the funds – we will be able to stop institutionalisation in Latin America. We believe that.

ER: So it’s solvable?

JKR: It is solvable. It sounds overwhelming when you think of that number of children, and the complexity – I’m not denying the solutions are complex. But Lumos is working with absolute experts in this field. They know what they’re doing, they know how to make it work, and what they need are the funds and the support. And the last thing I would say – particularly to young people in the audience today – I would reiterate: we need to change minds.

We need to change minds, because while people are putting money into these orphanages and while people are volunteering in orphanages, a lot of corruption flourishes around those institutions. There is a sense that we are, as ever with the best intentions, propping up something that’s very damaging. Those children should be with their families, and if they can’t be with families, foster care, or adoption, or supported living in small family-style units are all proven to be the best possible alternatives.

ER: What can we do? Tell us what we can do!

JKR: I think its two-part as I say so number one, I am going to firstly say I could not be more grateful all of you being here tonight. You’ve already done the most enormous amount for us to raise money for us and thank you, thank you. So fifty percent of what you can do: if you want to fundraise for us, I will be forever in your debt.

The other half though as I say is, if everyone who is here tonight walked out of here and said: “I get the issue! I know that institutionalisation is wrong, and in future when I donate, when I hear a friend donating, and saying they want to give some money away at Christmas, I will say “not the orphanages.”” But look, if you want to give it to a child in the developing world, look at community-based services. We’re not the only NGO working in the field, we are one of several, so do a little bit of research and make sure that you are supporting families to stay together.

ER: We will spread the word, we will spread the word. That is our job, to spread the word. And I’ve got to say, having known so little about it before, it’s an extraordinary thing and it’s a complicated thing, but as you say solvable. And you must be incredibly proud of the work that Lumos are doing.

JKR: I am – it’s probably the thing of which I am most proud.

This conversation took place on 12 November 2016 at Carnegie Hall, New York City.

This December, the New Statesman is joining with Lumos to raise money to help institutionalised children in Haiti return to family life. In the wake of Hurricane Matthew, funds are needed to help those who have become separated from their families. Please consider pledging your support at bit.ly/lumosns

Thanks to Lumos’s 100 per cent pledge, every penny of your donation goes straight to the programme. For more information, see: wearelumos.org