Friday, 29 April 2011

Competitive Order

Following the advice of a friend of mine, I have just discovered the value of “ ‘Free’ Enterprise and Competitive Order”, the speech Friedrich Hayek had delivered in occasion of 1947’s Mont Pellerin Society meeting. I found it as a sort of piece of philosophy of public policy, very appropriate for the present years.

In that paper, Hayek states that the “continued movement toward more government control” is mostly due to the lack of “a consistent philosophy of the groups which wish to oppose it”, groups that advocate free enterprise but not a competitive order.

Hayek qualifies “the impression that abandonment of all harmful of unnecessary activity” is “the consummation of all political wisdom” as a “fatal tactical mistake”. In this sense, he calls for assuming that “demands for greater security and greater equality” will “determine action for a long time to come and carefully to consider how far a place can be found for them in a free society”.

Hayek presents the concept of competitive order as the political programme of making competition work, not by mere absence of intervention on free enterprise, but by an active prevention of monopolies. He also points out that the “preconditions of a competitive order” require a monetary and financial policy and some sort of provision to “be made for the unemployed and the unemployable poor”.

To summarize, Hayek claims to “pay deliberate attention to the moral temper of the contemporary man”, trying to canalize his “energies from the harmful policies to which they are now devoted to a new effort on behalf of individual freedom”.


Carolina Gonzalez Rodriguez said...

Wish all our "ancap" friends were more prone to read, understand AND agree with Hayek! Such a master piece you've shared Fede!
Thanks a bunch! It's a huge relieve to realize that my ideas are close to those of Hayek's!!


Federico Sosa Valle said...

Thank you, Carolina. I’m glad you enjoyed the post. “ ‘Free’ Enterprise and Competitive Order” is worth a read in full. You can find it included in Hayek’s “Individualism and Economic Order”. It is an example of the sort of position papers we all are calling for.