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May 6, 2007
Does Hayek approve of state planning? Is he engaged in fostering state action to shape the activity of free individuals in a market order? Does Hayek transgress the libertarian and classical liberal duality of individual freedom versus the state unfreedom?
In this text by Viktor Vanberg in The Cato Journal it is argued that Hayek in both his 1939 article "Freedom and the Economic System" as well as in The Road to Serfdom took particular care to point out that his criticism of modern planners was not about whether we ought to choose intelligently between the various possible organizations of society but about the ways in which we can reasonably hope to improve the order of society by planning and rational construction. Vanberg says:
There is, [Hayek] argues, an important distinction between two kinds of "social planning," namely the "distinction between the construction of a rational system of law, under the rule of which people are free to follow their preferences, and a system of specific orders and prohibition" (1939: 9). While liberalism denies that the latter kind of social planning can be a suitable tool for social improvement, it is not only compatible with the former type of planning, but, in Hayek's understanding, has to consider it the principal means by which we can hope to improve our social condition.
The paper on "Free Enterprise and Competitive Order" stressed the role that the classical liberal doctrine, in his view, ought to assign to the positive task of improving the "legal framework." He suggests there that it is more adequate to interpret "the fundamental principle of liberalism" not as absence of state activity, but "as a policy which deliberately adopts competition, the market, and prices as its ordering principle and uses the legal framework enforced by the state in order to make competition as effective and beneficial as possible" .
Vanberg adds that in a handbook article on Liberalism, written in 1973, Hayek included a section entitled "Positive Tasks of Liberal Legislation" in which he refers approvingly to certain "neoliberal" approaches that explicitly address the issue of what the positive content of the legal framework must be in order "to make the market mechanism operate satisfactorily" ..... Though he did not specify which neoliberal approaches he had in mind, his description certainly fits German Ordo-liberals of the so-called Freiburg School, like Walter Eucken and Franz Boehm... It corresponds to their understanding of the role of liberal legislation when Hayek...notes that the "attitude of the liberal toward society is like that of the gardener" who seeks to create favorable conditions for natural growth.
Hayek is mostly definitely engaged in planning' a system of general rules for a liberal order.
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