Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/250381 
Year of Publication: 
2022
Series/Report no.: 
Freiburger Diskussionspapiere zur Ordnungsökonomik No. 22/1
Publisher: 
Albert-Ludwigs-Universität Freiburg, Institut für Allgemeine Wirtschaftsforschung, Abteilung für Wirtschaftspolitik und Ordnungsökonomik, Freiburg i. Br.
Abstract: 
What is the appropriate role of the state in economic policy-making? This paper shows that Friedrich Hayek, who is often considered a proponent of laissez-faire liberalism, offers three different answers to this problem. First, Hayek argues that the state should provide a legal framework for competitive markets. Second, he proposes to employ the rule of law criteria - generality, equality, and certainty - to distinguish permissible from non-permissible state interventions. Third, he rejects deliberate legislation and moves closer to the Misean idea of a minimal state. The paper considers these answers in light of Hayek's analysis of the knowledge problem. We suggest that a Hayekian approach to economic policy-making should focus on improving the framework of general rules that guide individual behavior, thereby enabling spontaneous ordering processes and reducing the epistemological burden placed on policy-makers.
Subjects: 
Friedrich Hayek
Rule-based economic policy
Spontaneous order
Knowledge problem
Cultural evolution
JEL: 
B31
D78
P16
Document Type: 
Working Paper

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