IDEAS home Printed from https://ideas.repec.org/a/eee/jeborg/v204y2022icp457-465.html
   My bibliography  Save this article

Hayekian economic policy

Author

Listed:
  • Feld, Lars P.
  • Nientiedt, Daniel

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 downplays the importance of deliberate legislation and moves closer to the Misesian 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.

Suggested Citation

  • Feld, Lars P. & Nientiedt, Daniel, 2022. "Hayekian economic policy," Journal of Economic Behavior & Organization, Elsevier, vol. 204(C), pages 457-465.
    • Handle: RePEc:eee:jeborg:v:204:y:2022:i:c:p:457-465
    DOI: 10.1016/j.jebo.2022.10.019
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167268122003705
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jebo.2022.10.019?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Bruce Caldwell, 2011. "Hayek on Socialism and on the Welfare State," Challenge, Taylor & Francis Journals, vol. 54(1), pages 82-97.
    2. Kersting, Wolfgang, 2005. "Der liberale Liberalismus: Notwendige Abgrenzungen," Freiburg Discussion Papers on Constitutional Economics 05/13, Walter Eucken Institut e.V..
    3. Dold, Malte & Lewis, Paul, 2022. "F.A. Hayek on the political economy of endogenous preferences: An historical overview and contemporary assessment," Journal of Economic Behavior & Organization, Elsevier, vol. 196(C), pages 104-119.
    4. Bergh, Andreas, 2020. "Hayekian welfare states: explaining the coexistence of economic freedom and big government," Journal of Institutional Economics, Cambridge University Press, vol. 16(1), pages 1-12, February.
    5. Paul Lewis, 2014. "Hayek: from economics as equilibrium analysis to economics as social theory," Chapters, in: Roger W. Garrison & Norman Barry (ed.), Elgar Companion to Hayekian Economics, chapter 9, pages 195-223, Edward Elgar Publishing.
    6. Buchanan,James M. & Congleton,Roger D., 2006. "Politics by Principle, Not Interest," Cambridge Books, Cambridge University Press, number 9780521031325, October.
    7. Andy Denis, 2004. "Two rhetorical strategies of laissez-faire," Journal of Economic Methodology, Taylor & Francis Journals, vol. 11(3), pages 341-357.
    8. Christofzik, Désirée & Feld, Lars P. & Reuter, Wolf Heinrich & Yeter, Mustafa, 2018. "Uniting European fiscal rules: How to strenghten the fiscal framework," Working Papers 04/2018, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung.
    9. Hayek, F. A. & Caldwell, Bruce, 2007. "The Road to Serfdom," University of Chicago Press Economics Books, University of Chicago Press, number 9780226320557 edited by Caldwell, Bruce.
    10. Boettke,Peter J. & Salter,Alexander William & Smith,Daniel J., 2021. "Money and the Rule of Law," Cambridge Books, Cambridge University Press, number 9781108790840, September.
    11. Hayek, F. A. & Caldwell, Bruce, 2007. "The Road to Serfdom," University of Chicago Press Economics Books, University of Chicago Press, number 9780226320540 edited by Caldwell, Bruce, Febrero.
    12. Beck, Naomi, 2018. "Hayek and the Evolution of Capitalism," University of Chicago Press Economics Books, University of Chicago Press, number 9780226556000.
    13. repec:ucp:bkecon:9780226320625 is not listed on IDEAS
    14. James M. Buchanan, 1954. "Individual Choice in Voting and the Market," Journal of Political Economy, University of Chicago Press, vol. 62(4), pages 334-334.
    15. Samuel Bowles & Alan Kirman & Rajiv Sethi, 2017. "Retrospectives: Friedrich Hayek and the Market Algorithm," Journal of Economic Perspectives, American Economic Association, vol. 31(3), pages 215-230, Summer.
    16. Hayek, F. A., 2011. "The Constitution of Liberty," University of Chicago Press Economics Books, University of Chicago Press, number 9780226315379 edited by Hamowy, Ronald.
    17. Carl Shapiro, 2019. "Protecting Competition in the American Economy: Merger Control, Tech Titans, Labor Markets," Journal of Economic Perspectives, American Economic Association, vol. 33(3), pages 69-93, Summer.
    18. Ulrich Witt, 2003. "Economic policy making in evolutionary perspective," Journal of Evolutionary Economics, Springer, vol. 13(2), pages 77-94, April.
    19. Arndt Christiansen & Wolfgang Kerber, 2006. "Competition Policy With Optimally Differentiated Rules Instead Of “Per Se Rules Vs Rule Of Reason”," Journal of Competition Law and Economics, Oxford University Press, vol. 2(2), pages 215-244.
    20. Andrew Farrant & Edward McPhail, 2012. "Supporters Are Wrong," Challenge, Taylor & Francis Journals, vol. 55(5), pages 94-105.
    21. Schnellenbach, Jan & Schubert, Christian, 2015. "Behavioral political economy: A survey," European Journal of Political Economy, Elsevier, vol. 40(PB), pages 395-417.
    22. Erwin Dekker, 2016. "Left luggage: finding the relevant context of Austrian Economics," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 29(2), pages 103-119, June.
    23. Gerhard Wegner, 2008. "Political Failure by Agreement," Books, Edward Elgar Publishing, number 13011.
    24. Samuelson, Paul A., 2009. "A few remembrances of Friedrich von Hayek (1899-1992)," Journal of Economic Behavior & Organization, Elsevier, vol. 69(1), pages 1-4, January.
    25. Stefan Kolev, 2018. "Paleo- and Neoliberals: Ludwig von Mises and the “Ordo-interventionists”," The European Heritage in Economics and the Social Sciences, in: Patricia Commun & Stefan Kolev (ed.), Wilhelm Röpke (1899–1966), pages 65-90, Springer.
    26. Jan Schnellenbach, 2019. "Revisiting the Tension Between Classical Liberalism and the Welfare State," Journal of Contextual Economics (JCE) – Schmollers Jahrbuch, Duncker & Humblot, Berlin, vol. 139(2–4), pages 365-383.
    27. Hayek, F. A. & Vanberg, Viktor J., 2017. "The Sensory Order and Other Writings on the Foundations of Theoretical Psychology," University of Chicago Press Economics Books, University of Chicago Press, number 9780226436425 edited by Vanberg, Viktor J..
    28. William E. Kovacic & Carl Shapiro, 2000. "Antitrust Policy: A Century of Economic and Legal Thinking," Journal of Economic Perspectives, American Economic Association, vol. 14(1), pages 43-60, Winter.
    29. Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 473-491, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Feld, Lars P. & Nientiedt, Daniel, 2023. "Examining the ordoliberal tradition in classical liberal thought," Freiburg Discussion Papers on Constitutional Economics 23/5, Walter Eucken Institut e.V..

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kolev, Stefan, 2021. "When liberty presupposes order: F. A. Hayek's learning ordoliberalism," Freiburg Discussion Papers on Constitutional Economics 21/2, Walter Eucken Institut e.V..
    2. Niclas Berggren, 2009. "Choosing one’s own informal institutions: on Hayek’s critique of Keynes’s immoralism," Constitutional Political Economy, Springer, vol. 20(2), pages 139-159, June.
    3. Stefan Kolev & Nils Goldschmidt & Jan-Otmar Hesse, 2020. "Debating liberalism: Walter Eucken, F. A. Hayek and the early history of the Mont Pèlerin Society," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 33(4), pages 433-463, December.
    4. Makovi, Michael, 2016. "The Freedom of the Prices: Hayek's Road to Serfdom Reassessed," MPRA Paper 72071, University Library of Munich, Germany.
    5. Klump Rainer & Wörsdörfer Manuel, 2015. "Paternalistic Economic Policies: Foundations, Implications and Critical Evaluations," ORDO. Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, De Gruyter, vol. 66(1), pages 27-60, January.
    6. Schnellenbach, Jan & Schubert, Christian, 2015. "Behavioral political economy: A survey," European Journal of Political Economy, Elsevier, vol. 40(PB), pages 395-417.
    7. Roger D. Congleton, 2020. "Governance by true believers: supreme duties with and without totalitarianism," Constitutional Political Economy, Springer, vol. 31(1), pages 111-141, March.
    8. Viktor J. Vanberg, 2022. "Carl Menger, F.A. Hayek and the evolutionary strand in Austrian economics," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 35(4), pages 481-515, December.
    9. Horn, Karen, 2011. "James M. Buchanan – Doing away with discrimination and domination," Journal of Economic Behavior & Organization, Elsevier, vol. 80(2), pages 358-366.
    10. Christopher S. Martin & Nikolai G. Wenzel, 2020. "Generality and knowledge: Hayek's constitutional theory of the liberal state," Constitutional Political Economy, Springer, vol. 31(2), pages 145-168, June.
    11. Daniel Nientiedt, 2021. "Hayek’s treatment of legal positivism," European Journal of Law and Economics, Springer, vol. 51(3), pages 563-576, June.
    12. Andrew Farrant & Edward McPhail, 2012. "Supporters Are Wrong," Challenge, Taylor & Francis Journals, vol. 55(5), pages 94-105.
    13. Kolev, Stefan & Goldschmidt, Nils & Hesse, Jan-Otmar, 2014. "Walter Eucken's role in the early history of the Mont Pèlerin Society," Freiburg Discussion Papers on Constitutional Economics 14/02, Walter Eucken Institut e.V..
    14. Donato Masciandaro, 2020. "Covid-19 Helicopter Money, Monetary Policy And Central Bank Independence: Economics And Politics," BAFFI CAREFIN Working Papers 20137, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    15. Jean-Paul Azam & Elodie Djemai, 2019. "Matching, Cooperation and HIV in the Couple," Working Papers DT/2019/02, DIAL (Développement, Institutions et Mondialisation).
    16. Michael Makovi, 2015. "George Orwell as a Public Choice Economist," The American Economist, Sage Publications, vol. 60(2), pages 183-208, September.
    17. Masciandaro, Donato, 2022. "Independence, conservatism, and beyond: Monetary policy, central bank governance and central banker preferences (1981–2021)," Journal of International Money and Finance, Elsevier, vol. 122(C).
    18. Roger Congleton, 2014. "The contractarian constitutional political economy of James Buchanan," Constitutional Political Economy, Springer, vol. 25(1), pages 39-67, March.
    19. Åsbjørn Melkevik, 2016. "No progressive taxation without discrimination? On the generality of the law in the classical liberal tradition," Constitutional Political Economy, Springer, vol. 27(4), pages 418-434, December.
    20. Glenn L. Furton & Alexander William Salter, 2017. "Money and the rule of law," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 30(4), pages 517-532, December.

    More about this item

    Keywords

    Friedrich Hayek; Rule-based economic policy; Spontaneous order; Knowledge problem; Cultural evolution;
    All these keywords.

    JEL classification:

    • B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jeborg:v:204:y:2022:i:c:p:457-465. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jebo .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.