Page 42 - Šolsko polje, XXIX, 2018, no. 1-2: The Language of Neoliberal Education, ed. Mitja Sardoč
P. 42
šolsko polje, letnik xxix, številka 1–2
in the journal ORDO in 1954 where Hayek laments the fact that clas-
sical economists had not adequately defined ‘intervention’ because, as
Cornelissen summarizes Hayek’s view, “many of them held ‘economic
politics’, of the sort advocated by Eucken and Ropke, to be antithetical to
‘the fundamental principles of liberalism’” (Cornelissen, 2017: p. 206; cit-
ing Hayek, 1954: p. 4).
Being aware of the controversy between classical liberalism and the
‘economic politics’ of Eucken and Ropke, Hayek is more careful to limit
the active role of the state to establishing the juridical structure of socie-
ty. For Hayek, the creation and maintenance of a competitive order is pri-
marily a legal affair. The only type of intervention for an ‘economic pol-
itics’ is in the “permanent juridical framework” as opposed to “constant
intervention of state force [Staatsgewalt]” (Cornelissen: p. 206; Hayek: p.
5). Hayek thus restricts intervention of the state to the legal order and thus
has a much narrower view of active state intervention to establish the ‘con-
ditions’ of economic activity than does either Röpke or Eücken.
Planning and the Rule of Law
Throughout his career Hayek remained steadfastly committed to the idea
that markets best guaranteed the freedom of citizens, and on this ground
remained staunchly opposed to all forms of state planning and control.
What essentially undermines state planning in Hayek’s view is that real
knowledge is gained and true economic progress made as a consequence
of locally generated knowledge derived from “particular circumstances
of time and place” and the state is not privy to such knowledge (Hayek,
1949b: 79). Planning ignores this localistic character of knowledge and
thus interferes with the self-regulating mechanism of the market.
It is on these grounds that Hayek argues that the state should only
be concerned with the protection of individuals by ‘general rules’, such as
the ‘rule of law’, but not with what he refers to as “central planning.” If we
look to Hayek, both to The Road to Serfdom (1944) and The Constitution
of Liberty (1960) where Hayek discusses planning and the rule of law, in
contrast to the rule of law’s formal, and a priori character, the plan’s ap-
proach to decision-making is ad hoc and arbitrary. A plan also embod-
ies, says Hayek (1944: p. 91) ‘substantive’ commitments on ends and val-
ues, whereas the rules constitutive of the rule of law are ‘general’, ‘formal’,
‘impartial’ and ‘systematic’ (p. 90-92). Formal rules operate “without ref-
erence to time and place or particular people” (p. 92). They refer to “typ-
ical situations…. Formal rules are thus merely instrumental in the sense
they are expected to be useful to yet unknown people” (p. 92). On the oth-
er hand, planning involves “a conscious direction towards a single aim”
40
in the journal ORDO in 1954 where Hayek laments the fact that clas-
sical economists had not adequately defined ‘intervention’ because, as
Cornelissen summarizes Hayek’s view, “many of them held ‘economic
politics’, of the sort advocated by Eucken and Ropke, to be antithetical to
‘the fundamental principles of liberalism’” (Cornelissen, 2017: p. 206; cit-
ing Hayek, 1954: p. 4).
Being aware of the controversy between classical liberalism and the
‘economic politics’ of Eucken and Ropke, Hayek is more careful to limit
the active role of the state to establishing the juridical structure of socie-
ty. For Hayek, the creation and maintenance of a competitive order is pri-
marily a legal affair. The only type of intervention for an ‘economic pol-
itics’ is in the “permanent juridical framework” as opposed to “constant
intervention of state force [Staatsgewalt]” (Cornelissen: p. 206; Hayek: p.
5). Hayek thus restricts intervention of the state to the legal order and thus
has a much narrower view of active state intervention to establish the ‘con-
ditions’ of economic activity than does either Röpke or Eücken.
Planning and the Rule of Law
Throughout his career Hayek remained steadfastly committed to the idea
that markets best guaranteed the freedom of citizens, and on this ground
remained staunchly opposed to all forms of state planning and control.
What essentially undermines state planning in Hayek’s view is that real
knowledge is gained and true economic progress made as a consequence
of locally generated knowledge derived from “particular circumstances
of time and place” and the state is not privy to such knowledge (Hayek,
1949b: 79). Planning ignores this localistic character of knowledge and
thus interferes with the self-regulating mechanism of the market.
It is on these grounds that Hayek argues that the state should only
be concerned with the protection of individuals by ‘general rules’, such as
the ‘rule of law’, but not with what he refers to as “central planning.” If we
look to Hayek, both to The Road to Serfdom (1944) and The Constitution
of Liberty (1960) where Hayek discusses planning and the rule of law, in
contrast to the rule of law’s formal, and a priori character, the plan’s ap-
proach to decision-making is ad hoc and arbitrary. A plan also embod-
ies, says Hayek (1944: p. 91) ‘substantive’ commitments on ends and val-
ues, whereas the rules constitutive of the rule of law are ‘general’, ‘formal’,
‘impartial’ and ‘systematic’ (p. 90-92). Formal rules operate “without ref-
erence to time and place or particular people” (p. 92). They refer to “typ-
ical situations…. Formal rules are thus merely instrumental in the sense
they are expected to be useful to yet unknown people” (p. 92). On the oth-
er hand, planning involves “a conscious direction towards a single aim”
40
