Friedrich August von Hayek’s Moral Conception of Market

Abstract

Although Hayek's economic views are in favor of a free market economy, they also contain
differences from the classical liberal thesis. According to him, the fundamental economic issue is the
issue of effectively using the economic knowledge that each individual has. The market has the
function of transferring information rather than providing balance, because the formation of the market
mechanism is an evolutionary process and the information that continues to exist dispersed in society
is only coordinated through the market mechanism and creates the opportunity for people to obtain
more information. In such a mechanism, all human related activities occur spontaneously. The market
is a kind of wealth creation game, and since most of the players in the market system are unaware of
each other, there is a need for a highly developed communication system; According to him, it is the
prices that provide this communication network. Prices enable the transmission of information. A
complex network of relationships and countless connections in society are formed spontaneously,
thanks to individuals who exercise their right to choose and are given the opportunity to realize
themselves, independently of each other. Only in this way can the desired level of welfare in society
be achieved. On the other hand, the uncontrolled management mechanisms that were popular at the
time, based on central authority planning and ignoring individualism, could, over time, deviate from
the aim of providing equal opportunities for everyone, which they promised at the beginning, and
evolve into an unjust and totalitarian system, or even a system of slavery that ignores the free
individual. They can lead to transformation into a corrupt social structure. Planning should be on a
micro scale and decisions made by the central authority on behalf of everyone should be avoided.
Since this would mean trying to plan a naturally evolving process by calculating it, it’s obvious that
resources will be used inefficiently and will lead to an unhealthy information-price-market formation.
In order for individuals to realize themselves equally, the most appropriate sets of public policies
should be implemented and the state should only be involved in the equation in a regulatory, effective
and fair competition manner. On the contrary, it is inevitable that policies implemented with the
intention of trying to impose certain views and actions on the masses will eventually fail economically
and socially and bring about a collapse, because the market is not created consciously by man, it is a
cosmos, which is not the result of the knowledge and purposes of an organizer or a an organization
like taxis. Since in a cosmos the knowledge of the facts and purposes that guide individual action
belongs to the individuals performing the action and in a taxis it belongs only to the organizer,
knowledge in a designed organization is more limited than knowledge in a spontaneous order. Since
the individual rules of behavior that create order by themselves will reduce the power that everyone
can use without harming the system, a fairer market that creates more equal opportunities will be
created.