Friedrich von Hayek was a philosopher from the early 1990’s. He was best known for his defence on Classical Liberalism against Socialism. Hayek once said “Even the striving for equality by means of a directed economy can result only in an officially enforced inequality- an authoritarian determination of the status of each individual in the new hierarchical order.” I believe that we should embrace Hayek’s ideologies on a free market economy. With a free market economy a supply and demand system in theory would benefit all. Laissez-faire economic is a big part in free market and Hayek strongly supported it. Most liberal thinkers believe in a free market system, as a liberal thinker myself I believe in the ideologies of Friedrich von Hayek. Though free markets did not work for some countries like Russia, I believe if run properly this ideology will better the economy. Economic freedom, completion and individual rights and freedoms are only a few on the classical liberalism ideas that benefit from free market systems.
What is a free market? A free market economy is one in which the government is highly restricted. Thus cost and availability of products are primarily determined by supply and demand, with little or no influence from taxes, tariffs, and other government regulation. The biggest advantage that a market-oriented economy enjoys is the determination of a unique price determined by the demand and supply. The decision of what to produce, for whom to produce and in what quantities is taken by the market forces and not determined by the state. The role of the state is limited to ensuring proper transparency in the prices charged by the sellers of the concerned commodity. Prices also have the function to allocate and distribute a country's resources. In a "perfect world", free market leads to complete efficiency bringing about the optimal distribution of a country's resources. This would only happen in a state of equilibrium or when demand equals supply.
Laissez-faire economics is the belief that economic imbalances are self-correcting, not requiring intervention by government so long as the equal rights of individuals are respected. The Laissez-faire principle is also referred to as the principle of Spontaneous Order or the Invisible Hand of the Marketplace. With Laissez-faire it provides people with the individual right to buy and sell as they please but with support from a capitalist supporter. I believe this help run the free market more smoothly.
Soviet Russia attempted to gain economic growth by opening a free market system. This later turned Russia’s economy upside down and landed their entire country in poverty. This particle attempt at free market never worked because when demand is high you are sub post to increase tax spending and when demand is low you are sub post in decrease tax spending. The government never lowered tax spending when demand was low therefore making people bankrupt. The government was sub post to give up more control but never did; this in itself never gave the free market hope to succeed.
Hayek had the right idea with supporting a free market. If executed properly the free market idea could benefit the economy more. People rather be in control then being control so having little government control would give people more economic and individual freedom, making people more happy. I believe that with a liberalism background Hayek was right with stating have socialism would not work because people don’t like when the government has too much control. Even though the free market has been attempted by countries like Russia and failed I strongly believe it could work if the government would give up a little of their power and control.
Hayek had the right idea with supporting a free market. If executed properly the free market idea could benefit the economy more. People rather be in control then being control so having little government control would give people more economic and individual freedom, making people more happy. I believe that with a liberalism background Hayek was right with stating have socialism would not work because people don’t like when the government has too much control. Even though the free market has been attempted by countries like Russia and failed I strongly believe it could work if the government would give up a little of their power and control.
While some valid interpretations are presented, much of the discussion is based on unreferenced sources (with a clear bias, by the way). The total lack of historical references examined in class is worrisome as well. For example, Russia's free market attempt followed 70 years of command economy that created the "enforced inequality" to which Hayek referred.
ReplyDeleteI strongly suggest revisions to the argument that include historical & contemporary examples explored in class. With or without revisions, this response is incomplete without proper citation of sources and a bibliography.