Friedrich August von Hayek set essential new accents in the modern
economic theory of Ordnungspolitik, as worked out by the
Freiburg School. In particular, he expanded that approach into
a comprehensive theory of the functional conditions of the market
order and of the prerequisites of a free social order in general.
Like no other academic of the 20th century, he promoted and
influenced research in the following areas:
Preservation and protection of the freedom of the individual have
to be the unconditional objective of all government policy and,
therefore, must also define the restraints on such policy.
Only the market economy is a free economic order, for only in
the market economy can human beings set their own goals and
pursue these through actions of their own choice. Furthermore,
the market economy, better than any other known economic order,
creates general prosperity and promotes an efficient allocation
The main problem in the coordination of individual economic actions is that knowledge about
relevant economic matters is very limited and dispersed among many individuals. An economic
order will, therefore, be the more successful, the better it makes such individual knowledge
accessible to others and the more it helps to discover new knowledge. In the market economy
competition causes individuals to use their individual skills and their specific knowledge in an
especially intensive manner, and induces them to acquire and to utilize new knowledge as quickly
as possible: Competition is a discovery procedure.
Social progress relies essentially on dynamic ventures of individuals to modify existing conditions
and on the capacity of citizens to react flexibly and quickly to changed circumstances. In this respect,
the most important incentives are competition and the prospect of individual profit. A society that
eliminates competition or that socializes profits destroys its own dynamic evolution. In the long run
this leads to a paralysis of all progress and to social decline.
Modern democracies are exploited by lobbies that pursue special interests at the expense of society
as a whole. Politicians are frequently defenceless, because they are dependent on these special
interest groups in order to gain a majority for their own political goals. The result is an impenetrable
tangleof privilege and discrimination. This erosion of the democratic principle can only be stopped by
a fundamental reform of democracy: Government must be deprived of those instruments of power
whereby it can serve special interests.
Brochure (In German language, PDF-Download, 32 KB)