Friedman and Hayek's neo-liberal political economy Research Paper

Friedman and Hayek's neo-liberal political economy - Research Paper Example If the delivery of mail is a technical monopoly, no one else will be able to succeed in competition with the government. If it is not, there is no reason why the government should be engaged in it. The only way to find out is to leave other people free to enter. (Friedman 1982, p. 29) He therefore disapproves of the idea of the government monopolizing many fields where the private sectors would be able to participate in. Where there is an involvement by the government, because it is necessary, then it should be a legal monopoly, whereby the private sector is prohibited by the law to participate. Hayek Friedrich von Hayek and The neo-liberal political theory Hayek, while continuing with Adam Smith’s liberal traditions, comes to define the concept of minimal state. The most vital contributions include the radical opposition to social justice system which in his opinion disguises the defending of the middle class’ corporate interest. It promotes the complete removal of eco nomic and public social intervention. The idea of the minimal state was just a means of breaking away from middle class’ power which was known to be controlling the democratic processes with an intention of using the public treasury to redistribute wealth. Hayek’s views on neo-political economy as presented in the constitution of liberty (Hayek 1960) and advocates for elimination of ruling, privatization, elimination of housing, fighting of unemployment through the limitation of the number of programs, , reduction of the total social security expenditures, subsidies and rent control and lastly to remove the power of the trade unions. Redistribution cannot be ensured by the state to serve social justice system. Its function is to provide the legal means that... This paper illustrates both Hayek and Milton Friedman defend neo-liberal economy on grounds that it is rational and an inherently free way that people may relate to one another, by removing undue obstacles that the state often imposes on the exchange of goods and services. Neoliberal political economic theory therefore goes beyond identification of the market as a mere place for production of goods and services but as a place that is tangential top the interaction of people. This conception of market economy issues being closely intertwined with socio-moral issues and social relations have equally been raised by the classical liberal theorist. Robins, for instance, stresses the value of inherent morality that underlies ensuring free exchange in the market. He asserts that the ultimate value of liberal political economy is liberty, and not just the market or private ownership. Liberty is very important to the society, in order that every member of the society may be in a position to o ptimize his or her social contribution. When the government gets too much into controlling the private individuals, their optimal contributions will be greatly minimized by the systematic obstacles that the state put in place, such as limitation as to quotas, quantity of exports, price fixing and so on. Such erosion of liberty in the manner an individual deals with one’s products in the market would be a great disincentive to the spirit of enthusiasm, which sustains production.