Economic discourse and the market

 

In the last decades, the emergence and diffusion of the neoliberal agenda reflected the intellectual victory of Hayek’s ideas about the supremacy of the competitive economic order and the rejection of interventionism to promote economic growth and social justice. Considering the relevant economic outcomes of this intellectual victory, the main question that arises in the context of economics education is: What is at stake in  the economic discourse that privileges the economic competitive order?

The economic competitive order, as a necessary one, is the pillar of Hayek’s theoretical construction. The competitive market is a necessary order in which men make choices and the fundamental economic problem is that of coordinating the plans of many independent individuals. The main advantage of the competitive economic order, in Hayek’s view, is that rational agents respond to price signals, which convey the relevant information available in the markets, for the purpose of economic calculus. In his view, competition, through the price market system, leads to such an efficient coordination. Individuals, acting in their own self-interest, respond to prices which, in turn, reflect the information available in society for the purpose of economic calculus. Indeed, prices are signals that support an extensive social division of labour in a context of individual freedom.  In Hayek’s approach, the domain of liberty (the market) presupposes the legitimate domain of government intervention.

Taking into account the economics education, it is relevant to highlight that what is really at stake in economic discourse is the sociopolitical function of the scientific and academic work, and hence interests and ideologies.

Beyond the competitive market as a necessary order is an initial assumption that this particular arrangement exists autonomously and prior to human action, and thus any changes that could  threaten the competitive market order  are “unnatural” acts.     For example, Hayek highlighted that it is not the evolution of capitalism that is responsible for the emergence of social problems. Instead, he noted that these problems are the product of planning methods and growing bureaucratic apparatuses deployed, after the Second World War, by the “enemies” of the market mechanism.

In other words, after taking into account the necessity of the competitive market order, Hayek’s economic discourse turns out to “naturalize” the competitive market as a superior arrangement. However,  the “naturalization” of the competitive market – by considering it the “natural” arrangement  for live people to deal with each other in regard to goods and services-  is overwhelmed by political interests that play a crucial role in the economic and political decision procedures, and in the institutional management of such issues.

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