It is a name for a premise that, quietly, has come to regulate all we practise and believe: that competition is the only legitimate organising principle for human activity.

we now live in Hayek’s world, as we once lived in Keynes’s.
He begins by assuming that nearly all (if not all) human activity is a form of economic calculation, and so can be assimilated to the master concepts of wealth, value, exchange, cost – and especially price. Prices are a means of allocating scarce resources efficiently, according to need and utility, as governed by supply and demand. For the price system to function efficiently, markets must be free and competitive. Ever since Smith imagined the economy as an autonomous sphere, the possibility existed that the market might not just be one piece of society, but society as a whole. Within such a society, men and women need only follow their own self-interest and compete for scarce rewards. Through competition, “it becomes possible”, as the sociologist Will Davies has written, “to discern who and what is valuable”.

Hayek built into neoliberalism the assumption that the market provides all necessary protection against the one real political danger: totalitarianism.

To prevent this, the state need only keep the market free.

This last is what makes neoliberalism “neo”. It is a crucial modification of the older belief in a free market and a minimal state, known as “classical liberalism”. In classical liberalism, merchants simply asked the state to “leave us alone” – to laissez-nous faire. Neoliberalism recognised that the state must be active in the organisation of a market economy. The conditions allowing for a free market must be won politically, and the state must be re-engineered to support the free market on an ongoing basis.

Even his conservative colleagues at the University of Chicago – the global epicentre of libertarian dissent in the 1950s – regarded Hayek as a reactionary mouthpiece, a “stock rightwing man” with a “stock rightwing sponsor”, as one put it.

Milton Friedman who helped convert governments and politicians to the power of Hayek’s Big Idea. But first he broke with two centuries of precedent and declared that economics is “in principle independent of any particular ethical position or normative judgments” and is “an ‘objective’ science, in precisely the same sense as any of the physical sciences”.

The internet is personal preference magnified by algorithm; a pseudo-public space that echoes the voice already inside our head. Rather than a space of debate in which we make our way, as a society, toward consensus, now there is a mutual-affirmation apparatus banally referred to as a “marketplace of ideas”.

“A taste is almost defined as a preference about which you do not argue,” the philosopher and economist Albert O Hirschman once wrote. “A taste about which you argue, with others or yourself, ceases ipso facto being a taste – it turns into a value.”


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