Misjudging the character of the welfare state: Hayek, generality, and the knowledge problem

Christopher S. Martin and Nikolai G. Wenzel ()
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Christopher S. Martin: Hillsdale College
Nikolai G. Wenzel: University of Paris Law School (Center for Law & Economics)

The Review of Austrian Economics, 2018, vol. 31, issue 3, No 2, 314 pages

Abstract: Abstract What are the limits of collective action? As James Buchanan famously worried, is it possible to empower the productive state without lapsing into the predatory state? This paper uses insights from F.A. Hayek to address problems of public goods and the role of the state. Hayek convincingly argued that no central planner has sufficient knowledge to run an economy. Yet Hayek also allowed for state provision of some goods beyond the prevention of coercion. The question, then, is whether Hayek’s safeguards offer a satisfactory response to Buchanan’s worry. This paper contends that Hayek violated his own conditions for permissible government activity. Nevertheless, he offers a serious research agenda for limiting state abuses.

Keywords: Productive state; Predatory state; Hayek; Anarcho-capitalism; Generality principle; Knowledge problem; Welfare state; Public goods (search for similar items in EconPapers)
JEL-codes: B53 D71 H11 H41 P51 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s11138-017-0376-1

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