Influence of Hayek on the Crypto Economy

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Discussion

Dick Bryan and Akseli Virtanen:

"Hayek was vehemently anti-socialist, but he had major conflicts with the neoclassical economists too. He embraced homo economicus as the premise of social rationality but thought the neo-classicals endorsed a role for the state in economic management that was way beyond what was necessary. The state, he contended, is innately authoritarian, imposing its will on society: sometimes well-intentioned but flawed; other times clearly to enhance the power of the state itself. Milton Friedman later called it the tyranny of the majority: that an elected government could claim legitimacy in trampling on people’s natural rights. The market, claimed Hayek, is the natural site of freedom of expression and a means to generate spontaneous social order.

Of course the critique is that markets, if left to themselves, create massive inequality, environmental destruction, etc.. Not so said Hayek. It is the inadequate specification of property rights and the rules of markets that are the problem, and when states tinker with outcomes (levies and bounties) they generally mess it up. This includes, critically, the provision of a state-sanctioned money system (fiat money).

Not surprisingly, Hayek has had great appeal in cryptoeconomics. On the surface, they are a near perfect fit. A cryptoeconomic order conceived in a rejection of the state as economic manager, including as provider of the sole monetary system, and instead focussing on optimizing individuals in contractual transactions, seems to resonate deeply with Hayek. We can readily source essays on cryptoeconomics that celebrate the optimizing individual and claim foundation in Hayek. It should be noted that, knowingly or not, the idealization of individualism, profit and the market as foundational social relations come as integral to the Hayek package and those foundations are being transmitted, perhaps not always intentionally, into cryptoeconomic culture. Associated with, and developing out of, a broadly Hayekian tradition are those who see that the integrity of market processes have been corrupted in various ways, and not simply by ‘the state’. Here, the outcomes of neoliberalism — extreme inequality, monopoly power, environmental destruction — are forcefully criticised, but not in the name of a critique of capitalism; rather in the name of obstacles to free expression in markets." (https://medium.com/econaut/crypto-political-economy-dd91c6fcff7)

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