The aim of this chapter is to focus on the neo-liberal understanding of the nature
of markets and their relationship to the role of government. This will clearly draw
upon and presuppose many of the themes we have looked at so far – the nature of
freedom and coercion, social justice, rights, group interests, etc. However, there
are other issues which are equally important to the nature of markets from an
economic liberal point of view, so, as well as drawing upon arguments already
considered, we shall also break new ground in looking at the nature, scope, and
legitimacy of markets as the neo-liberal sees them.
Iwant to begin this discussion by looking at economic planning since the issues
at stake here not only draw upon what has gone before, but also raise new aspects
of the neo-liberal outlook on a range of very important matters. Some of the most
salient and enduring of neo-liberal writings have been focused on the question of
economic planning – for example, Mises’ volume on Socialism1 and Hayek’s
historically significant The Road to Serfdom.2 Hence, understanding the arguments
against economic planning will in fact reveal a very great deal about some
central tenets of neo-liberal economic thought.
Centralized economic planning has often been thought to be basic to the
socialist project of securing a socially just society. After all, a free market left to
itself cannot be guaranteed to secure a just distribution of resources to meet the
needs of all, to provide for the realization of rights, and to ensure that individual’s
capacities are developed. On the socialist view these ends can be achieved only by
planning the economy both in terms of production – to make sure that the ‘right’
goods are produced to meet human needs; and in terms of distribution – so that
the outcomes of markets embody some patterned principle of social justice such
as Marx’s distribution ‘from each according to his ability to each according to his
needs’ as set out in the Critique of the Gotha Program or just to achieve greater
social and economic equality without having a commitment to a principle as
definite as Marx’s. Planning, to secure the aim of a patterned or end state
principle of distributive justice, embodies all sorts of requirements and assumptions.
It assumes first of all, of course, that such an end state is desirable and
achievable and, as we have seen in detail in earlier chapters, for the neo-liberal this
is not the case – at least its desirability is not. I want, however, to concentrate on the
question of achievability because the neo-liberal critique of the practicability of
socialist planning is very important. Some of these arguments are empirical, some
are more a matter of logic and the theory of knowledge, and also some are more or
less to do with morality.