Munich Personal RePEc Archive

Labor in a Planned Economy: Hayek and Jewkes on the Reliance of Freedom on Prices

Makovi, Michael (2016): Labor in a Planned Economy: Hayek and Jewkes on the Reliance of Freedom on Prices.

WarningThere is a more recent version of this item available.
[img]
Preview
PDF
MPRA_paper_71262.pdf

Download (368kB) | Preview

Abstract

Milton Friedman (1962) is known for the claim that political freedom presupposes economic freedom (cf. Lawson and Clark 2010). Friedman's famous example is that there cannot be freedom of speech where the government owns the printing presses. Less well-known is F. A. Hayek's and John Jewkes's illustrations of the same principle, both drawing from labor economics. Economic planning – the abandonment of a freely operating price system – cannot function without resorting to compulsory assignment of labor. Similarly, no state may simultaneously fix “fair” wages and demand a given pattern of productive output and employment. It is impossible to both achieve income equality and accomplish an economic plan. Among Hayek's enduring contributions, therefore, is a demonstration that liberty hangs on the maintenance of the price-system.

Available Versions of this Item

Logo of the University Library LMU Munich
MPRA is a RePEc service hosted by
the University Library LMU Munich in Germany.