Journal on Policy & Complex Systems Volume 4, Number 1, Spring 2018 | Page 164

Keynes , Hayek , and the Roots of Complexity Theory in Economics

Creating World Order : Global Public Policy According to Hayek

It is no secret that the international

financial institutions , such as the

International Monetary Fund , identify more with

Keynes than Hayek . His ideas contributed to the progressive idealism underlying the construction of world order via institutions like the United Nations , the World Bank and the IMF after World War II . But what if Hayek , and not Keynes , had been the influence and inspiration at Bretton Woods in 1944 ? Surely , the policy preferences and the institutions of the postwar international order would have differed . Hayek would not have aspired to attain collective security via global institutions that were inclusive of all regime types .

community , common views on the relative importance of the main tasks , agreed standards of value , will exist on a great many subjects . But their number will become less and less the wider we throw the net : and , as there is less community of views , the necessity to rely on force and coercion increases ” ( Hayek , 1994 , p . 222 ). At Bretton Woods , he likely would have argued for building order on affinities , not compulsion .

Hayek explained that “ to undertake the direction of economic life of people with widely divergent ideals and values is to assume responsibilities which commit one to the use of force ; it is to assume a position where the best intentions cannot prevent one from being forced to act in a way which to some of those affected must appear highly immoral ” ( Hayek , 1994 , p . 223 ). Extending this reasoning to the potential of international order , we can hypothesize that he would have preferred a smaller , tighter foundation in order to encourage closer association of those countries more similar in their “ civilization , outlook , and standards ” ( Hayek , 1994 , p . 238 ). His conception of order would be an association of like-minded democracies that other nations could aspire to join once there is convergence to a commonality of values . ⁶ But he

5 The question Hayek raised about coordination of views among diverse constituents has significant

implications for the construction of an effective global order . It surfaces today , in discussions on the virtues of a Tobin tax on global financial / currency flows . Many international development professionals believe it is needed to fund international public goods ; it would be easy to collect , given current technology — but agreeing on how to spend it would be the real conundrum of global governance .

6 Hayek seems to have anticipated Brexit when in 1944 he wrote , “ The English people , for instance , perhaps more than any others , begin to realize what such schemes [ economic planning that encompasses Western Europe ] mean only when it is presented to them that they might be a minority in

163