Hayekian Economics (Friedrich Hayek)

Hayekian Economics, developed by economist Friedrich Hayek, emphasizes the importance of individual freedom and decentralized decision-making in a market economy. Hayek argued that prices are signals that reflect consumer preferences and resource scarcity, allowing individuals to make informed choices. He believed that central planning undermines this process, leading to inefficiencies and loss of innovation. Hayek also highlighted the role of knowledge in the economy, suggesting that no single entity can possess all necessary information to make optimal decisions. Thus, he advocated for a free-market system where individuals can respond to changing circumstances more effectively.