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The Importance of Rules

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On pages 127-128 of volume II of Law, Legislation, and Liberty [2], Hayek [3] speaks to those who would inhibit or suspend market forces in order to protect identifiable individuals — such as, today, workers at GM and Ford — from the play of these forces:

In a spontaneous order undeserved disappointments cannot be avoided.  They are bound to cause grievances and a sense of having been treated unjustly, although nobody has acted unjustly.  Those affected will usually, in perfectly good faith and as a matter of justice, put forward claims for remedial measures.  But if coercion is to be restricted to the enforcement of uniform rules of just conduct, it is essential that government should not possess the power to accede to such demands.  The reduction of the relative position of some about which they complain is the consequence of their having submitted to the same chances to which not only some others now owe the rise in their position, but to which they themselves owed their past position.  It is only because countless others constantly submit to disappointments of their reasonable expectations that everyone has as high an income as he has; and it is therefore only fair that he accept the unfavorable turn of events when they go against him [emphasis added].

The above is Hayek’s unique way of saying what I struggled to say in this post [4].

Thanks to Vernon Smith [5] for reminding me of this Hayek quotation.

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