ABSTRACT
Friedrich Hayek’s defence of the free market hinges on a distinction between economies and catallaxies. The former are orders instituted via central planning, whereas the latter are spontaneous competitive orders independent from conscious top-down design. According to Hayek, economies only function properly in small communities held together by innate instincts for solidarity and altruism. Hayek rejects economic household management for larger groups because it is immoral and unfeasible. The Rule of Law sets out the basic guidelines of social interaction, but also gives individuals the freedom to enact their own divergent preferences. The system of exchange allows different individuals to have divergent preferences without obliging them to agree upon a common set of goals or to battle for the same scarce resources. Hayek firmly establishes catallactics as an atheistic discipline and equates socialism with nostalgia for divine providential intervention.
