Hayek’s Meaning of Competition and Antitrust in a Digital Age

28 Pages Posted: 18 Nov 2021 Last revised: 13 Dec 2021

See all articles by Cento Veljanovski

Cento Veljanovski

Case Associates; Institute of Economic Affairs

Date Written: December 10, 2021

Abstract

Friedrich A. von Hayek’s (1899-1992) view of competition as a discovery process is well known but little used. His central thesis is that a competitive pricing system is the most effective way to coordinate economic activity and economise on the information held by market participants in a world of generalised ignorance and change. But do the tremendous advances in computing and data management undermine Hayek’s claim that the market is superior? Does his focus on prices make his view of competition less relevant to the digital economy? Even Hayek had doubts. Unlike most ‘Austrian economists’ Hayek saw a need for antitrust to deal with the exclusionary abuses of ‘non-privileged monopolies’ and restraints of trade. Yet the conceptual basis for this is vague and it jars with Hayek’s view of liberal market law as spontaneously created. Here I critically assess Hayek’s views on competition, monopoly and antitrust, and their relevance to the ‘digital economy’.

Keywords: prices, discovery process, perfect competition, Hayek, Schumpeter, monopoly, antitrust, digital, self-preferencing.

JEL Classification: B20, B25, B53, D23, D41, K21, L40, P22

Suggested Citation

Veljanovski, Cento, Hayek’s Meaning of Competition and Antitrust in a Digital Age (December 10, 2021). Available at SSRN: https://ssrn.com/abstract=3965633 or http://dx.doi.org/10.2139/ssrn.3965633

Cento Veljanovski (Contact Author)

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