Hayek’s theory is very well received in the economic discourse but in today’s day and age where Human Rights are a part of the conversation in every sphere, his theory needs revisiting. Neo-liberalism as defined in Collins’ dictionary is the form of liberalism that supports economic freedom and free market17. It is a faith in free market capitalism to distribute societal resources most efficiently and justly. What Hayek’s theory also implies is for a given market to be free, the capitalist class must be absolutely free to make unilateral decisions on how they want to run their capital, free from governmental and collective pressure.
The capitalist is free to –Set the price of the product, set arbitrary wages for his employees, providing the employees deplorable working conditions, treat the waste of the corporation as they like, use the profits made from the societal resources as per their choice and so on. Neither the employees have any place in decision making with respect to their rights nor can the government interfere. This does not paint a pleasant picture as it furthers the misery of the working class, society and the environment. Labor rights are human rights, and the ability to exercise these rights in the workplace is prerequisite for workers to enjoy a broad range of other rights, whether economic, social, cultural, political or otherwise. 18 Workers need protection. Globalization means that mass migrations, women workers and work in informal sector. Gender gap has always been an issue, leading to unsafe work environment for women. They are heavily under paid and are verbally and sexually abused. There are several labors outside the legal framework and have no protection either from trade unions or collective bargaining.19 As far as income inequality is concerned, Samuel Moyn20 argues that human rights framework through Universal Declaration of Human rights and various treaties have no provisions for reducing the income inequality between the rich and poor, making the human rights movement at best a passive bystander at the hands of neoliberalism and at worst, it’s accomplice21 . Globally many are fighting unjust wars against trade policies, corporate impunity, financialization of public goods and many other factors that promote inequality. These can be cured by social protection policies that promote social integration which plays a vital role in balancing both social and economic inequalities.22 Hayek’s argument that true liberty can only be achieved with free markets, does not take into account inherent difficulties that one my face due to poor socio-economic conditions. Even Milton friedman23’s quote, “You can never cure poverty, poverty is in the eyes of beholder” puts emphasis on the view that If one works hard, he/she can get out of poverty. The assertion is that the way to elevate one from poverty, the way forward is to provide incentives as it would encourage poor people to work hard. They are also against social schemes as they encourage the poor to remain poor and it punishes the hardworking wealthy people by taxing them. This opinion fails to take into account the socio-economic realities. In a country like India, there are structural inequalities where despite the merit of a person, they would be discriminated against on the basis of caste, class, religion and various other factors. It villianizes the poor and is a moral justification for letting people wallow in poverty
Keywords: Hayek’s theory, Neo-liberalism, Economic freedom, Free market, Human rights, Capitalist class, Unilateral decisions, Governmental pressure, Collective pressure, Working conditions, Labor rights, Workplace protection, Globalization, Mass migrations, Women workers, Informal sector, Gender gap, Income inequality, Universal Declaration of Human Rights, Poverty, Social protection policies, Social integration, Socio-economic conditions, Milton Friedman, Incentives, Social schemes, Structural inequalities, Discrimination, Caste, Class, Religion, Poverty justification