Neoliberals justify their views through the work of Hayek, who viewed the free price system of free markets as a system which exchanged information very efficiently about the state of the economy as prices fluctuated to supply and demand, an idea which was developed into the efficient-market hypothesis.

The economist Walter Block observed critically that while The Road to Serfdom is " a war cry against central planning ," it does show some reservations with a free market system and laissez-faire capitalism, with Hayek even going so far as to say that " probably nothing has done so much harm to the liberal cause as the wooden insistence of some liberals on certain rules of thumb, above all the principle of laissez-faire.

" In the book, Hayek writes that the government has a role to play in the economy through the monetary system, work-hours regulation, institutions for the flow of proper information, and other principles on which most members of a free society will tend to agree.

In 1976, in a paper on The Denationalization of Money, Hayek advocated that rather than re-instituting a government-mandated gold standard, a free market in money be allowed to develop, with issuers of money competing with each other to produce the best, most stable and healthy currency.

Hayek stated that if the Conservative leader had said " that free choice is to be exercised more in the market place than in the ballot box, she has merely uttered the truism that the first is indispensable for individual freedom while the second is not: free choice can at least exist under a dictatorship that can limit itself but not under the government of an unlimited democracy which cannot ".

Hayek visited Chile in the 1970s and 1980s during the Government Junta of general Augusto Pinochet and accepted being named Honorary Chairman of the Centro de Estudios Públicos, the think tank formed by the economists who transformed Chile into a free market economy.

The Hayek Fund invests in corporations who financially support free market public policy organizations

Friedrich Hayek in particular elaborated the arguments of Weber and Mises about economic calculation into a central part of free market economics's intellectual assault on socialism, as well as into a model for the spontaneous coordination of " dispersed knowledge " in markets.

This is because access to the law and information is not free as liberals ( such as Hayek ) assume, but have associated costs.

With John Chamberlain ( and Suzanne La Follette as managing editor ), Hazlitt served as editor of the early free market publication The Freeman from 1950 to 1952, and as sole editor-in-chief from 1952 to 1953, and its contributors during his tenure there included Hayek, Mises and Wilhelm Röpke, as well as the writers James Burnham, John Dos Passos, Max Eastman, John T. Flynn, Frank Meyer, Raymond Moley, Morrie Ryskind and George Sokolsky.

His defining issue as economist since 1990 has been his enthusiasm for the free market economy as exemplified by Friedrich Hayek and Milton Friedman.

He further explained in Dissent in 1992 that " capitalism has been as unmistakable a success as socialism has been a failure " and complimented Milton Friedman, Friedrich Hayek, and Ludwig von Mises on their insistence of the free market's superiority.

About this time, he also became a friend and admirer of the noted free market economists Friedrich Hayek, Ludwig von Mises and Wilhelm Röpke, and an ally to the American writers James Burnham, John Chamberlain and John Dos Passos.

However, in 1976, in a paper on The Denationalization of Money, Hayek advocated that rather than re-instituting a government-mandated gold standard, a free market in money be allowed to develop, with issuers of money competing with each other to produce the best, most stable and healthy currency.

The LSE ( London School of Economics ) Hayek Society supports classical liberalism, free market economics and free trade.

Although Hayek believed that government intervention in markets would lead to a loss of freedom, he recognized a limited role for government to perform tasks of which free markets were not capable:

Eric Zencey wrote that the free market economy Hayek advocated is designed for an infinite planet, and when it runs into physical limits ( as any growing system must ), the result is a need for centralized planning to mediate the problematic interface of economy and nature.

Rather, they were more in the tradition of the work of Friedrich von Hayek, who opposed government regulation, tariffs, and other infringements on a pure free market, and Milton Friedman, who emphasized the futility of using inflationary monetary policies to influence rates of economic growth.

Although a strong advocate of capitalism, Whitman is a critic of free markets in the sense advocated by Milton Friedman and Friedrich Hayek.

Further, Whitman argues ( explicitly against Hayek ) that " a free market situation is probably also doomed to failure if there exist control persons who are not subject to external disciplines imposed by various forces over and above competition.

Austrian School economist Friedrich A. Hayek argued that a free price system allowed economic coordination via the price signals that changing prices send, which is regarded as one of his most significant and influential contributions to economics.

The price conveys embedded information about the abundance of resources as well as their desirability which in turn allows, on the basis of individual consensual decisions, corrections that prevent shortages and surpluses ; Mises and Hayek argued that this is the only possible solution, and without the information provided by market prices socialism lacks a method to rationally allocate resources.

As for socialism, Mises ( 1944 ) and Hayek ( 1937 ) insisted that bureaucrats in individual ministries could never coordinate their plans, not without a price system.

In The Use of Knowledge in Society ( 1945 ), Hayek argued that the price mechanism serves to share and synchronize local and personal knowledge, allowing society's members to achieve diverse, complicated ends through a principle of spontaneous self-organization.

Thus, Hayek put the price mechanism on the same level as, for example, language.

Hayek himself praised the work, as did fellow Nobel Prize laureate Milton Friedman, who said that Hazlitt's description of the price system, for example, was " a true classic: timeless, correct, painlessly instructive.

While Hayek is opposed to regulations which restrict the freedom to enter a trade, or to buy and sell at any price, or to control quantities, he acknowledges the utility of regulations which restrict allowed methods of production, so long as these are applied equally to everyone and not used as an indirect way of controlling prices or quantities, and without forgetting the cost of such restrictions:

The price conveys embedded information about the abundance of resources as well as their desirability which in turn allows, on the basis of individual consensual decisions, corrections that prevent shortages and surpluses ; Mises and Hayek argued that this is the only possible solution, and without the information provided by market prices socialism lacks a method to rationally allocate resources.

Friedrich von Hayek responded that the system of equations required too much information that would not be easily available and the ensuing calculations would be too difficult.

Through analysis of this and other of Hayek's works, Block purports, " in making the case against socialism, Hayek was led into making all sort of compromises with what otherwise appeared to be his own philosophical perspective – so much so, that if a system was erected on the basis of them, it would not differ too sharply from what this author explicitly opposed.

" As referenced above in the section on " The economic calculation problem ", Hayek wrote that " there is no reason why ... the state should not help to organize a comprehensive system of social insurance ...." Summarizing on this topic, Wapshott writes " advocated mandatory universal health care and unemployment insurance, enforced, if not directly provided, by the state.

In designing a liberal system of law, Hayek believed that two things were vitally important: the protection and delineation of the personal sphere and the prevention of fraud and deception, which could be maintained only by threat of coercion from the state.

In designing such a system, Hayek believed that it could maintain a protected sphere by protecting against abuses by the ruling power, be it a monarch ( e. g. Bill of Rights 1689 ), the will of the majority in a democracy ( e. g. the US Constitution ) or the administration ( e. g. the Rechtsstaat ).

This problem of information flow implied that a decentralised system, in which information travelled freely and was freely determined at each localised point ( Hayek called this catallaxy ), would be much better than a central authority trying to do the same, even if it was completely efficient and was motivated to act in the public good.

Control of information also, as Hayek notes, allows control of the actions of an individual, rendering any liberal system illiberal.

Friedrich Hayek felt that luck was too much of a variable in economics, such that one can not devise a system with any kind of fairness when many market outcomes are unintended.

By sheer chance or random circumstances, a person may become wealthy just by being in the right place and time, and Hayek argued that it is impossible to devise a system to make opportunities equal without knowing how such interactions may play out.

( 1985 ) John Burnheim utilized the term " demarchy " ( created by Friederich A. Von Hayek in his Law, Legislation and Liberty ) to describe a political system without the state or bureaucracies, and based instead on randomly selected groups of decision makers.

Economists such as Milton Friedman, Friedrich Hayek and Brink Lindsey argue that if the market is eliminated along with property, prices, and wages, then the mode of information transmission is eliminated and what will result is a highly inefficient system for transmitting the value, supply, demand, of goods, services, resources, along with an elimination of the most efficient mode of market transactions.

Writing for the Naples Daily News, Steve Schmadeke, notes, " it's also true that his system of governance, in which authority is given to the expert in each field — in this case, specially programmed computers — is one that many writers, including Nobel-prize-winner Friedrich Hayek, have shown to be disastrous.

He has also developed software inspired by his theories, including Hayek, an evolutionary system that can solve large blocks world problems ( named for economist Friedrich Hayek due to a bidding mechanism used by the program ).