I’ve been preparing a class on Hayek for MRUniversity.com, and I was struck by my reread of this essay, which was presented at the Mont Pelerin Society meeting of 1947 (it was later published in Individualism and Economic Order, pdf of the book here).
In this piece Hayek argues the following:
1. It is not enough for classical liberals to seek to limit the state, they also must outline what governments could and should do better.
2. Monetary policy should be used to limit unemployment, albeit in a rules-based framework.
3. Eminent domain is an essential function of government, especially in urban cities, and it needs to be thought through more carefully.
4. Many of the biggest dangers of monopoly stem from patent law and intellectual property protection, rather than from monopoly of the traditional “sole seller” sort. On this issue Hayek sounds like Alex or Larry Lessig.
5. It is not enough to defend “freedom of contract” in the abstract, rather the details of the law really matter.
6. Hayek questions whether limited liability for corporations is always the right way to proceed.
7. Finally, although inheritance taxes have in the past sometimes been abused, “…inheritance taxes could, of course, be made an instrument toward greater social mobility and greater dispersion of property and, consequently, may have to be regarded as important tools of a truly liberal policy…”
You will recall that in other settings Hayek endorsed the idea of a social welfare state and also the taxation of pollution.