Rules for a globalised world

Contents

I. Foreword

II. Introduction

III. Hayek's Two Arguments on Global Order

IV. Abstract Rules for a Globalised World
Types and Origin of Rules
Cultural Evolution in a Globalised World
The Meaning of Abstract Rules for an International Order

V. Domains of Agreement as a Basis for Formal Rules
The Hayekian Epistemology
The Epistemolocical Significance Rules
Cultural Economics and Domains of Agreement

VI. Conclusion

VII. Literature

I. Foreword

I wrote this essay for the biannual Essay Contest of the Mont Pelèrin Society in spring 2004. Fortunately and amazingly, in this year I was one of the winners of the contest and I had the privilege to be invited to visit the annual meeting 2004 in Salt Lake City, Utah/USA. Then, in 2005 I visited the regional meeting of the Society in Reykjavik, Iceland and 2006 the next annual meeting in Guatemala City, Guatemala. Today again, I want to thank the functionaries, officers and members oft the Mont Pelèrin Society for the chance to visit all that stimulating, informative and edifying meetings. To call by some of them by name, I want to thank Victoria Curzon-Price, Edwin J. Feulner, Leonard Liggio and Viktor J. Vanberg. At this great meetings I became acquainted with so many open minded, intellectual and amiable people, all of them fighting for the values of liberty. Now, four years after the contest, I am not less concerned with the question of what the rules for a globalised world could and should be. Now my perspective is a more political and a more practical since I work as a director for global economic affairs at the Federation of German Industries (BDI). This year, in autumn 2008, the stimulating vision of liberty and international free trade had to suffer a setback when the WTO negotiations in Geneva/Switzerland were aborted. So, confronted with this unbeautiful event and with the problem of increasing national protectionism, I wanted to remind to the Hayekian Ideas concerning the problem of economic globalisation, written down in this essay. In this situation, I decided to publish the original essay, with a little hope that thus a very little piece of the great ideas of Hayek could flow into the public debate on globalisation.

II. Introduction

The question of this essay refers to the origin and to the role of abstract and formal rules of just conduct for the peaceful intercourse of culturally different people, the relation of such rules to protected domains such as private property and, furthermore, to the question of why private property is an indispensable condition for the mentioned abstract rules. Appreciating the history of the Mont Pelerin Society I will answer this extensive question with Hayekian ideas. Particularly, I will refer to his theory of cultural evolution and to his epistemology. Not only to mark the boundaries of the answer but also to refer to an actual political task of this century, I will focus on the global dimension of the subject.

At the end of the 20th century mankind had completed many preconditions for a globalised world. Aircraft-transportation, satellite-communication and the internet had been invented and advanced. Even a single language had succeeded to be accepted as an international standard. Now the most important political tasks of the 21st century will be to facilitate this process of internationalisation by establishing an international political framework so that globalisation will be mutually beneficial for all people.

However, the last century gave birth not only to technological prerequisites for the process of globalisation but it has also brought out considerable intellectual work concerning the global dimension of the development of world history. As one of the leading thinkers of the last century, Friedrich August von Hayek also had important ideas which not only addressed the task of an order of freedom and prosperity, but he furthermore gave remarkable intellectual contribution to the possibilities and conditions of a globalised world of peace and mutual benefit.

III. Hayek's Two Arguments on Global Order

Although the problem of an international order was not the principal topic of Hayek's diversified intellectual work, his ideas on social phenomena can give important insight in to this problem. Altogether he wrote very little explicitly about the requirements of an international order but, as Michael Wohlgemuth points out (Wohlgemuth/Sideras 2002:3), there are two early and interesting writings on this issue: A paper on ‘Economic Conditions of International Federalism’ (Hayek 1939) and chapter XV of his ‘Road to Serfdom’ (Hayek 1944). According to Wohlgemuth, one finds in these writings both arguments that still today characterise the discussion of globalisation and international political governance: Firstly the need for proscriptive, general 'rules of the game' in order to preserve peace and facilitate international economic interaction and secondly a need to limit the purpose of international rules and authorities to fields where true agreement can be reached.

The second Hayekian requirement for international rules is that they be limited to fields where true agreement can be reached. Communication and agreement always depend on shared goals, values and mental concepts. Facing the immense global differences in political traditions as well as in philosophical and religious ideas, the efficiency of an international order depends on the range of globally shared values. Therefore the size and the intensity of globally organised political entities are dependent on the size of the globally shared values and viewpoints. One instruction to a social scientist, who has come to this second realisation, can be interpreted as to identify and maximise the range of known correspondence between different cultures. But the problem here, as we will see, is to choose an adequate theoretical approach to challenge this non-classical economic issue.

Therefore we will discuss Hayek's two main arguments concerning an international order. Such an order has to rely on general rules of just conduct and it can only rely on the range of domains in which one can find agreement between cultures. Section III is related to his first argument; there we will address Hayek's ideas of the principles of the evolvement of rules and a problem which certainly arises by an application of his theory of cultural evolution at a global level. The section IV is related to his second argument. There we will have a look at the connections between the structure of the human mind, the range of intercultural agreement and the political delimiting of protected domains where the concept of private property will serve us as a 'visual aid'. Section V summarises what has been said.

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