In a society where no central agency co-ordinates the human activity of producing, selling and buying, why is there order and not chaos? This fundamental question has taxed generations of economists. Hayek's notion of spontaneous order goes some way to providing an answer. Hayek's Political Economy argues that, after explicitly rejecting positivism, Hayek was free to embrace reality and offer an explanation of the processes involved in bringing about order. This book draws many of Hayek's insights together by locating them within the newly emerging methodological perspective of critical realism. The author argues that understanding how agents communicate knowledge and cope with ignorance leads directly to a focus upon social rules which are essential in addressing the question of order. The final chapter illustrates how it is possible to abandon the notion of equilibrium without falling into analytical anarchy.
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