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  • Print publication year: 2010
  • Online publication date: November 2010

2 - Free-Market Economics

Summary

In 1947, Friedrich A. von Hayek convened a meeting of fellow economists and academics in Montreux, Switzerland to discuss what they feared most in postwar Europe and America. It was not hunger, or unemployment, or even communism. It was government. They all took great pride in their individual points of view but they collectively agreed that the increasing role of government posed the greatest threat and that “The central values of civilization are in danger.” They complained that “Over large stretches of the earth's surface the essential conditions of human dignity and freedom have already disappeared….” The reason for their pessimism was “a decline of belief in private property and the competitive market; for without the diffused power and initiative associated with these institutions it is difficult to imagine a society in which freedom may be effectively preserved.”

With these words, the Mont Pelerin Society was born and promptly elected its first president, Hayek. The society insisted on personal liberty and saw “danger in the expansion of government, not least in state welfare, in the power of trade unions and business monopoly, and in the continuing threat and reality of inflation.” The philosophy that united Pelerinists was classical liberalism (almost the opposite of modern liberalism), a philosophy more commonly referred to today as libertarianism. Named after the mountain near its first meeting, the society continues to meet in various locations around the world to share stories and research about individual freedom.

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