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The Constitution of Liberty in the Open Economy In these heady days of ever increasing globalization it has become vital to question whether governments should be allowed to protect domestic enterprises from foreign competitors. This book represents a first attempt to provide a new conceptual basis for discussing the cases in which free trade should be the option of choice in trade policy and those in which it should not. Lüder Gerken expands Friedrich A. Hayek’s approach to the open/globalized economy, as elaborated on in books such as The Constitution of Liberty, to make it applicable to foreign trade. With impressive clarity and ingenuity, Gerken powerfully argues a scientific case for free trade as a best practice solution. Dr Lüder Gerken is Director of the foundations Stiftung Marktwirtschaft, Stiftung für Ordnungspolitik and Friedrich-August-von-Hayek-Stiftung, Germany. Foundations of the market economy Edited by Mario J. Rizzo and Lawrence H. White New York University and University of Missouri at St Louis A central theme in this series is the importance of understanding and assessing the market economy from a perspective broader than the static economics of perfect competition and Pareto optimality. Such a perspective sees markets as causal processes generated by the preferences, expectations and beliefs of economic agents. The creative acts of entrepreneurship that uncover new information about preferences, prices and technology are central to these processes with respect to their ability to promote the discovery and use of knowledge in society. The market economy consists of a set of institutions that facilitate voluntary cooperation and exchange among individuals. These institutions include the legal and ethical framework as well as more narrowly ‘economic’ patterns of social interaction. Thus the law, legal institutions, and cultural and ethical norms, as well as ordinary business practices and monetary phenomena, fall within the analytical domain of the economist. Other titles in the series: The Meaning of Market Process Essays in the development of modern Austrian economics Israel M. Kirzner Prices and Knowledge A market-process perspective Esteban F. Thomas Keynes’ General Theory of Interest A reconsideration Fiona C. Maclachlan Laissez-faire Banking Kevin Dowd Expectations and the Meaning of Institutions Essays in economics by Ludwig Lachmann Edited by Don Lavoie Perfect Competition and the Transformation of Economics Frank M. Machovec Entrepreneurship and the Market Process An enquiry into the growth of knowledge David Harper Economics of Time and Ignorance Gerald O’Driscoll and Mario J. Rizzo Dynamics of the Mixed Economy Toward a theory of interventionism Sanford Ikeda Neoclassical Microeconomic Theory The founding of Austrian vision A. M. Endres The Cultural Foundations of Economic Development Urban female entrepreneurship in Ghana Emily Chamlee-Wright Risk and Business Cycles New and old Austrian perspectives Tyler Cowen Capital in Disequilibrium The role of capital in a changing world Peter Lewin The Driving Force of the Market Essays in Austrian economics Israel Kirzner An Entrepreneurial Theory of the Firm Frédéric Sautet Time and Money The macroeconomics of capital structure Roger Garrison Microfoundations and Macroeconomics An Austrian perspective Steven Horwitz Money and the Market Essays on free banking Kevin Dowd Calculation and Coordination Essays on socialism and transitional political economy Peter Boettke Keynes and Hayek The money economy G. R. Steele The Constitution of Markets Essays in political economy Viktor J. Vanberg Foundations of Entrepreneurship and Economic Development David A. Harper Markets, Information and Communication Austrian perspectives on the internet economy Edited by Jack Birner and Pierre Garrouste The Constitution of Liberty in the Open Economy Lüder G