Ethical Review of Social Sciences

Durham & Thunmann, 2025. Published under a Creative Commons Attribution 4.0 International (CC BY 4.0) license.

https://doi.org/10.70150/dgk3a826

FROM DECENTRALIZATION TO ETHICAL RESILIENCE:

A CRITICAL REAPPRAISAL AND EXTENSION OF HAYEK’S THEORY OF

KNOWLEDGE IN SOCIETY

FRANS LAVDARI*

Abstract:

Friedrich Hayek’s The Use of Knowledge in Society presents a

seminal argument for the virtues of decentralized knowledge and

the price mechanism, positing that markets, by leveraging

dispersed, context-specific knowledge, can achieve efficient

resource coordination without central oversight. Hayek’s work has

deeply influenced economic thought, particularly in its defence of

spontaneous order and its critique of central planning. However,

Hayek’s framework, developed in a pre-digital and less

interconnected economic landscape, reveals limitations when

confronted with today’s challenges, such as digital monopolies,

ecological degradation, and economic inequality. This article

critically examines Hayek’s theoretical positions, revealing

inconsistencies and limitations when applied to the complexities of

modern global economies. The article then presents an evolved

framework—the Ethically Resilient Market Theory (ERMT)—

which builds upon Hayek’s insights, incorporating principles of

ethical accountability, ecological valuation, and resilience to

address the ethical and practical demands of contemporary

economic life.

Keywords: Decentralized Knowledge, Digital Monopolies,

Ethical Resilience, Market Coordination, Price Mechanism.

JEL Classification: B25, D83, E02, L51, O33.

1. Reconceptualizing Hayek's Notion of

Dispersion of Knowledge in Today's

Context

Friedrich Hayek's 1945 article, “The Use of

Knowledge in Society”, is one of the foundational

texts of economic theory, representing a sophisticated

critique of centralized planning and an equally

powerful defence of decentralized market systems. In

his article, Hayek develops what has since become

known as the "knowledge problem," the

epistemological fatal flaw in centralized economic

coordination, where he argues that knowledge is

intrinsically localized and particular to the context of

the individual. He goes on to say, "practically every

individual has some advantage over all others in the

knowledge of a particular circumstance" (Hayek,

1945, p. 521), thereby underlining his assertion that a

decentralized system is peculiarly capable of making

effective use of the fact that knowledge is widely

dispersed. Hayek's contribution brought to the fore

knowledge as situational, dynamic, and diffused-these

were pioneering thoughts during the atomization of

central planning frameworks into the majority

socialistic economies.

We began with Hayek's case for the market resting

on prices as a facilitator of signalling to people,

enabling them to make economically rational

decisions with their fragments of localized

knowledge. In a free market, prices convey shorthand

ways of revealing scarcity and demand. From such

prices, people are able to adjust their behaviours

appropriately. For example, if the price of a certain

good rises, this is an indication of increased demand

or low supply, which should spur producers to

increase production and consumers to use in

moderation. Hayek describes this as "spontaneous

order"; he conceptualizes it as an emergent, self-

correcting equilibrium, impregnated with the

dispersed and dynamic knowledge of those

individuals involved. The attribute of the market as a

collecting device for knowledge has consequences,

beyond the boundaries of pure economic theory, for

political philosophy; thus, notions of individual

freedom, autonomy, and arguments about stateless

government of society come forth.

Pragmatic and philosophical considerations alike

underlie Hayek's judgement concerning centralized

economic planning. What he is saying practically

amounts to his belief that no central authority could

either acquire or use the masses of information

* Sapienza University of Rome, Italy

frans.lavdari@outlook.com

necessary to make sensible decisions in a

comprehensive economy. And as he sees things, the

knowledge required by economic coordination, is in

its very nature too scattered, too context-dependent

and too dynamic to be usefully aggregated at the

centre. Knowledge for Hayek is not only an

epistemological limit; it is, further, the rebuke to

conceit that he considers characteristic of centralized

modes of governance. In its most philosophic avatar,

Hayek's theory allied a commitment to individual self-

determination in its insistence that markets preserve

the self not by protecting individuals from their own

decisions but by allowing them to act on the particular

knowledge they have. This one aspect of Hayek's

scholarship falls in line with greater liberal

philosophy; his framework carries on with the

structure of the society that respects the independence

and diversity of individual perspectives.

Indeed, in so many respects, Hayek's notion of the

market as a spontaneous order embraced an entirely

bundled set of insights concerning society and the

individual's freedoms. He argues that one way of

attaining coordination, via the price mechanism

conveying the relevant information concerning scarce

means and desired ends, is far from requiring any such

rigid, authoritarian structures. This contrasts

completely with central planning, which Hayek

attacks as essentially authoritarian and quite

unworkable, given the impossibility of an

organization's being privy to all relevant facts.

Markets, Hayek insists, are in one respect an answer

to the knowledge problem and, because of that, a

protector of individual liberty, permitting people to

decide matters in terms of their respective

circumstances instead of the arbitrary dictates of a

faceless authority. Thus, it is a moral issue with him

no less than an economic justification of the

decentralized markets within which one could have

liberty and efficiency within a system which respects

the diversified nature of individual knowledge (Yoon,

2023). But, while the insights of Hayek concerning

decentralized knowledge and the price mechanism did

create a revolutionary impact on thinking, his model

was conceived against the background of a vastly

different historical context-one that lacked many of

today's technological, social, and ecological

complexities. Composed in the aftermath of World

War II, Hayek's theoretical framework spoke to a

setting mainly characterized by either local or national

economies, where the main alternative to market

mechanisms of allocation seemed to arrive from

centralized and government-driven models. In

contrast, the networked, digitized, and ecologically

aware economic structure of the 21st century

introduces complexities that seem to question the

applicability of Hayek's paradigm. Especially, the

founding assumptions of his theory on the dispersion

of knowledge and neutrality of the price signal show,

when put within the contemporary setting-digital

monopoly, ecological emergency, and general

inequality-their limits.

This creates digital monopolies in any given field

and conglomerates all consumer data, which is a big

blow to the Hayekian concept of dispersed

knowledge.

In contemporary economic contexts, businesses

like Google, Amazon, and Facebook have amassed

significant amounts of data related to consumer

behaviour, essentially centralizing knowledge Hayek

believed would remain dispersed. But these

companies not only possess all the relevant knowledge

with which to understand market responses, they also

possess the power to directly influence consumer

behaviour. Algorithmic pricing by these firms, for

example, allows for instantaneous price updates in

response to personalized data from consumers in order

to manufacture artificial demand or scarcity that

potentially distorts conventional price signals. The

prospect of this form of data-driven manipulation

scrambles Hayek's assumptions of the character of

dispersed information and introduces ethical issues

concerning the centralization of epistemic power.

Other thinkers, for example, Shoshana Zuboff in her

book with the title The Age of Surveillance Capitalism

(2019), think that these methods denote a sort of

"surveillance capitalism," where corporate subjects

gain an unparalleled influence on the information

flows forming the activities within markets.

Moreover, Hayek had little recourse to the price

mechanism as an encompassing signal of social needs

in the context of ecological sustainability.

Conventional pricing mechanisms reflect direct

human needs but do not include the broader ecological

costs. As such, the prices of fossil fuels do not reflect

the ecological damage due to carbon emission, let

alone encouraging conservation of natural resources.

Hayek's concept is very anthropocentric in that prices

will always automatically reflect the demand of

society; such an assumption fails to recognize

ecological cost of consumption. As the ramifications

of climate change become increasingly apparent, it

becomes clear that price signals are inadequate in

communicating ecological costs. Scholars like

Nicholas Stern (2007), in his work The Economics of

Climate Change, contend that it is essential for

markets to incorporate environmental externalities in

order to confront the existential dangers associated

with ecological degradation. This perspective

indicates that a solely market-oriented strategy is

inadequate for the sustainable management of

resources. Apart from the various digital monopoly

challenges imposed on his framework and

environmental crisis, he also suffers from a binding in

explaining the realities of economic inequality. The

respective theory assumes that people can afford the

wherewithal financially to act on price signals and

thereby be substantive participants in the market

processes.

But economic inequality frustrates this freedom for

many-most obviously, when access to basic needs-

housing, healthcare, and education-is beyond the

purchasing power of the less well off. Lacking the

wherewithal, individuals are, in effect, excluded from

access to the coordinating market mechanism so that,

for large groups of people, Hayek's spontaneous order

is impossible to attain. Indeed, in perhaps the most

influential work, Development as Freedom,

philosopher and economist Amartya Sen (1999) offers

an important critique, arguing that freedom and

agency depend, at bottom, on access to the set of basic

resources. For Sen, economic freedom involves more

than merely engaging in market transactions; instead,

it involves the ability of individuals to exercise their

choice in actually fulfilling their real needs and

interests.

A pointed conjunction in the manner of centralized

data management, environmental degradation, and

socioeconomic disparity underlines how incomplete

or wanting the Hayek approach has been-whereby the

valid contribution of Hayek needs modification in the

new unfolding complexities of the growingly

globalized and ecologically sensitive paradigm. More

recently, authors like Mariana Mazzucato (2018) and

Joseph Stiglitz (2002) pressed for an active role in

terms of market coordination in ways which take

account of social and environmental externalities over

and above information asymmetries. Mazzucato

argues, for example, in her book, The Value of

Everything, that where it comes to public goods, such

as health and environmental sustainability, market

mechanisms are simply insufficient. On a related note,

Stiglitz supports his case against the efficiency of the

markets-when information asymmetry and monopoly

practices make distortions neutralize the price signals.

Taking these criticisms for a lead, this article

develops a more elaborated theory, herein referred to

as the Ethically Resilient Market Theory (ERMT),

which integrates the important elements of Hayek's

work on distributed knowledge but modifies them

according to the ethical, ecological, and resilience-

related demands exerted by today's economic

conditions. Whereas it takes its grounding from

Hayek's idea about the importance of dispersed

knowledge and spontaneous order, it goes further to

underline the underpinning of moral accountability,

ecological judgment, and systemic sustainability. In

so doing, it tries to construct a market system that,

while respecting the autonomy of the individual agent,

would give due recognition in return to the welfare of

the common good and environmental stewardship. In

other words, it would mean for ERMT that the

conceptual step away from the one-dimensional

measure of shortage and demand in the multi-

dimensional "ethical-economic index" has to be a

socio-ecological one: "Prices would then convey not

only economic scarcity but also environmental

impacts of production and moral claims at the level of

resource distribution.". ERMT deals with these

problems caused by data monopolies through the

infusion of principles of transparency and sharing of

data that avoid the centralization of informative

powers. It also starts mechanisms of equity in

participation so that all people, regardless of their

social class, have access to resources that allow them

to effectively participate in the market. With such

modifications, it represents the state-of-the-art model

of economic coordination under Hayek's notion of

decentralized knowledge and, in the process,

addresses concretely the requirements of the global

economy in the 21st century. It conceives of markets

not merely as means of allocating resources but as

moral ecosystems negotiating between individual

liberty and collective responsibility. It is envisaged

that it would theorize market systems through

increasing demands for resiliency, sustainability, and

equity through infusions of ethical accountability,

ecological sustainability, and inclusiveness.

2. Hayek’s Theory of Decentralized

Knowledge and the Price Mechanism

Friedrich Hayek's famous essay “The Use of

Knowledge in Society” starts with a controversial

statement regarding the character and dispersion of

knowledge within society. As Hayek would have it,

knowledge is strictly decentralized among the

individual members of mankind, each with knowledge

and information about his circumstances. This-the

"knowledge problem-sets the foundation for Hayek's

argument against centralized economic planning and

underlines his case for market-oriented systems. As

Hayek expressed it, no central authority could

possibly centralize and utilize economic knowledge

since such knowledge is, in its essence, fragmented

and transient. On the other side, he believed that the

fragments of knowledge are being coordinated

through a special kind of dispersed mechanism, viz.

the price system. Hayek insisted that “practically

every individual has some advantage over all others in

the knowledge of a particular circumstance” (Hayek,

1945, p. 521). In this, he reflects his belief in the

importance of individual contributions to the

economic system-a theme continuing throughout his

work.

Central to Hayek's theory is the idea of the price

system as the solution to the problem of knowledge.

One example is the role of prices: prices reduce

cumbersome information on scarcity, demand, and

resource availability into an intelligible form for the

individual decisionmaker who has no knowledge

whatsoever of the total economic structure. When the

circumstances change, prices change; and this allows

changed actions on the part of consumers and

producers. Thus, this poor yield due to the rapid

increase in the price of wheat is the clear call to the

consumers to reduce consumption and to the

producers to seek ways of increasing supply. In the

opinion of Hayek, the markets hence can arrive at the

optimal allocation of resources by decentralized

decision making and hence the existence of the central

authority is not required. He describes the process as

“spontaneous order”, a term to capture its emergent

and self-organizing features in the markets (Hayek

1945, p. 526). From a philosophical point of view,

Hayek's dependence upon the price mechanism speaks

to his commitment to individual liberty and an abiding

distrust of central authority. In this sense, for Hayek,

the market is respectful of the heterogeneity of

knowledge and experience that exists in society

because individuals are allowed to act where their

particular knowing is greatest. The regard for

localized knowledge finds harmony with the

epistemological theories posited by philosophers like

Michael Polanyi. In his work, The Tacit Dimension,

Polanyi contended that knowledge frequently relies on

context and resists complete articulation (Polanyi,

1966). Polanyi’s concept of tacit knowledge

corresponds with Hayek’s assertion that a substantial

portion of the knowledge guiding economic decisions

is implicit, ingrained within particular contexts, and

eludes centralized systems. In this respect, Hayek and

Polanyi argue for decentralization of decision-making

as prerequisite for conserving the subtle and local

knowledge of men.

In contrast, the contribution by Hayek is rather a

serious critique of the central planning system. He

foresees problems related to cognition. Such a system

requires informational control of the decision makers,

more or less unattainable in real life. He extends this

further into the philosophical realm when he says that

central planning constrains human liberty since it

cannot utilize the particular, localized knowledge of

the individual mind. To Hayek, the price mechanism

can serve the dual purposes of being an efficient

means of coordinating economic activity with a means

of preserving human freedom whereby men can

respond to market signals rather than to the dictates of

a central authority. The conception of the market as an

institutional arrangement of cooperative interaction

combined with informational competition squarely

challenges the idea that the needs of society can be met

by central planning.

While Hayek's schema of dispersed knowledge and

the price mechanism is fruitful of insight, it also

reveals some theoretically limiting aspects. Hayek's

reliance on prices as comprehensive reflectors of

scarcity and demand is grounded in the economic

environment of knowledge dispersion and somewhat

equal distribution of information. While such a

presupposition seemed plausible in the times of

Hayek, nowadays, it faces serious criticism on the

basis of digital monopolies aggregating data in the

contemporary economy. When today's Amazon,

Google, or Facebook can acquire, master, and control

consumer information on an unprecedented scale, it

can shape the market through patterns of leading

consumer behaviour in directions that violate Hayek's

assumption of diffused information, and by altering

consumer tastes by manipulating their algorithms to

manufacture artificially created demand or scarcity,

masking the neutrality of the price signal. With that

centralization of data, such researchers as Shoshana

Zuboff (2019) even go further to claim that it is

actually "surveillance capitalism," whereby corporate

institutions get hold of information flows through

which economic transactions are influenced. With

such prominence, this is directly opposite to Hayek's

vision of markets as a self-organizing, decentralized

structure and raises ethical issues regarding the role of

data in advanced economies. Another limitation, in

using Hayek's framework to consider environmental

sustainability, is that while the price mechanism could

bear out adequate information about human scarcity

and demand, through his lens, wider ecological costs

of consumption and production are ignored. For

instance, the prices of fossil fuels in no way reflect

their environmental damage in the form of carbon

emissions, let alone incentivize the protection of

biodiversity. It is anthropocentric in its very

foundational structure: prices reflect the needs of the

social body. Yet, the assumption misses the ecological

footprint coming out of consumption in many

traditional price signals. For instance, theorists like

Nicholas Stern (2007) argue that markets need to

internalize environmental externalities if there is to be

any hope of sustainable resource management. In The

Economics of Climate Change, Stern contends that a

market system which is indifferent to the ecological

costs of economic activity provides no incentive for

good environmental stewardship (Stern, 2007).

Finally, Hayek's theoretical structure relies on the

prerequisite that people possess the necessary capital

that would allow them, when receiving the appropriate

price signals, to respond to the market. This

assumption certainly aligns with classic liberal

positions on questions of personal agency and

autonomy, of course: people should be best positioned

to apply their knowledge to the fluctuating market.

Economic inequality restricts that agency for many,

disproportionately so in those markets in which basic

goods like housing, healthcare, and education exist out

of economic reach for lower-income individuals. In

his work, Development as Freedom, economist

Amartya Sen presents a relevant critique, positing that

genuine freedom and agency hinge upon the

availability of fundamental resources (Sen, 1999). In

the absence of adequate financial resources,

individuals find themselves effectively barred from

engaging in the market's coordination mechanisms,

thereby making Hayek’s conception of spontaneous

order unattainable for substantial portions of the

populace.

The above criticisms of Hayek point out that his

theoretical construction is not very well-equipped to

deal with the moral and structural issues of

contemporary advanced economies. However

germane the Hayekian model as of views on how

fragmented knowledge performs its role in economic

coordination, it does need revisions to amply account

for data concentration in digital monopolies,

environmental impact resulting from production

processes, and issues of participatory hindrances of

economic inequalities in markets. While this may be

central to the Hayekian theoretical apparatus,

insistence on the neutrality and universality of the

price signal from Hayek does seem increasingly

tendentious set against a background where

information asymmetries, environmental pressures,

and economic injustice compromise market

coordinating mechanisms.

While intuitively appealing, Hayek's account of

spontaneous order actually rests on an implicit faith in

the efficiency and moral neutrality of markets-a

presumption increasingly called into question by

many recent scholars. Joseph Stiglitz also mentioned,

while working on market efficiency, such cases when

asymmetric information results in distorted market

output, especially in those kinds of situations where

only a part of the actors is in possession of special

information that becomes relevant for price setting.

Stiglitz did this to underline that the theoretical

framework which Hayek pursued was incomplete to

deal with those situations where powerful actors

distort or lock up price signals and to create a better

theory of economic coordination (Stiglitz, 2002).

Besides, spontaneous order in Hayek is based on an

assumption that the actions of individuals through the

price mechanisms ensure allocation efficiency.

However, other critics such as Mariana Mazzucato

(2018), think otherwise. According to her, markets

have no self-corrective mechanism. In The Value of

Everything, Mazzucato argues that markets frequently

neglect public goods, particularly in sectors such as

healthcare, infrastructure, and environmental

sustainability, where collective action is crucial. Her

analysis implies that Hayek’s emphasis on

spontaneous order might be excessively optimistic,

considering the intricate interdependencies present in

contemporary economies and the substantial

externalities linked to economic endeavours

(Mazzucato, 2018). These criticisms, however, put

even more emphasis on the need for an elaborated

framework that extends Hayek's insights with respect

to decentralized knowledge but develops the moral,

ecological, and structural needs of the present market

systems. The Hayekian interest in the price

mechanism and the notion of spontaneous order

indeed reflect an important foundational element for

developing complex natures through the globalized,

technologically advanced, and ecologically fragile

environment. The following chapters will introduce an

advanced theoretical framework in addressing these

challenges: the so-called Ethically Resilient Market

Theory, or ERMT, that will be directed at sustaining

Hayek's commitment to decentralized coordination by

means of introducing ethical dimensions, ecological

assessment, and participatory fairness toward the

construction of a more robust and ecologically

inclusive economic system. While reconceptualizing

the price mechanism as a multi-dimensional, complex

ethical-economic indicator, it raises the price

mechanism from a mere measure of scarcity and

demand to a carrier of information with regard to

social and environmental values. Thus, it makes

market coordination congruent with far-reaching

social concerns by integrating the value of social and

environmental concerns within the pricing framework

and gives a system that respects individual freedom

while fostering the common welfare. This is how

ERMT's theory contributes to the new economic

organization: It supplements another different

approach, other than Hayek's theory, to the

peculiarities of the 21st century.

3. The Inconsistencies of Hayek’s Theory in

the Face of Contemporary Challenges

Friedrich Hayek's solution to the problem of

dispersed knowledge through the price mechanism

within a perfectly functioning market is an advanced

solution to the epistemic problems of economic

coordination. Using prices as the carrier of

information on scarcity and demand conditions,

Hayek argued that the market could coordinate

resources with ease independent of any central

observer. However, in as much as Hayek's

contributions remain influential, contemporary

economies reflect substantial limitations characteristic

of his schema. Here I reflect on the identified

constraints in the context of data centralization,

environmental externalities, and problems of

economic inequality. Each of them has disclosed an

identified contradiction in the Hayek theoretical

framework by showing that Hayek's leaning on the

price mechanism and the assumption of dispersed

knowledge are not enough to justify the ethical and

structural claims coming from economic systems

today.

3.1. Data Centralization and the Assumption of

Dispersed Knowledge

A fundamental presupposition of Hayek's theory is

that knowledge is naturally dispersed among the

group's members, each of them possessing situation-

specific knowledge because of his situation. Hayek

argued that this fragmented distribution of knowledge

makes any type of central economic planning

fundamentally ineffective inasmuch as no central

authority could acquire and process the enormous

amount of information needed to make apt decisions

on behalf of an entire economy (Hayek, 1945, p. 519).

But the rise of digital monopolies and the

centralization of data run flatly counter to Hayek's

assumption of necessarily dispersed knowledge.

Today's giant corporations-Google, Amazon,

Facebook-have access to previously unimaginable

volumes of information on consumer behaviour, thus

centralizing knowledge which Hayek assumed never

was destined to be centralized.

This data consolidation amongst these companies

strengthens their capabilities and enables them to

conduct market behaviour in ways that undermine

price indicators' impartiality.

They could therefore use algorithmic pricing:

change the prices in real-time per consumer data, thus

creating artificial sensations of scarcity or demand that

actually do not exist in any market. Such manipulation

of prices, however, opposes what Hayek had

postulated: that prices reflect objective scarcity and

demand. Shoshana Zuboff (2019) describes this

phenomenon as "surveillance capitalism," arguing that

such firms exert a new form of power via the control

of information flows that shape economic activity

(Zuboff, 2019, p. 8). Zuboff's work highlights one of

the deep inconsistencies in Hayek's framework: while

Hayek viewed prices as spontaneous manifestations of

dispersed knowledge, modern economies show how

prices can be distorted by firms with monopolistic

control over information.

This, in turn, jeopardizes the equality principle that

should underpin Hayek's theory, since informational

power will then diffuse across a few corporations.

While classically, the agents in the market act upon

their local knowledge and contribution to emergent

organization-a reflection of the diverse tastes and

needs within society-under data-driven economy,

those firms with large datasets take epistemic

dominance, introducing twists in the market process.

These businesses not only perceive consumer

preference but also shape it, making it a vicious circle

wherein the prices are changed in their favour to

maximize their profit rather than depict real scarcity

or demand. This concentration of knowledge is

against the decentralized system suggested by Hayek,

and thus, it means that the markets under digital

monopolies would not keep operating on the principle

of spontaneous coordination suggested by him. The

ethical ramifications associated with data

centralization add complexity to Hayek’s theoretical

framework. Through the management of consumer

data, digital monopolies engage in a type of

surveillance that prompts concerns regarding privacy,

autonomy, and consent. Zuboff (2019) contends that

the commodification of personal data signifies a “new

economic order” that emphasizes profit at the expense

of individual agency (Zuboff, 2019, p. 15).

Commercialization of knowledge thus evidently

collides with Hayek's view of markets as mechanisms

respecting individual freedom because they enable

agents to act on grounds of their unique knowledge.

However, within an economic environment in which

data become concentrated in a few corporations,

power balances change, thus undermining the moral

foundation of Hayek's scheme and thereby indicating

that the chasm between Hayek's theoretical axioms

and the facts of digital capitalism has become fairly

wide.

3.2. External environmental factors and

anthropogenic bias in price mechanisms

The other strong contradiction to Hayek's theory is

based on the price mechanism as an all-encompassing

carrier of information regarding questions of relative

scarcity and demand. According to Hayek, prices are

carrying the information about the availability of

resources and allow markets to function perfectly

without oversight of any type. The conventional price

mechanisms reflect only immediate human

preferences and scarcity but not wider ecological

costs. More precisely, through price, markets

summarize human needs and dismiss concern about

the possible ecological impact of the production and

consumption. This negligence is one of the significant

factors contributing to environmental degradation and

global change. For instance, the prices of fossil fuels

do not take into account the long-run ecological price

of emitting carbon into the atmosphere and conserving

natural ecosystems. Nicholas Stern (2007), in his The

Economics of Climate Change, enumerates the

preconditions for resource management to be truly

sustainable: markets need to internalize natural

externalities. As Stern (2007, p. 13) points out, this

constitutes a grave failure in Hayek's model:

ecological costs, excluded from the price mechanism,

cannot be valued effectively by traditional markets, let

alone rewarded for good behaviour. By claiming

Hayek's plan may assume that price conveys societal

need, but again this cedes almost all relevant

ecological consequences of consumption to the

invisible part of the price signal.

Correspondingly, many environmental economists

have become a proponent of an extended valuation

system in an effort to overcome the ecological

limitations of markets. In their landmark study on

ecosystem services, Robert Costanza and his

colleagues make the case for incorporating

environmental costs into economic valuations,

asserting that ecosystems provide "natural capital"

without which human life would be impossible

(Costanza et al., 1997). Such a perspective challenges

Hayek's anthropocentric vision of prices as neutral

signals, suggesting instead that markets must evolve

in a way that respects both human scarcity and the

ecological renewability of natural systems. Without

considering such more general ecological concerns,

Hayek's scheme is profoundly limited in its capacity

to engage with the existential dangers glimpsed

through environmental degradation-dissonance

between the dependence he placed on price signals

and the more complex, ecologically embedded reality

of contemporary society.

The failure by conventional pricing mechanisms to

capture ecological costs therefore carries huge ethical

implications in that it jeopardizes the very principles

of intergenerational equity. Some philosophers, such

as John Rawls (1971), argue that a just society must

look ahead into the need of future generations, so that

the activities undertaken today do not use up the

resources necessary to ensure their prosperity. The

Hayek framework focuses merely on the functioning

of the current market and is thus blind to this moral

vision. By neglecting environmental effects of

consumption, the conventional price tends to intensify

ecological damages, which disproportionately hurt

future generations. Anthropocentrism in Hayek's

model points to a sort of philosophical inconsistency:

his model has chosen between short-run market

efficiency and long-run sustainability.

3.3. Economic Inequality and Obstacles to Market

Entry

Another fallacy in Hayek's model is the assumption

that people can afford to act upon price signals. The

Hayek schema thus assumes that everyone has

wherewithal to act upon changes in prices, hence

acting efficiently in the market. However, economic

injustice confines that in a large fraction of any

population in most markets, given that the prices for

basic goods like housing, health, and education lie

beyond the reach of the poorest part of the population.

Amartya Sen (1999) presents a relevant analysis in his

work Development as Freedom, contending that

authentic freedom and agency are reliant on the

availability of fundamental resources (Sen, 1999, p.

36). In Sen's view, economic freedom cannot simply

be viewed as a matter of engaging in market activities;

instead, it is predicated on individuals' ability to make

choices that align with their true needs and aspirations.

It would be highly contentious to consider that people

have an equal opportunity when economic inequality

increases. When basic commodities become so

expensive that part of the population cannot buy them,

these people automatically get excluded from the

coordinating function of the market. This constitutes

an affront to the inclusiveness of the notion of

spontaneous order by Hayek because it is assumed that

decent coordination in a decentralized manner would

require participants having equal resources. With

Hayek considering the market as a mechanism of

democratic, free deals, his utopia becomes

unreachable for those who cannot afford the

wherewithal to enter the market. It is here that one

finds the weakest link within his theory-that despite

Hayek's avowal of divided knowledge and the

freedom of individuals, his system overlooks

economic inequity, a fact that so many persons are

compelled by economic restraints. Such exclusion, as

can be imagined, raises important ethical questions

and speaks to core issues of fairness in a system that

prioritizes market efficiency over basic need.

Theorists like Martha Nussbaum have contributed

significantly to discussing the question of the

capability approach to justice, or justice that consists

of supplying individuals with the basic resources that

enable them to function in an important sense (2000).

In other words, from that perspective, economic

inequality is not only a question of unequal income but

also an attack on human flourishing. The Hayekian

structure, which considers only coordination within

the market to be efficient, completely ignored such

moral notions. Therein lies the contradiction in

Hayek: between his commitment to individual

freedom and the structural causes of economic

inequality.

3.4. A Call to Refine the Existing Framework

These diverse challenges point, in turn, to questions

of data centralization, environmental externalities, and

economic inequality that underpin the critical

limitations of Hayek's reliance on the price

mechanism and the assumption of decentralized

knowledge. Where Hayek's insights into the role of

prices in economic coordination remain apt today, his

theory is increasingly inapplicable to the ethical and

structural demands placed on advanced economies.

Against the background of information channelled

through digital monopolies and ecological

degradation threatening the next generation and

polity, the proposition of Hayek on spontaneous order

sounds vastly reductive. These limits set the order that,

although Hayek's construction was of great

importance, it needs a revision to meet the

complications arising today within the economy.

Academics such as Joseph Stiglitz (2002) and Mariana

Mazzucato (2018) have been more interventionist in

methodological terms, calling attention to the role of

information asymmetries, social externalities and

public goods. In her latest book, The Value of

Everything, Mazzucato makes this case: that markets

left to their own devices cannot deliver collective

needs in the areas of health, infrastructure, and

environmentally sustainable investment. The former

indeed criticizes Hayek for resting on spontaneous

order probably a bit too idealistically, considering the

great magnitude of externalities arising from

economic activities. The following chapters will

introduce the Ethically Resilient Market Theory, or

ERMT-a thought pattern that also remains committed

to Hayek's emphasis on the decentralizing

coordination logic of markets but does respond to

significant ethical, ecological, as well as structural

imperatives for the current economic life. In this

respect, ERMT re-conceptualizes the price

mechanism into a multi-dimensional ethical-

economic indicator, whereas its meaning shifts from a

pure representation of scarcity and demand into a

device of information about social and environmental

values. By embedding social and environmental

values into the price mechanism, it aligns market

coordination with wider social imperatives and

provides a conceptual platform that also respects

individual self-determination while promoting the

common welfare. In so doing, it provides a new

framework of economic coordination, one rooted in

the tradition of Hayek but addressing the specific

features of the 21st century.

4. Toward an Evolved Theory: The

Ethically Resilient Market Theory

(ERMT)

In view of such constraints understood within

Hayek's theory, the required development has to be a

high-level model of economic coordination that

embeds the basic insights of Hayek's decentralized

knowledge and the price mechanism but develops

them further to meet the ethical, ecological, and

structural demands of modern society. The Ethically

Resilient Market Theory represents a further step

ahead in economic thought, offering a conceptual

framework whereby ethical consideration,

environmental sustainability, and inclusiveness are

hosted right in the very basic working of market

coordination. The ERMT follows Hayek's basics but

reinterprets the price mechanism in a

multidimensional "ethical-economic index" that,

alongside scarcity and demand, it conveys values

relating to social and environmental, and resilience-

related issues. Here I explore the foundational

elements of it necessary to extend Hayek's theory in

ways that construct a model of the market compatible

with both individual freedom and social

responsibility.

4.1. Decentralized Knowledge and Dynamic

Transparency in ERMT

Central to Hayek's theory is this notion of

decentralized knowledge-that knowledge is uniquely

and contextually held by individuals, and it is

impossible to aggregate it or use it effectively by a

central authority. ERMT retains this commitment to

decentralized knowledge but adjusts this to the

realities of a data-driven economy in which the

knowledge is usually firmly concentrated within the

digital monopolies. It is against this agglomeration

that it theorizes dynamic transparency as a

methodology that restores the symmetrical

distribution of information argued for by Hayek.

Dynamic transparency would presuppose, first, that

major data controllers-the big technology companies-

publish non-proprietary information in a decentralized

information commons. For example, that would be a

kind of virtual repository for all market participants

where data concerning marketplace conditions, trends

in consumer behaviour, and product information is

freely available. This would mean symmetric access

to information, whereby small-scale enterprises,

entrepreneurs, and consumers would be correctly

informed in making decisions independent of

monopolistic dependence. Because of this, dynamic

transparency would make informational authority

decentralized with the aim of nurturing a self-

managing market as exemplified by Hayek's notion of

decentralized knowledge and self-managing systems.

Further, dynamic transparency also considers

ethical aspects related to data privacy and personal

self-determination. By insisting on data sharing within

a communal model, ERMT limits good data

governance and reduces risks connected with the

monopolization of data. With respect to "surveillance

capitalism," Shoshana Zuboff (2019) writes that data

commercialization by businesses implies a new

method of domination over people's lives (Zuboff

2019, p. 15). Due to these facts, it applies a clear,

transparent, and decentralized data infrastructure that

saves privacy and individual self-determination.

Through this glass, dynamic transparency seeks to

balance Hayek's commitment to individual liberty

with these needs in a digital economy.

It would manage information in conformance with

the ethical standards of a decentralized information

commons: first, principles of transparency, data

integrity, and privacy. It would avoid corporate uses

of data entailing manipulative and distorting

consumer behaviour or market signals. In this sense,

dynamic transparency secures the veracity of price

signals as a guarantee of real market conditions versus

artificially contrived outcomes. This brings the pricing

mechanism in tune with the best practice principles of

transparency and fairness to ensure that it retains the

priceless coordination Hayek valued in its original

form while enhancing the ethical and informational

integrity of today's markets.

4.2. The Social-Economic Index: A Pricing-for-

Value That Integrates Social and

Environmental Values

A major development of ERMT was the reworking

of the traditional price mechanism into an "ethical-

economic index," an embedded function that

synthesizes social and environmental values with the

facts of scarcity and demand. As explained in Chapter

3, the Hayek anthropocentric model of pricing did not

measure ecological costs or the welfare of society. It

will inculcate ethical and ecological concerns directly

into prices in an attempt to get a more sustainable

marketplace that is fair and resistant along with

efficiency. The value is sought within goods and

services that add to the betterment of the environment,

social equity, and sustainability. It would include the

ecological footprint of various systems of production

and would give incentives to the consumers in case of

choosing products that have less environmental cost.

Goods produced in an environmentally friendly way-

such as if renewable energy is used-would bear low

ecological costs. And they are highly dependent on the

environment – like the use of fossil fuels or products

resulting from deforestation – would be assessed with

higher costs so that these wider ecological costs are

shown. This is how the ethical-economic index would

align incentives within markets with the care for the

environment: create incentives for sustainable

consumption and production.

This approach adheres to methods adopted from

environmental economics, especially the concept of

natural capital, put forward by Costanza et al. (1997,

pp. 254). As described by Costanza, there is basic

"natural capital" supplied by ecosystems that must be

included in economic calculations. Ecological

resilience integrated into its valuation has allowed the

ethical-economic index to include ecological costs

and thus turned the pricing mechanism right into an

instrument that delivers the footprint of consumption.

This change in Hayek's price mechanism is but an

expression of the consensus reached by the

economists and the environmentalists on the need for

principles of sustainability to be nested inside market

value for effective action by the markets to address

current climate change and biodiversity loss. Aside

from valuing natural capital, the ethical-economic

index embodies an important element of social equity:

goods and services considered to enhance social

welfare-such things as low-income housing,

healthcare, and education-receive social equity credits

that underwrite some of the cost and make these goods

and services available to the poor.

This mechanism embodies the ethical obligation to

guarantee access to vital resources, corresponding

with Amartya Sen's notion of “capabilities”, which he

posits as fundamental to human welfare (Sen, 1999, p.

36). By integrating social equity into the pricing

framework, ERMT fosters inclusivity and justice,

tackling the obstacles to participation that constrain

agency for marginalized communities. It is for this

reason that the ethical-economic index reinterprets the

price mechanism as an instrument applied not only in

signalling scarcity and demand but also in imparting

values that are of essence in bringing forth a just and

sustainable society. This will surely make the

marketplaces reflect the increasingly intricate ethical

and ecological imperatives of today, hence raising the

price mechanism from a narrow economic tool to a

wide system for guaranteeing responsible economic

conduct.

4.3. Crisis-Responsive Market Nodes to Enhance

Market Resilience

Hayek's theory of spontaneous order at least

suggests that, in normal conditions, self-regulating

capabilities of markets could perform well. It was

crystal clear from the COVID-19 pandemic that

during such emergency situations, a response purely

grounded in market mechanisms turned out to be

inadequate in preventing extreme shortages and

equitably organizing the distribution of supply, other

than by timely and coordinated action. This deficit in

the ERMT is overcome through CRN, a temporary

decentralized hub of resource management during the

emergency. Crisis-response market nodes are

triggered into operation at threshold conditions of

scarcity or threshold conditions surrounding crisis-

related ones, such as in contexts involving a natural

disaster or pandemic. Such nodes employ "equity-

pricing algorithms" that temporarily adjust prices

based on urgency, need, and equitable access, other

than the convention of supply and demand as an

isolated principle. This ensures that important

products remain available and within reach, at least to

the vulnerable segments of society.

In autonomous decentralized traditional markets,

these nodes dissolve once the crisis has passed and

prices return to normal.

The foundational motivation for CRN derives from

the abstract notion of "public goods provisioning,"

which recognizes that, when supply is squeezed,

markets can occasionally allocate resources in a very

uneven way (Samuelson 1954). CRNs provide

temporary interventions, such as the priority of

collective welfare, within those aspects where Hayek's

framework seems to fall short of accounting for moral

responsibilities arising during crises. It is without

losing the Hayekian emphasis on decentralized

coordination that CRNs serve as flexible means of

assuring resilience and equity in the face of

extraordinary disruptions.

4.4. Participatory Equity Credits: Increasing

Opportunities for Market Participation

ERMT addresses this problem of economic

inequality by providing a new financial instrument

called Participatory Equity Credits that uses

blockchain technology in a very innovative way to

decentralize giving a greater voice and real

participatory role to poor people in markets. The

distribution would need to be done based on local

markets, or groupings of income, so as to create for

the people a basic level of purchase power in core

needs like housing, health, and education. Theorizing

PECs draws in part upon views emanating from the

capabilities approach to justice advanced by

philosophers such as Martha Nussbaum and Amartya

Sen. According to Nussbaum, justice requires

supplying individuals with what they need to pursue a

good life, a concept consistent with the goal of

participatory equity within ERMT (Nussbaum, 2000,

p. 84). It issues the PEC with a view to meeting

threshold needs, thus allowing economic agenthood to

remain with not one person but all in society. To this

extent, it can be taken as one way of democratizing

access to markets, considering how Hayek claims a

free market order would presuppose that knowledge

and capital become dispersed across various multiple

decision-makers.

Participatory Equity Credits, if embedded in an

ethical-economic index, would immediately reflect

changing local pricing and demand conditions-so they

could never lose their relevance under altered

economic circumstances. They would permit people

to respond to price signals and exert their will in the

market. The unique contribution of PECs within

widening the bounds of economic inclusion cleans an

important weakness in Hayek's theoretical

framework-a kind of assumption whereby everyone

has the same amount of capital uniformly. Hence,

incorporation makes participatory equity turn Hayek's

notion of spontaneous order into a truly democratic

model in a way that preserves diversity in choice and

inclusiveness.

4.5. Ecological Resilience Credits - Incorporating

environmental stewardship into the market

metrics

The theory of an Ethically Resilient Market furthers

this with the concept of Ecological Resilience Credits,

which ascribe value to natural capital, ecosystems, and

biodiversity according to their ecological importance

and resilience. ERC works alongside traditional price

signals, thus providing a twin-pricing mechanism that

can balance short-term economic needs with long-

term ecological health. For example, ERCs for

rainforest preservation would reflect the system's

value in terms of carbon sequestration and

biodiversity, thus encouraging its protection rather

than exploitation. Ecological Restoration Credits are

fundamentally based on the principles of ecological

economics, which is a discipline that has emphasized

the need for natural capital to be recognized within

economic systems. As early as 1997, Robert Costanza

and his colleagues identified "services" provided by

ecosystems-which are crucial for human survival-that

must be included in economic valuations (Costanza et

al., 1997, p. 254). By bringing ERCs into the pricing

system in a way that renders economic activity

compatible with environmental sustainability, ERMT

overcomes one of the major ecological limits to

markets. ERCs redefine the price mechanism through

ERMT, with respect to economic scarcity and

ecological resilience, extending Hayek's model to

incorporate human and environmental wellbeing as

intertwined. While this ecological aspect propagates

sustainable practices, it actually harmonizes markets

with the principles of intergenerational equity, hence

considering the needs of future generations within

current economic choices. With this in mind, ERCs

therefore offer a holistic strategy in the coordination

of markets which pays respect to human and

environmental well-being.

5. Ethically Resilient Market Theory as an

Evolution of Hayekian Thought

Friedrich Hayek's pioneering views on

decentralized knowledge and market coordination

have found resonance across disciplines, be it in

economics, philosophy, or political theory. His work

"The Use of Knowledge in Society" is thus an appeal

to the cogency of markets as one system of

decentralization whose price mechanism allows

variety in emergent order-what Hayek himself calls

"spontaneous order." The underlying idea is that

prices, through signalling scarcity and demand, allow

individuals to act upon their own local knowledge

without any centralized oversight. Thus, the market is

not viewed as any sort of economic mechanism, but

an epistemic and ethical space in which the agents

engage in the exercise of self-determination within the

structure of mutual coordination.

However, to focus on Hayek's schema, while

valuable for their time, reveal significant limitations

when considering the complexity introduced by

today's society and economy-data centralization,

environmental degradation, and deeply entrenched

economic inequalities.

The contemporary context brings to light the

structural lacuna in Hayek's dependence on the price

mechanism for efficiently signalling social needs. The

Ethically Resilient Market Theory assumes a mature

paradigm within a world in which all economic and

social dynamics are completely linked with ethical

and ecological imperatives; a re-conceptualization of

Hayek's notion befits the needs of an interconnected

universe which is at once ethically elaborate and

ecologically precarious. It is against these various

challenges that the ERMT responds by reinterpreting

Hayek's model in a far richer ethical and ecological

context and thus radically changes his key insights

into the nature of the market system which would

balance individual autonomy with collective

responsibility. Though it takes its cue from Hayek's

emphasis on dispersed knowledge and the price

mechanism, it extends the parameters of market

principles to cover transparency, social equity, and

environmental sustainability. In this sense, the

extension of Hayek's work means that it retains all the

insights of Hayekian theory but also takes into

consideration the ethical imperative of the 21st

century.

The novelty of the it basically lies in this concept of

dynamic transparency. The original theory of Hayek

implicitly assumes that the knowledge of dispersion

among agents occurs spontaneously, which enables

the markets to act as decentralized information

mechanisms.

However, this assumption is sorely stretched in a

data-centric world where a few digital monopolies

amass enormous stores of consumer information.

Dynamic transparency helps to redress this

asymmetry by forcing data-rich corporations to

generate and share non-proprietary information in a

decentralized information commons-a common

repository that democratizes market-relevant data.

Dynamic transparency in creating an open

information network counteracts any monopolies of

knowledge flows and replenishes egalitarian

knowledge distribution under conditions described by

Hayek. The premises here, therefore, answer the

epistemic ethical issues created by such a

concentration of data power and reinstate the

preconditions necessary to achieve the actual

coordination in a decentralized way.

This latter structure follows directly from Hayek's

wider moral commitments since it ensures, in

particular, that price signals reflect true market

conditions rather than the artefact of monopolistic

outcomes. Dynamic transparency resurrection

provides an open data infrastructure for Hayek's

original vision of decentralized knowledge in such a

way as to demonstrate awareness of ethical concerns

about data privacy and autonomy. As Shoshana

Zuboff warns in The Age of Surveillance Capitalism,

the commodification of data poses profound risks to

individual autonomy and agency (Zuboff, 2019). By

ensuring that data flows are not solely controlled by

corporate entities, ERMT preserves Hayek’s

commitment to individual autonomy within a digital

economy and prevents the epistemic monopolization

that undermines genuine market coordination.

Another critical novelty of ERMT is repositioning

the price mechanism as an ethical-economic indicator.

While Hayek's original model relies on the price

mechanism to convey the forces of scarcity and

demand, the conventional price system is unable to

internalize key social and ecological values relevant to

long-term sustainability and the common good. The

ethical-economic index applied in it changes the price

mechanism to a multi-dimensional signal, carrying not

only scarcity information but also ethical and

environmental consequences of economic choices.

The embedding of the ecological and social costs in

the pricing system of it is, in fact, an appeal for

recovery from the anthropocentric limits of the

traditional market, too frequently liable to simply

neglect various externalities of consumption and

production.

This draws from the thinking of environmental

economists such as Robert Costanza, who argue that

ecosystems are irreplaceable "natural capital" for

human survival (Costanza et al., 1997). The present

index, in translating prices into ethic signals, is based

upon an extended moral vision for markets, given that

personal economic decisions ripple throughout social

and ecological landscapes. That ethical remapping of

price signals finds its philosophical fellow traveller in

the work of Aldo Leopold, whose Land Ethic

proposed that moral communities extend beyond

humanity to include the broader biotic environment

(Leopold 1949). Looked at through that lens, ERMT

re-imagines markets as ecosystems in which human

economic interests are weighed against the intrinsic

value of ecological resilience. The ethics-economic

index, on the one hand, furthers this approach of

Hayek by embedding social equity as a central value

in prices. Goods and services contributing to welfare-

such as health care, low-income housing, and

education-receive social equity credits, which cut their

price to make them accessible to low-income classes.

This mechanism reflects the work of Amartya Sen,

who contends that genuine freedom requires access to

basic capabilities, enabling individuals to pursue

fulfilling lives (Sen, 1999). By embedding social

equity within prices, ERMT enhances the inclusivity

of markets, addressing the barriers to participation that

result from economic inequality. This extension of

Hayek's vision moves in the direction of making real

an insight into the reality that economic agency is not

solely the preserve of financial ability but of all

members of society, extending individual self-

determination in a manner compatible with the

common good.

Complementing these systemic adaptations, under

ERMT there would also be temporary, decentralized

hubs called Crisis-Responsive Market Nodes that

would support coordination of resource distribution in

crisis. Hayek's theory of spontaneous order presumes

that, in normal circumstances, markets can self-

regulate, while in crisis situations-such as natural

disasters or pandemics-the traditional ways in which

market mechanisms are supposed to work break down

in distributing resources equitably. CRNs address the

above flexibility in responses: they turn on when

specific crisis threshold levels are reached and adjust

prices in line with measures of urgency and equitable

access. It fulfils the moral dictate on the care of the

vulnerable in disaster and adds resiliency to Hayek's

conception of decentralized coordination.

By introducing PECs, ERMT attempts to deal with

economic inequalities inseparable from impeded

market participation. In contrast to Hayek's model,

which simply assumes that agents have whatever

resources might be necessary in order to exploit price

signals, it recognizes that agency for many is

circumscribed by economic inequality. PECs grant

credits to the economically deprived and offset the

costs of the goods for economic survival,

democratizing access to such a market and ensuring

that all of its members can exercise economic agents.

The mechanism is an inspiration from Martha

Nussbaum's capability approach defended by

Nussbaum (2000), whereby justice demands that

people are made capable of developing themselves

and acting in society as peers. The PECs therefore

expand access to whatever is required to extend

Hayek's spontaneous order into an inclusive

democratic format appreciating liberty in concert with

equity.

The wide philosophical ramifications of ERMT go

well beyond economic coordination, pointing at

nothing less than a paradigm shift in the very ethical

grounding of markets. If Hayek's model is grounded

in a notion of individual liberty, then it brings an ethics

of ecological responsibility beneath such liberty. It,

therefore, harmonizes individual freedom with the

ethical imperatives of the common welfare by

installing sustainability and inclusivity into the basic

market structure. What this reorientation means in

concrete terms is a change in the philosophy of

economics whereby markets are no longer understood

as transactional systems but as multidimensional

ecosystems carrying social and environmental value.

And also overcomes the dichotomy between

autonomy and collective responsibility, which is

thought to be essentially polar.

Martha Nussbaum has written about capabilities,

arguing that justice demands access to those resources

which are necessary for individuals to flourish-a line

of thought very much in tune with the commitment to

participatory equity expressed by ERMT (Nussbaum,

2000). With its structural supports for market

participation, this new approach takes up Hayek's

emphasis on individual agency and submits the moral

and pragmatic facts of inequality. Moreover, ERMT’s

ecological orientation aligns with John Rawls’s

principle of intergenerational justice, suggesting that

markets must incorporate long-term ecological values

to ensure that future generations are not deprived of

essential resources (Rawls, 1971). Through these

ethical extensions, it reinterprets markets as spaces

that uphold both individual freedom and societal

responsibility. This characterizes an adaptive

evolution of Hayekian thought whereby ERMT

preserves the virtues of decentralized knowledge, its

market process turning into ethical ecologies in

consonance with the imperatives of life in the modern

age. With the reconceptualization of the price

mechanism, the it extends the capability of markets to

reflect the full gamut of social values: sustainability,

inclusivity, resilience. The evolved framework

vindicates Hayek's legacy insofar as the core

principles in the theory are those of decentralized

coordination, but it recognizes that autonomy cannot

be insulated from ethical accountability. It is here that

it provides vision into economic coordination

compatible with both personal agency and collective

welfare, thereby turning in a resilient model that is

ethically tuned to the 21st century. The potential

impact wrought by ERMT is huge. It is a model

market that finds its balance in economic growth while

managing to harmonize social and environmental

values. Embedding principles of transparency, equity,

and sustainability, ERMT envisages markets

responsive to big societal challenges, not least climate

change and social inequalities. The Ethical-Economic

Index and Participatory Equity Credits apply to how

policy and business leaders may be guided in

responsible practice such that market outcomes would

reflect both individual and common interests. ERMT

is still evolving, but applications from health and

energy to digital governance indicate a great promise

for building resilience in systems that prioritize long-

term well-being. In all, Ethically Resilient Market

Theory marks a philosophically and economically

cogent turn that extends Hayek's insight into a wider

ethical and ecological framework. It is actually the

harmonization of Hayek's legacy with the modern

world's complexity by redefining markets as systems

supportive of individual autonomy and collective

responsibility. By anchoring itself on the principles of

transparency, equity, and resilience, ERMT shows

how markets can become ethical ecosystems able to

sustain human prosperity and the integrity of the

environment in concurrence. Such a forward path, as

represented by the reconceived framework, is able to

respect the precepts of Hayek, while answering the

moral and practical challenges posed to economic life

today in service of a vision of economic prosperity

combined with the ethical imperatives of the 21st

century.

Conflicts of interest

The author(s) states that there is no conflict of

interests.

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