AUSTRIAN ACADEMY 2022
In today’s world, the issues of global regulation, control, and governance arise in a very different way from the times of such structures as the Hanseatic League or the British Commonwealth, or colonialism in general, played a crucial role in global political and economic interaction. The post-colonialist world, in which global enforcement and protection of human rights is also a central concern, created entirely new structures based on legal principles and liberties.
However, international governance is dominated by a paradox: the paradox that fundamental rights must be enforced and protected globally—they are inseparable—but this is not possible if important countries do not participate or if there is no unanimity. Another matter is the international regulation of the financial sector. The problem is that increasing centralized regulation increases transaction costs. Therefore, a variety of decentralized regulatory systems would be preferable.
Unfortunately, untransparent complexity has become the norm, regulatory processes have been “hijacked” by experts to suit their interests (“regulatory capture”), and international regulation has also internationalized risks. Therefore, decentralized, competing bottom-up solutions should be promoted, and it should be voluntary to join regulatory systems; likewise, it should be possible to leave such a system.
This lecture was given at the AUSTRIAN ACADEMY 2022 “Market economy and entrepreneurship – their contribution to a free and humane society”. Participants of the multi-day event were 21 students and young professionals who were selected on the basis of an application process and received a full scholarship from the Austrian Institute, the organizer of the event, in cooperation with the Friedrich A. von Hayek Society and also supported by the Federation of Austrian Industries (IV).