What's competition?

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Originally Posted by Unit

Thatcher said she was taking her ideas from Hayek, but Hayek never endorsed her policy decisions, nor was he ever her advisor.

This aside, Hayek is describing what is, he's making a positive statement, in his opinion competition should be understood as a process of discovery. The policy consequences of this framework are far removed at this point and I bet hosts of "liberal" economists such as Delong or Krugman would agree that prices emerging from such a process are one of the main feature of free-markets.

I see, just like the "positive thinking" movement, when the practice fails, it is because the practitioner didn't follow the practice closely, or doggedly enough.

That aside, the idea that competition reveals what a free market will bear, you shouldn't need Hayek or anyone else to do that, as you have pointed out. But that's just the teaser to get one to buy into much more of the ideology, isn't it?