Final answer:
Friedrich Hayek viewed the Rule of Law as fundamental for securing property and contractual rights to ensure effective market functioning and protect against the encroachment of government overreach and totalitarianism. It provides a structure for a free-market economy, protecting individual freedoms and encouraging economic growth.
Step-by-step explanation:
The function of the Rule of Law for Friedrich Hayek was central to developing a free market economy which relies on the efficient and rational allocation of resources. Hayek believed in the protection of property rights and contractual rights, and argued that such protection is necessary for markets to function effectively and efficiently. According to Hayek, the Rule of Law is necessary for individuals to feel secure in their property, which is vital for exchange and investment to occur. Under this ideal, the government's role is to protect individual rights and to provide a framework where economic transactions can occur freely, without the fear of crime, corruption, or expropriation.
In Hayek's vision, the Rule of Law also serves as a safeguard against the perils of a command economy, which could arise from substantial governmental regulations. Hayek warned that complete governmental control over the economy, as seen in socialist states, would not only harm economic prosperity but would also lead to greater control over all aspects of life, eventually culminating in totalitarianism. Therefore, within this framework, the Rule of Law ensures that all members of society, including the government, are held accountable under a system of clear, public, fair, enforced, and universally applicable laws.