Friedrich Hayek, a proponent of classical liberal economic thought, wrote the following in his book The Road

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Friedrich Hayek, a proponent of classical liberal economic thought, wrote the following in his book The Road to Serfdom:

It is important not to confuse opposition against...planning with a dogmatic laissez faire attitude. The liberal argument does not advocate leaving things just as they are; it favors making the best possible use of the forces of competition as a means of coordinating human efforts. It is based on the conviction that, where effective competition can be created, it is a better way of guiding individual efforts than any other. It emphasizes that in order to make competition work beneficially a carefully thought-out legal framework is required, and that neither the past nor the existing legal rules are free from grave defects (emphasis added).

How does democracy address Hayek's concern regarding the legal framework necessary for competition?