In a webcast for BBC News Online, Mr Hague said the Tories would stop "the great racket" and "trade in human beings" that was causing chaos in the asylum system.
The Tory leader suggested that the party's policies would ensure fairer treatment of genuine refugees.
"Unfortunately it is the genuine refugees who are elbowed aside and lost in the system because the system has become so chaotic," he said.
"The system is being abused and there is a great racket going on, a great multi-million pound trade in human beings going on.
He added: "We should welcome genuine refugees to Britain."
But Mr Hague said there had to be rules to prevent economic migrants from seeking asylum.
He stressed that while they might have genuine reasons for wanting to move to Britain that was not a case for "unlimited movement around the world".
"There has to be some rules and they have to observed," he said
" There is a great racket going on, a great multi-million pound trade in human beings "
"We don't accept abuse of the asylum system."
Mr Hague defended his party's policy to establish a network of reception centres to house asylum seekers.
He said the centres would save money and deter unfounded applications for asylum.
"I think it would save money and the Labour Party themselves seem to think it would save money.
"They have created one reception centre so far in Cambridgeshire. It has cost about £6m to convert for this purpose. The government says it will save them £30m," he said.
"If we deterred unfounded asylum applications by having a stricter system that would also reduce the cost."
" It is possible to be in a club and not eat the same meals as everyone else all the time "
Mr Hague also defended Conservative policy of being "in Europe but not run by Europe" .
He denied that he wanted to tear up some of the European Union's existing laws and directives.
The Tory leader said his party was happy to follow existing EU rules but was against signing up to any new rules.
"I am not suggesting we break the rules. I am suggesting we do not sign up to more rules," he said.
"It is possible to be in a club and not eat the same meals as everyone else all the time."
To watch the webcast, select the link below: