No need to write in to let me know how little of this I really understand. I admit it freely.
(F.A.) Hayek’s skepticism about the effects of "big government" are rooted in an epistemological observation summarized in a 1945 article called "The Uses of Knowledge in Society." There he argued that most of the knowledge in a modern economy was local in nature, and hence unavailable to central planners. The brilliance of a market economy was that it allocated resources through the decentralized decisions of a myriad of buyers and sellers who interacted on the basis of their own particular knowledge. The market was a form of "spontaneous order," which was far superior to planned societies based on the hubris of Cartesian rationalism. He and his fellow Austrian Ludwig von Mises used this argument against Joseph Schumpeter in a famous debate in the 1930s and ’40s over whether socialism or capitalism offered a more efficient economic system. In hindsight, Hayek clearly emerged the winner.
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5 comments:
Since you picked the money paragraph, you can rest assured that your understanding is probably pretty sound.
Here's a teaching tool that's going the rounds in the geeky end of the right wing: the Keynes v. Hayek smackdown.
http://www.youtube.com/watch?v=GTQnarzmTOc
I actually tried to re-read "Small is Beautiful" last year. Seemed foggy and naive. This sounds much sharper.
Sometimes you seem a bit Rip van Winkle-ish....
"Small" is crap... A book of its time long past its time.
"Road to Serfdom" is an essential conservative text.
In a non-economic sense, or philosophically economic and not monetarily economic, the Hayekian "allocating resources through decentralized decisions" is at the root of the crowdsourcing phenomenon. It is the key to the "wisdom of crowds" and one of the reasons that Wikipedia -- as wrong as it can be during any specific point in time -- tends to be a decent place to begin looking at any information.
Put one way, look at the mathematical breakdowns that fans do of the underlying math of the D&D game. It is far more sophisticated than that done by the professionals.
Later in the piece: "freedom even in[Hayek's] minimal sense can be threatened by a variety of social actors, from wealthy elites to corrupt local governments to large corporations that hold a whip hand over their workers. A truly free society is not simply one that limits the power of the central government."
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