Hayek, The Use of Knowledge in Society | Library of Economics and Liberty

http://www.econlib.org/library/Essays/hykKnw1.html


This is a fascinating read. Makes you wonder, are our institutions particular to us, as citizens of a certain culture or as a breed of human animals? Or would these habits be rediscovered in the abstract by that very general creature summoned forth by the old philosophers under the spell of “any rational being?”

Economics (including its theories put into play) in particular characterizes our decisions as general, optimal responses to a world of known choices.

But it’s weird how almost no one uses a clear felicity of calculus in this manner. We are merely guided by an intuition of unknown origin, which leads us towards uncertain directions.

I guess one of the reasons why I have much admiration for the Austrian school of economics, inspired by thinkers like von Mises and Hayek, is that these minds had the humility to recognize that the massed motives of the market confound the predictive power of any economic theory that the Academics or Government economists, who are way up in their ivory towers, might try to apply to it.

They remind us that only the individual knows his or her own wants, and no other external outside agency can more effectively supply the plans to fulfill them.

Thoughts, stumblers? Discuss.

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