Friedrich von Hayek - 10/9/2024 Tutorial
According to Hayek:
Liberty = a policy which deliberately adopts competition, markets and prices as
it ordering principles
Markets guaranteed individual liberty
Text:
Who should be the one planning?
maybe experts have the best knowledge but how do we choose who these
experts are?
he stated that in contrary to what people think there is one knowledge that cant
be called scientific knowledge: the knowledge of the particular circumstances
of time and place
Most economists consider and want all information to be “given” even tho that
is not available in the existing order
Economic problems always arise as a consequence of change
He says that “this belief in the decreasing importance of change is, for that
reason, usually held by the same people who argue that the importance of
economic considerations has been driven into the background by the growing
importance of technological knowledge
= the same people that think economics is behind technology, also think
change is of decreasing importance.
The economic problem of society id mainly of rapid adaptation to changes in
the particular circumstances of time and place
So the answer is to follow the ultimate decisions made by people who are
familiar with these circumstances
– Solve it by some form of decentralisation
– This is only part of the solution
The “man on the spot” cannot decide solely on the basis of his limited but
ultimate knowledge of the facts of his immediate surroundings
– Now there is still a problem of communicating to him more information
because he needs to fit his decisions into the whole pattern of
changes of the larger economic system
His questions:
“How much knowledge does he need to do so successfully?”
“Which of the events which happen beyond the horizon of his immediate
knowledge are of relevance to his immediate decision?”
“How much of them need he know”
Important —> page 7
According to Hayek:
Liberty = a policy which deliberately adopts competition, markets and prices as
it ordering principles
Markets guaranteed individual liberty
Text:
Who should be the one planning?
maybe experts have the best knowledge but how do we choose who these
experts are?
he stated that in contrary to what people think there is one knowledge that cant
be called scientific knowledge: the knowledge of the particular circumstances
of time and place
Most economists consider and want all information to be “given” even tho that
is not available in the existing order
Economic problems always arise as a consequence of change
He says that “this belief in the decreasing importance of change is, for that
reason, usually held by the same people who argue that the importance of
economic considerations has been driven into the background by the growing
importance of technological knowledge
= the same people that think economics is behind technology, also think
change is of decreasing importance.
The economic problem of society id mainly of rapid adaptation to changes in
the particular circumstances of time and place
So the answer is to follow the ultimate decisions made by people who are
familiar with these circumstances
– Solve it by some form of decentralisation
– This is only part of the solution
The “man on the spot” cannot decide solely on the basis of his limited but
ultimate knowledge of the facts of his immediate surroundings
– Now there is still a problem of communicating to him more information
because he needs to fit his decisions into the whole pattern of
changes of the larger economic system
His questions:
“How much knowledge does he need to do so successfully?”
“Which of the events which happen beyond the horizon of his immediate
knowledge are of relevance to his immediate decision?”
“How much of them need he know”
Important —> page 7
