Good write up on a misconception with Hayek’s “The Use of Knowledge in Society”
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“Many people misrepresent Hayek’s position because they ignore or misunderstand his explicit emphasis on tacit knowledge. The misrepresentation occurs because they treat all knowledge and information as something that is “objective” and capturable — such as the amount of oil in a container or date and time an event occurred. Framing knowledge and information as purely objective, they believe Hayek’s challenge to central planning can be solved by advances in technology. This interpretation of Hayek is wrong. As it completely ignores his emphasis on tacit knowledge playing a major role in economic decision making and by its nature inarticulable. Tacit knowledge is subjective, personal, and uncapturable by an observer. It is not measurable, nor can it be codified into simple rules and applied by others. Moreover, tacit knowledge is conditioned by local circumstances. The institutions of private property and prices create unique local circumstances where knowledge and information can be generated, through the discovery process of entrepreneurship, which otherwise would not exist. Making the problem of “the use of knowledge in society”, not one of mere practicality solved by technology and engineering, but an insurmountable problem of epistemology. “