The Stupid Center

Belmont Club » One Framework To Rule Them All: "Freidrich Hayek, reflecting on the question of ‘who should decide’ economic activity concluded that the worst thing anyone could do was let the center rule the roost. Hayek argued that no group of bureaucrats knew  enough to make decisions for everybody. The right answer was literally unknown to any single group of planners. The only possible alternative was to create a framework in which everyone could make their own rational decisions.

The peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess. The economic problem of society is thus not merely a problem of how to allocate “given” resources—if “given” is taken to mean given to a single mind which deliberately solves the problem set by these “data.” It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know. Or, to put it briefly, it is a problem of the utilization of knowledge which is not given to anyone in its totality."