Friedrich Hayek vs. Reality
In 1945, Friedrich Hayek wrote "The Use of Knowledge in Society." Here he argued that knowledge is unevenly dispersed throughout society, that often people at the bottom of hierarchies, who are dealing hands-on with problems on an everyday basis, have more of a specific kind of information, including specifically acquired skills, than their "superiors" - what he calls "the knowledge of particular circumstances of time and place." It is impossible for any central authority to have all of the information at the "local" level, and for this reason, Hayek thought that central planning was effectively impossible, doomed forever to make fatal mistakes based on incomplete information. But all was not lost. Hayek's answer to this problem was free trade. He saw free trade as a means for information to flow freely throughout society. Fluctuations in price would reflect changes in supply and demand too subtle for the pollsters of central-command economie...