In his “Quotation of the Day” yesterday, one of my favorite parts of CafeHayek, Don Boudreaux quotes from one of my favorite Hayek articles, “The Use of Knowledge in Society,” published in the book. American Economic Review in 1945. (Parent note: Wouldn’t it be great if the AER started publishing articles with words and without numbers, articles that make important points? One can dream.)
Here is a key passage that Don quotes:
The peculiar character of the problem of rational economic organization is determined precisely by the fact that the knowledge of the conditions we must use never exists in a concentrated or integrated form but as scattered fragments of incomplete and often contradictory knowledge. different people have them. So the economic problem of society is not just a problem of allocating resources that are “given”—when they are “given” they are considered to be given by a single mind that deliberately solves the problem posed by this “data.” Rather, it is a problem of how to find the best use of resources known to any member of society, for whose purposes their value is estimated only by these people. Or, to put it more succinctly, it is the problem of the use of information that no one can provide completely.
About 20 years ago when I was teaching at the Naval Postgraduate School, I assigned this topic and we worked through it in class, section by section. (“In the old days,” the Liberty Fund had a number for each section, making classroom discussions easier.)
But you don’t teach a topic over and over again without realizing the problems. Actually, in this article, I have only mentioned one, and it is in the above section.
This is: “information that often contradicts itself.”
Information I won’t they contradict each other. Ideas can be. Testing can be. But not knowledge.
Let me take an example. I am at my home in Minaki, Ontario. One of the biggest changes here since last year is that the landfill is closed. Bears used to go there to feast on human food. Now they don’t. So the bears are now coming closer to the cottages.
Suppose I know that there is a bear in my yard. You know he is not there. If I really know, then you are wrong.
Or vice versa. You know there is no bear in my yard. “I know” that there is none. If you really know, then I’m wrong.
END.
Source link