Hayek’s epistemology made price-generated knowledge local and impossible to centralize

Evidence

Hayek’s strategy was two-pronged. On the one hand, the signaling function of prices was reliable for economic decisions and forecasts insofar as markets were competitive. Information, as relayed by prices, was not only carried but generated through the market—a crucial insight. On the other hand, this limited the kind of problems that economic science could solve. Widely shared among neoliberals, Hayek’s critique pivoted around one single axis: the (seemingly infinite) cognitive function of markets worked hand in hand with the epistemic limitations of other disciplines and institutions aiming to correct its workings. Knowledge remained irrevocably local, dispersed, and impossible to centralize; the marketplace produced a continuous stream of new data within the confines of a radical skepticism towards intervention. — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 68

Categorization

• DEFINE: Concise statement that price information is generated, not merely carried, by competitive markets — a definitional core of the Hayekian knowledge argument.
• XREF: Connects to Hayek’s ‘Use of Knowledge in Society’ and the socialist calculation debate literature in the reader’s political economy background. — connects to: Hayek’s epistemic turn made market-derived hostility to markets a central puzzle — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 101; Hayek reframed capitalism’s core problem as knowledge fragmentation, not labor or value. — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 168; Hayek argued constitutional ignorance makes economic planning impossible — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 173 (+11 more)

Broader Connections

• Hayek’s market argument rests on an epistemology of dispersed tacit knowledge #corroborates (0.92) — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 72
• Hayek saw the market as an unrepresentable knowledge network, not a contained machine #corroborates (0.90) — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 171
• Hayek grounded free-market economics in a theory of human ignorance #corroborates (0.88) — Angus Burgin, The Great Persuasion, 278
• Hayek argued contextual individual knowledge cannot be statistically aggregated #corroborates (0.85) — Jessica Whyte, The Morals of the Market, 211
• Hayek rejected utility maximization in favor of knowledge dispersion as the market’s justification #corroborates (0.85) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 1926
• Hayek located rationality in impersonal market processes, not individuals #corroborates (0.84) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 223
• Hayek justified markets by dispersed knowledge, not happiness maximization #expands (0.82) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 2195
• Hayek’s critique targets epistemic arrogance, not state action per se #expands (0.80) — Mark Blyth, Austerity, 255
• Hayek grounded freedom in the inevitability of ignorance #expands (0.78) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 221
• Hayek framed individual rational self-direction as dangerous civilizational hubris #expands (0.75) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 227