Hayek’s market argument rests on an epistemology of dispersed tacit knowledge
Evidence
Taken together, these arguments against the possibility of planning revolved around the elaboration of two key ideas. First, social knowledge is irremediably divided and dispersed. Second, it is a resource that remains largely implicit and tacit. In his seminal article on “Economics and Knowledge” from 1937, Hayek argued that the assumption of perfect knowledge in economic science was eliding the most important question that the social sciences had to address: “how knowledge is acquired and communicated.” Epistemic limitations deriving from the division of knowledge had both scientific and political consequences for just how much one (e.g. the state; the planning board; the welfare economist) was capable of knowing and thus of predicting adequately. Neoliberals shared the same critique of planning based on the impossibility of centralizing information efficiently, and the necessity of letting horizontal adjustments substitute for vertical decisions. But there existed an additional epistemological limit to planning. It was not only that social knowledge could not be centralized in one place, but also that it remained largely implicit, that is, tacitly embedded in traditions and customs. — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 72
Categorization
- XREF: Connects to the socialist calculation debate and Hayek’s ‘Economics and Knowledge’ — classic material in the Mirowski/Caliskan debate literature the reader is mapping. — connects to: Hayek grounded free-market economics in a theory of human ignorance — Angus Burgin, The Great Persuasion: Reinventing Free…, 278; Anti-rationalist epistemology links respect for tradition with market advocacy — Angus Burgin, The Great Persuasion: Reinventing Free…, 284; Hayek rejected utility maximization in favor of knowledge dispersion as the market’s justification — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 1926 (+16 more)
Broader Connections
- Hayek justified markets by dispersed knowledge, not happiness maximization
#corroborates(0.92) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 2195 - Hayek argued contextual individual knowledge cannot be statistically aggregated
#expands(0.85) — Jessica Whyte, The Morals of the Market, 211 - Hayek saw the market as an unrepresentable knowledge network, not a contained machine
#expands(0.85) — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 171 - Neoliberals recast Hayek’s tacit knowledge into a commodified thing for scientific resonance
#complicates(0.82) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 2162 - Hayek’s knowledge schema treats information as a disembodied good
#contradicts(0.80) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 2102 - Hayek’s epistemology drew on the same tacit-embodied model as Polanyi’s science
#corroborates(0.78) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 2162 - The market advocacy developed into a closed self-referential tradition in economics
#complicates(0.72) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 154