Digital Mind 🧠

🪵 The Threshold

Hayek held that dispersed market knowledge trumps even the wisest individual's knowledge

Properties2
tagsja-picks, xref, define, definitional_content, trade, singleton, category/definitional-content
aliases@mirowski_never_2013, loc. 225

4 min read

Hayek held that dispersed market knowledge trumps even the wisest individual’s knowledge

Evidence

For Hayek, “Knowledge is perhaps the chief good that can be had at a price,” but difficult to engross and accumulate, because it “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.” You might think this would easily be handled by delegating its collection and winnowing to some middlemen, say to academic experts, but you would be mistaken, according to Hayek. He takes the position that all human personal abilities to evaluate the commodity are weak, at best. And this is not a matter of differential capacities or distributions of innate intelligence: “the difference between the knowledge that the wisest and that which the most ignorant individual can deliberately employ is comparatively insignificant.” Experts are roundly disparaged by Hayek, and accused of essentially serving as little more than apologists for whomever employs them. On the face of it, it thus seems somewhat ironic that Hayek would be touted as the premier theorist of the New Knowledge Economy. But the irony dissolves once we realize that central to neoliberalism is a core conviction that the market really does know better than any one of us what is good for ourselves and for society, and that includes the optimal allocation of ignorance within the populace: “There is not much reason to believe that, if at any one time the best knowledge which some possess were made available to all, the result would be a much better society. Knowledge and ignorance are relative concepts.” — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 225

Categorization

  • XREF: Connects to the broader ‘thought collective’ theme of the book and to Hayek’s ‘Use of Knowledge in Society’ — the dispersed knowledge thesis underpinning why markets beat planners. — connects to: Hayek’s market argument rests on an epistemology of dispersed tacit knowledge — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 72; Hayek justified markets by dispersed knowledge, not happiness maximization — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin: The Making…, 2195; Hayek argued contextual individual knowledge cannot be statistically aggregated — Jessica Whyte, The Morals of the Market: Human Rights…, 211 (+7 more)
  • DEFINE: Defines Hayek’s distinctive epistemic claim: the market optimally allocates both knowledge AND ignorance across the populace.

Broader Connections

✉️

Backlinks