Hayek opposed planning because humans face constitutional ignorance

Evidence

Interestingly, here is where Hayek rejected the maximization of utility as the standard equilibrium concept in neoclassical economic theory. Markets don’t maximize happiness; rather, “the use of the market mechanism brings more of the dispersed knowledge of society into play than by any other [method]” (1967, 174). — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 2195 (#expands, via linked claim)

In so doing, he challenged not only socialist planning but also the positivism of neoclassical economics, telling both, in Michel Foucault’s words, ‘you cannot [act] because you do not know’. In his most influential article, The Role of Knowledge in Society (1945), Hayek distinguished between scientific knowledge of general laws and contextual knowledge of time and place, arguing that the specific knowledge possessed by individuals cannot be adequately aggregated or expressed in statistical form. — Jessica Whyte, The Morals of the Market, 211 (#expands, via linked claim)

Interestingly, here is where Hayek rejected the maximization of utility as the standard equilibrium concept in neoclassical economic theory. Markets don’t maximize happiness, rather, “the use of the market mechanism brings more of the dispersed knowledge of society into play than by any other [method]” (Studies in Philosophy, Politics and Economics, p. 174). — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 1926 (#expands, via linked claim)

Categorization

• XREF: connects to: Hayek’s critique targets epistemic arrogance, not state action per se — Mark Blyth, Austerity: The History of a Dangerous…, 255; Hayek grounded free-market economics in a theory of human ignorance — Angus Burgin, The Great Persuasion: Reinventing Free…, 278; Hayek grounded freedom in the inevitability of ignorance — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 221 (+7 more)

Related

• Hayek argued constitutional ignorance makes economic planning impossible (similarity 0.92)
• Hayek argued contextual individual knowledge cannot be statistically aggregated (similarity 0.91)
• Hayek grounded free-market economics in a theory of human ignorance (similarity 0.90)
• Hayek rejected utility maximization in favor of knowledge dispersion as the market’s justification (similarity 0.90)
• Hayek’s market argument rests on an epistemology of dispersed tacit knowledge (similarity 0.89)
• Hayek justified markets by dispersed knowledge, not happiness maximization (similarity 0.88)
• Hayek’s epistemology made price-generated knowledge local and impossible to centralize (similarity 0.87)
• Hayek grounded freedom in the inevitability of ignorance (similarity 0.87)
• Hayek held that dispersed market knowledge trumps even the wisest individual’s knowledge (similarity 0.87)
• Hayek located rationality in impersonal market processes, not individuals (similarity 0.86)
• Markets were valued by Hayek for computing tacit dispersed knowledge, not just coordinating plans. (similarity 0.86)
• Hayek reframed capitalism’s core problem as knowledge fragmentation, not labor or value. (similarity 0.85)
• Hayek’s epistemology denied others the holism his own vision required (similarity 0.85)
• Hayek’s epistemic turn made market-derived hostility to markets a central puzzle (similarity 0.84)
• Hayek’s critique targets epistemic arrogance, not state action per se (similarity 0.84)

Broader Connections

• Hayek argued contextual individual knowledge cannot be statistically aggregated #expands (0.90) — Jessica Whyte, The Morals of the Market, 211
• Hayek justified markets by dispersed knowledge, not happiness maximization #expands (0.90) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 2195
• Hayek rejected utility maximization in favor of knowledge dispersion as the market’s justification #expands (0.85) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 1926