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Hayek saw the market as an unrepresentable knowledge network, not a contained machine

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tagsja-picks, xref, define, definitional_content, trade, corroborated, category/definitional-content
aliases@philip_mirowski_nine_2020, loc. 171

4 min read

Hayek saw the market as an unrepresentable knowledge network, not a contained machine

Evidence

Following his mentor Ludwig von Mises’s idea of the “division of knowledge,” Hayek’s narrative of civilization was one of innovating new means for putting the knowledge of person A into productive contact with persons B through Z and from person B to persons A through Z and so on in an endless, unmappable, and indeed unrepresentable series of branching, splitting and star-bursting nodes and networks. Philip Mirowski has insisted correctly that Hayek saw the market as a “uniquely omnipotent information processor”—but even this metaphor is too concrete, conjuring up the image of an actual piece of hardware as it does—a supercomputer that one can look at. Hayek’s metaphors are more evanescent. The example he uses are the reconfiguration of neurons in the brain or a system of leaky tubes set into a pliable material so that pressure from the tubes creates new channels and rivulets in a constantly shifting and undulating arrangement. This vision of the economy differed starkly from that of Keynesianism visualized in the MONIAC machine designed by the economist Arthur Philips in 1949 to portray the economy as a self-contained hydraulic system of neat reservoirs and volumes responsive to the fine-tuning of the enlightened policy-maker. — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 171

Following his mentor Ludwig von Mises’s idea of the “division of knowledge,” Hayek’s narrative of civilization was one of innovating new means for putting the knowledge of person A into productive contact with persons B through Z and from person B to persons A through Z and so on in an endless, unmappable, and indeed unrepresentable series of branching, splitting and star-bursting nodes and networks. Philip Mirowski has insisted correctly that Hayek saw the market as a “uniquely omnipotent information processor”—but even this metaphor is too concrete, conjuring up the image of an actual piece of hardware as it does—a supercomputer that one can look at. Hayek’s metaphors are more evanescent. The example he uses are the reconfiguration of neurons in the brain or a system of leaky tubes set into a pliable material so that pressure from the tubes creates new channels and rivulets in a constantly shifting and undulating arrangement. — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 171

Categorization

  • XREF: Contrasts sharply with the hydraulic/Keynesian machine metaphor — connects to the reader’s other work on how economic models are visually imagined (MONIAC vs neural nets). — connects to: 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; Hayek held that dispersed market knowledge trumps even the wisest individual’s knowledge — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 225; Hayek’s market argument rests on an epistemology of dispersed tacit knowledge — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 72 (+11 more)
  • DEFINE: Defines Hayek’s ‘division of knowledge’ and his preferred market metaphors against the more literal ‘information processor’ reading.
  • corroborated: 2 independent passages support this claim — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 171

Broader Connections

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