I read the first few paragraphs and will set it aside for later, but it has always been fascinating to me how writing styles and English language usage varies over the years. I could immediately tell this was an “older” publication based on phrasing and word order, but it still flows nicely and conveys information elegantly (which we somewhat lack in modern writing). Go back 100 years and it’s even more pronounced but still very similar to modern English,
200 years and it’s still quite familiar, but 300 years you’re getting dangerously close to King James/Shakespeare, 400 years it’s almost a different language, etc. I sometimes like to back as far as I can until something becomes completely unintelligible.
The Use of Knowledge in Society (1945) [pdf]
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Re: The Use of Knowledge in Society (1945) [pdf]
#32I read the first few paragraphs and will set it aside for later, but it has always been fascinating to me how writing styles and English language usage varies over the years. I could immediately tell this was an “older” publication based on phrasing and word order, but it still flows nicely and conveys information elegantly (which we somewhat lack in modern writing). Go back 100 years and it’s even more pronounced bu…
Hayek wasn't a native English speaker so that could have something to do with the style.
Re: The Use of Knowledge in Society (1945) [pdf]
#33That''s a very classic view, from an era when market-based systems vs. central planning were a big issue. They missed so much. - Just because there are restoring forces doesn't mean stability is reached. This is basic control theory, but it escaped economists for a long time. There's always nonzero lag. Often there's a lot of lag. This can move things out of the stable region. - There's an assumption here that a mark…
>computing has made it possible to scale companies to planetary scale without organizational collapse I wonder. Say we had various factories for producing goods around the world, and different factories requested the same inputs in different amounts. An algorithm could probably calculate how much of each input it should distribute to those factories. However, the structure of this economy still relies on the commodit…
> Say we had various factories for producing goods around the world, and different factories requested the same inputs in different amounts. An algorithm could probably calculate how much of each input it should distribute to those factories.
That's a manufacturing planning system. Each product has a bill of materials, and all those parts have to be present before the product is assembled. Factories which make many similar products either have to have very good systems to get all the parts in the right place at the right time, or carry excessive inventories. It's not a market-based system. The main goal is minimizing stalls, where production stops due to lack of a part. The cost of stalls usually dominates the cost of the parts, because revenue is zero until the product is complete.
Re: The Use of Knowledge in Society (1945) [pdf]
#34Earlier quoted context omitted.
It’s not remotely true that prices are capable of transmitting all the information required to reproduce society. This is for the simple reason that prices more or less only communicate information about the amount of labor required to produce a thing[0]. Therefore prices on their own are, for example, incapable of transmitting information about what action needs to be taken to correct the relationship to the biosphe…
Is this an intuitive conclusion you’ve arrived at or do you have a source for it? It seems it can trivially be shown to be false under a number of circumstances: supply and demand, secondary markets, etc.
It's a bit strange you didn't mention externalities in your list. How are they factored into price?
Re: The Use of Knowledge in Society (1945) [pdf]
#35Earlier quoted context omitted.
>computing has made it possible to scale companies to planetary scale without organizational collapse I wonder. Say we had various factories for producing goods around the world, and different factories requested the same inputs in different amounts. An algorithm could probably calculate how much of each input it should distribute to those factories. However, the structure of this economy still relies on the commodit…
> Say we had various factories for producing goods around the world, and different factories requested the same inputs in different amounts. An algorithm could probably calculate how much of each input it should distribute to those factories. That's a manufacturing planning system. Each product has a bill of materials, and all those parts have to be present before the product is assembled. Factories which make many s…
Yes but the standardization of inputs and the optimization of revenue present us with a market rather than a more free form of creative development. The kind of production that such standardization allows is extremely limited formally.