Question

According to Hayek’s article “The Use of Knowledge in Society,” Why does he use the word "marvel" when he describes the price mechanism?

Answer 1

Friedrich Hayek strongly believed and proposed the decentralized economic planning and pricing mechanism. According to his belief, it is the decentralized pricing mechanism that causes the rise in the price of those goods or resources that are scarce and people start consuming that scarce resource in sparingly manner. It is the marvel of pricing mechanism that without passing an order to reduce the consumption, without telling anybody to reduce its usage or without spreading lot of knowledge about the cause of resources in scarce, it is the pricing mechanism that increases the price on the basis of demand and supply and scarce resources are used in an efficient manner. It makes people give huge value to that specific scarce resources. It is the marvel aspect of the pricing mechanism, as quoted by Hayek in the article.

More precisely, it is the ability of the pricing mechanism to give more value and use efficiently of the scarce resources by people, makes the pricing mechanism to be a marvel thing.