Question

Define and discuss the most interesting or persuasive arguments found in the Hayek (1945) article “The Use of Knowledge in Society”.

Answer 1

central planner can not have access to all the knowledege that is available to all the people for whom he is taking a central planned action. there are a lot of knowledge abailable at the spot. at the spot means the person who is actually facing the situation, he is aware about the problem better and in most probability knows the solution better than suggested by the central planner. in this sense he (Hayek)has also made a distinction between knowledge. knowledge is not only lomited to science or maths. the domain of knowledge is huge. a person in a street earns his living from the knowledge of his locality. he is not a scholar of science or for that matter any knowledge that has been formally developed. in this way we came to conclusion that all these formal knowledge can be transeffered from the central to the man on the spot so that man on the spot can take better decision but it is almost impossible to update centrnal planner about all the situation and all the knowledge that man on the spot can use. this according to me is the most persusavie argument in the favour of decentralisation and against any kind of central planning.