Quotation of the Day…

by Don Boudreaux on May 8, 2016

in Complexity & Emergence, Economics, Hayek, Hubris and humility

… is from page 225 of the 2014 collection, The Market and Other Orders (Bruce Caldwell, ed.), of some of F.A. Hayek’s essays on spontaneous-ordering forces; specifically, this quotation is from an essay of Hayek’s that, although it is relatively unknown, has long been among my favorites – namely, his June 1962 lecture, “The Economy, Science and Politics” (available on-line here):

One of the chief results of the theory of the market economy is thus that in certain conditions … competition produces an adaptation to countless circumstances which in their totality are not known and cannot be known to any person or authority, and that therefore this adaptation cannot be brought about by a central direction of all economic activity.  This means in the first instance that, contrary to a widely held opinion, economic theory has much of importance to say about the effectiveness of different kinds of economic systems … [and] has comparatively little to say on the concrete effects of particular measures in given circumstances.  We know the general character of the self-regulating forces of the economy and the general conditions in which these forces will function or not function, but we do not know all the particular circumstances to which they bring about an adaptation.

Today is the 117th anniversary of Hayek’s birth.


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