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… is from pages 106-107 of Eamonn Butler’s 2012 book, Friedrich Hayek: The Ideas and Influence of the Libertarian Economist [2]:
His [Hayek’s] point is more subtle: that the market system, paradoxically, makes use of far more information than anyone involved in it – or any agency – can actually grasp. That information is collected, processed, summarized and delivered to everyone who needs it through the price system, which is an information and processing network that spreads out into the entire market system and updates itself moment by moment. No agency, even one with many local offices, could ever collect and process so much information….
The key information that drives the market order is not information that is physical, public and organised, like the information that exists in ledgers and libraries. It is the inherently personal information of what people value; and it is producers’ understanding of those values, their skill at reading changing market events, their knowledge of their own customers and their experience of how a particular market works.