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Bonus Quotation of the Day…

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… is from pages 385-386 of the 2014 collection, The Market and Other Orders [2] (Bruce Caldwell, ed.), of some of F.A. Hayek’s essays on spontaneous-ordering forces; specifically, it’s from Hayek’s previously unpublished 1961 lecture at the University of Virginia “The Object of Economic Theory” (which is the first of four lectures that Hayek delivered in UVA’s Newcomb Hall during the Spring 1961 semester; the title of this lecture series by Hayek is “A New Look at Economic Theory”):

[T]he aim of economic theory must remain a comparatively modest one, not because of any immaturity of our discipline but because of the nature of its object.  Since the particular actions of individuals which make up the economic system are largely unpredictable, we cannot achieve that natural science ideal of the ‘prediction and control’ of particular events.  It seems to me to be of the greatest importance that we fully recognize and come to terms with this limitation of our knowledge, because the pretence [sic] to more knowledge than we possess or can obtain has certain dangerous consequences.  It creates a great temptation to create conditions under which we would be able to predict specific economic events and to assure that particular things will happen.  But this is incompatible with the main benefit we derive from the market system, namely that it makes use of more knowledge of circumstances than any single mind can possess; but so long as it does this it must also necessarily produce results which nobody can predict….

The danger of the pretence of the possession of more knowledge than we in fact possess is that this will tempt us into a suppression of those spontaneous ordering forces on which we depend and which we cannot replace by deliberate control so long as we are not able to master all the factual knowledge of all the men who take part in the free process.

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