The dichotomy that Hayek operates between the natural sciences and
the social domain also leaves its imprint on his categorisation of
forms of knowledge. In his view, there are but two such forms: knowledge
of general scientific laws, and (subjective) knowledge of `particular
circumstances of time and place'. But this leaves out of account a
whole layer of knowledge that is crucial for economics, namely knowledge
of specific technologies. Such knowledge is not reducible to general scientific
law (it is generally a non-trivial problem to move from a relevant
scientific theory to a workable industrial innovation), but neither
is it so time- or place-specific that it is non-communicable. The
licensing and transfer of technologies in a capitalist context shows
this quite clearly. A central registry of available technologies would
form as essential component of an efficient planning system.
How would such information be assembled? Again, Hayek's notion of
knowledge existing solely `in the mind' is an obstacle to understanding.
It is increasingly common---indeed, it is by now all but universal practice---
Further, even the sort of `particular' knowledge which Hayek thought too
localised to be susceptible to centralisation is now routinely
centralised. Take his example of the information possessed by shippers.
In the 1970s American Airlines achieved the position of the world's
largest airline, to a great extent on the strength of their
development of the SABRE system of computerised booking of flights
(Gibbs, 1994). Since then we have come to take it for granted that
our local travel agent will be able to tap into a computer network
to determine where and when there are flights available from just about
any A to any B across the world. Hayek's appeal to localised knowledge
in this sort of context may have been appropriate at the time of writing,
but it is now clearly outdated.
We would not dispute, however, that some localised knowledge,
important for the fine-grained efficiency of the system, may be too
specific for any meaningful centralisation. Our objection here is that
Hayek seems to overlook the possibility that this sort of
knowledge may simply be <#275#>used<#275#> locally, without prejudice to the operation of
a central plan. The question here concerns the degree of
recursiveness of planning, that is, the extent to which plans can be
formulated in general terms by the higher planning authorities, to be
specified in progressively fuller detail by successively lower or more
local instances. Nove (1977, 1983) has argued persuasively that
as regards the composition of output, the degree of recursiveness of
planning is rather small. If a central authority sets output targets in
aggregated terms, and leaves it to lower instances to specify the
details, the result is bound to be incoherent. In the absence of the sort
of horizontal links between enterprises characteristic of the market
system, the enterprises simply cannot know what specific sort of
output will be needed, unless they are told this by the planning authority.
This may be granted.4 But low recursiveness with respect to
decisions on the composition of output does not imply that all
decisions relating to production have to be taken centrally. Consider
the knowledge, at the level of the enterprise, of which particular
workers are best at which tasks, who is the fastest worker and who
the most reliable and so on (and similarly for the particular machines
operated within the enterprise). Why shouldn't such knowledge just
be used locally in drawing up the enterprise's own detailed schedules
for meeting an output plan given from the `centre'? Isn't this precisely
what happens at plant level in the context of planning by a large
(multiplant) capitalist enterprise?