Evolved order

The price system has not, of course, arisen as the product of human design, and moreover ``the people guided by it usually do not know why they are made to do what they do'' (<#74#>ibid<#74#>.). This observation leads Hayek to a very characteristic statement of his general case against central planning.

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[T]hose who clamour for ``conscious direction''---and who cannot believe that anything which has evolved without design (and even without our understanding it) should solve problems which we should not be able to solve consciously---should remember this: The problem is precisely how to extend the span of our utilization of resources beyond the span of the control of any one mind; and, therefore, how to provide inducements which will make individuals do the desirable things without anyone having to tell them what to do. (Hayek, 1945, p. 527)
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Hayek generalises this point by reference to other ``truly social phenomena'' such as language (also an undesigned system). Against the idea that consciously designed systems have some sort of inherent superiority over those that have merely evolved, he cites A. N. Whitehead to the effect that the progress of civilisation is measured by the extension of ``the number of important operations which we can perform without thinking about them'' (Hayek, 1945, p. 528). He continues:

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The price system is just one of those formations which man has learned to use#tex2html_wrap_inline101# after he had stumbled upon it without understanding it. Through it not only a division of labor but also a coordinated utilization of resources based on an equally divided knowledge has become possible#tex2html_wrap_inline103# [N]obody has yet succeeded in designing an alternative system in which certain features of the existing one can be preserved which are dear even to those who most violently assail it such as particularly the extent to which the individual can choose his pursuits and consequently freely use his own knowledge and skill. (<#78#>ibid<#78#>.)
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The outline of Hayek's argument is now, we trust, clearly in view. We are ready to proceed to our criticisms, which are structured as follows. We first challenge the subjectivist philosophy that underpins Hayek's conception of information. We then offer an alternative perspective on the nature of the problem faced by a planned economic system, and we dispute Hayek's claims regarding the benefits of decentralisation. This then leads into a critique of the idea that the market constitutes an efficient telecommunications system. Our critique is developed by means of a formal model of the information exchanges required under market and plan. The penultimate section of the paper deals with the idea that change is all important; and the concluding section takes up the issue of the market as a `spontaneously evolved' system. #./thesis.tex#