5 Matching Annotations
  1. Dec 2023
    1. Instead, he lauds the figure of themarket as a knowing entity, envisioning it as a kind of processor of socialinformation that, through the mechanism of price, continuously calcu-lates and communicates current economic conditions to individuals inthe market.

      Is it possible that in this paper we'll see the beginning of a shift from Adam Smith's "invisible hand" (of Divine Providence, or God) to a somewhat more scientifically based mechanism based on information theory?

      Could communication described here be similar to that of a fungal colony seeking out food across gradients? It's based in statistical mechanics of exploring a space, but looks like divine providence or even magic to those lacking the mechanism?

    2. This idealized vision would go on to rebrand economics asa form of information studies, eventually garnering Hayek a Nobel Prizein Economics in 1974.

      Note that Hayek writes this in 1945, 11 years before Shannon would write "The Bandwagon" (IEEE, 1956).

      It's also written at a time when economics as a field was still trying to legitimize itself, along with other humanities, as a "scientific" field.



      Hayek, Friedrich A. “The Use of Knowledge in Society.” In Information: A Reader, edited by Eric Hayot, Lea Pao, and Anatoly Detwyler. 1945. Reprint, New York: Columbia University Press, 2021. https://doi.org/10.7312/hayo18620.

      This paper was selected as one of the top 20 articles published in The American Economic Review during its first 100 years. In this paper Hayek poses the fundamental question of the nature of the economic system. He is especially concerned in its role in dealing with resource allocation when knowledge is distributed in small bits among a large population. —Fermats Library editors (email) https://fermatslibrary.com/s/the-use-of-knowledge-in-society