The use of knowledge in society
by Friedrich A. von Hayek · first published 1945
52% recommend48% neutral
Why HN recommends it
Short, non-technical 1945 essay on how prices pass along scattered local knowledge that no central planner can gather. Suits anyone asking why markets beat central planning, and it is readable in one sitting.
Summarised by Claude from recommending comments
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…http://jim.com/econ/, http://www.fee.org/pdf/books/Economics_in_one_lesson.pdf Basic Economics by Thomas Sowell Applied Economics by Thomas Sowell Free to Choose by Milton Friedman (video series, too) Use of Knowledge in Society by Hayek (short, non-technical paper which is full of brilliant insights): http://www.econlib.org/library/Essays/hykKnw1.html Not a book, but the Econtalk podcast is fantastic: http://www.econtalk.org/
on “Ask HN: Best book(s) to learn about the basics of economics?” ↗"The Use of Knowledge in Society" [0], Hayek's famous essay on the subject, is an enjoyable 12-page read. I first read it as an undergraduate economics major, and it remains one of my favorite economics papers for its clear and simple…
on “Why China’s Economy Will Be Hard to Fix” ↗Hayek's "The Use of Knowledge in Society" contains the most important and fundamental insight about markets. It's an essay worth a read every couple years.
on “Books to Understand Economics” ↗…anyone who is not at least a casual student of Economics to think a magic wand should be waved to make people prudent, kind, and just. If I could offer Scott one Economics paper, it would be Hayek's "The Use of Knowledge in Society", found online here: http://www.econlib.org/library/Essays/hykKnw1.html I think it would help him appreciate the complexity of the coordination problem that is addressed by decentralized means in the…
on “Scott Adams Blog: The End of Capitalism” ↗The Use of Knowledge in Society by Friedrich Hayek http://www.econlib.org/library/Essays/hykKnw1.html
on “Ask HN: Reccomend essays to a young, inquiring mind” ↗I'm also a big fan of Hayek's "The Use of Knowledge in Society" which explains how a capitalist system, rather than being "unplanned" as its critics often claim, actually uses decentralized planning that makes more efficient use of knowledge at all levels of society.…
on “Project Cybersyn: real-time computer control of a planned economy (1970-1973)” ↗…of market competition, and much reason to think that they can not. For a profound analysis of the underlying knowledge aggregation problem which dooms attempts to guide the economy, see Hayek's "The Use of Knowledge in Society" (http://www.econlib.org/library/Essays/hykKnw1.html).
on “Startup America -- Dead on Arrival” ↗…rarely, if ever, taken into proper account when formulating regulations. For a really good explanation of the differences and the problems caused, read Thomas Sowell's Knowledge and Decisions. Hayek's Use of Knowledge in Society also discusses this, as do other books and essays, but Sowell's is more readable and his examples are closer to contemporary (it was written in the late 1970s and published in 1981).
on “Your Brain Knows a Lot More Than You Realize ” ↗> What's wrong with centralized decision making and planning out everything for years? Read Hayek's "The Use of Knowledge in Society"; it's about exactly this.
on “The management myth (2006)” ↗A brief but profound paper: The Use of Knowledge in Society by Hayek (http://home.uchicago.edu/~vlima/courses/econ200/spring01/hay...). As others have said, the EconTalk podcast is excellent.
on “Ask HN: What are the must-read books about economics/finance?” ↗His essay "The Use of Knowledge in Society" is short and worthwhile. I think I got more out of John Gray's "Hayek on Liberty" than reading Hayek in the original. Look for it on libgen.
on “Friedrich Hayek and the Collective Brain” ↗…calculate otherwise. Logically, you can't calculate like the market does since the price system (or lack of system) is able to communicate vast amounts of information that socialism just can't. See The Use of Knowledge in Society by Friedrich Hayek. It's in part why he won the Nobel prize in economics. It's a short essay that's free online. > You seem to ignore the effects of embargos and arms races. It doesn't come close to…
on “Jacque Fresco has died” ↗The use of knowledge in society - Hayek https://www.econlib.org/library/Essays/hykKnw.html
on “Figgie: Simulate stock trading with a deck of cards” ↗…need a quick "how to read balance sheets/income statement/cash flow statements" I'd recommend "Warren Buffett Accounting Book" I think the best essay that describes what markets are good for is "The use of Knowledge in Society" by Hayek. At least it makes sense for me that they serve the function of aggregating local and specialized information. If you're interested, it's also a decent idea to research the different theories…
on “Ask HN: Book recommendations for understanding financial systems?” ↗Your problem is plainly answered by Hayek in The Use of Knowledge in Society
on “The story BCG offered me $16,000 not to tell (2010)” ↗