The dilemma of a socialized system is that the information flow overwhelms a centralized system if it is open to new ideas and data, that closing the system and forcing the plan to work forecloses alternatives and risks unhedged mistakes, and that decentralizing without real markets poses the problems discussed by Hayek. These information problems permeate virtually all economic processes.
--
Richard Nelson and Sidney Winter, in An Evolutionary Theory of Economic Change (1982), p. 365Friedrich Hayek
» Friedrich Hayek - all quotes »
One of the most original and most important ideas advanced by Hayek is the role of the "division of knowledge" in economic society … [But if] I had to single out the area in which Hayek's contributions were the most fundamental and pathbreaking, I would cast my vote for the theory of capital. As I said before, when I reviewed Hayek's book on The Pure Theory of Capital, it is "my sincere conviction that this work contains some of the most penetrating thoughts on the subject that have ever been published." If two achievements may be named, I would add Hayek's contributions to the the theory of economic planning. Most of what has been written on systems analysis, computerized data processing, simulation of market processes, and other techniques of decision-making without the aid of competitive markets, appears shallow and superficial in the light of Hayek's analysis of the 'division of knowledge', its dispersion among masses of people. Information in the minds of millions of people is not available to any central body or any group of decision-makers who have to determine prices, employment, production, and investment but do not have the signals provided by a competitive market mechanism. Most plans for economic reform in the socialist countries seem to be coming closer to the realization that increasing decentralization of decision-making is needed to solve the problems of rational economic planning.
Friedrich Hayek
As I have already hinted, one of the directions of work which the realm of ideas of the Macy meetings has suggested concerns the importance of the notion and the technique of communication in the social system. It is certainly true that the social system is an organization like the individual, that it is bound together by a system of communication, and that it has a dynamics in which circular processes of a feedback nature play an important part. This is true, both in the general fields of anthropology and sociology and in the more specific field of economics; and the very important work, which we have already mentioned, of von Neumann and Morgenstern on the theory of games enters into this range of ideas. On this basis, Drs. Gregory Bateson and Margaret Mead have urged me, in view of the intensely pressing nature of the sociological and economic problems of the present age of confusion, to devote a large part of my energies to the discussion of this side of cybernetics.
Norbert Wiener
What is a system? A system is a network of interdependent components that work together to try to accomplish the aim of the system. A system must have an aim. Without an aim, there is no system. The aim of the system must be clear to everyone in the system. The aim must include plans for the future. The aim is a value judgment. (We are of course talking here about a man-made system.)
W. Edwards Deming
Evolution embodies information in every part of every organism. ... This information doesn't have to be copied into the brain at all. It doesn't have to be "represented" in "data structures" in the nervous system. It can be exploited by the nervous system, however, which is designed to rely on, or exploit, the information in the hormonal systems just as it is designed to rely on, or exploit, the information embodied in your limbs and eyes. So there is wisdom, particularly about preferences, embodied in the rest of the body. By using the old bodily systems as a sort of sounding board, or reactive audience, or critic, the central nervous system can be guided - sometimes nudged, sometimes slammed - into wise policies. Put it to the vote of the body, in effect. ...
Daniel C. Dennett
We still think and talk of the basic problems of an industrial society as problems that can be solved by changing the system, that is the superstructure of political organization. Yet the real problems lie within the [industrial] enterprise. ...our representative institution... a mirror in which we look when we want to see ourselves.
Peter F. Drucker
Hayek, Friedrich
Hayek, Salma
A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
P
Q
R
S
T
U
V
W
X
Y
Z