Fukuyama obviously confuses Schumpeter with Oskar Lange On Fri, May 13, 2011 at 8:20 AM, Jim Devine <[email protected]> wrote:
> at > http://www.nytimes.com/2011/05/08/books/review/f-a-hayek-big-government-skeptic.html > , > Francis Fukuyama writes: > >Hayek’s skepticism about the effects of “big government” are rooted in an > epistemological observation summarized in a 1945 article called “The Uses of > Knowledge in Society.” There he argued that most of the knowledge in a > modern economy was local in nature, and hence unavailable to central > planners. The brilliance of a market economy was that it allocated resources > through the decentralized decisions of a myriad of buyers and sellers who > interacted on the basis of their own particular knowledge. The market was a > form of “spontaneous order,” which was far superior to planned societies > based on the hubris of Cartesian rationalism. He and his fellow Austrian > Ludwig von Mises used this argument against Joseph Schumpeter in a famous > debate in the 1930s and ’40s over whether socialism or capitalism offered a > more efficient economic system. In hindsight, Hayek clearly emerged the > winner. < > > does anyone know anything about this "famous debate"? > > BTW, Hayek's theory is clearly wrong if it says that "most of the > knowledge in a modern economy was local in nature." Individuals -- > including individual firms -- clearly know much more about the > benefits and costs that affect them as individuals alone than do > "central planners." But they have limited knowledge of externalities > (how their actions impose costs on other people, etc.) and hardly any > knowledge at all about macro-level effects of their actions (as with > global warming or macroeconomic demand failure). Even if they do know > these things, the individualized incentives (profit-grubbing) of a > capitalist economy encourage them to externalize as many of their > individual costs as possible (dumping them on others) and internalize > as many external benefits as possible. > > BTW2, can someone explain how there can be a "spontaneous order" in a > market without the state using coercion to enforce (some) property > rights? > -- > Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own > way and let people talk.) -- Karl, paraphrasing Dante. > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l > -- Sandwichman
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