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From the Archives #2

13 February 2012

After a pretty hectic couple of weeks I’ve been focusing on sources available a little closer to home. In particular, I’ve been looking at F.A. Hayek and his pre-Road to Serfdom publications. For the uninitiated, these can be pretty daunting. But they offer a fascinating insight into mid-twentieth century political thought. One item in particular is worth looking at in a little more detail.

In 1936 Hayek spoke to the London Economic Society on the theme of ‘Economics and Knowledge’. This was later published in a journal called Economica (1937) published by the LSE and was republished in a collection of essays called Individualism and Economic Order (1948). It’s a talk that continues to cause interest and debate (just try putting it into google…). But what was it all about?

In short, ‘Economics and Knowledge’ questioned whether it was possible to ever fully understand the working an economic system that was made up of numerous individual actions. Hayek conceded that it was possible to measure many of these actions and that they sometimes coincided. However, he also put forward the idea that any attempt to explain the workings of the economy would be inherently bound by the questions being asked and the exisiting knowledge of those who were asking them.

Any attempt to ‘plan’ the economy would, in this sense, fail to represent the interests of all those involved as it would be prejudiced by the interest of the person who was attempting to define a common aim. In his words, ‘the relevant knowledge that he must possess … is the knowledge that he is bound to acquire in view of the position in which he initially is and the plans which he makes’ (p.51).

For a breif overview at why I think this is important beyond 1930s economics check out http://perspectivesonafrica.wordpress.com/2011/08/22/africa-and-empire-workshop-peking-university-part-2/

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