Review of "The Use of Knowledge in Society" by Friedrich von Hayek

This video is a review of "The Use of Knowledge in Society" by Friedrich August von Hayek. "The Use of Knowledge in Society" is an article and economic paper first published in the September 1945 issue of The American Economic Review. The article was written as a rebuttal to economist Oskar Lange who endorsed a planned economy.

"The Use of Knowledge in Society" opposes central planning in the economy and advocates for the decentralization of decision making. Information regarding the economy, such as the desires and demands of consumers and the resources of the economy, can not be given to any one individual or entity, but is dispersed throughout the population. Even if central planners had this information, which would be impossible, they would not be able to maintain it because consumer demands and desires and economic resources change constantly. That is why economic calculus and decision making must be decentralized through the free market so that individuals and businesses can make economic decisions with the localized knowledge they have. Only individual consumers really know what they demand and desire, and only individual businesses really know what resources they have available, so their right to make their own economic decisions is a necessity for proper economic calculus in the economy, and is much more efficient and effective than having a central entity making economic decisions.

"The Use of Knowledge in Society" is a jewel in the works of the Austrian School of Economics. Austrian economists and Austrian economics advocate for free enterprise and the right of individuals and businesses to make their own economic decisions without the interference of the government. Unlike most scholarly papers, this article is widely read by the public and has influenced many people. For example, Jimmy Wales, the co-founder of Wikipedia cited this article as a major influence in "how to manage the Wikipedia project". Since information is decentralized and dispersed throughout the population, it is better to empower people all over the world to contribute to Wikipedia and write articles rather than have a central team with limited knowledge write every article on Wikipedia.

In this video, I will review this article with you and share some important quotes. In addition, I will discuss the relevance of this article on both the macro and micro level, going over its implications on the world and also for yourself in how you manage organizations. Successful military organizations, for example, have implemented mission-type tactics to allow for the decentralization of decision making to take advantage of the decentralization of knowledge on the battlefield. Officers are empowered to make their own decisions and to take initiative based on the localized info ... https://www.youtube.com/watch?v=qeyog62Wj8k