This node refers to the essay 'The Use of Knowledge in Society,' authored by Friedrich Hayek and published in 1945.

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In his 1945 essay, 'The Use of Knowledge in Society,' Friedrich Hayek established a comparison between central planning and market competition based on their ability to use information effectively. He proposed that a system's efficiency hinges on its capacity to leverage knowledge that is spread across many different people, rather than being concentrated in one place. According to Hayek, the fundamental choice is between two methods: either gathering all dispersed knowledge for a central authority to command, or providing individuals with the necessary information to coordinate their economic activities with one another.

Hayek on Central Planning vs. Markets: The Knowledge Problem

To cite the ebook, use The CORE Econ Team 2023 The Economy 2.0: Microeconomics Open access e-text https://core-econ.org/the-economy/.

To cite a unit, use The CORE Econ Team 2023 The Economy 2.0: Microeconomics Open access e-text https://core-econ.org/the-economy/ Unit [unit number] (url).

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