I Misunderstood Hayek

It isn't only that information is distributed across markets, it is generated by markets too

When I first discovered Friedrich A. Hayek’s work on information and markets, it struck me as brilliant. The simple observation that practical information is often widely distributed across societies and markets struck me as not only brilliant, but something underappreciated in philosophy. When we consider the specialized information and expertise is takes to make a peanut butter and jelly sandwich, not merely by assembling a few premade ingredients from the supermarket, but making the sandwich from scratch. Each individual simply lacks the information and expertise do make a peanut butter and jelly sandwich from scratch. As I wrote in a past Substack post,

There are many ingredients to a peanut butter and jelly sandwich, not to mention the components needed to process, pack, and ship those ingredients. Start with the bread: to make the bread one would need to know things like how to domesticate wheat, how to produce farm equipment to grow and harvest the wheat, how to produce fertiliz…