“There mere idea that the planning authority could ever possess a complete inventory of the amounts and qualities of all the different materials and instruments of production of which the manager of a particular plant will know or be able to find out makes the whole proposal a somewhat comic fiction. Once this is recognised it becomes obvious that what prices ought to be can never be determined without relying on competitive markets.”

—  Friedrich Hayek

1980s and later, "Two Pages of Fiction" (1982)

Adopted from Wikiquote. Last update June 3, 2021. History

Help us to complete the source, original and additional information

Do you have more details about the quote "There mere idea that the planning authority could ever possess a complete inventory of the amounts and qualities of all…" by Friedrich Hayek?
Friedrich Hayek photo
Friedrich Hayek79
Austrian and British economist and Nobel Prize for Economic… 1899–1992

Related quotes

Friedrich Hayek photo

“What the planning authority would have to know would not be the mere totals but the distinct, peculiar conditions prevailing in each enterprise which affect the information about values transmitted through market prices but would be completely lost in any statistical information about quantities that might reach the authority from time to time.”

Friedrich Hayek (1899–1992) Austrian and British economist and Nobel Prize for Economics laureate

1980s and later, "Two Pages of Fiction" (1982)

Friedrich Hayek photo

“My whole concept of economics is based on the idea that we have to explain how prices operate as signals, telling people what they ought to do in particular circumstances. The approach to this problem has been blocked by a cost or labor theory of value, which assumes that prices are determined by the technical conditions of production only. The important question is to explain how the interaction of a great number of people, each possessing only limited knowledge, will bring about an order that could only be achieved by deliberate direction taken by somebody who has the combined knowledge of all these individuals. However, central planning cannot take direct account of particular circumstances of time and place. Additionally, every individual has important bits of information which cannot possibly be conveyed to a central authority in statistical form. In a system in which the knowledge of relevant data is dispersed among millions of agents, prices can act to coordinate the separate actions of different individuals.
Given this context, it is intellectually not satisfactory to attempt to establish causal relations between aggregates or averages in the manner in which the discipline of macroeconomics has attempted to do. Individuals do not make decisions on the basis of partial knowledge of magnitudes such as the total amount of production, or the total quantity of money. Aggregative theorizing leads nowhere.”

Friedrich Hayek (1899–1992) Austrian and British economist and Nobel Prize for Economics laureate

1960s–1970s, A Conversation with Professor Friedrich A. Hayek (1979)

Philip Kotler photo

“Authentic marketing is not the art of selling what you make but knowing what to make! It is the art of identifying and understanding customer needs and creating solutions that deliver satisfaction to the customers, profits to the producers, and benefits for the stakeholders. Market innovation is gained by creating customer satisfaction through product innovation, product quality, and customer service. It these are absent, no amount of advertising, sales promotion, or salesmanship can compensate.”

Philip Kotler (1931) American marketing author, consultant and professor

As cited in: Jay Conrad Levinson (1999), Mastering Guerrilla Marketing. p. 218
Marketing Management: Analysis, Planning, Implementation and Control, 1967

“The marketing director in each department reported directly to the department head and controlled market research and sales. More important, the marketing manager was also responsible for new product development, requesting production schedules, and controlling finished goods inventory.”

Neil Fligstein (1951) American sociologist

Source: The transformation of corporate control, 1993, p. 234

Friedrich Engels photo

“Since the management of industry by individuals necessarily implies private property, and since competition is in reality merely the manner and form in which the control of industry by private property owners expresses itself, it follows that private property cannot be separated from competition and the individual management of industry. Private property must, therefore, be abolished and in its place must come the common utilization of all instruments of production and the distribution of all products according to common agreement – in a word, what is called the communal ownership of goods.”

Friedrich Engels book Principles of Communism

Principles of Communism (1847)

Dana Gioia photo

“Once an author finishes a poem, he becomes merely another reader. I may remember what I intended to put into a text, but what matters is what a reader actually finds there — which is usually something both more and less than the poet planned.”

Dana Gioia (1950) American writer

"Paradigms Lost," interview with Gloria Brame, ELF: Eclectic Literary Forum (Spring 1995)
Interviews

Oskar R. Lange photo

“Mathematical programming assisted by electronic computers becomes the fundamental instrument of long-term economic planning, as well as of solving dynamic economic problems of a more limited scope. Here, the electronic computer does not replace the market. It fulfils a function which the market never was able to perform.”

Oskar R. Lange (1904–1965) Polish economist

"The computer and the market" (1967)

W. Edwards Deming photo

“The aim of this book is to try to explain to top management of America that their job is to improve competitive position. One need not be an economist to understand from the papers that many American products are not competitive at home or abroad, lost to foreign invasion, causing unemployment at home. Failure of management to plan for the future and to foresee problems has nurtured waste of manpower, of materials and of machine time, all of which raise the manufacturers costs and the price the purchaser must pay. The consumer is not always willing to subsidize this waste.”

W. Edwards Deming (1900–1993) American professor, author, and consultant

Source: Quality, Productivity and Competitive Position, (1982), p. i; Preface

Tjalling Koopmans photo

“One can in particular interpret the proposition as a statement conditions under which the simplicity of incentive structure and the economies of information handling characteristic of a competitive market organization can be secured without loss of efficiency of allocation… The price system carries to each producer, resource holder, or consumer a summary of information about the production possibilities, resource availabilities and preferences of all other decision makers. Under the conditions postulated, this summary is all that is needed to keep all decision makers reconciled with a Pareto optimal state once it has been established.”

Tjalling Koopmans (1910–1985) Dutch American economist

Source: Three Essays (1957), p. 53, as cited in: Harold Kincaid, ‎Don Ross (2009) The Oxford Handbook of Philosophy of Economics. p. 128

N. Gregory Mankiw photo

“A market is a group of buyers and sellers of a particular good or service. The buyers as a group determine the demand for the product, and the sellers as a group determine the supply of the product. Markets take many forms. Some markets are highly organized, such as the markets for many agricultural commodities. In these markets, buyers and sellers meet at a specific time and place, where an auctioneer helps set prices and arrange sales. More often, markets are less organized.”

N. Gregory Mankiw (1958) American economist

Source: Principles of Economics (1998-), Ch. 4. The Market Forces of Supply and Demand; p. 66

Related topics