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Hayek's interpretation of prices as an impersonal signaling mechanism immediately caught my interest. His system theoretic approach engages with the market framework like how an engineer might analyze the mechanisms behind a complex apparatus. Essentially it's an attempt to understand the schematics and the scientific structural properties of the market system, uniquely Hayekian.
Toggle Commented Aug 12, 2015 on Prices -- what do they do? at Coordination Problem
Insightful! The fact that scientific critique has to be immanent and not exogenous seems like an implication of Hayek's theory of mind. To communicate ideas clearly there has to be some shared aspects within the employed mental framework, otherwise the structural validity of the new theories may not be accurately perceived. In that sense any evolutionary leap in terms of scientific inquiry has to integrate new improvements with relevant strands from the past. Individuals working on completely divergent paradigms cannot simply find a common ground. Also contention as a driving force is another Hayekian attribute. Competition as a discovery process is a theoretical insight valid at every structural levels of our order. Which includes mind, rules of conduct & capital structures.
Hi David Friedman, Thank you for the recommendation, yes I do agree that the final work by Ronald Coase draws on Hayek's theoretical view. How Ning Wang and Coase interpreted the Chinese transition of from Socialism to Capitalism with Socialist "qualities" was evolutionary in the Hayekian sense. On a totally different note, I do respect your anarcho world view. Seems like all we need are institutions and rules to coordinate our individual expectations. In that sense society is necessary but govt seems optional.
Toggle Commented May 15, 2015 on Hating libertarians at Stumbling and Mumbling
"If libertarians' critics overstate this, they themselves understate it." Yes, but a Hayekian libertarian would know that the outcome of an order depends on the nature of rules. Certain rules of conduct can as well lead to disorder. Hence a constructivist libertarian suffers from the same rationalist conceit as a command-order style Socialist. Both are ignoring the essential knowledge problem associated with human conduct. If you take Hayek seriously then at least one of the requirements for better social outcomes would be to allow the best practices to emerge. Essentially it's a constant discovery process enabled by a relatively open-ended institutional framework. Eventually with some certainty of conduct dictated by shared values and property rights we can have an effective selection mechanism to discover best practices which will benefit everyone.
Toggle Commented May 15, 2015 on Hating libertarians at Stumbling and Mumbling
Very coherently expressed, thanks. Indeed at the individual level it's about how can we creatively combine our existing ideas to act in manners which adds value. At the societal level it seems to be about discovering the scientific nature of institutions which will allow the best practices to evolve from a multitude of human actions. F.A.Hayek explained how emergence of various phenomenons can be eventually attributed to properties already immanent in the system, otherwise the idea of evolution itself is falsified. "The theory as such, as is true of all theories, describes merely a range of possibilities. In doing this it excludes other conceivable courses of events and thus can be falsified. Its empirical content consists in what it forbids. If a sequence of events should be observed which cannot be fitted into its pattern, such as, e.g., that horses suddenly should begin to give birth to young with wings, or that the cutting off of a hind-paw in successive generations of dogs should result in dogs being born without that hind-paw, we should regard the theory as refuted." Actually we can also interpret electrical/computer science engineering in the same light. It's mostly about organizing already existing abstract logical blocks in various ways, but based on some scientific principles and for catering to some economic ends.
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May 5, 2015