Via Twitter via Evonomics: ‘Hayek Meets Information Theory. And Fails.‘
So, replacing prices in a marketplace with AI deep learning models is apparently the way to go (reducing your knowledge, experience, and behavior to input nodes channeled through possible optimization distribution paths).
Let’s ignore the bureaucratic/political incentives for a moment…for man is a political animal.
‘The understanding of prices and supply and demand provided by information theory and machine learning algorithms is better equipped to explain markets than arguments reducing complex distributions of possibilities to a single dimension, and hence, necessarily, requiring assumptions like rational agents and perfect foresight’
From the comments, a response:
‘His [Hayek’s] crucial point is that market prices perform a co-ordination function, allowing people to act AS IF they had the relevant knowledge.’
Also, epistemologically speaking, from the comments:
Indeed it is a central tenant of Austrian school economics (of which he was not quite a founding member, but is perhaps its most thoughtful member) that the efficient market hypothesis is false, that markets are never actually in equilibrium, that people are not perfectly rational agents, and that they most definitely do not have (and cannot have) perfect foresight.’
On that note, Mark Pennington’s Robust Political Economy: Classical Liberalism and the Future of Public Policy comes recommended.
Duke professor Bruce Caldwell talks about his then new book on Hayek, an intellectual biography.