Hayek's Critique

Hayek’s critique focuses on the idea that centralized planning of an economy—like a government trying to control everything—can't efficiently gather or process all the information needed to make good decisions. He argues that knowledge is dispersed among many individuals, and prices in free markets serve as signals that help coordinate actions. When the government controls the economy, it lacks this detailed, real-time information, leading to inefficiencies and mistakes. Thus, Hayek supports limited government intervention, believing free markets better utilize individual knowledge to promote prosperity.