Hayekian Triad

The Hayekian Triad is a concept by economist Friedrich Hayek that describes how three key factors—knowledge, prices, and competition—interact in a free market. It suggests that individual knowledge and local information guide decision-making, prices serve as signals summarizing this knowledge, and competition ensures efficient allocation of resources. Together, they create a self-organizing system where markets adapt organically, allowing resources to flow towards their most valued uses without central planning. This triad underscores the importance of spontaneous order and decentralized decision-making in maintaining an effective and responsive economy.