Anyone who says or writes about social media and claims that today’s digital age is NOT about or related to Hayek’s Knowledge theory is dead wrong. They are either misrepresenting Hayek or have not read Hayek but has the chutzpah to make unfounded derogatory remarks.
The information age (third wave) is very much about the growing realization of Hayek’s Knowledge theory.
Proof?
Friedrich von Hayek wrote, (bold emphasis mine)
The peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess. The economic problem of society is thus not merely a problem of how to allocate "given" resources—if "given" is taken to mean given to a single mind which deliberately solves the problem set by these "data." It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know. Or, to put it briefly, it is a problem of the utilization of knowledge which is not given to anyone in its totality.
Well here is how technology enabled information gathering has been benefiting businesses, according to the New York Times, (bold highlights mine)
INFORMATION overload is a headache for individuals and a huge challenge for businesses. Companies are swimming, if not drowning, in wave after wave of data — from increasingly sophisticated computer tracking of shipments, sales, suppliers and customers, as well as e-mail, Web traffic and social-network comments. These Internet-era technologies, by one estimate, are doubling the quantity of business data every 1.2 years.
Yet the data explosion is also an enormous opportunity. In a modern economy, information should be the prime asset — the raw material of new products and services, smarter decisions, competitive advantage for companies, and greater growth and productivity.
Is there any real evidence of a “data payoff” across the corporate world? It has taken a while, but new research led by Erik Brynjolfsson, an economist at the Sloan School of Management at the Massachusetts Institute of Technology, suggests that the beginnings are now visible.
Mr. Brynjolfsson and his colleagues, Lorin Hitt, a professor at the Wharton School of the University of Pennsylvania, and Heekyung Kim, a graduate student at M.I.T., studied 179 large companies. Those that adopted “data-driven decision making” achieved productivity that was 5 to 6 percent higher than could be explained by other factors, including how much the companies invested in technology, the researchers said.
In the study, based on a survey and follow-up interviews, data-driven decision making was defined not only by collecting data, but also by how it is used — or not — in making crucial decisions, like whether to create a new product or service. The central distinction, according to Mr. Brynjolfsson, is between decisions based mainly on “data and analysis” and on the traditional management arts of “experience and intuition.”
Essentially this means that businesses don’t rely on top down flow of information. Instead, supported by the rapidly advancing computing capacity of the current generation of computers, data gathering has been decentralized—“increasingly sophisticated computer tracking of shipments, sales, suppliers and customers, as well as e-mail, Web traffic and social-network comments”—which operates on real time basis that allows the businesses to rapidly store and process data “how it is used” and thus employ a “data-driven decision making”
Not Hayek?
More from the late great Hayek,
If we can agree that the economic problem of society is mainly one of rapid adaptation to changes in the particular circumstances of time and place, it would seem to follow that the ultimate decisions must be left to the people who are familiar with these circumstances, who know directly of the relevant changes and of the resources immediately available to meet them. We cannot expect that this problem will be solved by first communicating all this knowledge to a central board which, after integrating all knowledge, issues its orders. We must solve it by some form of decentralization. But this answers only part of our problem. We need decentralization because only thus can we insure that the knowledge of the particular circumstances of time and place will be promptly used. But the "man on the spot" cannot decide solely on the basis of his limited but intimate knowledge of the facts of his immediate surroundings. There still remains the problem of communicating to him such further information as he needs to fit his decisions into the whole pattern of changes of the larger economic system.
Again Hayek’s Knowledge Theory extrapolated in today’s social media setting, from the New York Times anew (bold emphasis mine)
STILL, the software industry is making a big bet that the data-driven decision making described in Mr. Brynjolfsson’s research is the wave of the future. The drive to help companies find meaningful patterns in the data that engulfs them has created a fast-growing industry in what is known as “business intelligence” or “analytics” software and services. Major technology companies — I.B.M., Oracle, SAP and Microsoft — have collectively spent more than $25 billion buying up specialist companies in the field.
Well when Hayek said “further information as he needs to fit his decisions into the whole pattern of changes”, applied in today’s lingo they are called “business intelligence” or “analytics” software and services.
Get it? This is very much Hayek’s theory at work.
Experts who pretend that they know, don’t really know.
The presume superior knowledge out of self importance and deceptive conceit by relying on false theories and flawed models from which they extrapolate as foundations for their preferred political theory. (Let them bet on markets and see how they can predict them with consistency. I'll bet they'll be consistently wrong)
Again as Hayek once wrote,
All political theories assume, of course, that most individuals are very ignorant. Those who plead for liberty differ from the rest in that they include among the ignorant themselves as well as the wisest.
And that’s where the Hayek and statists camp differ. It’s in the admission of the knowledge problem.
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