Centralized knowledge is an impossible dream but
decentralized knowledge can work (doesn’t always) and well functioning markets
and democracies help combine decentralized knowledge.
For example if on a supply curve: if it’s easy to find
titanium and the price of titanium increases, then producers will dig up a lot
of titanium. But if it’s hard to find titanium then the supply curve will be
steeper.
Czar of titanium – needs to know everything about titanium –
all the stuff he doesn’t and will never know.
The solution to the failure of the czar = prices.
Prices show that someone can make adjustments.
If you change your behavior, the price increases less and
the quantity supplied doesn’t increase as much when demand is elastic.
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