Steele, Division of Knowledge

Steele, Division of Knowledge - by point of view or by...

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John Hawkins Policy Ideas in the History of Economic Thought Dr. Rizzo November 8, 2009 Steele: Division of Knowledge David Ramsey Steele’s Chapter in From Marx to Mises entitled Division of Knowledge sets out to repudiate the claim that modern man’s problems are so complex that society must be highly organized in a structure that is dictated from a central authority, or, in other words, from the top down. In Steele’s view. complex order can be derived spontaneously from separate actors. The order that is derived spontaneously is not always welcome (the example he gives is cancer) but he permits that their must be cases where spontaneous order is more effective than predetermined order. This is possible because though our knowledge is highly divided, we can use the knowledge of others in society by means of abstract signals. The way this knowledge may be divided is
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Unformatted text preview: by point of view or by accumulated wisdom (tacit knowledge). One example of the effect of the division of knowledge maximizing social gain would be peoples knowledge of their own comparative advantage when seeking jobs, or the price of one good relative to all others. The implications for central planning is that it wont be able to account for the thousands of shifts in the market that one price change (increase/decrease in scarcity of one product) would create. Perhaps more importantly, by centralizing the means of production, there is now only one producer as opposed to many, and without competing ideas as to how products should be made or distributed the manner with which the new government corporation conducts business is not likely to be as optimal as when many firms compete with eachother....
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Steele, Division of Knowledge - by point of view or by...

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