The Importance of Decentralization to the Economy

On page 96 of The Road to Serfdom by F.A. Hayek, we read the following:

“It is no exaggeration to say that if we had had to rely on conscious central planning for the growth of our industrial system, it would never have reached the degree of differentiation, complexity, and flexibility it has attained. Compared with this method of solving the economic problem by means of decentralization plus automatic coordination, the more obvious method of central direction is incredibly clumsy, primitive, and limited in scope. That the division of labor has reached the extent which makes modern civilization possible we owe to the fact that it did not have to be consciously created but that man tumbled on a method by which the division of labor could be extended far beyond the limits within which it could have been planned. Any further growth of its complexity therefore, far from making central direction more necessary, makes it more important than ever that we should use a technique which does not depend on conscious control.”

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