The illiterate expression ‘given data’ constantly recurs in Lange. It appears to have an irresistable attraction to mathematical economists because i… - Friedrich Hayek

I think the basic misconception is to speak of the so-called “best” allocation of resources. What is the best? In common economics it is defined as what would be if we knew everything. Economists operate with the fictitious assumption that all the relevant data is known, but this is totally unrealistic. Nobody knows all the data. What we have is widely dispersed knowledge, which cannot be concentrated in one mind. To call the situation—which would use all the knowledge available—“optimal” is nonsense because it is by definition a non-achievable solution. Our problem is not the full utilization of all knowledge but the best use we can achieve with any known institutional structure. In that sense, some oligopolistic (and even monopolistic situations), represent the best possible utilization of knowledge that we can achieve. Even the action of a monopolist can be extremely beneficial.

There can be no doubt that our innate moral emotions and instincts were acquired in the hundreds of thousand years—probably half a million years—in which Homo sapiens lived in small hunting and gathering groups and developed a physiological constitution which governed his innate instincts. These instincts are still very strong in us. Yet civilization developed by our gradually learning cultural rules which were trans­mitted by teaching and which served largely to restrain and suppress some of those natural instincts.

What I expect is that inflation will drive the Western countries into a planned economy via price controls. Nobody will dare to stop inflation because to discontinue inflation will inevitably cause extensive unemployment. So assuming inflation stops it will quickly be resumed. People will find they can't live with constantly rising prices and will try to control it by price controls and that of course is the end of the market system and the end of the free political order. So I think it will be via the attempt to regress the effects of a continued inflation that the free market and free institutions will disappear. It may still take ten years, but it doesn't matter much for me because in ten years I hope I shall be dead.