Friedrich Hayek (4)

Continuing my thoughts about Friedrich Hayek directly from my previous post here.

My third objection to the central thesis of Hayek is that the lack of understanding does not preclude intervention.

I think Hayek believes markets to be a natural phenomenon. I disagree with this idea of markets being natural. Markets are an artificial construction. Humans have constructed markets. They obey rules perculiar to humans.

Yet, the essence of Hayek's objection to government intervention in the workings of markets is that noone understands how markets work, and therefore any intervention is likely to be incorrect.

This seems to be an argument that academic knowledge is superior to practical knowledge and therefore must precede it. Nassim Talebi in his book, "Antifragility", argues strongly against this superiority of academic knowledge. He woild argue that practical knowledge is superior and precedes the emergence of acadamic knowledge.

Talebi seems to argue that intervention must be justified in that benefits must exceed the cost of doing nothing. Talebi's argument against intervention is based on cost-benefit analysis rather than ignorance in Hayek's argument. Talebi would argue that intervention would work under conditions of ignorance.