Hayek's Idea of Information Use and Its Use in 21st Century Essay

Hayek's Idea of Information Use and Its Use in 21st Century - Essay Example The essay "Hayek's Idea of Information Use and Its Use in 21st Century" talks about the Friedrich Hayek's views on information usage in the marketing area expressed in his article "The Use of Knowledge in Society". According to Hayek, the more decentralized the economy is, the more variable the information is (spread throughout the society). In his own words, â€Å"The marvel is that in a case like that of a scarcity of one raw material, without an order being issued, without more than perhaps a handful of people knowing the cause, tens of thousands of people whose identity could not be ascertained by months of investigation, are made to use the material or its products more sparingly; i.e., they move in the right direction†. Hayek has pointed out the danger of tyranny that lies in a centrally planned economy resulting from the control of economic decision-making by the government. The functioning of any market depends largely on the nature of the information that the economic agents interacting in that economy possess. According to Hayek, there are mainly two types of information that are available to an economic agent. In this article, Hayek also marked a difference between two categories of information or awareness. One is scientific or technical information and the other is the information about individual’s capacities on the other. This paper tries to relate these ideas to the 21st-century growth in information about individuals and their wants, needs, capacities and the making of new markets such as eBay.... The functioning of any market depends largely on the nature of the information that the economic agents interacting in that economy possess. According to Hayek, there are mainly two types of information that are available to an economic agent (Hayek, 1945). On the one hand there is the scientific information and the technical information. This is basically the theoretical information regarding any activity, related to production or distribution the goods and services or related to the allocation of scares resources. And the other is related to the information that an individual possess regarding his capacities on the other individual(s). The first type of information is basically of theoretical type. In this information an individual acquires information necessary to the make economic decisions, such as production, distribution etc. The other type of information relates to the practical exposure of all the theoretical information those are available to the individuals. These are basi cally the useful and realistic information (Hayek, 1945, p. 3). Types of information: According to Hayek, all the theoretical information is related to the specific section of the society that are related to the generation and the development of those theories. These individuals are responsible for the invention and the study of those theories. Again in other sense of the explanation of this information this kind of information is not the aggregate of all available information. Rather this is the information of specific circumstances of specific time and place. In this respect it is said that every individual in any economy possess some unique information which give him some kind of advantage