The Knowledge Problem

Comprehensive planning, the classic doctrine of planning advocates, seeks to achieve economic coordination without relying on the contention of separate decisionmakers with one another; it thereby deprives itself of access to one of the most important sources of knowledge exhibited by these kinds of orders. Just as in biological competition, there is the “information bearer” function of DNA, so in the society of Tradition, this function is further served by such developments as language and culturally acquired techniques and habits. In the society of Market, profit and loss signals are added to this array. In the society of Planning, there is no new information bearer and those of the Market are discarded. It is this lack that gives the knowledge problem argument its force.

From National Economic Planning: What is Left? by Don Lavoie