The Significance of the Knowledge Problem in the Development of Modern Austrian Economics

Kirzner (2018) has argued that one of the essentially epistemic properties of the market economy that cannot be ignored is the Hayekian division of knowledge. Despite the fact that knowledge being dispersed, tacit, existing in fractions and thus unable to be possessed by a single mind seems to be an obvious empirical observation, its significance was not fully appreciated by the profession until the publication of Hayek's (1945) The Use of Knowledge in Society. Though the initial intention of Hayek when writing the paper was to contribute to the socialist calculation debate, Hayek (1945) represents a broader point of view regarding the dynamic nature of the market. Furthermore, by calling attention to the knowledge problem, the paper of Hayek set forth a whole new path for the development of modern Austrian economics that has been continued to the present. This paper aims at summarizing such a significance and powerful influence