A Nobel Prize for Hayekian recalculation in the labor market

Details from Tyler Cowen here, here, here, and here.  Additional thoughts from Arnold Kling.  And here’s the official statement from the Nobel Prize committee explaining their rationale for the award.

There is something of a parallel here with the work of Leonid Hurwicz and Joseph Stiglitz and George Stigler — take an aspect of Hayek’s recalculation problem / knowledge problem / coordination problem, put it into a formal “model” built up out of mathematical “givens” (e.g. “given” probability distributions and “given” costs, etc.), and then look for “market failures” within this God’s-eye-view construct, failures which theoretically can be ameliorated by a benevolent government “intervention” looking and acting from something like a God’s-eye-view of the world.

The New York Times article is here.

UPDATE:  Ed Glaeser provides an excellent explication of the work which has been awarded the Nobel Prize.  Where Hayek has open-ended discovery processes and knowledge problems in the real world, here we have a further development of the Stigler paradigm where Hayekian discovery processes and knowledge problems are transformed into “given cost” and “given information” math “models” that eliminate open-ended entrepreneurial learning and non-given, non-quantifiable discovery problems of the sort hinted at by Kling.

MORE:  Another explication.

UPDATE II:  Peter Boettke on the “perfect market” strawman and Diamond’s Nobel Prize.

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