Outside the firm, price movements direct production, which is co-ordinated through a series of exchange transactions on the market. Within a firm, these market transactions are eliminated and in place of the complicated market structure with exchange transactions is substituted the entrepreneur-co-ordinator, who directs production.
Indeed, if communist central planners could have organized the economy with as much detail, precision, and flexibility as a modern-day Toyota or Wal-Mart, communism would probably still exist.
Germany is the biggest economy of Europe and we need Germany on board for the economic reforms of Europe, including, of course, the deepening of the internal market, resisting protectionism, and supporting further economic policy coordination.
Competition means decentralized planning by many separate persons.
Prices are important not because money is considered paramount but because prices are a fast and effective conveyor of information through a vast society in which fragmented knowledge must be coordinated.
In most circles, the idea of economic planning has been in disrepute most of the time and, particularly in America, has almost carried connotations of intellectual and moral perversion and even political subversion.
The market steers the capitalistic economy. It directs each individual's activities into those channels in which he best serves the wants of his fellow-men. The market alone puts the whole social system of private ownership of the means of production and free enterprise in order and provides it with sense and meaning.
The study of economic organization commonly proceeds as though market and administrative modes of organization were disjunct. Market organization is the province of economists. Internal organization is the concern of organization theory specialist. And never the twain shall meet.
We are entering a new phase of European politics. What is decisive is not only do we have a single currency area, but also that it is accompanied by a co-ordinated economic and financial policy. We must drive forward tax harmonisation in Europe.
Expressing the thoughts of my comrades, I suggested, among other means, the organization of an international information service on inventories, on production, and on the needs of the various countries for raw materials.
The much-maligned price system works not only to secure supply but to conserve. [...] Profits and prices are the street signs of the economy. Only fools flout them.
I would like to see Greece as a case study, an opportunity for Europe to strengthen its coordination of fiscal policy.
We need to put in place an economic system of governance for the euro-zone.
Fundamentally, there are only two ways of coordinating the economic activities of millions. One is central direction involving the use of coercion - the technique of the army and of the modern totalitarian state. The other is voluntary cooperation of individuals - the technique of the marketplace.
In fact, a large part of what we think of as economic activity is designed to accomplish what high transaction costs would otherwise prevent or to reduce transaction costs so that individuals can negotiate freely and we can take advantage of that diffused knowledge of which Friedrich Hayek has told us.
It is clear that these are alternative methods of co-ordinating production. Yet, having regard to the fact that, if production is regulated by price movements, production could be carried on without any organization at all might we ask, why is there any organization?
One of the beauties of an economy coordinated by price movements is that nobody has to understand it in order for it to work.
As a result of the efforts of Hayek .. and the many others who share his general outlook, the idea of a centrally planned and centrally administered economy, so popular in the 1930s and early 1940s, has been discredited.
The carrying out of the Potsdam Agreement has, however, been obstructed by the failure of the Allied Control Council to take the necessary steps to enable the German economy to function as an economic unit.
The fact that we're going through a crisis is an opportunity for Europe to be more coordinated and more integrated. We're actually talking about a European Monetary Fund or euro bonds, about guarantees for countries, about economic governance in the European Union. That shows the strength of Europe.
The direction of all economic affairs is in the market society a task of the entrepreneurs. Theirs is the control of production. They are at the helm and steer the ship. A superficial observer would believe that they are supreme. But they are not. They are bound to obey unconditionally the captain's orders.
But sovereign debt is a wider question not only in Europe but across the globe. While every country is a unique case, I think it's not an issue of countries acting on their own. We need a more coordinated strategy not only in Europe but around the world.
Most people are oblivious to F.A. Hayek's insight that the critical information needed to run an economy - or even 15 percent of one - doesn't exist in any one place where it is accessible to central planners. Instead, it is scattered piecemeal among millions of people. All those people put together are far wiser and better informed than Congress could ever be. Only markets - private property, free exchange and the price system - can put this knowledge at the disposal of entrepreneurs and consumers, ensuring the system will serve the people and not just the political class.
I have not the slightest doubt that the economic measures and the Socialist measures which one will find in countries of Eastern Europe, will become increasingly powerful against the uncoordinated, planless society in which the West is living at present.
