What was Friedrich Hayek's view on an individual's role in an economy?

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Regarding an individual's role in an economy, Friedrich Hayek argued that individuals in an economy pursue their own rational ends. In pursuing those ends, they generate the wealth and prosperity on which a society depends. Individual actors are important to the economy, because they each have the kind of on-the-ground information that an economist or a government functionary simply doesn't have. Hayek uses this theory of knowledge to argue against the establishment of centralized planning.

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In common with many free-market economists, Hayek posits the individual as the basic unit of society. This is an abstract individual: homo economicus, economic man—the calculating, rational individual whose choices ultimately determine the direction of society. In this reading, an individual makes rational decisions which, combined with the decisions of other individuals, generate wealth and opportunity in a free-market economy. If governments wish to maintain or increase levels of prosperity, they should interfere with these decisions as little as possible.

The individual in the economy, argues Hayek, is possessed of a certain amount of information on which he or she bases important decisions, such as where to invest and how much capital to invest. Each individual has knowledge about particular resources and economic opportunities that a bureaucrat sitting in a government office can never have.

As such, it is the height of folly in Hayek's eyes for governments to engage in central planning. The kind of information required for such an ambitious project simply isn't there. Only individual actors, with their very specific, on-the-ground information, have the ability to make decisions regarding productivity, investment, and so on.

In combination, these individual decisions maximize opportunity, creating a vibrant, healthy economy. This isn't a planned outcome; quite the opposite. Each individual is simply pursuing his own rational ends. It's just that the pursuit of those ends, taken together in totality, happens to generate wealth and prosperity in a way that central planning would never be able to.

We see here a variant of Adam Smith's famous "Invisible Hand" metaphor, in which the simultaneous pursuit of self-interest by many different economic actors ultimately conduces to the common good without being planned.

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