Prices and knowledge: A market-process perspective

114 Prices and knowledgeassigned and on the particular ends which have been indicated forhim by the commanding authority.(ibid.: 49; emphasis added)the general rules of law that a spontaneous order rests on aim at anabstract order, the particular or concrete content of which is notknown or foreseen by anyone; while the commands as well as therules which govern an organization serve particular results aimed atby those who are in command of the organization. 21 (ibid.: 50)This makes ‘decentralized hierarchies’ different from a market. Evenif decentralized organizations may allow room for someentrepreneurial initiative on the part of their different members, theseinitiatives will be constrained to occur within the limits determined bythe overall design of the ‘planner’. 22 Only those individuals approvedby the ‘planner’ will be allowed to exercise this limited entrepreneurialinitiative. And, in many cases, the creative individuals will have toconvince the ‘planner’ of the advantages of their new ideas, so that theapplication of these ideas will depend on the planner’s entrepreneurialvision. Organizations may therefore be said to be entrepreneuriallycentralized.Markets, on the other hand, leave much more room forentrepreneurial imagination and creativity. The results thatentrepreneurs may achieve in the market are not limited to thepossibilities discovered by any single limited mind. The profitincentives markets provide are rewards not for the successfulachievement of tasks assigned by any overall planner, but rather forthe task of better co-ordinating a diversity of individual plans. Anyindividual in the economy is free to exercise his entrepreneurialimagination and to try out ideas he believes to be promising. This isfrequently referred to as ‘free entry’. 23 In this way the market tapseverybody’s entrepreneurial abilities.To the stimulus to innovation and discovery provided bypecuniary profits free entry also adds the powerful spur ofrivalrous competition and potential pecuniary losses. Everyindividual in the market knows that if he does not strive todiscover and exploit profit opportunities, others will, and willdeprive him of them. In all these respects organizations, evendecentralized ones, are at a disadvantage with regard to markets.Still, as mentioned before, there are sometimes other economic