Hayek believed that all of us “know” many things that we cannot articulate but that we nevertheless act on in practical situations, and the price system can therefore aggregate and transmit that knowledge which we could not otherwise convey. Hayek’s analysis had implications for the viability of different economic systems.
With regard to centrally planned economic systems—which had considerable support in the West in 1945, in light of the increased use of government economic controls in many countries during World War II and the dismal performance of market economies during the Great Depression—Hayek’s analysis suggested that these systems would likely exhibit great inefficiency.