Hayek on Complexity, Uncertainty and Pandemic Response
Author: Mark Pennington
Published in Review of Austrian Economics (2020)
This paper draws on Hayek’s distinction between simple and complex phenomena to understand the nature of the challenge facing policymakers in responding to the new coronavirus pandemic. It shows that while government action is justifiable there may be few systemic mechanisms that enable policymakers to distinguish better from worse policy responses, or to make such distinctions in sufficient time. It then argues that this may be a more general characteristic of large-scale public policy making procedures and illustrates the importance of returning to a market-based political economy at the earliest convenience.