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Top1. Knowledge And Society: Why Central Planning Is Not Possible
Economics is a social science. It studies the economic side of society: how operators interact to manage never-ending needs and limited resources. We cannot therefore disregard social factors in analysing an economy, as it is a society seen by the economic perspective. For the purposes of this paper, economy is substantially equivalent to society.
When we talk about an economy, we talk about decisions, be they individual or institutional. For taking a decision, certain knowledge must be collected, then knowledge is one of the most important assets for a society. Knowledge of individual needs, knowledge of common needs for infrastructures, knowledge of priorities, knowledge of the most efficient ways to satisfy these needs, knowledge of the availability of resources and technologies, knowledge of the behaviour of individuals and institutions, and so on. All this knowledge is necessary for a society to coordinate its efforts to reach the best economic and social structure possible; knowledge is made up with all information – marginal utilities, expenses, opportunity costs, available resources and technologies – needed for the economic calculus by operators to lead the economy to its “social best”.