Tech Platforms and the Knowledge Problem

A mural decorates one of the many open space work areas at the Facebook headquarters in Menlo Park, California, May 15, 2012 — ROBYN BECK/AFP/Getty Images

By Frank Pasquale

Friedrich von Hayek, the preeminent theorist of laissez-faire, called the “knowledge problem” an insuperable barrier to central planning. Knowledge about the price of supplies and labor, and consumers’ ability and willingness to pay, is so scattered and protean that even the wisest authorities cannot access all of it. No person knows everything about how goods and services in…