Local Knowledge in Monterey
As regular readers of my blog posts know, I’m a big fan of Friedrich Hayek’s insight about “knowledge of the particular circumstances of time and place,” or what more-modern economists, applying his insight, often call “local knowledge.” The basic idea is that central planners can’t have all the information in real time that they would need to plan an economy well because that knowledge exists in dispersed bits in the minds of the millions of individuals in the economy.
But the insight also often applies to even private, non-coercive attempts to centralize information. I experienced an instance of that last Saturday morning. I had a reservation to fly from Monterey to San Francisco and then on to Las Vegas. The Monterey flight would leave at about 11:30 a.m. I got up at about 6:45 a.m., with plenty of time to surf the web, have breakfast, and pack. The airport is only 15 minutes away. My wife, though, had noticed how windy it was and got on the web to find out that my flight from Monterey to San Fran was delayed 2 hours. That meant I would miss my connection to Las Vegas. But the same web site, run by United Airlines, showed me arriving in San Fran on time. When she probed further on-line, it wasn’t clear that there were any earlier flights.
I had to go to my downtown office anyway to get a couple of pages out of a book that I needed for a discussion with a co-author in Vegas. I had the pages copied by about 7:55 a.m. I started to head for home and then realized that the trip from that office to the airport was only about 6 minutes. So I hustled to the airport and, within 2 minutes of getting there, was looked after by a United Express employee. She told me that there was an earlier flight, scheduled for 9:30 a.m., that was delayed until 10:50 a.m. and she put me on that flight. That was hugely valuable information that I could not find on the web and that I got only by taking advantage of the local knowledge of the airline employee in Monterey. Her co-worker warned me, by the way, that things could change quickly and that the flight could leave on time. So I hustled home, packed more quickly than I ever had in my life, wolfed down an egg, and was at the airport by 9:10 a.m. The flight ended up leaving at about 9:50 a.m.