A feature common to economics and sci-fi is abstraction, from the homogeneity of types (aliens, like utility maximisers, are usually representative rather than idiosyncratic) to the monocausal nature of change (the rule of ceteris paribus is usually only broken in sci-fi for comic effect, such as when an entire alien battle fleet is swallowed by a small dog following a terrible miscalculation of scale). This claim might appear questionable in hard sci-fi, where the writer delights in the scientific rigour and plausibility of her imaginings, but it is impossible to completely describe a speculative world within the confines of a single book, or even a series. The map is selective and approximate to the territory. The choices the author makes about which features to describe and which to ignore reflect not only the needs of the plot but her interests in the imaginary world. Much the same can be said of economists, hence the old joke, assume a can opener.
Price is not merely an efficient mechanism for the allocation of scarce resources but an abstraction that allows us to maintain a distance from the world. As Friedrich Hayek put it, in his 1945 essay The Use of Knowledge in Society, "The most significant fact about this system is the economy of knowledge with which it operates, or how little the individual participants need to know in order to be able to take the right action. In abbreviated form, by a kind of symbol, only the most essential information is passed on and passed on only to those concerned. It is more than a metaphor to describe the price system as a kind of machinery for registering change, or a system of telecommunications which enables individual producers to watch merely the movement of a few pointers, as an engineer might watch the hands of a few dials, in order to adjust their activities to changes of which they may never know more than is reflected in the price movement".
What's interesting about this is not just the prescient idea that price is "a system of telecommunications" but that obscurity ("how little the individual participants need to know"), rather than clarity, is its defining characteristic. Ignorance is a feature, not a bug. Hayek describes a world of "dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess". This dispersal, together with the fact that we cannot know who all the relevant individuals are in the composition of any given price, makes it impossible to gather and collate the underlying knowledge. Its meaning arises not through its aggregation but through its abstraction, "the movement of a few pointers". But where the metaphor breaks down is that we cannot reverse-engineer the mechanism, discovering and replicating the inputs that drove the needles on the dials. We have to take the output on trust. It's not too far-fetched to describe this as an occult theory of information.
The parallels between Hayek's system and a computer are obvious, if ultimately misleading: individually "dumb" calculations, massively-parallel processing, dynamic feedback and error-correction. In recommending the price system, he approvingly quoted Alfred North Whitehead from 1911: "Civilization advances by extending the number of important operations which we can perform without thinking about them". The relevance of that to recent developments in automation and AI hardly needs to be stressed. But Hayek's system was driven by its lack of self-understanding, the absence of a coherent underlying intelligence as much as a central coordinator, not just its tolerance of incomplete information: "The problem is precisely how to extend the span of our utilization of resources beyond the span of the control of any one mind; and therefore, how to dispense with the need of conscious control, and how to provide inducements which will make the individuals do the desirable things without anyone having to tell them what to do" [my italics].
The advance of IT since the 1970s has increasingly called into question Hayek's assumptions about what is possible, let alone desirable. Consider this: "Even the single controlling mind, in possession of all the data for some small, self-contained economic system, would not—every time some small adjustment in the allocation of resources had to be made—go explicitly through all the relations between ends and means which might possibly be affected". What seemed impractical in 1945 is now merely an electronic spreadsheet. Though social media have recently popularised the idea of "living our lives online", the dispersed knowledge that underpins price has been migrating to the digital realm (and thus becoming more consolidated and visible) since before Hayek picked up his Nobel Prize in 1974, not just in the growth of corporate resource planning and finance systems but in the spread of personal bank accounts, credit cards and so on.
While this has prompted some to speculate (with no little irony) that central planning might have been an idea ahead of its time (e.g. the debate around Francis Spufford's Red Plenty), most commentators on the intersection of IT and economics are dazzled by the promise of "big data" to reveal new opportunities for profit by isolating hitherto unknown signals in the vastly expanded noise. Some on the right have expressed unease at the potential challenge that big data presents to the Hayekian model of dispersed and fragmentary knowledge, but most have resolved this by accepting that data omniscience, like central planning itself, is fine as long as it occurs within a private firm operating in a competitive market. It's only a problem when done by the state, apparently.
But this ignores Hayek's crucial point that the justification for private action is ignorance not superior knowledge. As he put it in The Constitution of Liberty, "If there were omniscient men, if we could know not only all that affects the attainment of our present wishes but also our future wants and desires, there would be little case for liberty". Today, the impetus towards omniscience comes not only in the form of the state's appetite for mass surveillance but in the "imperial ambitions" of companies (working in tandem with the state) that seek to "organise the world's information" for profit. This desire has given rise to a business model in which information-rich services are offered for free (i.e. cross-subsidised to promote growth), which consequently inverts Hayek's system: greater visibility of preferences and the ability to infer expectations (i.e. knowledge) combined with price signals that are increasingly unrepresentative of "true cost".
Isabella Kaminska notes, "we are reverting to a world where a technocratic elite makes economic planning and allocation decisions based on their subjective interpretations of personal behaviours, status and privilege, who it’s fair to overprice and who it’s fair to subsidise, rather than clearcut at cost price signals from the market". Even technologies like blockchains, that seek to democratise information by avoing the "walled gardens" of the tech-titans as much as the central authority of the state, tend to do so by dispersing large datasets that are in regular communication with each other, to the point where we can reasonably talk of a distributed intelligence in which price is merely one property of a growing number of information classes. The desire to exploit that underlying intelligence is increasingly compromising the value of the price signal, which ironically makes Hayek's point that the power of price is a product of ignorance.