Abstract: As is well known, Hayek puts forward his dispersed knowledge theory based on his criticism of the theory of “perfect knowledge”, where he criticizes the concept of stationary equilibrium alleged by traditional economic theory. And as is usually ignored, Hayek argued furthermore that facts in social sciences are highly dependent on the epistemic subject, and that we rely on a system of classification of objects to organize our knowledge. The theory of objective classification of knowledge offers an explanation to Hayek’s dispersed knowledge theory, while the organizing of dispersed individual knowledge is wholly dependent on the market competition as a discovery procedure. Hayek’s overemphasis on the role of market competition is criticized by contemporary scholars such as L. Liggio and L. Hurwicz, with the latter arguing, contrary to Hayek’s famous standpoint, against government intervention, that spontaneous disorder should demand human intervention. Such criticism leads to the birth of modern mechanism design theory.

Key words: Hayek, dispersed knowledge theory, a system of classification, competition as a discovery procedure, mechanism design