524 THE AMERICAN ECONOMIC REVIEW SEPTEMBER show a very much greater stability than the movements of the detail. The comparative stability of the aggregates cannot,however,be ac- counted for-as the statisticians seem occasionally to be inclined to do-by the "law of large numbers"or the mutual compensation of random changes.The number of elements with which we have to deal is not large enough for such accidental forces to produce stability.The continuous flow of goods and services is maintained by constant de- liberate adjustments,by new dispositions made every day in the light of circumstances not known the day before,by B stepping in at once when A fails to deliver.Even the large and highly mechanized plant keeps going largely because of an environment upon which it can draw for all sorts of unexpected needs;tiles for its roof,stationery for its forms,and all the thousand and one kinds of equipment in which it cannot be self-contained and which the plans for the operation of the plant require to be readily available in the market. This is,perhaps,also the point where I should briefly mention the fact that the sort of knowledge with which I have been concerned is knowledge of the kind which by its nature cannot enter into statistics and therefore cannot be conveyed to any central authority in statistical form.The statistics which such a central authority would have to use would have to be arrived at precisely by abstracting from minor differ- ences between the things,by lumping together,as resources of one kind,items which differ as regards location,quality,and other particu- lars,in a way which may be very significant for the specific decision. It follows from this that central planning based on statistical informa- tion by its nature cannot take direct account of these circumstances of time and place,and that the central planner will have to find some way or other in which the decisions depending on them can be left to the“man on the spot..” V If we can agree that the economic problem of society is mainly one of rapid adaptation to changes in the particular circumstances of time and place,it would seem to follow that the ultimate decisions must be left to the people who are familiar with these circumstances,who know directly of the relevant changes and of the resources immediately available to meet them.We cannot expect that this problem will be solved by first communicating all this knowledge to a central board which,after integrating all knowledge,issues its orders.We must solve it by some form of decentralization.But this answers only part of our problem.We need decentralization because only thus can we ensure that the knowledge of the particular circumstances of time and place will be promptly used.But the "man on the spot"cannot decide