520 THE AMERICAN ECONOMIC REVIEW SEPTEMBER of how to allocate“given"resources--ift“given”is taken to mean given to a single mind which deliberately solves the problem set by these "data."It is rather a problem of how to secure the best use of resources known to any of the members of society,for ends whose relative importance only these individuals know.Or,to put it briefly, it is a problem of the utilization of knowledge not given to anyone in its totality. This character of the fundamental problem has,I am afraid,been rather obscured than illuminated by many of the recent refinements of economic theory,particularly by many of the uses made of mathe- matics.Though the problem with which I want primarily to deal in this paper is the problem of a rational economic organization,I shall in its course be led again and again to point to its close connections with certain methodological questions.Many of the points I wish to make are indeed conclusions toward which diverse paths of reasoning have unexpectedly converged.But as I now see these problems,this is no accident.It seems to me that many of the current disputes with regard to both economic theory and economic policy have their common origin in a misconception about the nature of the economic problem of society.This misconception in turn is due to an erroneous transfer to social phenomena of the habits of thought we have developed in dealing with the phenomena of nature. II In ordinary language we describe by the word "planning"the com- plex of interrelated decisions about the allocation of our available resources.All economic activity is in this sense planning;and in any society in which many people collaborate,this planning,whoever does it,will in some measure have to be based on knowledge which,in the first instance,is not given to the planner but to somebody else, which somehow will have to be conveyed to the planner.The various ways in which the knowledge on which people base their plans is communicated to them is the crucial problem for any theory explaining the economic process.And the problem of what is the best way of utilizing knowledge initially dispersed among all the people is at least one of the main problems of economic policy-or of designing an efficient economic system. The answer to this question is closely connected with that other question which arises here,that of wko is to do the planning.It is about this question that all the dispute about "economic planning" centers.This is not a dispute about whether planning is to be done or not.It is a dispute as to whether planning is to be done centrally, by one authority for the whole economic system,or is to be divided